STRATEGIC ALLIANCE AGREEMENT
dated as of
September 29, 1995
among
CIBA-GEIGY LIMITED,
CIBA-GEIGY CORPORATION
AND
HEXCEL CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I
Establishment of the Alliance
SECTION 1.01. Contribution of Transferred Business . . . 1
SECTION 1.02. Transferred Business Consideration . . . . 4
SECTION 1.03. Assumption of Certain Liabilities . . . . 4
SECTION 1.04. Allocation of Transferred Business
Consideration . . . . . . . . . . . . . . 7
ARTICLE II
The Closings
SECTION 2.01. Closing . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Transactions To Be Effected at the Closing 7
SECTION 2.03. The Deferred Closings . . . . . . . . . . 8
SECTION 2.04. Principal Amount of Subordinated Debt . . 10
SECTION 2.05. Danutec Closing . . . . . . . . . . . . . 14
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of Ciba . . 15
SECTION 3.02. Representations and Warranties of Hexcel . 31
ARTICLE IV
Covenants
SECTION 4.01. Conduct of Business . . . . . . . . . . . 43
SECTION 4.02. Access to Information . . . . . . . . . . 49
SECTION 4.03. Legal Requirements . . . . . . . . . . . . 49
SECTION 4.04. No Solicitation . . . . . . . . . . . . . 50
SECTION 4.05. Agreement Regarding Non-Assignable
Contracts . . . . . . . . . . . . . . . 51
SECTION 4.06. Transfer Taxes . . . . . . . . . . . . . . 52
SECTION 4.07. Use of Names . . . . . . . . . . . . . . . 52
SECTION 4.08. Insurance . . . . . . . . . . . . . . . . 54
SECTION 4.09. Post-Closing Cooperation . . . . . . . . . 54
SECTION 4.10. Bulk Transfer Laws . . . . . . . . . . . . 56
SECTION 4.11. Supplies . . . . . . . . . . . . . . . . . 56
SECTION 4.12. Certain Ancillary Agreements . . . . . . . 57
SECTION 4.13. Intellectual Property Licenses . . . . . . 57
SECTION 4.14. Directors' and Officers' Indemnification . 60
SECTION 4.15. Distribution Agreement . . . . . . . . . . 61
SECTION 4.16 Local Agreements. . . . . . . . . . . . . 61
SECTION 4.17. NYSE Listing . . . . . . . . . . . . . . . 61
SECTION 4.18. Stockholder Approval; Proxy . . . . . . . 61
SECTION 4.19. New Board of Directors . . . . . . . . . . 62
SECTION 4.20. Subsequent Agreement Royalty . . . . . . 63
SECTION 4.21. Financial and Insurance Expertise . . . . 63
SECTION 4.22. Transfer of Intercompany Debts . . . . . . 64
SECTION 4.23. Supplemental Disclosure . . . . . . . . . 64
SECTION 4.24. Non-Competition and Related Matters . . 64
ARTICLE V
Conditions Precedent
SECTION 5.01. Conditions to Each Party's Obligation . . 68
SECTION 5.02. Conditions to the Obligation of Hexcel . . 69
SECTION 5.03. Conditions to the Obligation of Ciba
and CGC . . . . . . . . . . . . . . . . 71
ARTICLE VI
Termination, Amendment and Waiver
SECTION 6.01. Termination . . . . . . . . . . . . . . . 73
SECTION 6.02. Amendments and Waivers . . . . . . . . . . 74
ARTICLE VII
Indemnification
SECTION 7.01. Indemnification by Ciba . . . . . . . . . 74
SECTION 7.02. Indemnification by Hexcel . . . . . . . . 74
SECTION 7.03. Losses Net of Insurance, etc. . . . . . . 75
SECTION 7.04. Termination of Indemnification . . . . . . 75
SECTION 7.05. Indemnification Procedures . . . . . . . . 75
SECTION 7.06. Indemnification Procedures for Tax Claims;
Tax Returns . . . . . . . . . . . . . 77
SECTION 7.07. Adjustment to Transferred Business
Consideration . . . . . . . . . . . . . 78
ARTICLE VIII
General Provisions
SECTION 8.01. Notices . . . . . . . . . . . . . . . . . 78
SECTION 8.02. Interpretation . . . . . . . . . . . . . . 80
SECTION 8.03. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . 80
SECTION 8.04. Severability . . . . . . . . . . . . . . . 80
SECTION 8.05. Counterparts . . . . . . . . . . . . . . . 80
SECTION 8.06. Entire Agreement; No Third Party
Beneficiaries . . . . . . . . . . . . . 80
SECTION 8.07. Governing Law . . . . . . . . . . . . . . 81
SECTION 8.08. Consent to Jurisdiction . . . . . . . . . 81
SECTION 8.09. Publicity . . . . . . . . . . . . . . . . 81
SECTION 8.10. Expenses . . . . . . . . . . . . . . . . . 81
SECTION 8.11. Assignment . . . . . . . . . . . . . . . . 82
Schedule 3.02(u) -Product Liability
APPENDICES, SCHEDULES AND EXHIBITS
Schedule 3.02(w) -Labor Relations
Schedule 4.01(a)(iv) -Existing Contracts
Appendix A - Definitions
Schedule 4.01(b)(iv) -Existing Contracts
Schedule 4.13 - Intellectual Property License
Schedule 1.01(b) -Hive-down Assets
Schedule 4.13(b)(i) -Patents
Schedule 1.04 - Allocation Statement
Schedule 4.13(b)(ii) -Patents
Schedule 2.04(a1) -Ciba Closing Items
Schedule 4.13(b)(iii)-Patents
Schedule 2.04(a2) -Working Capital of Transferred Business
Schedule 4.13(c) -Patents
Schedule 2.04(b1) -Hexcel Closing Items
Schedule 4.13(d) -Patents
Schedule 2.04(b2) -Working Capital of Hexcel
Schedule 3.01(a) -Description of Activities by Jurisdiction
Exhibit A - Governance Agreement
Schedule 3.01(b) -
Exhibit B - Summary Terms of Subordinated Debt Indenture
Exhibit C - Distribution Agreement
Ciba Non-Contravention; Consents and
Exhibit D - Employment Matters Agreement
Approvals
Schedule 3.01(c) -Financial Statements
Exhibit E - Form of U.S. Real Property Deeds
Schedule 3.01(d) -Compliance with Applicable Laws
Schedule 3.01(e) -Litigation; Decrees
Schedule 3.01(f) -Contributed Shares
Schedule 3.01(g) -Liens
Schedule 3.01(h)(1) -Owned Real Property
Schedule 3.01(h)(2) -Leased Real Property
Schedule 3.01(i)(1) -Trademarks
Schedule 3.01(i)(2) -Patents
Schedule 3.01(i)(3) -Licensed Intellectual Property
Schedule 3.01(j) -Insurance
Schedule 3.01(k) -Contracts
Schedule 3.01(l) -Certain Changes or Events
Schedule 3.01(m) -Taxes
Schedule 3.01(n) -Environmental Matters
Schedule 3.01(u) -Product Liability
Schedule 3.01(v) -Cost Accounting Standards
Schedule 3.01(x) -Labor Relations
Schedule 3.02(b) -Authority
Schedule 3.02(c) -Capitalization of Hexcel and its Subsidiaries
Schedule 3.02(d) -Equity Interests of Hexcel
Schedule 3.02(f) -Certain Changes or Events
Schedule 3.02(i) -Compliance with Applicable Laws
Schedule 3.02(j) -Litigation; Decrees
Schedule 3.02(k) -Liens
Schedule 3.02(l) -Intellectual Property
Schedule 3.02(m) -Insurance
Schedule 3.02(n) -Contracts
Schedule 3.02(o) -Taxes
Schedule 3.02(p) -Environmental Matters
Schedule 3.02(q) -Cost Accounting Standards
STRATEGIC ALLIANCE AGREEMENT dated as of
September 29, 1995, among CIBA-GEIGY LIMITED,
a Swiss corporation ("Ciba"), CIBA-GEIGY
CORPORATION, a New York corporation and a
wholly-owned subsidiary of Ciba ("CGC"), and
HEXCEL CORPORATION, a Delaware corporation
("Hexcel").
WHEREAS Ciba (directly and indirectly through its
Subsidiaries) and Hexcel are each engaged worldwide in the
development, manufacture, marketing, sale and distribution
of composites, including structures and interiors, fabrics,
laminates, prepregs, adhesive films, honeycomb core,
sandwich panels and fabricated components (the "Business");
WHEREAS Ciba and Hexcel each would like to have a
continuing interest in the Business;
WHEREAS Ciba and Hexcel are aware of their
respective and complementary strengths in the Business and
wish to enhance their respective businesses and view a
strategic alliance as an attractive opportunity;
WHEREAS Hexcel and Ciba will at the Closing (as
defined below) enter into an agreement in the form attached
hereto as Exhibit A (the "Governance Agreement") with
respect to board representation, voting and other matters
relating to the relationship between Hexcel and Ciba
following the Closing;
WHEREAS the capitalized terms used herein shall
have the meanings specified in Appendix A hereto.
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein and for other
good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
Establishment of the Alliance
SECTION 1.01. Contribution of Transferred
Business. (a) Upon the terms and subject to the conditions
of this Agreement, at the Closing Ciba and CGC shall sell,
assign, transfer, convey and deliver to Hexcel, in the
manner set forth in Section 2.02, and Hexcel shall purchase
and accept from Ciba and CGC good, valid and marketable
title in and to the Contributed Shares, and all right, title
and interest of Ciba and/or any of its Subsidiaries in and
to the other business, properties, assets, goodwill and
rights of Ciba and/or any of its Subsidiaries of whatever
kind and nature, real or personal, tangible or intangible
(including any identifiable and severable portions of the
foregoing (financial assets being deemed severable for
purposes of this clause)), other than the Excluded Assets,
that are owned, held or used by Ciba and/or any of its
Subsidiaries on the Closing Date and that relate exclusively
or primarily to, arise exclusively or primarily out of or
are used exclusively or primarily in connection with, the
Transferred Business, but, in the case of such assets that
are severable, only to the extent that such assets relate
to, arise out of or are used in connection with the
Transferred Business (collectively, the "Acquired Assets"),
in each instance free and clear of any and all Liens and
free of any and all other limitations and restrictions
(other than the shares of Brochier, the transfer of which is
subject to regulation by the Direction du Tresor and the
approval of the Departement de Securite in France) other
than Permitted Liens. It is understood and agreed that the
following assets are deemed to relate exclusively or
primarily to, arise exclusively or primarily out of or be
used exclusively or primarily in connection with the
Transferred Business:
(i) the Scheduled Real Property;
(ii) the Acquired Inventory;
(iii) the Acquired Equipment;
(iv) the Accounts Receivable;
(v) the Acquired Intellectual Property;
(vi) the Acquired Permits;
(vii) the Acquired Contracts;
(viii) the Business Tax Returns;
(ix) the Contributed Shares (other than the
Danutec Shares);
(x) 100% of the equity interest in Danutec (the
"Danutec Equity"), if at or prior to the Closing or the
Danutec Closing, as the case may be, Ciba and/or its
Subsidiaries shall have acquired, pursuant to a Danutec
Agreement, the 49% of the Danutec Equity they do not
currently own; and
(xi) the Books and Records.
(b) Notwithstanding anything herein to the
contrary, from and after the Closing, Ciba and each of its
Subsidiaries shall retain all their respective right, title
and interest in and to, and there shall be excluded from the
sale, conveyance, assignment or transfer to Hexcel
hereunder, and the Acquired Assets shall not include, the
following (collectively, the "Excluded Assets"):
(i) all rights of Ciba or its Subsidiaries (other
than the Divested Subsidiaries) under this Agreement,
the Ancillary Agreements and any other agreements,
instruments and certificates delivered in connection
with this Agreement;
(ii) copies of all records prepared by Ciba and/or
any of its Subsidiaries and counsel and advisors
thereto in connection with the sale of the Acquired
Assets contemplated hereby;
(iii) all rights, claims, demands and judgments to
the extent relating to, arising out of or used in
connection with the Excluded Liabilities;
(iv) Ciba's Continuing Business;
(v) the Excluded Contracts;
(vi) any assets of any employee benefit plan of
Ciba and/or its Subsidiaries (other than the Divested
Subsidiaries) except such assets of employee benefit
plans as are being transferred pursuant to the
Employment Matters Agreement or any other Ancillary
Agreement;
(vii) the Income Tax Claims;
(viii) all Tax Returns of Ciba and/or any of its
Subsidiaries (other than the Business Tax Returns);
(ix) except as provided in Section 4.07, all
rights to the Ciba Tradenames or any variations,
abbreviations, acronyms or derivations thereof,
including any such rights owned by or licensed to any
Divested Subsidiary;
(x) if the Danutec Equity is not transferred to
Hexcel and/or its designated Subsidiary or
Subsidiaries at Closing, the Danutec Shares and the
business and assets of Danutec (until the Danutec
Closing, if any, upon consummation of which in
accordance with this Agreement, the Danutec Equity and
the business and assets of Danutec shall be deemed to
be Acquired Assets);
(xi) the Deferred Assets (until the applicable
Deferred Closing, upon consummation of which in
accordance with this Agreement and the Distribution
Agreement, the applicable Deferred Assets shall be
deemed to be Acquired Assets);
(xii) all assets and properties of Ciba UK (other
than assets and properties set forth on
Schedule 1.01(b) hereto); and
(xiii) the Excluded Stock.
SECTION 1.02. Transferred Business Consideration.
In consideration of the sale, assignment, transfer,
conveyance and delivery to Hexcel of the Acquired Assets,
and in consideration of establishing an alliance with Ciba,
(x) on the Closing Date Hexcel shall assume the Assumed
Liabilities, (y) in accordance with Sections 1.04(a) and
2.02(b) on the Closing Date Hexcel shall pay and deliver or
cause to be paid and delivered to Ciba and CGC $25 million
(the "Cash Price") and the Hexcel Shares and (z) Hexcel
shall deliver Subordinated Debt and, if applicable, interest
thereon, in each case, as provided in Section 2.04(g) (the
amounts in (y) and (z), together with Hexcel's assumption
of the Assumed Liabilities, being the "Transferred Business
Consideration").
SECTION 1.03. Assumption of Certain
Liabilities. (a) Upon the terms and subject to the
conditions of this Agreement, at the Closing, Hexcel shall
assume and shall pay, perform and discharge or cause to be
paid, performed and discharged when due, all liabilities or
obligations whatsoever, whether arising before or after the
Closing and whether known or unknown, fixed or contingent
(including any identifiable and severable portions of the
foregoing (financial liabilities and obligations being
deemed severable for purposes of this clause)), other than
Excluded Liabilities, relating exclusively or primarily to
or arising exclusively or primarily out of the Transferred
Business or the Acquired Assets, but, in the case of
obligations or liabilities that are severable, only to the
extent such liabilities or obligations relate to or arise
out of the Transferred Business or the Acquired Assets (the
"Assumed Liabilities"). It is understood and agreed that
the following liabilities and obligations shall be deemed to
relate exclusively or primarily to or arise exclusively or
primarily out of the Transferred Business or the Acquired
Assets:
(i) all obligations and liabilities of Ciba or its
Subsidiaries under the Acquired Contracts;
(ii) the Accounts Payable;
(iii) all obligations and liabilities with respect
to any and all products sold or serviced (whether or
not under warranty) by the Transferred Business at any
time, including obligations and liabilities for and
with respect to any refunds, adjustments, allowances,
repairs, exchanges, returns and warranty,
merchantability, products liability (including with
respect to personal injury caused by the use or
operation of products sold or serviced by the
Transferred Business) and other claims;
(iv) except as specifically provided otherwise in
the UK Agreements, any other Ancillary Agreement or a
Danutec Agreement, all obligations and liabilities
arising as a result of Ciba or any of its past or
present Subsidiaries, or any predecessor in interest
thereof, being the owner or occupant of, or the
operator of the activities conducted at, the Scheduled
Real Property sites at any time, including all
obligations and liabilities arising out of any
Environmental Law (including those arising under CERCLA
or from off-site waste disposal from the Scheduled Real
Property sites) and all other obligations or
liabilities relating to personal injury or property
damage involving the Scheduled Real Property sites;
(v) except as otherwise provided in the Employment
Matters Agreement or any other Ancillary Agreement, all
obligations and liabilities relating to employees of
the Transferred Business;
(vi) the Other Tax Liabilities and, to the extent
of the amount provided or reserved for or accrued in
the balance sheet of the Transferred Business as of the
Closing Date, the Income Tax Liabilities of the
Divested Subsidiaries (other than Danutec, if the
Danutec Equity is not delivered to Hexcel at Closing)
(collectively, the "Assumed Tax Liabilities"); and
(vii) except as provided in any Ancillary
Agreement or in Section 1.03(c), all other obligations
of the Divested Subsidiaries (other than Danutec, if
the Danutec Equity is not delivered to Hexcel at
Closing) of any kind, whether arising before or after
the Closing and whether known or unknown, fixed or
contingent.
(b) Notwithstanding anything herein to the
contrary, Hexcel shall have no liability or obligation
hereunder relating to or arising out of the following
liabilities and obligations of Ciba and its Subsidiaries,
including, if applicable, any such liabilities and
obligations of the Divested Subsidiaries (the "Excluded
Liabilities"), all of which are excluded from the Assumed
Liabilities, shall not be assumed by Hexcel hereunder and
shall remain the liabilities and obligations of Ciba and its
Subsidiaries (other than the Divested Subsidiaries):
(i) any obligation or liability relating to or
arising out of any of the Excluded Assets to the extent
such obligation or liability relates to the Excluded
Assets, or the realization of benefits of any of the
Excluded Assets;
(ii) the Income Tax Liabilities other than those
described in Section 1.03(a)(vi) (the "Excluded Tax
Liabilities");
(iii) any obligation or liability involving a
claim for products liability relating to or arising out
of products of the Transferred Business sold prior to
the Closing to Ciba or its Subsidiaries, other than
products resold by Ciba or its Subsidiaries to third
parties (including as a component of another product);
(iv) any obligation or liability involving a claim
for damages caused by asbestos included in or used in
the manufacture of products of the Transferred Business
that relates to or arises out of products sold or
manufactured prior to the Closing;
(v) any obligation or liability relating to or
arising out of an event occurring prior to the Closing
Date for which Ciba or any of its Subsidiaries has
coverage under the following (i) AAV--Policy
#0015P-5883, (ii) Lloyd's of London Policy
#576-A7A1018, (iii) Winterthur Policy #3095089,
(iv) USAIG Policy #51HL2-1224 and (v) CIGNA--Policy
#ATP014520;
(vi) all liabilities and obligations for which
Ciba or CGC has expressly assumed or retained
responsibility pursuant to this Agreement or any
Ancillary Agreement;
(vii) all liabilities and obligations relating to
the Satellite Personnel (other than as provided in the
Distribution Agreement); and
(viii) any obligations or liabilities relating to
or arising out of any employee benefit plan of Ciba
and/or its Subsidiaries (other than the Divested
Subsidiaries) except such obligations or liabilities as
are being transferred pursuant to the Employment
Matters Agreement or any Ancillary Agreement.
(c) Notwithstanding anything herein (including
Section 1.03(a)(vii)) or in any agreement relating to the
"hive-down" of assets and liabilities (including agreements
relating to the Duxford property transfer) by Ciba-Geigy PLC
("Ciba UK") to Composite Materials Limited ("CML") (the
"Hive Down Agreements"), (i) the principles set forth in
Section 1.03(a) and (b) as to the allocation of particular
liabilities among Assumed Liabilities and Excluded
Liabilities shall govern the allocation of liabilities
between Ciba UK on the one hand and CML on the other hand
and (ii) any and all covenants contained herein that provide
for the taking of actions by the parties which are intended
to give effect to the allocation of liabilities among
Assumed Liabilities and Excluded Liabilities shall apply to
the allocation of liabilities between Ciba UK on the one
hand and CML on the other hand.
SECTION 1.04. Allocation of Transferred Business
Consideration. (a) Schedule 1.04 sets forth the agreed
upon allocation of the consideration (the "Allocation
Statement").
(b) The Allocation Statement shall be revised in
accordance with applicable law from time to time jointly by
the parties hereto to reflect any adjustment of the
consideration (i) pursuant to Section 2.04, (ii) as a result
of any Deferred Closing or the Danutec Closing or (iii) for
Tax purposes.
(c) Hexcel and CGC shall treat the acquisition of
Acquired Assets, including when applicable the Deferred
Assets and the Danutec Equity, as an "applicable asset
acquisition" under Section 1060 of the Code. CGC shall
prepare Form 8594 under Section 1060 of the Code relating to
the transactions contemplated by this Agreement based on the
Allocation Statement. Hexcel and CGC shall file, or cause
the filing of, such Form with each relevant Taxing
Authority.
(d) Hexcel and Ciba and their respective
Subsidiaries shall file and cause to be filed all Tax
Returns, and execute such other documents as may be required
by any Taxing Authority, in a manner consistent with the
Allocation Statement as revised from time to time and shall
refrain from taking any position inconsistent with the
Allocation Statement as revised from time to time with any
Taxing Authority.
ARTICLE II
The Closings
SECTION 2.01. Closing. The closing of the sale
and transfer of the Acquired Assets and the other
transactions contemplated hereby (other than the
transactions contemplated to occur at any Deferred Closing
or the Danutec Closing) (herein referred to as the
"Closing") shall take place at the offices of Cravath,
Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 a.m. on the second business
day following the satisfaction or waiver of the conditions
set forth in Article V, or at such other time, date and
place as shall be fixed by agreement among the parties
hereto.
SECTION 2.02. Transactions To Be Effected at the
Closing. At the Closing:
(a) Ciba and/or its Subsidiaries shall deliver to
Hexcel or its designated Subsidiary or Subsidiaries, in
a manner to be agreed upon by the parties in good faith
prior to Closing, (i) such appropriately executed and
acknowledged (if necessary) deeds as to real property
substantially in the form attached hereto as Exhibit E
("Real Property Deeds"), bills of sale, assignments and
other instruments of transfer relating to the Acquired
Assets in form and substance (x) as to real property,
suitable for filing or recordation and (y) in each
case, otherwise reasonably satisfactory to Hexcel and
its counsel, (ii) a duly executed copy of each
Ancillary Agreement and (iii) such other documents as
Hexcel or its counsel may reasonably request to
demonstrate satisfaction or waiver of the conditions
and compliance with the agreements set forth in this
Agreement or as a condition to the issuance of owner's
title insurance policies (with exceptions for the
Permitted Liens) to be obtained by Hexcel with respect
to the fee-owned Scheduled Real Property; and
(b) Hexcel shall deliver to Ciba or its
designated Subsidiary or Subsidiaries, in a manner to
be agreed upon by the parties in good faith prior to
Closing, (i) the Transferred Business Consideration
(other than the Subordinated Debt, which shall be
delivered in accordance with Section 2.04(g) and
allocated in accordance with Section 1.04), including
the Cash Price, which shall be delivered by wire
transfer in immediately available funds to an account
or accounts designated in writing by Ciba at least two
business days prior to the Closing Date, which
Transferred Business Consideration shall be allocated
in accordance with Section 1.04, (ii) a duly executed
copy of each Ancillary Agreement and (iii) such other
documents as Ciba or its counsel may reasonably request
to demonstrate satisfaction or waiver of the conditions
and compliance with the agreements set forth in this
Agreement.
(c) No later than 60 business days prior to
Closing, Hexcel shall designate which Trademarks or Patents
that are Acquired Intellectual Property with respect to
which Hexcel wishes requisite filings to be made to record
transfer with Governmental Entities in the United States at
or prior to Closing, and within 60 days after Closing Hexcel
shall designate any Trademarks or Patents that are Acquired
Intellectual Property with respect to which Hexcel wishes
requisite filings to be made to record transfer with
Governmental Entities, and Ciba shall prepare all necessary
documents in connection therewith and shall promptly make
all such filings; provided, however, that in each case
Hexcel shall pay all transfer taxes and filing fees in
connection therewith.
SECTION 2.03. The Deferred Closings. (a) The
closings of the sale and transfer of the Deferred Assets
(the "Deferred Closings") shall take place at the offices of
Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., in each case, on
the earlier of (x) the fifth business day following the
delivery by Hexcel of notice of its intention to purchase
any of the Deferred Assets as provided in the Distribution
Agreement, or (y) the date of termination of the
Distribution Agreement as to any of the Deferred Assets, or
at such other time, date and place as shall be fixed by
agreement among the parties hereto.
(b) At each Deferred Closing, Ciba and/or its
Subsidiaries shall deliver to Hexcel, in a manner to be
agreed upon by the parties in good faith prior to each such
Deferred Closing, (i) such appropriately executed and
acknowledged (if necessary) real property deeds (with
respect to South African real property) in form and
substance reasonably satisfactory to the parties hereto,
bills of sale, assignments and other instruments of transfer
relating to the applicable Deferred Assets in form and
substance (x) as to real property, suitable for filing or
recordation and (y) in each case, otherwise reasonably
satisfactory to Hexcel and its counsel and (ii) such other
documents as Hexcel or its counsel may reasonably request to
demonstrate satisfaction or waiver of the conditions and
compliance with the agreements set forth in this Agreement
and the Distribution Agreement or as a condition to the
issuance of owner's title insurance policies (with
exceptions for Permitted Liens) obtained by Hexcel with
respect to the South African real property.
(c) At each Deferred Closing, Hexcel shall
deliver to Ciba or its designated Subsidiary or
Subsidiaries, (i) an undertaking to pay the applicable
Deferred Consideration in additional Subordinated Debt on
the earlier of (x) the first anniversary of the Closing Date
or (y) the date of the final sale and transfer of Deferred
Assets under the Distribution Agreement (the "Deferred
Consideration Payment Date"), which Deferred Consideration
shall be allocated in accordance with Section 1.04 and
(ii) such other documents as Ciba or its counsel may
reasonably request to demonstrate satisfaction or waiver of
the conditions and compliance with the agreements set forth
in this Agreement and the Distribution Agreement.
(d) At each Deferred Closing, Hexcel shall assume
any and all obligations and liabilities (including any
identifiable and severable portions of the foregoing
(financial liabilities and obligations being deemed
severable for purposes of this clause) relating exclusively
or primarily to or arising exclusively or primarily out of
the applicable Deferred Assets, but, in the case of such
obligations or liabilities that are severable, only to the
extent such obligations or liabilities relate to such
Deferred Assets, and all such obligations and liabilities
shall immediately thereafter be deemed to constitute Assumed
Liabilities for the purposes of this Agreement.
(e) On the Deferred Consideration Payment Date,
Hexcel shall deliver to Ciba or its designated Subsidiary or
Subsidiaries Subordinated Debt in aggregate principal amount
equal to the aggregate amount of Deferred Consideration
payable in respect of all Deferred Closings (including any
Deferred Closing occurring on or before the Deferred
Consideration Payment Date) as evidenced by the undertakings
referred to in Section 2.03(c), which Subordinated Debt
shall bear interest from the Deferred Consideration Payment
Date.
SECTION 2.04. Principal Amount of Subordinated
Debt. (a) (i) Within 75 days after the Closing Date, Ciba
shall prepare and deliver to Hexcel a statement (the "Ciba
Statement"), certified by a duly authorized signatory of
Ciba, setting forth (A) the components of Working Capital
(as defined below) immediately prior to the Closing
("Closing Working Capital") of the Transferred Business, in
no less detail than, and determined in accordance with U.S.
GAAP applied on a basis consistent with, the balance sheet
of the Transferred Business as of June 30, 1995 included in
Schedule 3.01(c) (the "Balance Sheet"), (B) if the Danutec
Equity is delivered to Hexcel at Closing, the total
consideration paid by Ciba and its Subsidiaries for equity
securities of Danutec purchased after the date hereof and on
or prior to the Closing Date pursuant to a Danutec Agreement
(the "Danutec Price"), (C) the amounts as of the Closing
corresponding to individual items set forth on
Schedule 2.04(a1), increases after June 30, 1995 in reserves
relating to Assumed Tax Liabilities (other than deferred Tax
liabilities) for taxable periods ending on or prior to
December 31, 1994) and any other reserves for non-operating
liabilities that would represent future cash expenses of the
Transferred Business, all as would be properly reflected on
the balance sheet of the Transferred Business as of the
Closing Date prepared in accordance with U.S. GAAP on a
basis consistent with the Balance Sheet (the "Ciba Closing
Items"), (D) the amount of Taxes with respect to the
Transferred Business paid by Ciba or its Subsidiaries prior
to the Closing that, absent the Closing, would have been
payable after the Closing ("Prepaid Taxes"), (E) the book
value on the Closing Date of the Deferred Assets that are
Current Assets and the book value of Current Liabilities
relating thereto and (F) a certificate of Ciba that the Ciba
Statement has been prepared in compliance with the
requirements of this Section 2.04. Schedule 2.04(a2) sets
forth the proper calculation of Working Capital of the
Transferred Business as of the date of the Balance Sheet
determined in accordance with this Section 2.04.
(ii) Hexcel shall cooperate with Ciba in
connection with the preparation of the Ciba Statement and
shall, to the extent reasonably requested by Ciba, provide
Ciba and its advisors access during normal business hours to
the personnel, properties, books and records of Hexcel and
its Subsidiaries relating to the Transferred Business for
such purpose; provided, however, that Ciba shall have the
primary responsibility and authority for preparing the Ciba
Statement.
(iii) During the thirty-day period following
Hexcel's receipt of the Ciba Statement, Hexcel and its
advisors shall be permitted to review the working papers
relating to the Ciba Statement. Ciba shall and shall cause
its advisors to cooperate with Hexcel and Hexcel's advisors
in connection with such review. The Ciba Statement shall
become final and binding upon the parties on the thirtieth
day following delivery thereof, unless Hexcel gives written
notice of its disagreement with the Ciba Statement ("Hexcel
Notice of Disagreement") to Ciba prior to such date. Any
Hexcel Notice of Disagreement shall (A) specify in
reasonable detail the nature of any disagreement so asserted
and (B) be accompanied by a certificate of Hexcel that it
has complied with the covenants set forth in this
Section 2.04. If a Hexcel Notice of Disagreement is
received by Ciba in a timely manner, then the Ciba Statement
(as revised in accordance with clause (I) or (II) below)
shall become final and binding upon Ciba and Hexcel on the
earlier of (I) the date Ciba and Hexcel resolve in writing
any differences they have with respect to the matters
specified in the Hexcel Notice of Disagreement or (II) the
date any disputed matters are finally resolved in writing by
the Accounting Firm (as defined below).
(b) (i) Within 75 days after the Closing Date,
Hexcel shall prepare and deliver to Ciba a statement (the
"Hexcel Statement"), certified by an officer of Hexcel,
setting forth (A) the components of Closing Working Capital
of Hexcel in no less detail than, and determined in
accordance with U.S. GAAP applied on a basis consistent
with, the balance sheet of Hexcel as of July 2, 1995
included in Hexcel's quarterly report on Form 10-Q for the
quarter ended July 2, 1995 (the "Hexcel Balance Sheet"),
(B) the amounts as of the Closing Date corresponding to
individual items set forth in Schedule 2.04(b1), increases
after June 30, 1995 in reserves for Taxes (other than
deferred Tax liabilities) relating to taxable periods ending
on or prior to December 31, 1994 and any other reserves for
non-operating liabilities that would represent future cash
expenses of Hexcel, all as would be properly reflected on
the balance sheet of Hexcel as of the Closing Date prepared
in accordance with U.S. GAAP on a basis consistent with the
Hexcel Balance Sheet (the "Hexcel Closing Items"), (C) the
amount of Transfer Taxes paid by Hexcel pursuant to
Section 4.06 (directly or by reimbursement to Ciba) on or
prior to the Closing Date and (D) a certificate of Hexcel
that the Hexcel Statement has been prepared in compliance
with the requirements of this Section 2.04.
Schedule 2.04(b2) sets forth the proper calculation of
Working Capital of Hexcel as of the date of the Hexcel
Balance Sheet determined in accordance with this
Section 2.04.
(ii) During the thirty-day period following
Ciba's receipt of the Hexcel Statement, Ciba and its
advisors shall be permitted to review the working papers
relating to the Hexcel Statement. Hexcel shall and shall
cause its advisors to cooperate with Ciba and Ciba's
advisors in connection with such review. The Hexcel
Statement shall become final and binding upon the parties on
the thirtieth day following delivery thereof, unless Ciba
gives written notice of its disagreement with the Hexcel
Statement ("Ciba Notice of Disagreement") to Hexcel prior to
such date. Any Ciba Notice of Disagreement shall
(A) specify in reasonable detail the nature of any
disagreement so asserted and (B) be accompanied by a
certificate of Ciba that it has complied with the covenants
set forth in this Section 2.04. If a Ciba Notice of
Disagreement is received by Hexcel in a timely manner, then
the Hexcel Statement (as revised in accordance with
clause (I) or (II) below) shall become final and binding
upon Hexcel and Ciba on the earlier of (I) the date Ciba and
Hexcel resolve in writing any differences they have with
respect to the matters specified in the Ciba Notice of
Disagreement or (II) the date any disputed matters are
finally resolved in writing by the Accounting Firm (as
defined below).
(c) During the thirty-day period following the
delivery of a Hexcel or Ciba Notice of Disagreement, Hexcel
and Ciba shall seek in good faith to resolve in writing any
differences which they may have with respect to the matters
specified in such Notice of Disagreement. During such
period each of Hexcel or Ciba, as the case may be, and its
advisors shall have access to the working papers of the
other party and its advisors prepared in connection with
such Notice of Disagreement. At the end of such thirty-day
period, Hexcel and Ciba shall each submit, in the form of a
written brief, any and all matters that remain in dispute
and that were properly included in such Notice of
Disagreement to such nationally recognized independent
public accounting firm (the "Accounting Firm") as shall be
agreed upon by the parties hereto in writing for final and
binding review and resolution. Hexcel and Ciba shall
jointly request that the arbitration be conducted in
accordance with procedures established by the Accounting
Firm. Hexcel and Ciba agree that judgment may be entered
upon the determination of the Accounting Firm in any court
having jurisdiction over the party against which such
determination is to be enforced. The cost of such review
and resolution (including the fees and expenses of the
Accounting Firm and reasonable attorneys' and accountants'
fees and expenses of the parties) pursuant to this
Section 2.04 shall be borne by Hexcel and Ciba in inverse
proportion as they may prevail on the merits of the matters
resolved by the Accounting Firm, which proportionate
allocations shall also be determined by the Accounting Firm
at the time the determination of the Accounting Firm is
rendered thereon. Except as set forth in the immediately
preceding sentence, the parties shall bear their own costs
and expenses (including attorneys' and accountants' fees and
expenses) in connection with the matters contemplated by
this Section 2.04.
(d) The principal amount of the Subordinated Debt
shall be $48,029,000 adjusted as follows:
(i) if the Danutec Equity is delivered to Hexcel
at Closing, the principal amount shall be increased by
an amount equal to (x) the Danutec Price if the Danutec
Price is $7 million or less, (y) $7 million plus 50% of
the amount by which the Danutec Price exceeds
$7 million if the Danutec Price does not exceed
$11 million or (z) $9 million if the Danutec Price
exceeds $11 million (the amount of such increase being
hereinafter referred to as the "Danutec Amount");
(ii) the principal amount shall be decreased or
increased, as the case may be, by an amount equal to
the amount by which the Closing Working Capital of
Hexcel exceeds or is less than, as the case may be, the
Working Capital of Hexcel reflected on the Hexcel
Balance Sheet;
(iii) the principal amount shall be increased or
decreased, as the case may be, by an amount equal to
the amount by which the Closing Working Capital of the
Transferred Business exceeds or is less than, as the
case may be, the Working Capital of the Transferred
Business reflected on the Balance Sheet;
(iv) the principal amount shall be decreased by
the net book value of the Deferred Assets that are set
forth in the Ciba Statement plus $457,500;
(v) to the extent any amount of Prepaid Taxes is
not included as a Current Asset (as defined below) in
the calculation of Closing Working Capital of the
Transferred Business, the principal amount shall be
increased by an amount equal to the amount of such
Prepaid Taxes;
(vi) to the extent any amount of Transfer Taxes
paid by Hexcel pursuant to Section 4.06 (directly or by
reimbursement to Ciba) on or prior to the Closing Date
is not included as a Current Asset in the calculation
of Closing Working Capital of Hexcel, the principal
amount shall be decreased by an amount equal to such
Transfer Taxes; and
(vii) the principal amount shall be increased by
the amount, if any, by which the result of subtracting
the total amount of Ciba Closing Items from the total
amount of Hexcel Closing Items exceeds $83,029,000 or
shall be decreased by the amount, if any, by which
$83,029,000 exceeds such result.
(e) The term "Working Capital" shall mean Current
Assets minus Current Liabilities. The terms "Current
Assets" and "Current Liabilities" shall mean the current
assets and current liabilities (other than any such assets
or liabilities that are included in the adjustment required
by 2.04(d)(vii)), respectively, of Hexcel or the Transferred
Business, as the case may be, calculated in accordance with
U.S. GAAP on a basis consistent with (x) in the case of the
Transferred Business, the Balance Sheet and (y) in the case
of Hexcel, the Hexcel Balance Sheet; provided, (i) Current
Assets and Current Liabilities of the Transferred Business
shall not include any amounts in respect of Excluded Tax
Assets or Excluded Tax Liabilities and (ii) for purposes of
calculating Working Capital of the Transferred Business as
of the date of the Balance Sheet, cash, cash equivalents and
marketable securities shall be deemed to be zero; provided
further that, if the Danutec Equity is not delivered to
Hexcel at the Closing, no amounts relating to Danutec shall
be included in any component of Closing Working Capital of
the Transferred Business or Working Capital of the
Transferred Business on the date of the Balance Sheet. The
parties agree that the adjustment regarding Working Capital
contemplated by this Section 2.04 is intended to show the
change in Working Capital from the dates of the Balance
Sheet and Hexcel Balance Sheet to the Closing Date, and that
such change can only be measured if each calculation is done
in the same way, using the same methods, at both dates.
Accordingly, in the event that the resolution of any dispute
relating to the calculation of any component of Working
Capital as of any particular date results in a change in the
way that, or the method by which, such component of Working
Capital was calculated, a corresponding change shall be made
in the way that, or the method by which, such component of
Working Capital is calculated as of any other date.
(f) Except as required by applicable law or U.S.
GAAP, Hexcel agrees that following the Closing and until the
final resolution of the principal amount of the Subordinated
Debt pursuant hereto it shall not take any actions with
respect to the accounting books and records of the
Transferred Business that are not consistent with the past
practices the Transferred Business that would have any
effect on the determination or verification of the
determination of the principal amount of the Subordinated
Debt. Without limiting the generality of the foregoing,
except as required by applicable law or U.S. GAAP, no
changes shall be made in any reserve or other account
existing as of the date of the Balance Sheet except as a
result of events occurring after the date of the Balance
Sheet and, in such event, only in a manner consistent with
past practices. In the event that Hexcel is required under
applicable law or U.S. GAAP to take such an action or make
such a change that affects either the Balance Sheet or the
Ciba Closing Statement, as the case may be, a corresponding
adjustment shall be made in the other.
(g) Hexcel shall, within 2 business days after
the Hexcel Statement and the Ciba Statement become final and
binding on the parties, issue and deliver to Ciba and/or its
Subsidiaries an aggregate principal amount of Subordinated
Debt calculated in accordance with Section 2.04(d) and
bearing interest accruing from the Closing Date (which
interest shall be paid in cash to the extent that any
interest payment date with respect to such Subordinated Debt
has passed).
SECTION 2.05. Danutec. (a) If Ciba does not
deliver the Danutec Equity to Hexcel and/or its designated
Subsidiary or Subsidiaries at Closing, Ciba shall either
(x) prior to the first anniversary of the Closing Date,
deliver the Danutec Equity to Hexcel at the Danutec Closing
(as defined below) or (y) on the first anniversary of the
Closing Date, pay $11 million to Hexcel in immediately
available funds by wire transfer to an account or accounts
designated by Hexcel at least two business days prior to the
first anniversary of the Closing, together with interest
thereon from the Closing Date through the first anniversary
of the Closing Date at the applicable interest rate in
effect from time to time under the Indenture.
(b) If Ciba does not deliver the Danutec Equity
to Hexcel at Closing but consummates a transaction pursuant
to a Danutec Agreement, the closing of the sale and transfer
of the Danutec Equity to Hexcel (the "Danutec Closing")
shall take place at the offices of a notary public mutually
acceptable to the parties in Vienna, Austria on the fifth
business day following (i) the consummation of such Danutec
Agreement if no pre-merger notification is filed under the
Austrian Cartel Act, (ii) receipt of a confirmation from the
Austrian Cartel Court resulting in a clearance of the
transaction if a pre-merger notification is filed under the
Austrian Cartel Act or (iii) at such other time, date and
place as shall be fixed by agreement among the parties.
(c) At the Danutec Closing, Ciba and Hexcel shall
execute and deliver (i) the notarial deed required under
Austrian law for the transfer of the Danutec Equity to
Hexcel and (ii) such other documents as Hexcel and its
counsel may reasonably request to demonstrate satisfaction
or waiver of the conditions and compliance with the
agreements set forth herein, in each case, in form and
substance reasonably satisfactory to Hexcel and its counsel.
(d) At the Danutec Closing, Hexcel shall deliver
to Ciba or its designated Subsidiary or Subsidiaries
(i) Subordinated Debt in an aggregate principal amount equal
to the Danutec Amount and bearing interest from the date of
the Danutec Closing, which amount shall be allocated in
accordance with Section 1.04, and (ii) such documents, in
form and substance reasonably satisfactory to Ciba and its
counsel, as Ciba and its counsel shall reasonably request to
demonstrate satisfaction or waiver of the conditions and
compliance with the agreements set forth herein.
(e) At the Danutec Closing, Hexcel shall assume
any and all obligations and liabilities (other than Excluded
Liabilities) relating to Danutec which are of the sort that
would have been Assumed Liabilities had the Danutec Equity
been delivered to Hexcel at Closing, whether or not such
liabilities or obligations existed at Closing.
(f) If, following the Danutec Closing, any
environmental remediation is determined to be reasonably
necessary (after good faith consultation with Ciba) (i) with
respect to any Danutec property as a result of events
occurring prior to the Danutec Closing or (ii) with respect
to any property as a result of the operations of Danutec
prior to the Danutec Closing, Ciba's sole obligation with
respect to such remediation shall be to pay Hexcel an amount
equal to 50% of the first $2.5 million of costs incurred by
Danutec in connection with all such remediation,
notwithstanding that such costs are Assumed Liabilities
hereunder.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of
Ciba. Ciba and CGC (with respect to themselves and, where
applicable, the Subsidiaries of Ciba) hereby represent and
warrant to Hexcel as follows:
(a) Organization, Standing and Power; Structure.
(i) Non-U.S. Each of Ciba, the Divested Subsidiaries and
any other non-U.S. Subsidiary of Ciba that owns Acquired
Assets or Deferred Assets or that conducts the Transferred
Business is a legal entity duly organized, validly existing
and, where applicable, in good standing under the laws of
the jurisdiction in which it is organized, has the requisite
power and authority and all material governmental licenses,
authorizations, consents and approvals required to own the
Acquired Assets and/or the Deferred Assets owned by it and
to carry on the operations of the Transferred Business as
now being conducted by it and is duly qualified to do
business as a foreign corporation and, where applicable, is
in good standing in each jurisdiction in which the character
of the property owned or leased by it or the nature of its
activities make such qualification necessary, except for
those jurisdictions in which the failure to be so qualified
would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Ciba has
heretofore made available to Hexcel true and complete copies
of the respective certificate of incorporation and by-laws
(or similar organizational documents) of Ciba and each
Divested Subsidiary, in each case as amended through the
date of this Agreement. Such organizational documents are
in full force and effect, and no other organizational
documents are applicable to or binding on such entities.
None of such entities is in violation of any provision of
its certificate of incorporation or by-laws (or similar
organizational documents).
(ii) U.S. CGC is a corporation duly organized,
validly existing and in good standing under the laws of the
State of New York, has the requisite corporate power and
authority and all material governmental licenses,
authorizations, consents and approvals required to own the
Acquired Assets owned by it and to carry on the operations
of the Transferred Business as now being conducted by it and
is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the
nature of the activities make such qualification necessary,
except for those jurisdictions in which failure to be so
qualified would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
CGC has heretofore made available to Hexcel true and
complete copies of its certificate of incorporation and
by-laws, as amended through the date of this Agreement.
Such organizational documents are in full force and effect,
and no other organizational documents are applicable to or
binding on CGC. CGC is not in violation of any provision of
its certificate of incorporation or by-laws.
(iii) Schedule 3.01(a) sets forth (x) for Ciba,
CGC, each Divested Subsidiary and each other Subsidiary of
Ciba that owns Acquired Assets or Deferred Assets or that
conducts the Transferred Business, the countries in which
such entity manufactures products or retains employees,
sales representatives or distributors that are part of the
Transferred Business, and, for each such country, a brief
description of the nature of those activities and the
approximate number on the date hereof of such entity's
employees that are employees of the Transferred Business and
(y) for each Excluded Jurisdiction, a brief description of
the nature of the activities related to the Deferred Assets
located in such jurisdiction and the approximate number on
the date hereof of employees engaged exclusively or
primarily in such activities ("Satellite Personnel").
(b) Authority. (i) Non-U.S. Ciba and, to the
extent applicable, each of its Subsidiaries has all
requisite power and authority to execute each of this
Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized
by all requisite action on the part of Ciba and, to the
extent applicable, each of its Subsidiaries, and the
execution and delivery of the Ancillary Agreements and the
consummation of the transactions contemplated thereby will
be authorized by all necessary corporate action on the part
of Ciba and, to the extent applicable, each of its
Subsidiaries prior to the Closing, and do not and will not
require the approval of the stockholders of Ciba or any of
its Subsidiaries, other than such approvals as have
heretofore been obtained. This Agreement has been duly
executed and delivered by Ciba and constitutes, and each
Ancillary Agreement when duly executed and delivered by Ciba
and, to the extent applicable, any of its Subsidiaries will
constitute, legal, valid and binding obligations of Ciba
and, to the extent applicable, any such Subsidiary
enforceable against each of them in accordance with their
respective terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws affecting creditors' rights generally
from time to time in effect, and subject, as to
enforceability, to general principles of equity regardless
of whether such enforceability is considered in a proceeding
in equity or at law). Except as set forth on
Schedule 3.01(b), none of Ciba or any of its Subsidiaries is
a party to, bound by or subject to any agreement or
restriction that would materially restrict or impede Hexcel
from exercising its full rights under, and enjoying the full
benefits contemplated by, this Agreement and the Ancillary
Agreements. The execution and delivery by Ciba of this
Agreement do not, and the execution and delivery by Ciba
and, to the extent applicable, any of its Subsidiaries of
the other Ancillary Agreements will not, and the
consummation by Ciba and its Subsidiaries of the
transactions contemplated hereby and thereby and the
compliance by Ciba and its Subsidiaries with the terms
hereof and thereof will not, (i) violate any law, judgment,
order, decree, statute, ordinance, rule or regulation
applicable to Ciba or any of its Subsidiaries, (ii) conflict
with any provision of Ciba's or any of its Subsidiaries'
certificate of incorporation or by-laws (or similar
organizational documents), (iii) except as set forth on
Schedule 3.01(b), conflict with or result in the breach or
termination of any provision of or constitute a default
(with or without the giving of notice or the lapse of time
or both) under, or require any consent under or give rise to
any right of termination, cancellation or acceleration or
the loss of any benefit under any Contract to which any of
them is a party or by which any of them or any of their
respective assets or properties is bound, (iv) except as set
forth on Schedule 3.01(b), require any consent, approval,
order, authorization or other action of, or the
registration, declaration or filing with, any Governmental
Entity or any other Person or (v) except as set forth on
Schedule 3.01(b), result in the creation or imposition of
any Lien on any of their respective properties or assets
other than, in the case of clauses (i), (iii), (iv) and (v),
any such conflicts, violations or Liens, the existence of
which or consents the lack of which could not reasonably be
expected to (x) have a Material Adverse Effect, (y) prevent
the consummation of any of the transactions contemplated by
this Agreement and the Ancillary Agreements or (z)
materially impair Ciba's or, to the extent applicable, any
of its Subsidiaries' ability to perform its obligations
under this Agreement or any Ancillary Agreement, except
(A) for the filing of a premerger notification and report
form by Ciba under the HSR Act and any filings required
pursuant to applicable antitrust and competition law
statutes and regulations in each of the Applicable
Jurisdictions, (B) for compliance with and filings under
Section 13(d) of the Exchange Act, (C) for the filing of a
notice pursuant to the Exon-Xxxxxx Amendment, (D) the
consent of the Departement de Securite pursuant to the
Demande d'Autorisation with the Direction du Tresor in
France, and (E) as otherwise set forth on Schedule 3.01(b).
(ii) U.S. CGC has all corporate power and
authority to execute each of this Agreement and the
Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. The execution and delivery
of this Agreement and the Employment Matters Agreement and
the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate
action on the part of CGC, and the execution and delivery of
the other Ancillary Agreements and the consummation of the
transactions contemplated thereby will be authorized by all
necessary corporate action on the part of CGC prior to the
Closing, and do not and will not require the approval of the
stockholder of CGC, other than such approvals as have
heretofore been obtained. This Agreement and the Employment
Matters Agreement have been duly executed and delivered by
CGC and constitute, and each other Ancillary Agreement when
duly executed and delivered by CGC will constitute, legal,
valid and binding obligations of CGC enforceable against it
in accordance with their respective terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting
creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity regardless of whether such enforceability is
considered in a proceeding in equity or at law). Except as
set forth on Schedule 3.01(b), CGC is not a party to, bound
by or subject to any agreement or restriction that would
materially restrict or impede Hexcel from exercising its
full rights under, and enjoying the full benefits
contemplated by, this Agreement and the Ancillary
Agreements. The execution and delivery by CGC of this
Agreement and the Employment Matters Agreement do not, and
the execution and delivery by CGC of the other Ancillary
Agreements to which it will be a party will not, and the
consummation by CGC of the transactions contemplated hereby
and thereby and the compliance by CGC with the terms hereof
and thereof will not, (i) violate any law, judgment, order,
decree, statute, ordinance, rule or regulation applicable to
CGC, (ii) conflict with any provision of CGC's certificate
of incorporation or by-laws, (iii) except as set forth on
Schedule 3.01(b), conflict with or result in the breach or
termination of any provision of or constitute a default
(with or without the giving of notice or the lapse of time
or both) under, or require any consent under or give rise to
any right of termination, cancellation or acceleration or
the loss of any benefit under any Contract to which it is a
party or by which it or any of its assets or properties is
bound, (iv) except as set forth on Schedule 3.01(b), require
any consent, approval, order, authorization or other action
of, or the registration, declaration or filing with, any
Governmental Entity or any other Person or (v) except as set
forth on Schedule 3.01(b), result in the creation of any
Lien on any of the properties or assets of CGC, other than,
in the case of clauses (i), (iii), (iv) and (v), any such
conflicts, violations or Liens, the existence of which or
consents the lack of which could not reasonably be expected
to (x) have a Material Adverse Effect, (y) prevent the
consummation of any of the transactions contemplated by this
Agreement and the Ancillary Agreements or (z) materially
impair CGC's ability to perform its obligations under this
Agreement or any Ancillary Agreement, except (A) for the
filing of a premerger notification and report form by Ciba
under the HSR Act and any filings required pursuant to
applicable antitrust and competition law statutes and
regulations in each of the Applicable Jurisdictions, (B) for
compliance with and filings under Section 13(d) of the
Exchange Act, (C) for the filing of a notice pursuant to the
Exon-Xxxxxx Amendment, (D) for the consent of the
Departement de Securite pursuant to the Demande
d'Autorisation with the Direction du Tresor in France, and
(E) as otherwise set forth on Schedule 3.01(b).
(c) Financial Information; Undisclosed
Liabilities. The financial statements of the Transferred
Business, including the notes thereto (except, in the case
of unaudited quarterly statements, as would be permitted for
use on Form 10-Q), which are attached as Schedule 3.01(c)
hereto (the "Financial Statements"), have been prepared in
accordance with U.S. GAAP applied on a consistent basis
during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated
financial position of the Transferred Business as of the
dates thereof and the consolidated results of operations of
the Transferred Business for the periods then ended
(subject, in the case of any unaudited statements, to normal
year-end audit adjustments). Except as set forth on the
Balance Sheet, the Transferred Business has no liabilities
or obligations of any nature (whether accrued, absolute,
contingent or otherwise), other than liabilities and
obligations incurred in the ordinary course of business and
consistent with past practice since the date of the Balance
Sheet that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Material
Adverse Effect.
(d) Compliance with Applicable Laws. Each of
Ciba and each of its Subsidiaries has complied, and except
as set forth on Schedule 3.01(h)(1) all the Scheduled Real
Property is in compliance, with all laws, regulations,
rules, orders, statutes, ordinances, Permits and
authorizations of all Governmental Entities applicable to it
which relate to the Transferred Business, except where the
failure to so comply would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect and, except as set forth in Schedule 3.01(d), neither
Ciba nor any of its Subsidiaries has received any written
notice of any such failure to so comply. Neither Ciba nor
any of its Subsidiaries has received any written notice that
any investigation or review by any Governmental Entity with
respect to or otherwise relating to the Transferred Business
is pending or that any such investigation or review is
contemplated, except where the outcome of such investigation
or review would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
This paragraph (d) does not relate to Tax laws, laws
relating to employee benefits and Environmental Laws for
which Section 3.01(m), the Employment Matters Agreement and
Section 3.01(w) and Section 3.01(n), respectively, are
applicable in lieu of this paragraph (d).
(e) Litigation; Decrees. Schedule 3.01(e) sets
forth a list of certain lawsuits, claims, actions,
investigations and proceedings. Except as set forth in
Schedule 3.01(e), there is no suit, claim, action,
investigation or proceeding pending or, to the knowledge of
Ciba or any of its Subsidiaries, threatened against Ciba or
any of its Subsidiaries that (i) if adversely determined
would, individually or in the aggregate, be reasonably
likely to result in a Material Adverse Effect, (ii) in any
manner challenges or seeks to enjoin, prevent, alter or
materially delay the transactions contemplated hereby or
(iii) alleges criminal action or inaction with respect to
the Transferred Business, the Acquired Assets or the
Deferred Assets. Neither Ciba nor any of its Subsidiaries
is bound by or subject to any judgment, order, injunction,
rule, decree, writ, determination or award of any
Governmental Entity or arbitrator having, or which,
individually or in the aggregate, have or would reasonably
be expected to have, a Material Adverse Effect or which
would prevent, alter or materially delay the transactions
contemplated hereby.
(f) Contributed Shares. Except for the Austrian
Shares Contract, the Contributed Shares are owned by Ciba,
free and clear of any and all Liens and free of any and all
other limitations or restrictions and Ciba has sufficient
power and right to sell, assign, transfer, convey and
deliver the Contributed Shares to Hexcel, free and clear of
any and all Liens and free of any and all other limitations
or restrictions (other than the shares of Brochier, the
transfer of which is subject to regulation by the Direction
du Tresor and the approval of the Departement de Securite in
France). The Contributed Shares are duly authorized,
validly issued and outstanding, fully paid and
nonassessable, and were not issued in violation of any
preemptive or other right of any person to acquire such
securities. Except for the interest in Danutec owned by PCD
Polymere Gesellschaft m.b.H., the Contributed Shares
constitute all the capital stock of or other equity
interests in the Divested Subsidiaries. Except for the
right to purchase the Danutec Shares or wind up Danutec
pursuant to the Austrian Shares Contract, there are no
(i) securities of Ciba or any of its Subsidiaries or
affiliates convertible into or exchangeable for capital
stock of, other voting securities of or other equity
interests in any Divested Subsidiary or (ii) securities,
options, warrants, calls or other rights or obligations that
require Ciba or any of its Subsidiaries or affiliates to
issue, deliver or sell additional shares of capital stock of
or other voting securities of or other equity interests in
(or securities convertible into or exchangeable for the
same) any Divested Subsidiary. None of the Divested
Subsidiaries has any interest in any other entity, including
subsidiaries, joint ventures or partnerships. Upon transfer
to Hexcel of the Contributed Shares, Hexcel will have good
and marketable title to the Contributed Shares, free and
clear of any and all Liens and free of any and all other
limitations or restrictions (including any restriction on
the right to vote, sell or otherwise dispose of such
Contributed Shares) (other than the shares of Brochier, the
transfer of which is subject to regulation by the Direction
du Tresor and the approval of the Departement de Securite in
France). There are no outstanding bonds, debentures, notes
or other indebtedness having the right to vote on any
matters on which stockholders of any Divested Subsidiary may
vote. Neither the Contributed Shares nor any shares of
capital stock of any Divested Subsidiary have been issued in
violation of, and none of the Contributed Shares or such
shares of capital stock are subject to, any purchase option,
call, right of first refusal, preemptive, subscription or
similar rights under any provision of applicable law, the
certificate of incorporation or by-laws or comparable
governing instruments of any Divested Subsidiary or, except
pursuant to the Austrian Shares Contract, any contract,
agreement or instrument to which any Divested Subsidiary is
subject, bound or a party or otherwise. Except as set forth
on Schedule 3.01(f), there are no outstanding warrants,
options, rights, "phantom" stock rights, agreements,
convertible or exchangeable securities or other commitments
(other than this Agreement) (i) pursuant to which any
Divested Subsidiary is or may become obligated to issue,
sell, purchase, refund or redeem any shares of its capital
stock or other securities of or equity interests in a
Divested Subsidiary or (ii) that give any Person the right
to receive any benefits or rights similar to any rights
enjoyed by or accruing to the holders of shares of capital
stock of any Divested Subsidiary. Except as set forth on
Schedule 3.01(f), there are no equity securities of any
Divested Subsidiary reserved for issuance for any purpose.
(g) Title to Acquired Assets and Deferred Assets.
Either Ciba or a Subsidiary of Ciba has good, valid and
marketable title to all the Acquired Assets and the Deferred
Assets and has good and marketable title to, or valid
leasehold interests in all the personal property and assets
reflected in the Balance Sheet or thereafter acquired,
except for assets sold or otherwise disposed of for fair
value since that date in the ordinary course of business
consistent with past practice and not in violation of this
Agreement, in each case free and clear of any and all Liens
and free of any and all other limitations or restrictions,
except (i) as disclosed in Schedule 3.01(g) or on the
Balance Sheet or in the notes thereto and (ii) for Permitted
Liens. Ciba or CGC has sufficient power and authority to
sell, assign, transfer, convey and deliver the Acquired
Assets and the Deferred Assets to Hexcel, free and clear of
any and all Liens and free of any and all other limitations
or restrictions, except for Permitted Liens. Each Divested
Subsidiary has good, valid and marketable title to all its
assets free and clear of any and all Liens and free of any
and all other limitations or restrictions except for
Permitted Liens. This paragraph (g) does not relate to real
property, interests in real property or leasehold interests
in real property or Intellectual Property, as to which
Section 3.01(h) and Section 3.01(i), respectively, shall be
applicable in lieu of this Section 3.01(g).
(h) Real Property. (i) Ciba or one of its
Subsidiaries has good, marketable and insurable title to, or
valid leasehold interests in, or other rights to use, all
the real property required for the conduct of the
Transferred Business (including the real property interests
comprising a part of the Acquired Assets and the Deferred
Assets) as currently conducted and all the real property or
interests therein reflected in the Balance Sheet or
thereafter acquired, except for real property or interests
therein sold or otherwise disposed of for fair value since
the date of the Balance Sheet or the ordinary course of
business consistent with past practice and not in violation
of this Agreement, in each case free and clear of any and
all Liens of any kind and free of any and all other
limitations and restrictions except for (A) Permitted Liens,
(B) easements, covenants, rights-of-way, claims and other
encumbrances or restrictions of record, none of which,
either individually or in the aggregate, materially detract
from the value of the property or materially interfere with
the current use of the property, (C) zoning, building and
other similar restrictions, none of which, either
individually or in the aggregate, materially detract from
the value of the property or materially interfere with the
current use of the property, (D) unrecorded easements,
covenants, rights-of-way or other restrictions, none of
which, either individually or in the aggregate, materially
detract from the value of the property or materially
interfere with the current use of the property, (E) any
conditions that may be shown by a current, accurate survey
or physical inspection of any Scheduled Real Property made
prior to Closing and (F) Liens disclosed in
Schedule 3.01(h)(l) or 3.01(h)(2) or in the Balance Sheet or
in any notes thereto, none of which items set forth in
clauses (A) through (E) above, individually or in the
aggregate, have had or would reasonably be expected to have
a Material Adverse Effect.
(ii) Ciba and each of its Subsidiaries has
complied in all respects with the terms of all material
leases to which it is a party and the subject of which
relates exclusively or primarily to, arises exclusively or
primarily out of or is used exclusively or primarily in
connection with the Transferred Business, and each of the
Divested Subsidiaries has complied in all respects with the
terms of all material leases to which it is a party. To the
knowledge of Ciba or any of its Subsidiaries all such leases
are in full force and effect, all rents and additional rents
due thereunder have been paid in full when due through the
date hereof, and the tenant thereunder enjoys peaceful and
undisturbed possession under all such material leases.
(iii) Schedule 3.01(h)(1) sets forth a complete
description of all real property and interests in real
property directly or indirectly owned in fee simple by Ciba
or any of its Subsidiaries that relate exclusively or
primarily to, arise exclusively or primarily out of or that
are used exclusively or primarily in connection with the
Transferred Business, and all real property and interests in
real property owned directly or indirectly in fee simple by
a Divested Subsidiary. Schedule 3.01(h)(2) sets forth a
complete list of all real property and interests in real
property leased, subleased or otherwise occupied pursuant to
a written instrument by Ciba or any of its Subsidiaries that
relate exclusively or primarily to, arise exclusively or
primarily out of or that are used exclusively or primarily
in connection with the Transferred Business, except for real
property and interests in real property leased by a Divested
Subsidiary.
(iv) At the date of this Agreement there has been
no actual or, to the knowledge of Ciba, threatened
condemnation or taking by eminent domain of any portion of
the properties listed in Schedules 3.01(h)(1) and
3.01(h)(2).
(v) There are no Persons other than Ciba or any
of its Subsidiaries that have a possessory interest pursuant
to a written agreement with Ciba or any of its Subsidiaries
in any of the properties listed in Schedules 3.01(h)(1) and
3.01(h)(2), except as set forth on such schedules.
(i) Intellectual Property. To Ciba's knowledge,
except as set forth on Schedule 3.01(i), no Acquired
Intellectual Property, no Intellectual Property licensed
pursuant to the Trademark License Agreement and no
Intellectual Property otherwise licensed pursuant to
Section 4.13 (A) has, in whole or in part, lapsed, been
declared invalid or been abandoned, dedicated or disclaimed
or (B) is being infringed by any Person, in each case, which
could reasonably be expected to have a Material Adverse
Effect. To Ciba's knowledge, except as disclosed in
Schedule 3.01(i) (A) neither Ciba nor any of its
Subsidiaries during the five years preceding the date of
this Agreement has been sued, charged in writing or
threatened with respect to, or been a defendant in, any
claim, suit, action or proceeding including a claim of
infringement by Ciba or such Subsidiary of any Intellectual
Property which, if successful, could reasonably be expected
to have a Material Adverse Effect and (B) to Ciba's
knowledge, the conduct of the Transferred Business does not
infringe the valid intellectual property rights of any other
Person in any way that could reasonably be expected to have
a Material Adverse Effect.
(j) Insurance. Schedule 3.01(j) sets forth a
complete and correct list of all insurance policies
(including a brief summary of the nature and terms thereof)
providing coverage in respect of the Transferred Business,
the Acquired Assets or the Deferred Assets. All the
material properties and businesses constituting any part of
the Acquired Assets or the Deferred Assets are insured for
Ciba's, CGC's or a Divested Subsidiary's benefit, and will
be so insured until the Closing or the applicable Deferred
Closing, as the case may be. Except as set forth on
Schedule 3.01(j), the coverage provided by such policies is
adequate and sufficient in nature, scope and amount in
accordance with applicable prudent risk management
practices. All such policies currently in effect are in
full force and effect, no notice of termination,
cancellation or reservation of rights has been received with
respect to any such policy, there has not been any failure
to present any claim or give any notice under any such
policy in a timely manner or in the manner or detail
required by such policy, and there is no default with
respect to any such policy, except for such as would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Except as set forth on
Schedule 3.01(j) or as otherwise disclosed to Hexcel prior
to the date of this Agreement, neither Ciba nor any of its
Subsidiaries self-insures or has self-insured any material
risks with respect to the Transferred Business, the Acquired
Assets or the Deferred Assets.
(k) Contracts. Schedule 3.01(k) sets forth a
list of each of the following Acquired Contracts:
(i) any collective bargaining Contract;
(ii) any Contract with any employee involving
aggregate future obligations in excess of $100,000;
(iii) any Contract entered into in the ordinary
course of business which involves payment or receipt in
the future of aggregate amounts in excess of
$5,000,000;
(iv) any Contract entered into other than in the
ordinary course of business which involves payment or
receipt in the future of aggregate amounts in excess of
$500,000;
(v) any credit agreement, loan agreement,
indenture, guarantee, note, mortgage, security
agreement, loan commitment, evidence of indebtedness or
other Contract relating to the borrowing or lending of
funds in excess of $500,000;
(vi) any contract granting to any Person a
preferential right to purchase any of the Acquired
Assets or the Deferred Assets (other than sales of
inventory in the ordinary course of business);
(vii) any Contract with respect to the discharge,
transportation, removal or storage of effluent, waste,
pollutants or hazardous substances;
(viii) any Contract containing a covenant not to
compete or similar provisions relating to any aspect of
the Business or a covenant or other provision
restricting the development, manufacture, marketing or
distribution of products or services within the scope
of the Business;
(ix) any Contract for the lease of land,
buildings, equipment or other property that is material
to the Transferred Business;
(x) any Contract relating to Intellectual Property
that is material to the Transferred Business (including
any such Contract that restricts the use of such
Intellectual Property);
(xi) any Contract limiting or restricting the
voting, acquisition or disposition of any equity
securities of or other equity interests in any of the
Divested Subsidiaries;
(xii) any Contract evidencing any Lien on the
Acquired Assets or the Deferred Assets (other than
Liens created in the ordinary course of business); and
(xiii) any Contract involving aggregate future
obligations in excess of $50,000 or involving material
non-monetary obligations relating to the Transferred
Business, the Acquired Assets or the Deferred Assets
between or among Ciba and/or any of its Subsidiaries,
on the one hand, and Ciba and/or any of its
Subsidiaries or affiliates, on the other hand.
True, complete and correct copies of all the Contracts
listed on Schedule 3.01(k) (including any amendments thereof
or waivers with respect thereto) have been made available to
Hexcel (other than (x) purchase orders and invoices to
customers and suppliers of the Transferred Business using
standard forms made available to Hexcel and (y) employment
agreements pursuant to standard forms agreements made
available to Hexcel). Except as set forth on
Schedule 3.01(k), each of the material Acquired Contracts is
a valid and binding agreement of Ciba, CGC or a Divested
Subsidiary, as the case may be, and is in full force and
effect and enforceable in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting
creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law), and neither
Ciba nor any of its Subsidiaries nor, to the knowledge of
Ciba or any of its Subsidiaries, any other party thereto is
in default or breach in any material respect under the terms
of any such material Acquired Contract, nor, to the
knowledge of Ciba or any of its Subsidiaries, has any event
or circumstance occurred that, with or without notice or
lapse of time or both, would constitute any material event
of default or give rise to any right of termination,
cancellation or acceleration or the loss of any benefit or
require any consent thereunder other than as set forth on
Schedule 3.01(k). Except as set forth on Schedule 3.01(k),
neither the execution and delivery of this Agreement and the
Ancillary Agreements nor the consummation of the
transactions contemplated by this Agreement and the
Ancillary Agreements will cause any breach of a material
Acquired Contract or, with or without notice or lapse of
time or both, result in any default, require any consent or
give rise to any right of termination, cancellation or
acceleration or the loss of any benefit under any material
Acquired Contract (including benefits that may be exercised
only upon consummation of a transaction of the type
contemplated by this Agreement and the Ancillary
Agreements). All Contracts involving aggregate future
obligations of $50,000 or less relating to the Transferred
Business, the Acquired Assets or the Deferred Assets between
or among Ciba and/or any of its Subsidiaries, on the one
hand, and Ciba and/or any of its Subsidiaries or affiliates,
on the other hand, do not, in the aggregate, involve
aggregate future obligations in excess of $1,000,000.
Except as disclosed on Schedule 3.01(k), neither Ciba nor
any of its Subsidiaries, as the case may be, has received
any written or, to its knowledge, oral notice of termination
or cancellation of or notice of an intent to terminate or
cancel any material Acquired Contract. No material Acquired
Contract is the subject of or, to the knowledge of Ciba or
any of its Subsidiaries, has been threatened to be made the
subject of any arbitration, suit or legal proceeding. With
respect to any material Acquired Contract that will by its
terms terminate as of a particular date unless renewed or
unless an option to extend is exercised, neither Ciba nor
any of its Subsidiaries has received any written or, to its
knowledge, oral notice, or otherwise has knowledge that any
such material Acquired Contract will not be, or is not
likely to be, so renewed or that any such extension option
will not be, or is not likely to be, so exercised. Except
as set forth on Schedule 3.01(k) or as would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, each of the foregoing
representations and warranties as to material Acquired
Contracts is also true and correct as to the other Acquired
Contracts.
(l) Absence of Certain Changes or Events. Except
as set forth in Schedule 3.01(l), from the date of the
Balance Sheet to the date hereof, Ciba and its Subsidiaries
have conducted the Transferred Business in the ordinary
course of business consistent in all material respects with
past practice, and there has not been any development or
event or series of events that would reasonably be expected
to have a Material Adverse Effect.
(m) Taxes. Except as set forth in
Schedule 3.01(m), (i) each of the Divested Subsidiaries has
timely filed, in correct and complete form after giving
effect to any applicable extensions, all Tax Returns
relating to Income Taxes or any other material Taxes
required to be filed by it and paid all Taxes required to be
paid by it, (ii) each of Ciba and its Subsidiaries (other
than the Divested Subsidiaries) has timely filed, in correct
and complete form, after giving effect to any applicable
extensions, all Tax Returns relating to Income Taxes and
other material Taxes of the Transferred Business and
required to be filed by it, and paid all such Taxes required
to be paid by it, and (iii) no Taxing Authority is
asserting or is expected to assert any deficiency against
Ciba or its Subsidiaries with respect to Taxes described in
(i) or (ii) above.
(n) Environmental Matters. Except as set forth
in Schedule 3.01(n) and, in each case of clauses (A) through
(H) below, except (i) where the failure to so comply,
(ii) where such actual or alleged liability or (iii) to the
extent that such statements, if untrue, would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect:
(A) the Transferred Business has secured and is in
compliance with all Environmental Permits and is in
compliance with all Environmental Laws;
(B) since June 30, 1990, neither Ciba nor any of
its Subsidiaries has received any written communication
from a Governmental Entity that alleges that the
Transferred Business is not in compliance with any
Environmental Law or Environmental Permits;
(C) there are no writs, injunctions, decrees,
orders or judgments outstanding, or any actions, suits,
proceedings or investigations pending or, to the
knowledge of Ciba or any of its Subsidiaries,
threatened, relating to compliance by the Transferred
Business with, or liability of the Transferred Business
under, any Environmental Law;
(D) there are no Liens attached, asserted, or, to
the knowledge of Ciba or any of its Subsidiaries,
threatened against any of the Scheduled Real Property
pursuant to any Environmental Law;
(E) there have been no releases or, to the
knowledge of Ciba or any of its Subsidiaries,
threatened releases (as those terms are defined under
Environmental Law) of Hazardous Substances on, from or
adjacent to any of the Scheduled Real Property which
could reasonably be expected to give rise to liability
under any Environmental Law;
(F) with respect to the Transferred Business,
neither Ciba nor any of its Subsidiaries has received a
request for information or has been named a potentially
responsible party regarding any Federal National
Priority List site (as that term is defined under
Environmental Law) or any other disposal site pursuant
to any similar Environmental Law;
(G) there are no other liabilities under any
Environmental Law with respect to the Transferred
Business; and
(H) following the consummation of the transactions
contemplated by this Agreement and the Ancillary
Agreements, all Environmental Permits will be
transferable upon appropriate notification to relevant
Governmental Entities.
(o) Brokers. Except for CS First Boston
Corporation, whose fees will be paid by Ciba, there is no
investment banker, broker, finder, financial advisor or
other intermediary that has been retained by or is
authorized to act on behalf of Ciba or any of its
Subsidiaries who might be entitled to any fee or commission
in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements.
(p) Sufficiency of Acquired Assets and Deferred
Assets. The Acquired Assets, the Deferred Assets and the
assets of the Divested Subsidiaries (i) together with the
rights and services to be provided pursuant to the Ancillary
Agreements are sufficient for the conduct of the Transferred
Business by Hexcel in substantially the same manner as it is
currently conducted and (ii) are in the aggregate, in good
and useable condition and, to the extent applicable, in good
working order, ordinary wear and tear excepted.
(q) Investment Intent; Securities Act. Ciba, CGC
and, to the extent applicable, any other Subsidiary of Ciba
are acquiring the Hexcel Shares for their own account (not
as a nominee or agent) for investment and not with a present
view to, or for sale in connection with, any distribution or
resale thereof or any granting of a participation therein.
Ciba and CGC, on behalf of themselves and any other
Subsidiary of Ciba that will own Hexcel Shares, acknowledge
and understand that (i) the Hexcel Shares may not be
transferred unless they are subsequently registered under
the Securities Act or an exemption from such registration is
available, (ii) the Hexcel Shares will be subject to the
restrictions on transfer, voting agreements and other
restrictive provisions of the Governance Agreement and
(iii) will contain an appropriate restrictive legend
consistent with the foregoing.
(r) Accounts Receivable. All Accounts Receivable
included in the Acquired Assets or, if applicable, the
Deferred Assets represent sales actually made in the
ordinary course of business and represent legal, valid and
binding obligations of the obligors thereon. The Financial
Statements contain, as of their respective dates, adequate
and sufficient reserves for bad debts in respect of Accounts
Receivable calculated in accordance with U.S. GAAP applied
on a consistent basis.
(s) Inventory. All Inventory included in the
Acquired Assets and the Deferred Assets is of a quality and
quantity useable and saleable in the ordinary course of
business. All Inventory of the Transferred Business is
valued in the Balance Sheet at lower of cost or market, with
obsolete or below-standard quality materials having been
written off and with adequate and sufficient reserves for
inactive and surplus Inventory calculated in accordance with
U.S. GAAP applied on a consistent basis.
(t) Product Manufacturing. With respect to each
product of the Transferred Business, Ciba and/or its
Subsidiaries (i) have obtained all applicable Permits (other
than as set forth on Schedule 3.01(n)) necessary for the
manufacture, distribution, sale and marketing of such
products, except for such Permits the lack of which would
not reasonably be expected to have a Material Adverse
Effect, and (ii) are in material compliance with the terms
and conditions of all such Permits in each jurisdiction in
which such products are manufactured, distributed, sold or
marketed. All products of the Transferred Business have
been manufactured in full compliance with applicable product
specifications.
(u) Product Liability. Except as set forth on
Schedule 3.01(u), there are not presently pending, or to the
knowledge of Ciba or any of its Subsidiaries, threatened any
civil, criminal or administrative actions, suits, demands,
claims, hearings, notices of violation, investigations,
proceedings or demand letters relating to any alleged hazard
or alleged defect in design, manufacture, materials or
workmanship, including, without limitation, any failure to
warn or alleged breach of express or implied warranty or
representation, relating to any product manufactured,
distributed or sold by or on behalf of the Transferred
Business that would reasonably be expected to have a
Material Adverse Effect. Schedule 3.01(u) sets forth a true
and complete list of (i) all matters referred to in the
preceding sentence since January 1, 1992 and (ii) all
material product recalls, material reworks or material
post-sale warnings ("Recalls") and all investigations,
considerations or decisions made by Ciba or any of its
Subsidiaries, or to the knowledge of Ciba or any of its
Subsidiaries, by any other person concerning a Recall
relating to any product manufactured, distributed or sold by
or on behalf of the Transferred Business, in each case,
since January 1, 1992. The Financial Statements contain, as
of their respective dates, adequate and sufficient reserves
for product warranty related expenses and product returns.
(v) Cost Accounting Standards. Except as set
forth on Schedule 3.01(v), Ciba and its Subsidiaries have
(and are not aware of any allegation that they have not)
accounted for all Acquired Contracts (or subcontracts
relating thereto) with Governmental Entities related to the
United States Federal government in accordance with the Cost
Accounting Standards applicable thereto and have adhered in
all material respects with all Federal Acquisition
Regulations, all Federal Acquisition Supplemental
Regulations and all other relevant cost accounting
requirements.
(w) Foreign Benefit Plans. (i) France. Except
for the Retraite Maison covering one employee of Brochier,
there are no contractual employee benefit plans covering any
employees of Brochier. Brochier has complied in all
material respects with all its obligations under the
Retraite Maison. All employees of Brochier are subject to a
"Convention Collective". Brochier has complied in all
material respects with all requirements of law applicable
thereto and under the governing documents of such Convention
Collective.
(ii) Italy. There are no contractual employee
benefit plans covering any employees of Salver. All
employees of Salver are subject to a "Convenzione
Collectiva". Salver has complied in all material respects
with all requirements of law applicable thereto and under
the governing documents of such Convenzione Collectiva.
(iii) General. Each employee benefit plan
relating to employees of the Transferred Business employed
in Austria or the Excluded Jurisdictions is in compliance in
all material respects with all requirements of law
applicable thereto and the respective requirements of the
governing documents of such plan. Neither Ciba nor any of
its Subsidiaries has incurred any liability (nor, to the
knowledge of Ciba or any of its Subsidiaries, does any
condition exist or has any event occurred that presents a
material risk that any such liability will be incurred) with
respect to any employee benefit plan relating to employees
of the Transferred Business employed outside the United
States or the United Kingdom (other than for contributions
not yet due) that, when aggregated with other such
liabilities, would result in a material liability to the
Transferred Business. Each employee benefit plan relating
to employees of the Transferred Business employed outside
the United States or the United Kingdom is fully and
properly funded in accordance with, and the assets thereof
are held by a Person authorized to hold such assets under,
applicable law and regulation and the governing documents of
such plan.
(x) Labor Relations. Except as set forth in
Schedule 3.01(x), no collective bargaining agreement is
being negotiated by Ciba or any of its Subsidiaries with
respect to the Transferred Business. Except as set forth in
Schedule 3.01(x), to the knowledge of Ciba or any of its
Subsidiaries, there are no activities or proceedings of any
labor union to organize any of the employees of the
Transferred Business. There is no labor dispute, strike or
work stoppage against the Transferred Business pending or,
to the knowledge of Ciba or any of its Subsidiaries,
threatened, except for such disputes, strikes or work
stoppages that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(y) No Other Representations. Except for the
representations and warranties expressly set forth in this
Section 3.01, none of Ciba, CGC or any other Person makes
any express or implied representation or warranty on behalf
of Ciba or any of its Subsidiaries. HEXCEL ACKNOWLEDGES
THAT, SHOULD THE CLOSING OCCUR, HEXCEL WILL ACQUIRE THE
ACQUIRED ASSETS AND THEREAFTER ACQUIRE THE DEFERRED ASSETS,
IN EACH CASE WITHOUT ANY REPRESENTATION OR WARRANTY AS TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IN AN
"AS IS" CONDITION AND ON A "WHERE IS" BASIS, EXCEPT AS
OTHERWISE EXPRESSLY REPRESENTED OR WARRANTED HEREIN. The
provisions of the immediately preceding sentence do not
apply to the Contributed Shares (it being understood that no
representations or warranties other than those expressly set
forth herein are implied with respect to the Contributed
Shares).
SECTION 3.02. Representations and Warranties of
Hexcel. Hexcel hereby represents and warrants to Ciba and
CGC as follows:
(a) Organization, Standing and Power. Hexcel and
each of its Subsidiaries is a legal entity duly organized,
validly existing and, where applicable, in good standing
under the laws of the jurisdiction in which it is
incorporated, has the requisite corporate power and
authority and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now being conducted and is duly qualified to
do business as a foreign corporation and, where applicable,
is in good standing in each jurisdiction in which the
character of the property owned or leased by it or the
nature of the activities make such qualification necessary,
except for those jurisdictions in which failure to be so
qualified would not, individually or in the aggregate,
reasonably be expected to have a Hexcel Material Adverse
Effect. Hexcel has heretofore delivered to Ciba true and
complete copies of the certificate of incorporation and by-
laws (or similar organizational documents) of Hexcel and
each of its Subsidiaries, in each case as amended through
the date of this Agreement. Such organizational documents
are in full force and effect, and no other organizational
documents are applicable to or binding on such entities.
None of such entities is in violation of any provision of
its certificate of incorporation or by-laws (or similar
organizational documents).
(b) Authority. Hexcel and, to the extent
applicable, each of its Subsidiaries has all corporate power
and authority to execute this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this
Agreement and the Employment Matters Agreement and the
consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate
action on the part of Hexcel and, to the extent applicable,
each of its Subsidiaries, subject only to approval of
(x) the issuance of the Hexcel Shares and (y) an amendment
to the certificate of incorporation of Hexcel increasing the
authorized number of shares of Hexcel Common to 100,000,000
(the "Required Amendment"), in each case by the requisite
vote of the holders of Hexcel Common entitled to vote
thereon, and the execution and delivery of the other
Ancillary Agreements and the consummation of the
transactions contemplated thereby will be authorized by all
necessary corporate action on the part of Hexcel and, to the
extent applicable, each of its Subsidiaries prior to the
Closing. This Agreement and the Employment Matters
Agreement have been duly executed and delivered by Hexcel
and constitute, and each other Ancillary Agreement when duly
executed and delivered by Hexcel and, to the extent
applicable, any of its Subsidiaries will constitute a legal,
valid and binding obligation of Hexcel and, to the extent
applicable, any such Subsidiary enforceable against each of
them in accordance with their respective terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting
creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity regardless of whether such enforceability is
considered in a proceeding in equity or at law). Except as
set forth on Schedule 3.02(b), none of Hexcel or any of its
Subsidiaries is a party to, bound by or subject to any
agreement or restriction that would materially restrict or
impede Ciba or CGC from exercising its full rights under,
and enjoying the full benefits contemplated by, this
Agreement and the Ancillary Agreements. The execution and
delivery of this Agreement and the Ancillary Agreements by
Hexcel and, to the extent applicable, any of its
Subsidiaries do not and will not, and the consummation by
Hexcel and, to the extent applicable, any of its
Subsidiaries of the transactions contemplated hereby and
thereby, and the compliance with the terms hereof and
thereof by Hexcel and, to the extent applicable, any of its
Subsidiaries will not (i) violate any law, judgment, order,
decree, statute, ordinance, rule and regulation applicable
to it, (ii) conflict with any provision of Hexcel's or, to
the extent applicable, any of its Subsidiaries' certificate
of incorporation or by-laws (or similar organizational
documents), (iii) except as set forth on Schedule 3.02(b),
conflict with or result in the breach or termination of any
provision or constitute a default (with or without the
giving of notice or the lapse of time or both) under, or
require any consent under or give rise to any right of
termination, cancellation or acceleration or the loss of any
benefit under any Contract to which it is a party or by
which it or any of its properties or assets is bound,
(iv) except as set forth on Schedule 3.02(b), require any
consent, approval, order, authorization or other action of,
or the registration, declaration or filing with, any
Governmental Entity or any other Person, or (v) except as
set forth an Schedule 3.02(b), result in the creation or
imposition of any Lien on any of its assets or properties
other than, in the case of clauses (i), (iii), (iv) and (v),
any such conflicts, violations or Liens the existence of
which or consents the lack of which could not reasonably be
expected to (x) have a Hexcel Material Adverse Effect,
(y) prevent the consummation of any of the transactions
contemplated by this Agreement and the Ancillary Agreements
or (z) materially impair Hexcel's or, to the extent
applicable, any of its Subsidiaries' ability to perform its
obligations under this Agreement or any Ancillary Agreement,
except (A) for the filing of a premerger notification and
report form by Hexcel under the HSR Act and any filings
required pursuant to applicable antitrust and competition
law statutes and regulations in each of the Applicable
Jurisdictions, (B) for compliance with and filings under
Sections 13(a) and 14(a) of the Exchange Act, (C) for the
filing of a notice pursuant to the Exon-Xxxxxx Amendment,
(D) for consent of the Departement de Securitie pursuant to
the Demande d'Autorisation with the Direction du Tresor in
France, (E) for the filing of a Special Security Agreement
and a related request for a National Interest Determination
and all approvals of the United States Defense Investigative
Service required in connection therewith and (F) as
otherwise set forth on Schedule 3.02(b). At a meeting duly
called and held, the Board of Directors of Hexcel duly and
unanimously adopted a resolution recommending that the
stockholders of Hexcel approve the issuance of the Hexcel
Shares and the Required Amendment.
(c) Capitalization of Hexcel and its
Subsidiaries. On the date hereof, the authorized capital
stock of Hexcel consists of 40,000,000 shares of Hexcel
Common, of which 18,093,903, are duly authorized and validly
issued and outstanding, fully paid and nonassessable and
1,500,000 shares of Hexcel Preferred, of which none are
issued and outstanding. On the Closing Date the number of
shares of Hexcel Common authorized for issuance will be
100,000,000 and, subject to stockholder approval, the number
of shares of Hexcel Preferred authorized for issuance will
be 20,000,000. Except for Hexcel Common there are no shares
of capital stock or other equity securities of Hexcel
outstanding. Schedule 3.02(c) sets forth for each material
Subsidiary of Hexcel the amount of its authorized capital
stock, the amount of its outstanding capital stock and the
amount of such stock owned by Hexcel. All the outstanding
shares of capital stock of each material Subsidiary of
Hexcel have been duly authorized and validly issued and are
fully paid and nonassessable. Except as set forth in
Schedule 3.02(c), there are no shares of capital stock or
other equity securities of any material Subsidiary of Hexcel
outstanding that are not owned by Hexcel or a wholly owned
Subsidiary of Hexcel. Neither the Hexcel Common nor any
shares of capital stock of any Subsidiary of Hexcel have
been issued in violation of, and none of the Hexcel Common
or such shares of capital stock are subject to, any purchase
option, call, right of first refusal, preemptive,
subscription or similar rights under any provision of
applicable law, the certificate of incorporation or by-laws
of Hexcel or the comparable governing instruments of any
Subsidiary of Hexcel, or any contract, agreement or
instrument to which Hexcel or any Subsidiary of Hexcel is
subject, bound or a party or otherwise. Except as set forth
in Schedule 3.02(c), there are no outstanding warrants,
options, rights, "phantom" stock rights, agreements,
convertible or exchangeable securities or other commitments
(other than this Agreement) (i) pursuant to which Hexcel or
any Subsidiary of Hexcel is or may become obligated to
issue, sell, purchase, refund or redeem any shares of
capital stock or other securities of or equity interest in
Hexcel or any Subsidiary of Hexcel or (ii) that give any
Person the right to receive any benefits or rights similar
to any rights enjoyed by or accruing to the holders of
shares of capital stock of Hexcel or any Subsidiary of
Hexcel. The Hexcel Shares have been or will be prior to
Closing duly and validly authorized and when issued and
delivered in accordance with the provisions of this
Agreement will be duly and validly issued, fully paid and
nonassessable. The Indenture and the Subordinated Debt have
been or will be prior to Closing duly and validly authorized
and when executed and delivered in accordance with the
provisions of this Agreement will constitute legal, valid
and binding obligations of Hexcel enforceable against Hexcel
in accordance with their terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws affecting creditors'
rights generally from time to time in effect, and subject,
as to enforceability, to general principles of equity
regardless of whether such enforceability is considered in a
proceeding in equity or at law). Except as set forth in
Schedule 3.02(c), there are no equity securities of Hexcel
or any Subsidiary of Hexcel reserved for issuance for any
purpose. Except as set forth in Schedule 3.02(c), Hexcel
has good and valid title, directly or through one or more
wholly owned subsidiaries, to all the outstanding shares of
capital stock of each material Subsidiary of Hexcel, free
and clear of any Liens. Except as set forth in
Schedule 3.02(c), there are no outstanding bonds,
debentures, notes or other indebtedness having the right to
vote on any matters on which stockholders of Hexcel or any
Subsidiary of Hexcel may vote.
(d) Equity Interests. Except for the
Subsidiaries of Hexcel and as set forth in Schedule 3.02(d),
Hexcel does not directly or indirectly have any material
interest in any other entity, including subsidiaries, joint
ventures or partnerships.
(e) SEC Documents; Undisclosed Liabilities.
Hexcel has filed all required reports, schedules, forms,
statements and other documents with the SEC since
December 31, 1992 (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act, or the
Exchange Act, as the case may be, applicable to such SEC
Documents, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The financial statements of Hexcel included in the SEC
Documents as of their respective dates complied as to form
in all material respects with applicable accounting
requirements and the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with
U.S. GAAP (except, in the case of unaudited statements, as
permitted for use on Form 10-Q) applied on a consistent
basis during the periods involved (except as may be
indicated in the notes thereto) and fairly presented the
consolidated financial position of Hexcel and its
Subsidiaries as of the dates thereof and the consolidated
results of operations of Hexcel and its Subsidiaries for
the periods then ended (subject, in the case of any
unaudited statements, to normal year-end audit adjustments).
Except as set forth in the Hexcel Balance Sheet, neither
Hexcel nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute,
contingent or otherwise), other than liabilities and
obligations incurred in the ordinary course of business
consistent with past practice since the date of such balance
sheet that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Hexcel
Material Adverse Effect.
(f) Absence of Certain Changes or Events. Except
as set forth in Schedule 3.02(f), from the date of the
Hexcel Balance Sheet to the date hereof, Hexcel and its
Subsidiaries have conducted their business in the ordinary
course of business consistent in all material respects with
past practice, and there has not been any development or
event or series of events that would reasonably be expected
to have a Hexcel Material Adverse Effect.
(g) Brokers. Except for Bear, Xxxxxxx & Co.
Inc., whose fees will be paid by Hexcel, there is no
investment banker, broker, finder, financial advisor or
other intermediary that has been retained by or is
authorized to act on behalf of Hexcel or any of its
Subsidiaries who might be entitled to any fee or commission
in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements.
(h) Investment Intent. Hexcel and, to the extent
applicable, any Subsidiary of Hexcel is purchasing and
acquiring the Contributed Shares for its own account (not as
a nominee or agent) for investment and not with a present
view to, or for sale in connection with, any distribution or
resale thereof or any granting of a participation therein.
Hexcel acknowledges, on behalf of itself and its
Subsidiaries, and understands that the Contributed Shares
may not be transferred unless they are subsequently
registered under the Securities Act or an exemption from
such registration is available.
(i) Compliance with Applicable Laws. Each of
Hexcel and its Subsidiaries has complied with all laws,
regulations, rules and orders, statutes, ordinances, Permits
and authorizations of all Governmental Entities applicable
to it except where the failure to so comply would not,
individually or in the aggregate, reasonably be expected to
have a Hexcel Material Adverse Effect and, except as set
forth in Schedule 3.02(i), neither Hexcel nor any of its
Subsidiaries has received any written notice of any such
failure to so comply. Except as set forth on
Schedule 3.02(i), neither Hexcel nor any of its Subsidiaries
has received any written notice that any investigation or
review by any Governmental Entity is pending or that any
such investigation or review is contemplated, except where
the outcome of such investigation or review would not,
individually or in the aggregate, reasonably be expected to
have an Hexcel Material Adverse Effect. This paragraph (i)
does not relate to Tax laws, laws relating to employee
benefits and Environmental Laws for which Section 3.02(o),
the Employment Matters Agreement and Section 3.02(v) and
Section 3.02(p), respectively, are applicable in lieu of
this paragraph (i).
(j) Litigation; Decrees. Schedule 3.02(j) sets
forth a list of certain lawsuits, claims, actions,
investigations and proceedings. Except as set forth in
Schedule 3.02(j), there is no suit, claim, action,
investigation or proceeding pending or, to the knowledge of
Hexcel or any of its Subsidiaries, threatened against
Hexcel or any of its Subsidiaries that (i) if adversely
determined would, individually or in the aggregate, be
reasonably likely to result in an Hexcel Material Adverse
Effect, (ii) in any manner challenges or seeks to enjoin,
prevent, alter or materially delay the transactions
contemplated hereby or (iii) alleges criminal action or
inaction. Except as set forth on Schedule 3.02(j), neither
Hexcel nor any of its Subsidiaries is subject to any
judgment, order, injunction, rule, decree, writ,
determination or award of any Governmental Entity or
arbitrator having, or which, individually or in the
aggregate, have or would reasonably be expected to have, a
Hexcel Material Adverse Effect or which would prevent, alter
or materially delay the transactions contemplated hereby.
(k) Properties. (i) Hexcel or a Subsidiary
thereof has good, marketable and insurable (in the case of
real property) title to, or valid leasehold interests in, or
other rights to use all the real and personal properties and
assets required for the conduct of the business of Hexcel
and its Subsidiaries as currently conducted and has good and
marketable title to, or valid leasehold interests in, all
the properties and assets reflected on the Hexcel Balance
Sheet or thereafter acquired, except for assets sold or
otherwise disposed of for fair value since the date of such
balance sheet in the ordinary course of business consistent
with past practice and not in violation of this Agreement,
in each case free and clear of any and all Liens of any kind
and free of any and all other limitations and restrictions
except for (A) Hexcel Permitted Liens, (B) easements,
covenants, rights-of-way, claims and other encumbrances or
restrictions of record, none of which, either individually
or in the aggregate, materially detract from the value of
the property or materially interfere with the current use of
the property, (C) zoning, building and other similar
restrictions, none of which, either individually or in the
aggregate, materially detract from the value of the property
or materially interfere with the current use of the
property, (D) unrecorded easements, covenants, rights-of-way
or other restrictions, none of which, either individually or
in the aggregate, materially detract from the value of the
property or materially interfere with the current use of the
property, (E) any conditions that may be shown by a current,
accurate survey or physical inspection of any such property
made prior to Closing and (F) Liens disclosed in
Schedule 3.02(k) or in the Hexcel Balance Sheet or in the
notes thereto, none of which items set forth in clauses (A)
through (F) above, individually or in the aggregate, have or
would reasonably be expected to have a Hexcel Material
Adverse Effect.
(ii) Hexcel and each of its Subsidiaries has
complied in all respects with the terms of all material
leases to which it is a party. To the knowledge of Hexcel
and its Subsidiaries, all such leases are in full force and
effect and all rents and additional rents due thereunder
have been paid in full when due through the date hereof.
Hexcel or a Subsidiary thereof enjoys peaceful and
undisturbed possession under all such material leases.
(iii) At the date of the Agreement there has been
no actual or, to the knowledge of Hexcel, threatened
condemnation or taking by eminent domain of any of its real
property or any real property in which it has an interest.
(iv) There are no Persons other than Hexcel or
any of its Subsidiaries that have a possessory interest
pursuant to a written agreement with Hexcel or any of its
Subsidiaries in any of its real property.
(v) This paragraph (d) does not relate to
Intellectual Property, as to which Section 3.02(l) shall be
applicable in lieu of this Section 3.01(k).
(l) Intellectual Property. (i) Schedule 3.02(l)
sets forth a complete list of all Intellectual Property
(other than Know-how) owned by Hexcel or its Subsidiaries
that is material to its business (collectively, the "Hexcel
Material Intellectual Property"). To Hexcel's knowledge,
except as disclosed in Schedule 3.02(l), no Hexcel Material
Intellectual Property (A) has, in whole or in part, lapsed,
been declared invalid, or been abandoned, dedicated or
disclaimed or (B) is being infringed by any Person, in each
case, which could reasonably be expected to have a Hexcel
Material Adverse Effect.
(ii) To Hexcel's knowledge, except as disclosed
in Schedule 3.02(l) (A) neither Hexcel nor any of its
Subsidiaries during the five years preceding the date of
this Agreement has been sued, charged in writing or
threatened with respect to, or been a defendant in, any
claim, suit, action or proceeding including a claim of
infringement by Hexcel or such Subsidiary of any
Intellectual Property which, if successful, could reasonably
be expected to have a Hexcel Material Adverse Effect and
(B) to Hexcel's knowledge, the conduct of its business does
not infringe the valid intellectual property rights of any
other Person in any way that could reasonably be expected to
have a Hexcel Material Adverse Effect.
(m) Insurance. Schedule 3.02(m) sets forth a
complete and correct list of all insurance policies
(including a brief summary of the nature and terms thereof)
providing coverage in respect of Hexcel and its
Subsidiaries. All the material properties of Hexcel and its
Subsidiaries are insured for Hexcel's or its Subsidiaries'
benefit, and will be so insured until the Closing. The
coverage provided by such policies is adequate and
sufficient in nature, scope and amount in accordance with
applicable prudent risk management practices. All such
policies currently in effect are in full force and effect,
no notice of termination, cancellation or reservation of
rights has been received with respect to any such policy,
there has not been any failure to present any claim or give
any notice under any such policy in a timely manner or in
the manner or detail required by such policy, and there is
no default with respect to any such policy, except for such
as would not, individually or in the aggregate, reasonably
be expected to have a Hexcel Material Adverse Effect.
Except as set forth on Schedule 3.02(m) or as otherwise
disclosed to Ciba prior to the date of this Agreement,
neither Hexcel nor any of its Subsidiaries self-insures or
has self-insured any material risks.
(n) Contracts. Schedule 3.02(n) sets forth each
of the following Contracts to which Hexcel or any of its
Subsidiaries is a party or by which any of them is bound:
(i) any collective bargaining Contract;
(ii) any Contract with any employee involving
aggregate future obligations in excess of $100,000;
(iii) any Contract entered into in the ordinary
course of business which involves payment or receipt in
the future of aggregate amounts in excess of
$5,000,000;
(iv) any Contract entered into other than in the
ordinary course of business which involves payment or
receipt in the future of aggregate amounts in excess of
$500,000;
(v) any credit agreement, loan agreement,
indenture, guarantee, note, mortgage, security
agreement, loan commitment, evidence of indebtedness or
other Contract relating to the borrowing or lending of
funds in excess of $500,000;
(vi) any contract granting to any Person a
preferential right to purchase any assets of Hexcel or
its Subsidiaries (other than sales of inventory in the
ordinary course of business);
(vii) any Contract with respect to the discharge,
transportation, removal or storage of effluent, waste,
pollutants or hazardous substances;
(viii) any Contract containing a covenant not to
compete or similar provisions or a covenant or other
provision restricting the development, manufacture,
marketing or distribution of products or services;
(ix) any Contract for the lease of land,
buildings, equipment or other property that is material
to the business of Hexcel and its Subsidiaries;
(x) any Contract limiting or restricting the
voting, acquisition or disposition of any equity
securities or other equity interests of Hexcel or any
of its Subsidiaries;
(xi) any Contract relating to Intellectual
Property that is material to the business of Hexcel and
its Subsidiaries (including any such Contract that
restricts the use of Intellectual Property); and
(xii) any Contract evidencing any Lien on any of
the assets of Hexcel or any of its Subsidiaries (other
than Liens created in the ordinary course of business).
True, complete and correct copies of all the Contracts
listed on Schedule 3.02(n) (including any amendments thereof
or waivers with respect thereto) have been made available to
Ciba (other than (x) purchase orders and invoices to
customers and suppliers using standards forms made available
to Ciba and (y) employment agreements pursuant to standard
form agreements made available to Ciba). Except as
disclosed on Schedule 3.02(n), each of the material
Contracts is a valid and binding agreement of Hexcel or a
Subsidiary thereof, as the case may be, and is in full force
and effect and enforceable in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject as to enforceability, to general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law), and neither Hexcel nor any of its Subsidiaries nor, to
the knowledge of Hexcel or any of its Subsidiaries, any
other party thereto is in default or breach in any material
respect under the terms of any such Contract, nor, to the
knowledge of Hexcel or any of its Subsidiaries, has any
event or circumstance occurred that, with or without notice
or lapse of time or both, would constitute any material
event of default or give rise to any right of termination,
cancellation or acceleration or the loss of any benefit or
require any consent thereunder other than as set forth on
Schedule 3.02(n). Except as set forth on Schedule 3.02(n),
neither the execution and delivery of this Agreement and the
Ancillary Agreements nor, the consummation of the
transactions contemplated by this Agreement and the
Ancillary Agreements by Hexcel will cause any breach of a
material Contract or, with or without notice or lapse of
time or both, result in any default, require any consent or
give rise to any right of termination, cancellation or
acceleration or the loss of any benefit under any material
Contract (including benefits that may be exercised only upon
consummation of a transaction of the type contemplated by
this Agreement and the Ancillary Agreements). Except as
disclosed on Schedule 3.02(n), neither Hexcel nor any of its
Subsidiaries has received any written or, to its knowledge,
oral notice of termination or cancellation of or notice of
an intent to terminate or cancel any material Contract. No
material Contract is the subject of or, to the knowledge of
Hexcel or any of its Subsidiaries, has been threatened to be
made the subject of any arbitration, suit or legal
proceeding. With respect to any material Contract that will
by its terms terminate as of a particular date unless
renewed or unless an option to extend is exercised, neither
Hexcel nor any of its Subsidiaries has received any written
or, to its knowledge, oral notice, or otherwise has
knowledge that any such material Contract will not be, or is
not likely to be, so renewed or that any such extension
option will not be or is not likely to be so exercised.
Except as set forth on Schedule 3.02(n) or as would not,
individually or in the aggregate, reasonably be expected to
have a Hexcel Material Adverse Effect, each of the foregoing
representations and warranties as to material Contracts is
also true and correct as to the other Contracts.
(o) Taxes. Except as disclosed on
Schedule 3.02(o), (i) each of Hexcel and its Subsidiaries
has timely filed, in correct and complete form after giving
effect to any applicable extensions, all Tax Returns
relating to Income Taxes and other material Taxes required
to be filed by it and paid all Taxes required to be paid by
it, (ii) no Taxing Authority is asserting or is expected to
assert any deficiency against Hexcel or its Subsidiaries
with respect to any Taxes described in (i) above and
(iii) the accruals for Taxes reflected in the consolidated
financial statements of Hexcel as of December 31, 1994
adequately provide for the liability of Hexcel and its
Subsidiaries for Taxes as of that date and (iv) Hexcel's
aggregate net operating loss for U.S. Federal income Tax
purposes as of December 31, 1994 was approximately
$48 million.
(p) Environmental Matters. Except as set forth
in Schedule 3.02(p) and, in each case of clauses (A) through
(G) below, except (i) where the failure to so comply,
(ii) where such actual or alleged liability or (iii) to the
extent that such statements, if untrue, would not,
individually or in the aggregate, reasonably be expected to
have a Hexcel Material Adverse Effect:
(A) Hexcel and its Subsidiaries have secured and
are in material compliance with all Environmental
Permits and are in material compliance with all
Environmental Laws;
(B) since June 30, 1990, neither Hexcel nor any of
its Subsidiaries has received any written communication
from a Governmental Entity that alleges that Hexcel or
its Subsidiaries is not in compliance with any
Environmental Law or Environmental Permits;
(C) there are no writs, injunctions, decrees,
orders or judgments outstanding, or any actions, suits,
proceedings or investigations pending or, to the
knowledge of Hexcel or any of its Subsidiaries,
threatened, relating to compliance by Hexcel or its
Subsidiaries with, or liability of Hexcel or any of its
Subsidiaries under, any Environmental Law;
(D) there are no Liens attached, asserted, or, to
the knowledge of Hexcel or any of its Subsidiaries,
threatened against any property of Hexcel or any of its
Subsidiaries pursuant to any Environmental Law;
(E) there have been no releases or, to the
knowledge of Hexcel or any of its Subsidiaries,
threatened releases (as those terms are defined under
Environmental Law) of Hazardous Substances on, from or
adjacent to any property of Hexcel or its Subsidiaries
which could reasonably be expected to give rise to
material liability under any Environmental Law;
(F) neither Hexcel nor any of its Subsidiaries has
received a request for information or has been named a
potentially responsible party regarding any Federal
National Priority List site (as that term is defined
under Environmental Law) or any other disposal site
pursuant to any similar Environmental Law; and
(G) there are no other material liabilities under
any Environmental Law.
(q) Cost Accounting Standards. Except as set
forth on Schedule 3.02(q), Hexcel and each of its
Subsidiaries have (and are not aware of any allegation that
they have not) accounted for all their Contracts (or
subcontracts relating thereto) with Governmental Entities
related to the United States Federal government in
accordance with the Cost Accounting Standards applicable
thereto and have adhered in all material respects with all
Federal Acquisition Regulations, all Federal Acquisition
Supplemental Regulations and all other relevant cost
accounting requirements.
(r) Accounts Receivable. All accounts receivable
of Hexcel and any of its Subsidiaries represent sales
actually made in the ordinary course of business and
represent legal, valid and binding obligations of the
obligors thereon. The financial statements set forth in the
SEC Documents contain, as of their respective dates,
adequate and sufficient reserves for bad debts in respect of
such accounts receivable calculated in accordance with U.S.
GAAP applied on a consistent basis.
(s) Inventory. All Inventory of Hexcel and any
of its Subsidiaries is of a quality and quantity useable and
saleable in the ordinary course of business. All such
Inventory is valued in the Hexcel Balance Sheet at lower of
cost and market, with obsolete or below-standard quality
materials having been written off and with adequate and
sufficient reserves for inactive and surplus Inventory
calculated in accordance with U.S. GAAP applied on a
consistent basis.
(t) Product Manufacturing. With respect to each
product of Hexcel and any of its Subsidiaries, Hexcel or
such Subsidiary (i) has obtained all applicable Permits
(other than as set forth on Schedule 3.01(p)) necessary for
the manufacture, distribution, sale and marketing of such
products, except for such Permits the lack of which would
not reasonably be expected to have a Hexcel Material Adverse
Effect, and (ii) is in material compliance with the terms
and conditions of all such Permits in each jurisdiction in
which such products are manufactured, distributed, sold or
marketed. All products of Hexcel and any of its
Subsidiaries have been manufactured, in full compliance with
applicable product specifications.
(u) Product Liability. Except as set forth on
Schedule 3.02(u), there are not presently pending, or to the
knowledge of Hexcel or any of its Subsidiaries, threatened
any civil, criminal or administrative actions, suits,
demands, claims, hearings, notices of violation,
investigations, proceedings or demand letters relating to
any alleged hazard or alleged defect in design, manufacture,
materials or workmanship, including, without limitation, any
failure to warn or alleged breach of express or implied
warranty or representation, relating to any product
manufactured, distributed or sold by or on behalf of Hexcel
that would reasonably be expected to have a Hexcel Material
Adverse Effect. Schedule 3.02(u) sets forth a true and
complete list of (i) all matters referred to in the
preceding sentence since January 1, 1992 and (ii) all
Recalls and all investigations, considerations or decisions
made by Hexcel or any of its Subsidiaries, or to the
knowledge of Hexcel or any of its Subsidiaries, by any other
person concerning a Recall relating to any product
manufactured, distributed or sold by or on behalf of Hexcel
or any of its Subsidiaries, in each case, since January 1,
1992. The financial statements of Hexcel included in the
SEC Documents contain, as of their respective dates,
adequate and sufficient reserves for product warranty
related expenses and product returns.
(v) Foreign Benefit Plans. Each employee benefit
plan relating to employees of Hexcel employed outside the
United States is in compliance in all material respects with
all requirements of law applicable thereto and the
respective requirements of the governing documents of such
plan. Neither Hexcel nor any of its Subsidiaries has
incurred any liability (nor, to the knowledge of Hexcel or
any of its Subsidiaries, does any condition exist or has any
event occurred that presents a material risk that any such
liability will be incurred) with respect to any such plan
relating to such employees (other than for contributions not
yet due) that, when aggregated with other such liabilities,
would result in a material liability to Hexcel and its
Subsidiaries taken as a whole. Each employee benefit plan
relating to employees of Hexcel employed outside the United
States is fully and properly funded in accordance with, and
the assets thereof are held by a Person authorized to hold
such assets under, applicable law and regulation and the
governing documents of such plan.
(w) Labor Relations. Except as set forth in
Schedule 3.02(w), no collective bargaining agreement is
being negotiated by Hexcel or any of its Subsidiaries.
Except as set forth in Schedule 3.02(w), to the knowledge of
Hexcel or any of its Subsidiaries, there are no activities
or proceedings of any labor union to organize any of the
employees of Hexcel or any of its Subsidiaries. There is no
labor dispute, strike or work stoppage against Hexcel or any
of its Subsidiaries pending or, to the knowledge of Hexcel
or any of its Subsidiaries, threatened, except for such
disputes, strikes or work stoppages that would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(x) No Other Representations. Except for the
representations and warranties expressly set forth in this
Section 3.02, neither Hexcel nor any other Person makes any
express or implied representation or warranty on behalf of
Hexcel or any of its Subsidiaries.
ARTICLE IV
Covenants
SECTION 4.01. Conduct of Business. (a) From and
after the date of this Agreement and until the Closing (or,
if the Danutec Equity is not delivered to Hexcel at the
Closing, with respect to Danutec, until the earlier of
(x) the Danutec Closing and (y) the first anniversary of the
Closing), except as expressly provided in this Agreement or
as Hexcel shall otherwise reasonably agree, Ciba and CGC
shall and Ciba shall cause each of its Subsidiaries (other
than CGC) to (i) conduct the Transferred Business in the
ordinary course of business consistent in all material
respects with past practice; (ii) use all commercially
reasonable efforts to preserve intact the business
organizations and relationships with third parties of the
Transferred Business and to keep available the services of
the current employees of the Transferred Business and
(iii) not sell, assign, transfer, lease, license or
otherwise dispose of any Acquired Assets or Deferred Assets
or any parts thereof except (A) pursuant to existing
Contracts and commitments (including the Austrian Shares
Contract) or (B) in the ordinary course of business
consistent in all material respects with past practice and
(iv) notify Hexcel as to any material event of condemnation
or casualty affecting any of the Acquired Assets or Deferred
Assets promptly after the occurrence thereof. In addition,
until the Closing (or, if the Danutec Equity is not
delivered to Hexcel at the Closing, with respect to Danutec,
until the earlier of (x) the Danutec Closing and (y) the
first anniversary of the Closing), Ciba shall not permit any
Divested Subsidiary to do any of the following, and Ciba and
CGC (to the extent related to the Transferred Business)
shall not do any of the following, in each case without the
prior written consent of Hexcel:
(i) issue, authorize the issuance of, sell,
purchase, redeem or otherwise acquire (or waive any
restrictions on any third party from taking any such
action with respect to) any capital stock, bonds,
debentures, notes or other securities, or authorize any
stock option plan or amendment thereto or grant any
options (including employee stock options), "phantom"
stock or similar contractual rights, warrants or other
rights or commitments entitling any Person to require
the issuance, delivery, sale, refunding or redemption
of any capital stock, bonds, debentures, notes or other
securities (or that give any Person the right to
receive the benefits or other similar rights enjoyed by
or accruing to holders of capital stock) or amend the
terms of any such securities or agreements outstanding
as of the date hereof;
(ii) declare, set aside or pay any dividends on,
or make any other distributions in respect of, its
capital stock or the Transferred Business (other than
dividends or other distributions of cash, cash
equivalents and marketable securities);
(iii) split or reclassify any of its capital stock
or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution
for shares of its capital stock;
(iv) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person,
issue or sell any debt securities or warrants or other
rights to acquire any debt securities, guarantee any
debt securities of another Person, enter into any "keep
well" or other agreement to maintain any financial
statement condition of another Person or enter into any
arrangement having the economic effect of any of the
foregoing, in any such case to the extent such action
would create an Assumed Liability, or make any loans,
advances or capital contributions to, or investments
in, any other Person, other than (A) any Divested
Subsidiary, (B) pursuant to existing Contracts as set
forth on Schedule 4.01(a)(iv) and (C) non-material
loans, advances or extensions of credit to employees,
customers or suppliers in the ordinary course of
business consistent with past practice;
(v) take any action that would result in any of
the representations and warranties of Ciba or CGC set
forth in this Agreement or any Ancillary Agreement
becoming untrue or any of the conditions to the Closing
not being satisfied;
(vi) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint
venture, association or other business organization or
division thereof or (y) any assets that are material,
individually or in the aggregate, to the Transferred
Business taken as a whole, except (A) purchases of
inventory in the ordinary course of business consistent
with past practice and (B) the purchase of any interest
in Danutec pursuant to a Danutec Agreement;
(vii) mortgage or otherwise encumber or subject to
any Lien (other than Permitted Liens) or, except in the
ordinary course of business consistent with past
practice, sell, lease or otherwise dispose of (x) any
of the Acquired Assets or Deferred Assets or (y) in the
case of a Divested Subsidiary, any of its properties or
assets;
(viii) enter into, modify, amend or terminate any
material Acquired Contract or waive, release or assign
any material rights or claims or fail to take any
action necessary to preserve the benefits of any
material Acquired Contract;
(ix) make or agree to make any new capital
expenditure relating to the Transferred Business which
is individually in excess of $100,000 or which when
taken together with all other new capital expenditures
relating to the Transferred Business is in excess of
$500,000;
(x) make any material Tax election or settle or
compromise any material liability for Taxes other than
to the extent the amount of such settlement or
compromise is less than or equal to the amount of the
accruals or reserves for Taxes on the Balance Sheet;
(xi) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise) that are
Assumed Liabilities, other than the payment, discharge
or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with
their terms, of liabilities reflected or reserved
against in the Balance Sheet or incurred after the date
thereof in the ordinary course of business consistent
with past practice;
(xii) amend, or cause or permit to be amended, the
certificate of incorporation or by-laws (or similar
organizational documents) of any Divested Subsidiary;
(xiii) (A) adopt or amend in any material respect
or terminate any pension or benefit plan relating to
employees of the Divested Subsidiaries, or (B) adopt,
amend or terminate any pension or benefit plan relating
to employees of the Transferred Business employed
outside the United States (other than employees of the
Divested Subsidiaries) other than any adoption,
amendment or termination that would not individually or
in the aggregate reasonably be expected to have a
Material Adverse Effect, in either case, except as
required by law, or change any actuarial or other
assumption used to calculate funding obligations with
respect to any such plan (except to the extent that
failure to make such change would result in
noncompliance with U.S. GAAP, the Code or other
applicable law), or change the manner in which
contributions to any such plan are made or the basis
upon which such contributions are determined, except as
required by law;
(xiv) make any material change in the compensation
or benefits of, or enter into or amend in any material
respect any employment agreement with respect to, any
employee (or any director of a Divested Subsidiary) of
the Transferred Business outside the United States,
except in the ordinary course of business consistent
with past practice or, if applicable, as may be
required under existing agreements;
(xv) make any change in any method of accounting
or accounting practice or policy other than those
required by U.S. GAAP;
(xvi) enter into an agreement to settle any
material lawsuits, claims, actions, investigations or
proceedings; or
(xvii) authorize any of, or commit or agree to
take any of, the foregoing actions.
(b) From and after the date of this Agreement and
until the Closing, except as expressly provided in this
Agreement or as Ciba shall otherwise reasonably agree,
Hexcel shall and shall cause each of its Subsidiaries to
(i) conduct its business in the ordinary course of business
consistent in all material respects with past practice,
(ii) use all commercially reasonable efforts to preserve
intact its business organizations and relationships with
third parties and to keep available the services of its
current employees, (iii) not sell, assign, transfer, lease
or license or otherwise dispose of any of its assets or any
parts thereof except (A) pursuant to existing Contracts and
commitments or (B) in the ordinary course of business
consistent in all material respects with past practice and
(iv) notify Ciba as to any material event of condemnation or
casualty affecting any of the properties or assets of Hexcel
or any of its Subsidiaries promptly after the occurrence
thereof. In addition, until the Closing, Hexcel shall not
and shall not permit any of its Subsidiaries to do any of
the following without the prior written consent of Ciba:
(i) issue (other than (x) upon exercise of
outstanding stock options or stock options which are
permitted to be granted hereunder, (y) upon conversion
of outstanding convertible debt or (z) up to 39,604
shares of Hexcel Common pursuant to Hexcel's plan of
reorganization), authorize the issuance of, sell,
purchase, redeem or otherwise acquire (or waive any
restrictions on any third party from taking any such
action) any capital stock, bonds, debentures, notes or
other securities of Hexcel or its Subsidiaries or
authorize any stock option plan or any amendment
thereto (other than Hexcel's Amended and Restated
Incentive Stock Plan in substantially the form
previously disclosed to Ciba) or grant any options
(other than employee or director stock options the
grant of which has been authorized and disclosed to
Ciba prior to the date hereof (even if such grant is
subject to stockholder approval) or that are granted to
newly hired employees (other than directors or
executive officers) in the ordinary course of business
in amounts consistent with past practice), "phantom"
stock or similar contractual rights, warrants or other
rights or commitments entitling any Person to require
the issuance, delivery, sale, refunding or redemption
by Hexcel or any of its Subsidiaries of any capital
stock, bonds, debentures, notes or other securities of
Hexcel or its Subsidiaries (or that give any Person the
right to receive the benefits or similar rights enjoyed
by or accruing to holders of shares of capital stock of
Hexcel or any of its Subsidiaries) or amend the terms
of any such securities or agreements outstanding as of
the date hereof;
(ii) declare, set aside or pay any dividends on,
or make any other distributions in respect of, its
capital stock;
(iii) split or reclassify any of its capital stock
or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution
for shares of its capital stock;
(iv) except for drawings on existing working
capital facilities in the ordinary course of business,
incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, issue or sell
any debt securities or warrants or other rights to
acquire any debt securities of Hexcel or any of its
Subsidiaries, guarantee any debt securities of another
Person, enter into any "keep well" or other agreement
to maintain any financial statement condition of
another Person or enter into any arrangement having the
economic effect of any of the foregoing, or make any
loans, advances or capital contributions to, or
investments in, any other Person, other than (A) Hexcel
or any direct or indirect wholly owned Subsidiary of
Hexcel, (B) pursuant to existing Contracts as set forth
on Schedule 4.01(b)(iv) and (C) non-material loans,
advances or extensions of credit to employees,
customers or suppliers in the ordinary course of
business consistent with past practice;
(v) take any action that would result in any of
the representations and warranties of Hexcel set forth
in this Agreement or any Ancillary Agreement becoming
untrue or any of the conditions to the Closing not
being satisfied;
(vi) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint
venture, association or other business organization or
division thereof or (y) any assets that are material,
individually or in the aggregate, to Hexcel and its
Subsidiaries taken as a whole, except purchases of
inventory in the ordinary course of business consistent
with past practice;
(vii) mortgage or otherwise encumber or subject to
any Lien (other than Hexcel Permitted Liens) or, except
in the ordinary course of business consistent with past
practice, sell, lease or otherwise dispose of any of
its properties or assets;
(viii) enter into, modify, amend or terminate any
material Contract or waive, release or assign any
material rights or claims or fail to take any action
necessary to preserve the benefits of any material
Contract;
(ix) make or agree to make any new capital
expenditure which is individually in excess of $100,000
or which when taken together with all other new capital
expenditures is in excess of $500,000;
(x) make any material Tax election or settle or
compromise any material liability for Taxes other than
to the extent the amount of such settlement or
compromise is less than or equal to the amount of the
accruals or reserves for Taxes on the Hexcel Balance
Sheet;
(xi) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in
accordance with their terms, of liabilities reflected
or reserved against in the Hexcel Balance Sheet or
incurred after the date of the Hexcel Balance Sheet in
the ordinary course of business consistent with past
practice;
(xii) except for the Required Amendment, the
authorization of an additional 18,500,000 shares of
Hexcel Preferred and except as contemplated by the
Governance Agreement, amend its certificate of
incorporation or by-laws (or similar organizational
documents);
(xiii) adopt or amend in any material respect or
terminate any pension or benefit plan relating to
employees of Hexcel or any of its Subsidiaries employed
outside the United States, except as required by law,
or change any actuarial or other assumption used to
calculate funding obligations with respect to any such
plan (except to the extent that failure to make such
change would result in noncompliance with U.S. GAAP,
the Code or other applicable law), or change the manner
in which contributions to any such plan are made or the
basis upon which such contributions are determined,
except as required by law;
(xiv) make any material change in the compensation
or benefits of, or enter into or amend in any material
respect any employment agreement with respect to, any
employee or director of Hexcel or any of its
Subsidiaries outside the United States, except in the
ordinary course of business consistent with past
practice or, if applicable, as may be required under
existing agreements;
(xv) make any change in any method of accounting
or accounting practice or policy other than those
required by U.S. GAAP;
(xvi) enter into an agreement to settle any
material lawsuits, claims, actions, investigations or
proceedings; or
(xvii) authorize any of, or commit or agree to
take any of, the foregoing actions.
SECTION 4.02. Access to Information. Each of
Hexcel and Ciba shall, and shall cause each of their
respective Subsidiaries to, afford to the other party and to
the officers, employees, accountants, counsel, financial
advisors and other representatives of such other party,
reasonable access during normal business hours during the
period prior to the Closing, to all their respective
properties, books, Contracts, commitments, personnel and
records (in the case of Ciba, only to the extent relating to
the Transferred Business or the transactions contemplated by
this Agreement and the Ancillary Agreements) and, during
such period, each of Hexcel and Ciba shall, and shall cause
each of their respective Subsidiaries to, furnish promptly
to the other party (a) a copy of each report, schedule,
registration statement and other document filed by it during
such period pursuant to the requirements of Federal, state
or foreign securities laws and (b) all other information
concerning its business, properties and personnel (in each
case with respect to Ciba, only to the extent relating to
the Transferred Business or the transactions contemplated by
this Agreement and the Ancillary Agreements) as such other
party may reasonably request. Each of Hexcel and Ciba
acknowledge that the information being provided to it in
connection with the transactions contemplated hereby is
subject to the Confidentiality Agreement, the terms of which
are incorporated herein by reference. No investigation
pursuant to this Section 4.02 shall affect any
representations or warranties of the parties herein or the
conditions to the obligations of the parties hereunder.
SECTION 4.03. Legal Requirements. Upon the terms
and subject to the conditions set forth in this Agreement,
each of the parties shall use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions
contemplated by this Agreement and the Ancillary Agreements,
including (i) the obtaining of all necessary actions,
waivers, consents and approvals from Governmental Entities
and the making of all necessary registrations and filings
(including the prompt filing of (A) the premerger
notification and report form under the HSR Act and any
filings required pursuant to applicable antitrust and
competition law statutes and regulations in each of the
Applicable Jurisdictions, (B) a notice pursuant to the Exon-
Xxxxxx Amendment, (C) all materials requested by the
Department de Securite pursuant to the Demande
d'Autorization with the Direction du Tresor in France,
(D) the filing of a Special Security Agreement and a related
request for a National Interest Determination and all
approvals of the United States Defense Investigative Service
required in connection therewith and (E) any other filings
necessary with Governmental Entities, if any) and the taking
of all reasonable steps as may be necessary to obtain any
approval or waiver from, or to avoid an action or proceeding
by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging
this Agreement or any of the Ancillary Agreements or the
consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements, including seeking to
have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and
(iv) the execution and delivery of any additional
instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of,
this Agreement and the Ancillary Agreements.
SECTION 4.04. No Solicitation. (a) Neither Ciba
nor Hexcel shall, nor shall they permit any of their
respective Subsidiaries to, nor shall they authorize or
permit any officer, director or employee of, or any
investment banker, attorney or other advisor or
representative of, either of them or their respective
Subsidiaries to, (i) solicit or initiate, or facilitate or
endorse or encourage the submission of, any Interfering
Transaction, (ii) participate in any discussions or
negotiations regarding, or furnish to any person any
information with respect to, or take any other action to
expedite any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Interfering Transaction provided, that, prior to the receipt
of Hexcel stockholder approval of (x) the issuance of the
Hexcel Shares and (y) the Required Amendment, if in the
opinion of the Board of Directors of Hexcel or Ciba, as the
case may be, based on the advice of outside counsel, such
failure to act would be inconsistent with the fiduciary
duties of Hexcel or Ciba or their respective boards of
directors, as the case may be, to stockholders under
applicable law, Hexcel or Ciba, as the case may be, may, in
response to an unsolicited proposal relating to an
Interfering Transaction, and subject to compliance with
Section 4.04(c) below, furnish information with respect to
it to any Person pursuant to a confidentiality agreement.
Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding
sentence by any officer of Hexcel or Ciba or any of their
respective Subsidiaries or any investment banker, attorney
or other advisor or representative of Hexcel or Ciba or any
of their respective Subsidiaries, acting on behalf of Hexcel
or Ciba or any of their respective Subsidiaries, shall be
deemed to be a breach of this Section 4.04(a) by Hexcel or
Ciba, as the case may be. For purposes of this Agreement,
"Interfering Transaction" means any transaction, other than
the transactions contemplated by this Agreement and the
Ancillary Agreements, the consummation of which prior to the
consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements would or could
reasonably be expected to impede, interfere with, prevent or
materially delay, or which would or could reasonably be
expected to materially dilute the benefits to Ciba or
Hexcel, as the case may be, of the transactions contemplated
hereby or by the Ancillary Agreements.
(b) The Board of Directors of Hexcel shall not
(i) withdraw or modify, or propose to withdraw or modify, in
a manner that would prevent the stockholders of Hexcel from
voting on, and approving if the requisite vote is obtained,
the issuance of the Hexcel Shares or the Required Amendment,
the approval or recommendation by such Board of Directors of
the transactions contemplated hereby or by the Ancillary
Agreements, (ii) approve or recommend, or propose to approve
or recommend, any Interfering Transaction or (iii) negotiate
or approve or authorize entering into any preliminary or
definitive agreement or understanding with respect to any
Interfering Transaction.
(c) The boards of directors of Ciba and CGC shall
not (i) withdraw or modify, or propose to withdraw or
modify, the approval or recommendation by such boards of
directors of the transactions contemplated hereby or by the
Ancillary Agreements, (ii) approve or recommend, or propose
to approve or recommend, any Interfering Transaction or
(iii) negotiate or approve or authorize entering into any
preliminary or definitive agreements or understanding with
respect to any Interfering Transaction.
(d) Hexcel and Ciba and CGC shall promptly advise
each other of the existence of any request for information
or of any proposal for an Interfering Transaction, or any
inquiry with respect to, or which could reasonably be
expected to lead to, any Interfering Transaction.
(e) Nothing contained in this Section 4.04 shall
prohibit Hexcel from making any recommendation with respect
to the transactions contemplated hereby or any disclosure to
Hexcel's stockholders if, based on advice of outside
counsel, such disclosure or recommendation is required by
applicable fiduciary duties, law or stock exchange rules.
SECTION 4.05. Agreement Regarding Non-Assignable
Contracts. If any Acquired Contract (i) is not assignable
without the consent of any party thereto, (ii) may by its
terms be terminated or cancelled upon assignment or (iii) is
not by its terms assignable, Ciba and Hexcel shall use all
commercially reasonable efforts to obtain the consent of any
required parties thereto to effect such assignment. If any
such consent or approval can not be obtained, Ciba shall use
all commercially reasonable efforts (not involving the
expenditure of money (other than incidental fees and
expenses) or the giving of financial accommodations) to
secure an arrangement reasonably satisfactory to Hexcel to
provide Hexcel the benefits that it would have received and
to subject Hexcel to the obligations it would have owed, in
each case, under such Acquired Contract following the
Closing as if such consent or approval had been obtained.
SECTION 4.06. Transfer Taxes. Ciba and Hexcel
shall cooperate and shall cause their respective
Subsidiaries to cooperate in timely making and filing all
Tax Returns as may be required to comply with the provisions
of any Transfer Tax laws. To the extent legally able to do
so, Hexcel and Ciba shall deliver or cause to be delivered
to each other exemption certificates satisfactory in form
and substance to each other with respect to Transfer Taxes
if such delivery would reduce the amount of Transfer Taxes
that would otherwise be imposed. To the extent permitted by
law, Hexcel shall pay when due, all Transfer Taxes, and
Hexcel shall reimburse Ciba for any Transfer Taxes paid by
Ciba and its Subsidiaries within ten days of Ciba's written
request, which request shall include a calculation of such
Transfer Taxes and evidence of payment thereof. Hexcel
shall provide to Ciba, within 10 days of Hexcel's payment of
a Transfer Tax, a statement setting forth the amount of such
Transfer Tax, the calculation thereof and evidence of
payment thereof.
SECTION 4.07. Use of Names. (a) Following the
Closing, Hexcel shall have the right to continue to use
existing inventories of the following materials bearing Ciba
Tradenames for the periods specified below:
(i) quotation forms, order acknowledgments,
purchase orders, invoices, shipping documents,
letterhead, business cards and similar stationary sent
to third parties for a period not to exceed 90 days
following the Closing Date (and with respect to those
of Danutec for a period not to exceed 90 days following
the Danutec Closing, if any); provided, however, that
Hexcel shall overlabel or make such other changes to
such documents as is necessary to reflect correct
payment instructions;
(ii) packaging, labeling, containers, brochures,
technical data sheets and similar product related
materials for a period of not more than twelve months
following the Closing Date (and with respect to those
of Danutec for a period of not more than twelve months
following the Danutec Closing, if any); and
(iii) internal documents and forms used in the
day-to-day conduct of the business for a period of up
to twelve months following the Closing Date (and with
respect to those of Danutec for a period of up to
twelve months following the Danutec Closing, if any);
provided that in no event shall Hexcel distribute any
such internal documents to any third party.
(b) Hexcel shall use reasonable efforts to
replace Ciba Tradenames on buildings, cars, trucks and other
fixed assets as soon as possible, but in any event shall
replace the same within 180 days following the Closing Date
(and with respect to Danutec within 180 days following the
Danutec Closing, if any).
(c) (i) Following the Closing Date, Hexcel shall
not place any orders for advertising copy using any of the
Ciba Tradenames. Orders for advertising copy made prior to
the Closing Date (or, with respect to Danutec, the date of
the Danutec Closing) may be completed, provided that
publication of such advertising is completed prior to
180 days following the Closing Date (and with respect to
Danutec prior to 180 days following the Danutec Closing, if
any).
(ii) For a period of 180 days following the
Closing Date (and with respect to Danutec for a period of
180 days following the Danutec Closing, if any), Hexcel
shall have the right to use Ciba Tradenames in association
with Hexcel Trade Names in advertising media solely for the
purpose of communicating to customers the consummation of
the transactions contemplated by this Agreement and the
Ancillary Agreements; provided, however, that any such use
shall be subject to the prior review and approval of Ciba,
not to be unreasonably withheld.
(d) (i) Hexcel and the Ciba Distributors (as
defined below) shall use their respective commercially
reasonable efforts to cause the orderly sale of all existing
inventory constituting Deferred Assets and bearing Ciba
Tradenames by each Subsidiary of Ciba conducting the
Transferred Business in the Excluded Jurisdictions under the
Distribution Agreement (each, a "Ciba Distributor") as soon
as reasonably practicable and consistent with past practice
for such Ciba Distributors. Thereafter, subject to
subparagraph (iii) below, Hexcel shall supply, in accordance
with the Distribution Agreement, the respective Ciba
Distributors with products that do not bear any Ciba
Tradename.
(ii) Each Ciba Distributor continuing to serve as
a distributor of products of the Transferred Business
following the Closing shall be entitled to use the Ciba
Tradenames in association with existing products only until
the earliest to occur of (A) the date on which all existing
inventory of such Ciba Distributor bearing any Ciba
Tradename (including any additional inventory supplied in
accordance with subparagraph (iii) below) has been sold;
(B) the date of termination of the Distribution Agreement
with respect to such Ciba Distributor; or (C) the first
anniversary of the Closing Date.
(iii) Hexcel may supply directly or indirectly to
any Ciba Distributor additional inventory bearing any Ciba
Tradename in volumes consistent with past practice in effect
prior to Closing for a period not to exceed 90 days
following the Closing Date. If a Danutec Closing occurs
after the Closing Date, Danutec shall be permitted to use
inventory bearing Ciba Tradenames until the earlier to occur
of (x) the exhaustion of Danutec's existing inventory as of
the date of the Danutec Closing or (y) 90 days following the
Danutec Closing. In the event that any Ciba Distributor is
terminated as a distributor of products of the Transferred
Business prior to the first anniversary of the Closing Date,
any successor distributor engaged by Hexcel to distribute
products of the Transferred Business in the territory
formerly serviced by such Ciba Distributor shall be entitled
to use the Ciba Tradenames in association with such products
until the earlier of (A) the date on which all the then
existing inventory of the Ciba Distributor transferred to
the new distributor has been sold by such new distributor,
(B) 90 days from the date of such engagement by Hexcel, or
(C) the first anniversary of the Closing Date.
(e) Notwithstanding any other provision of this
Agreement, Hexcel agrees that Ciba and CGC shall have no
responsibility for claims by third parties arising out of,
or relating to, the use by Hexcel of any Ciba Tradename, and
Hexcel agrees to indemnify and hold harmless Ciba, CGC and
each of their respective Subsidiaries and their directors,
officers and employees from any and all claims that may
arise out of the use thereof by Hexcel or any affiliate of
Hexcel whether or not in accordance with this Agreement.
SECTION 4.08. Insurance. From and after the
Closing, Hexcel shall secure insurance with respect to the
Business, including the Transferred Business, with coverages
and amounts customary in the industry in accordance with
applicable prudent risk management practices.
SECTION 4.09. Post-Closing
Cooperation. (a) After the Closing, upon reasonable
written notice, Hexcel and Ciba shall furnish or cause to be
furnished to each other and their respective accountants,
counsel and other representatives access, during normal
business hours, to such information (including records
pertinent to the Transferred Business), personnel and
assistance relating to the Transferred Business and the
transactions contemplated hereby and by the Ancillary
Agreements as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing
of any Tax Returns, reports or forms, the defense of any Tax
claim or assessment, the pursuit of any adjustment or refund
of Taxes, the calculation of any deferred Tax items, the
giving of testimony or the preparation and defense or
prosecution of any actions or proceedings (other than
actions or proceedings in which Ciba and Hexcel are adverse
parties) and for any other reasonable purpose relating to
the transactions contemplated by this Agreement and the
Ancillary Agreements. Such assistance shall include
cooperation in responding to audit reports made by Taxing
Authorities regarding or relating to the Transferred
Business and, at the request of the party being audited,
participation in audits relating to the Transferred
Business. The reasonable fees and expenses (except
de minimis fees and expenses) incurred in connection with
any cooperation and assistance provided pursuant hereto
shall be reimbursed to the party providing such cooperation
and assistance by the party receiving such cooperation and
assistance. Hexcel shall retain the books and records
included in the Acquired Assets and the Deferred Assets for
a period of seven years after the Closing or such longer
period as may be required by applicable law. Ciba shall
retain the books and records relating to the Transferred
Business that are Excluded Assets for a period of seven
years after the Closing or such longer period as may be
required by applicable law. After the end of such period,
in the event Hexcel or Ciba determines to dispose of such
books or records, Hexcel or Ciba, as the case may be, shall
give 30 days' prior written notice to such effect to the
other party and give the other party at the other party's
cost and expense, reasonable opportunity to remove and
retain all or any part of such books or records as the other
party may select.
(b) Ciba and CGC shall use all commercially
reasonable efforts to facilitate and effect the
implementation of the transactions contemplated hereby and
by the Ancillary Agreements and, for such purpose but
without limitation, Ciba and CGC shall execute and deliver
to Hexcel promptly at and after the Closing such
assignments, Real Property Deeds (and other similar real
property deeds in South Africa), bills of sale, consents and
other instruments as Hexcel or its counsel may reasonably
request as necessary for such purpose.
(c) In the event that after the Closing, a
Deferred Closing or the Danutec Closing, as the case may be,
Ciba, CGC or Hexcel becomes aware that any Acquired Assets
or Deferred Assets were not transferred to Hexcel by Ciba or
any of its Subsidiaries at the Closing, a Deferred Closing
or the Danutec Closing, as the case may be, Ciba and CGC or
Hexcel shall promptly notify the other to that effect and
Ciba and CGC shall transfer such Acquired Assets or Deferred
Assets to Hexcel or its designated Subsidiary or
Subsidiaries. In the event that after the Closing, a
Deferred Closing or the Danutec Closing, Hexcel, Ciba or CGC
becomes aware that any assets that are not Acquired Assets
were transferred to Hexcel at the Closing, a Deferred
Closing or the Danutec Closing, Hexcel or Ciba and CGC shall
promptly notify the other to that effect and Hexcel shall
transfer such assets to Ciba or its designated Subsidiary or
Subsidiaries.
(d) From time to time after the Closing, as and
when requested by a party hereto, the party receiving such
request shall execute and deliver, or cause to be executed
and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other
actions (including pursuant to the provisions of
Sections 4.03, 4.05 and 4.19), as the party receiving such
request reasonably deems necessary or desirable to
consummate the transactions contemplated by this Agreement
and the Ancillary Agreements.
(e) Effective on the Closing Date, each of Ciba
and CGC hereby constitutes and appoints Hexcel and its
successors, legal representatives and assigns the true and
lawful attorneys of Ciba and CGC with full power of
substitution, in the name of Ciba and CGC or Hexcel, but on
behalf of and for the benefit of Hexcel and its successors,
legal representatives and assigns, and at the expense of
Hexcel: (i) to demand and receive from time to time any and
all the Acquired Assets and, after a Deferred Closing, the
relevant Deferred Assets and to make endorsements and give
receipts and releases for and in respect of the same and any
part thereof; (ii) to institute, prosecute, compromise and
settle any and all proceedings at law, in equity or
otherwise that Hexcel and its successors, legal
representatives or assigns may deem proper in order to
collect, assert or enforce any claim, right or title of any
kind in or to the Acquired Assets and, after a Deferred
Closing, the relevant Deferred Assets; (iii) to defend or
compromise any or all actions, suits or proceedings in
respect of any of the Acquired Assets and, after a Deferred
Closing, the relevant Deferred Assets, other than actions,
suits or proceedings with respect to which indemnification
is provided by Ciba and CGC pursuant to Section 4.10 or
Article VII (except as provided in Section 7.06) and (iv) to
do all such acts and things in relation to the matters set
forth in the preceding clauses (i) through (iii) as Hexcel
and its successors, legal representatives or assigns shall
deem desirable. Each of Ciba and CGC hereby agrees that the
appointment hereby made and the powers hereby granted are
coupled with an interest and are and shall be irrevocable.
Ciba shall deliver to Hexcel at the Closing an acknowledged
power of attorney to the foregoing effect executed by Ciba
and CGC.
(f) Effective upon the Closing Date, Hexcel and
its Subsidiaries shall have the right to receive and open
all mail, packages and other communications addressed to
Ciba or any of its affiliates that are delivered to Hexcel
or any of its Subsidiaries and they shall have the right to
retain all such communications which relate exclusively or
primarily to the Transferred Business. Ciba and CGC agree
promptly to deliver to Hexcel any such mail, packages or
other communications delivered directly or indirectly to
Ciba or any of its affiliates. Hexcel shall promptly
deliver to Ciba all mail, packages and other communications
delivered to Hexcel or any of its Subsidiaries that do not
relate exclusively or primarily to the Transferred Business.
Hexcel shall have the right and authority to collect, for
its own account, all receivables and other items which shall
be transferred or are intended to be transferred to Hexcel
as provided in this Agreement, and to endorse with the name
of Ciba or any of its Subsidiaries any checks or drafts
received on account of any such receivables or other items,
and Ciba or CGC shall promptly transfer or deliver to Hexcel
any cash or other property received directly or indirectly
by Ciba or any of its Subsidiaries or affiliates in respect
of such receivables and other items.
SECTION 4.10. Bulk Transfer Laws. Hexcel hereby
waives compliance by Ciba and its Subsidiaries with the
provisions of any so-called "bulk transfer law" of any
jurisdiction in connection with the sale of the Acquired
Assets and the Deferred Assets to Hexcel. Ciba and CGC
shall indemnify and hold harmless Hexcel against any and all
liabilities (other than the Assumed Liabilities) that may be
asserted by third parties against Hexcel as a result of
noncompliance with any such bulk transfer law; provided,
however, that nothing herein shall prevent Ciba or CGC from
contesting any such liabilities in good faith.
SECTION 4.11. Supplies. Except as set forth in
Section 4.07, Hexcel shall not use stationery, purchase
order forms, signage, invoices, receipts, or advertising and
promotional materials, training and service literature and
materials or other similar materials that state or otherwise
indicate thereon that the Transferred Business or any part
thereof is a division or unit of Ciba or any of its
Subsidiaries.
SECTION 4.12. Certain Ancillary
Agreements. Prior to the Closing, the parties hereto shall
negotiate in good faith and agree upon mutually acceptable
terms of (i) an assignment and assumption agreement relating
to the transactions contemplated hereby and by the Ancillary
Agreements (the "Assignment and Assumption Agreement"),
(ii) a registration rights agreement relating to the sale of
the Hexcel Shares as contemplated by the letter of intent
dated July 11, 1995 between Hexcel and Ciba (the
"Registration Rights Agreement"), (iii) certain supply and
tolling agreements (the "Supply and Tolling Agreements"),
(iv) the Trademark License Agreement for the Trademark
"Redux", (v) transitional services agreements (which, unless
otherwise agreed, shall reflect prices that do not exceed
the historically allocated cost at which such services were
provided to the Transferred Business as operated by Ciba
prior to the Closing) for the United States, the United
Kingdom and France (the "Transitional Services Agreements"),
(vi) an agreement regarding employees of the Transferred
Business in the United Kingdom (the "UK Employment Matters
Agreement"), (vii) certain agreements relating to the
sharing of the Duxford site and CML (together with the Hive-
Down Agreements, the "UK Agreements") and (viii) the
Indenture. At the Closing, Hexcel and Ciba (or, as
applicable, their Subsidiaries) will execute and deliver
such agreements.
SECTION 4.13. Intellectual Property
Licenses. For use in this Section 4.13, "Composite
Products" shall mean composites, including structures and
interiors, fabrics, laminates, prepregs, adhesive films,
honeycomb core, sandwich panels and fabricated components.
(a) At Closing, Ciba and CGC shall grant to
Hexcel pursuant to a Trademark license agreement in form and
substance reasonably satisfactory to Ciba, CGC and Hexcel
(the "Trademark License Agreement"), a paid-up, perpetual,
royalty-free, non-exclusive, license, without the right to
grant sublicenses, under the Trademark "Redux".
(b) (i) At Closing, Hexcel shall be deemed to
have granted to Ciba and its Subsidiaries a paid-up,
perpetual, royalty-free, non-exclusive license (without the
right to grant sublicenses except to customers that purchase
products from Ciba) under all currently existing Patents set
forth on Schedule 4.13(b)(i) to sell products, other than
Composite Products, for the manufacture and sale by Ciba's
customers of products (including Composite Products) in any
field including the Composites Field .
(ii) At Closing, Ciba shall be deemed to have
granted to Hexcel and its Subsidiaries a paid-up, perpetual,
royalty-free, non-exclusive license (without the right to
grant sublicenses except to have products licensed under the
Patents set forth on Schedule 4.13(b)(ii) made for Hexcel
for internal use by Hexcel in the manufacture and sale of
Composite Products) to make, have made, use and sell
products licensed under the Patents set forth on
Schedule 4.13(b)(ii) for the manufacture and sale of
Composites Products.
(iii) At Closing, Ciba shall be deemed to have
granted to Hexcel and its Subsidiaries a paid-up, perpetual,
royalty-free, non-exclusive license, with the right to grant
sublicenses, to make, use and sell products under the
Patents set forth on Schedule 4.13(b)(iii).
(c) After Closing, Hexcel shall, upon request,
grant to Ciba and its Subsidiaries a perpetual, nonexclusive
license (without the right to grant sublicenses except to
customers that purchase products from Ciba) to sell products
other than Composite Products for the manufacture and sale
by Ciba's customers of products (including Composite
Products) for use in any field including the Composites
Field, bearing a commercially reasonable royalty to be
mutually agreed upon under the Patents set forth on
Schedule 4.13(c).
(d) After Closing, Ciba shall, upon request,
grant to Hexcel and its Subsidiaries a perpetual, non-
exclusive license (without the right to grant sublicenses
except to have products licensed under the Patents set forth
on Schedule 4.13(d) made for Hexcel for internal use by
Hexcel in the manufacture and sale of Composite Products) to
make, have made, use and sell products licensed under the
Patents set forth on Schedule 4.13(d) for the manufacture
and sale of Composites Products, bearing a commercially
reasonable royalty to be mutually agreed upon.
(e) In the event that (i) the conduct of the
Transferred Business as conducted on the Closing Date would
infringe any Patents developed by the Polymers or Composites
Divisions of Ciba as existing on the Closing Date of Ciba or
its Subsidiaries that are not Acquired Intellectual Property
or utilize any Know-how as existing on the Closing Date of
Ciba or its Subsidiaries that is not Acquired Intellectual
Property and (ii) Hexcel provides written notice to Ciba
specifying the relevant Patent or Know-how, Ciba or CGC
shall thereupon be deemed to have granted Hexcel as of the
Closing Date a non-exclusive, paid-up, perpetual, royalty-
free license (without the right to grant sublicenses except
to have products licensed hereunder made for Hexcel for
internal use by Hexcel in the manufacture and sale of
Composite Products) in order to continue to conduct the
Transferred Business as conducted on the Closing Date under
such Patents and utilizing such Know-how.
(f) In the event that (i) the conduct of Ciba's
business, excluding the manufacture of Composite Products,
by the Transferred Business as conducted on the Closing Date
would infringe any Patent or utilize any Know-how that is
Acquired Intellectual Property as existing on the Closing
Date and (ii) Ciba or CGC provides written notice to Hexcel
specifying the relevant Patent or Know-how, Hexcel shall
thereupon be deemed to have granted to Ciba and CGC as of
the Closing Date a non-exclusive, paid-up, perpetual,
royalty-free license (without the right to grant sublicenses
except to customers that purchase products from Ciba) to
sell product other than Composite Products for the
manufacture and sale by Ciba's customers of products
(including Composite Products) in any field including the
Composites Field in order to conduct such business, under
such Patents or utilizing such Know-how.
(g) In the event that (i) the conduct of the
Transferred Business relating solely to the sale of resin
systems for resin transfer molding ("RTM") applications as
conducted on the Closing Date would infringe any Patents
developed by the Polymers Division or Composites Divisions
of Ciba as existing on the Closing Date of Ciba or its
Subsidiaries that are not Acquired Intellectual Property or
utilize any Know-how as existing on the Closing Date of Ciba
or its Subsidiaries that is not Acquired Intellectual
Property and (ii) Hexcel provides written notice to Ciba
specifying the relevant Patent or Know-how, Ciba or CGC
shall thereupon be deemed to have granted Hexcel as of the
Closing Date a non-exclusive, paid-up, perpetual, royalty-
free license, with the right to grant sublicenses, in order
continue to conduct the Transferred Business as conducted on
the Closing Date under such Patents and utilizing such Know-
how.
(h) In the event that (i) the conduct of Ciba's
business relating solely to the sale of resin systems for
RTM applications as conducted by the Polymers Division of
Ciba or its Subsidiaries on the Closing Date would infringe
any Patent or utilize any Know-how that is Acquired
Intellectual Property as existing on the Closing Date and
(ii) Ciba or CGC provides written notice to Hexcel
specifying the relevant Patent or Know-how, Hexcel shall
thereupon be deemed to have granted to Ciba and CGC as of
the Closing Date a non-exclusive, paid-up, perpetual,
royalty-free license, with the right to grant sublicenses,
in order to conduct such business under such Patents or
utilizing such Know-how.
(i) After Closing, in the event that (i) Ciba or
CGC determines that a Patent on Schedule 4.13(c) should be
on 4.13(b)(i) because the conduct of Ciba's business,
excluding the manufacture of Composite Products, by the
Transferred Business as conducted on the Closing would
infringe such Patent designated on Schedule 4.13(c) and
(ii) Ciba or CGC provides written notice to Hexcel
specifying the relevant Patent, Hexcel shall thereupon be
deemed to have granted to Ciba and CGC as of the Closing
Date a non-exclusive, paid-up, perpetual, royalty-free
license (without the right to grant sublicenses except to
customers that purchase product from Ciba) to sell products
other than Composite Products for the manufacture and sale
by Ciba's customers of products (including Composite
Products) in any field including the Composites Field in
order to conduct such business outside the Composites Field,
under such Patent.
(j) After Closing, in the event that (i) Hexcel
determines that a Patent on Schedule 4.13(d) should be on
Schedule 4.13(b)(ii) because the conduct of the Transferred
Business as conducted on the Closing Date would infringe
such Patent designated on Schedule 4.13(d) and (ii) Hexcel
provides written notice to Ciba specifying the relevant
Patent, Ciba or CGC shall thereupon be deemed to have
granted Hexcel as of the Closing Date a non-exclusive, paid-
up, perpetual, royalty-free license (without the right to
grant sublicenses except to have product licensed hereunder
made for Hexcel for internal use by Hexcel in the
manufacture and sale of Composite Products) in order to
continue to conduct the Transferred Business as conducted on
the Closing Date under such Patents.
SECTION 4.14. Directors' and Officers'
Indemnification. The certificate of incorporation and
by-laws of Hexcel shall continue to contain the provisions
with respect to indemnification contained therein as of the
date hereof, which provisions shall not be amended, repealed
or otherwise modified for a period of six years following
the Closing in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to
the Closing were directors or officers of Hexcel in respect
of actions or omissions occurring at or prior to the
Closing, except for such modifications as are required by
applicable law. From and after the Closing, Hexcel shall
indemnify, defend and hold harmless the officers and
directors of Hexcel as of the date hereof and their
respective heirs and personal and legal representatives
(collectively, the "Indemnified Individuals") against all
losses, expense, claims, damages, liabilities, costs or
expenses (including, without limitation, reasonable fees and
expenses of counsel selected by the Indemnified Individuals;
provided that Hexcel shall in no event be responsible for
the fees and expenses of more than one counsel for all
Indemnified Individuals in respect of any particular Claim
(as defined below) or group of related Claims, unless an
Indemnified Individual shall have reasonably concluded that
there may be legal defenses available to him that are not
available to, and that are in conflict with, other
Indemnified Individuals in respect of such Claim or Claims,
in which case Hexcel shall be responsible for the reasonable
fees and expenses of one counsel for such Indemnified
Individual) arising out of or in connection with any civil,
criminal, administrative or investigative claim, action,
suit, proceeding or investigation based in whole or in part
on the fact that such person was a director or officer of
Hexcel at or prior to the Closing (each a "Claim"), in each
case to the fullest extent permitted under Delaware law (and
shall pay the costs and expenses incurred by such
Indemnified Individuals in connection with or relating to
such Claim (including fees and expenses of counsel as
provided above) upon presentation of statements in advance
of the final disposition of any such matter to the fullest
extent permitted under Delaware law, subject to receipt of
the Indemnified Individual's undertaking to repay such
advances following a final and nonappealable decision by a
court of competent jurisdiction that such repayment is
required). For six years after the Closing, Hexcel shall
provide directors' and officers' liability insurance ("D&O
Insurance") for the Indemnified Individuals in respect of
actions or omissions occurring at or prior to the Closing
(i) in an amount no less than that currently in effect or
such greater amount as shall hereafter be maintained for the
benefit of Hexcel's directors, (ii) with other terms no less
favorable than those currently in effect and (iii) with an
insurance carrier of comparable or better financial
condition than Hexcel's current D&O Insurance carrier, it
being understood that the provision of such D&O Insurance
shall not relieve Hexcel of its indemnification obligations
pursuant to this Section 4.14. Notwithstanding the
foregoing, if at any time Hexcel does not maintain D&O
Insurance for its then current directors, the D&O Insurance
referred to in the preceding sentence for the Indemnified
Individuals need only be maintained to the extent it is
available on commercially reasonable terms. The provisions
of this Section 4.14 shall, to the maximum extent permitted
by law, be binding upon the successors and assigns of
Hexcel.
SECTION 4.15. Distribution Agreement. At
Closing, Hexcel and Ciba shall execute the Distribution
Agreement, which relates to the Deferred Assets and the
distribution, sales, marketing and receivables collection
services currently provided to the Transferred Business in
the Excluded Jurisdictions by the Ciba Distributors.
SECTION 4.16. Local Agreements. Prior to the
Closing or, if applicable, any Deferred Closing or the
Danutec Closing, the parties to this Agreement shall
negotiate in good faith and agree upon for relevant
jurisdictions other than the United States such agreements
and arrangements consistent with the terms hereof as are
necessary to effectuate the transactions contemplated hereby
and by the Ancillary Agreements including conveyancing
agreements and legally required arrangements regarding
employees. In the event of any inconsistency between the
provisions of any such local agreement and this Agreement,
the provisions of this Agreement shall govern in all
instances.
SECTION 4.17. NYSE Listing. Hexcel shall use all
commercially reasonable efforts to cause the Hexcel Shares
to be listed on the New York Stock Exchange at the time of
the Closing, subject only to official notice of issuance.
SECTION 4.18. Stockholder Approval;
Proxy. (a) Hexcel shall hold a vote of its stockholders to
approve the matters described in paragraph (b) below at an
annual meeting of stockholders duly called and held for that
purpose as soon as practicable.
(b) Hexcel shall prepare, file with the SEC and
mail to its stockholders a proxy statement that complies as
to form in all material respects with all relevant
provisions of the Exchange Act relating to the solicitation
of proxies for the approval of (i) the issuance of the
Hexcel Shares, (ii) (A) the Required Amendment and (B) an
amendment to the certificate of incorporation of Hexcel to
increase the number of shares of Hexcel Preferred authorized
for issuance to 20,000,000, (iii) the election of the slate
of nominees to be directors of Hexcel described in
Section 4.19, (iv) Hexcel's amended and restated incentive
stock plan, (v) the ratification of the appointment of
Hexcel's independent auditors and (vi) such other business
as may properly come before the annual meeting. Hexcel
covenants that on the date filed with the SEC and on the
date first sent or given to stockholders such proxy
statement shall not contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which
they were made, not misleading, except that Hexcel makes no
such covenant as to information supplied by Ciba or any of
its Subsidiaries or affiliates in writing expressly for
inclusion therein. Ciba shall cooperate with Hexcel in the
preparation of such proxy statement and, in that connection,
shall provide for use in such proxy statement such
information with respect to Ciba, CGC, the Divested
Subsidiaries, any of their respective affiliates, the
Transferred Business, the Acquired Assets and the Deferred
Assets as is reasonably necessary for (i) such proxy
statement to comply as to form in all material respects with
the relevant provisions of the Exchange Act and (ii) for
such proxy statement not to contain any untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which
they were made, not misleading, in each case, solely with
respect to Ciba, CGC, the Divested Subsidiaries, any of
their respective affiliates, the Transferred Business, the
Acquired Assets or the Deferred Assets. Ciba covenants that
on the date such proxy statement is filed with the SEC and
on the date such proxy statement is first given or sent to
Hexcel's stockholders such information provided in writing
by Ciba or any of its Subsidiaries or affiliates for use
therein shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements related
thereto contained in such proxy statement, in light of the
circumstances in which they were made, not misleading.
Hexcel and Ciba, as the case may be, shall each promptly
correct any information provided by it or any of its
Subsidiaries or affiliates for use in such proxy statement,
if and to the extent that such information shall have become
false or misleading in any material respect, and Hexcel
further agrees to take all commercially reasonable steps
necessary to amend or supplement such proxy statement and to
cause such proxy statement as so amended or supplemented to
be filed with the SEC and disseminated to Hexcel's
stockholders, in each case as and to the extent required by
the Exchange Act. Ciba and its counsel shall be given a
reasonable opportunity to review and comment upon the proxy
statement and all amendments and supplements thereto prior
to their filing with the SEC or dissemination to Hexcel's
stockholders. Hexcel shall provide Ciba and its counsel in
writing with any comments Hexcel or its counsel may receive
from the SEC or its staff with respect to the proxy
statement promptly after the receipt of such comments.
SECTION 4.19. New Board of Directors. (a) The
slate of directors to be presented to stockholders of Hexcel
in accordance with Section 4.18 is expected to be
Xxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxxxx,
Xxxx X. Xxx, Xxxxxx X. Xxxxxxxx, Xxxxxxxxx X. Xxxxxxx,
Xxxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxx.
(b) On the Closing Date, Hexcel shall cause to be
delivered to Ciba (i) duly signed resignations, effective
immediately after the Closing, of Messrs. Harrosh, Wimer,
Xxxxxxx and Xxxx in order to permit the appointment of
Xxxx M.D. Xxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx and
Xxxxxxx Xxxxxxx to fill the vacancies thereby created in
accordance with the Governance Agreement and (ii) such other
resignations as may be necessary permit Ciba's nominees to
become directors and committee members in accordance with
the Governance Agreement, and Hexcel shall take such other
action as is necessary to accomplish the foregoing.
Immediately following the appointment of such Ciba nominees,
the number of directors constituting Hexcel's Board of
Directors shall be fixed at ten and Xxxxxxx Xxxxxxxxxx shall
be appointed to fill the remaining vacancy in accordance
with the Governance Agreement. On the Closing Date, Ciba
shall cause to be delivered to Hexcel duly signed
resignations (from the applicable boards of directors and
committees thereof), effective immediately after the
Closing, of the directors of each of the Divested
Subsidiaries.
SECTION 4.20. Subsequent Agreement Royalty. If
prior to Closing, a major original equipment manufacturer
enters into an agreement with CGC that would constitute an
Acquired Contract with respect to certain interiors programs
and/or the manufacturing of secondary composites for such
manufacturer in the Peoples Republic of China, Hexcel and
Ciba shall promptly negotiate in good faith the terms of a
royalty agreement or agreements providing for the payment to
Ciba or CGC of a royalty with respect to sales under such
Contract or Contracts on terms to be mutually agreed upon in
good faith by the parties hereto based upon the anticipated
profitability of such Contract or Contracts to Hexcel and
the level of capital expenditures that will be required for
Hexcel to perform its obligations thereunder.
SECTION 4.21. Financial and Insurance Expertise.
(a) For a period of 12 months after the Closing, Ciba shall
provide its knowledge and expertise to Hexcel to assist
Hexcel in securing sources of financing adequate to support
the operations of Hexcel assuming that the transactions
contemplated by this Agreement and the Ancillary Agreements
are consummated, provided that in no event shall Ciba be
under any obligation to provide any financial support or
accommodation whatsoever (whether as obligor, guarantor or
otherwise) to Hexcel or any of its Subsidiaries or any other
party in connection with securing such financing.
(b) For a period of 24 months after the Closing
in accordance with the provisions of the Transitional
Services Agreements, Ciba shall provide its knowledge and
expertise to Hexcel to assist Hexcel in obtaining insurance
coverage consistent with prudent risk management principles,
at a rate of $200 per hour, with respect to the operations
of Hexcel assuming that the transactions contemplated by
this Agreement and the Ancillary Agreements are consummated,
provided that in no event shall Ciba be under any obligation
to provide any financial support or accommodation whatsoever
in connection with obtaining such insurance coverage.
SECTION 4.22 Transfer of Intercompany Debts.
Ciba shall, at the applicable closing, with respect to all
indebtedness existing as of the date of this Agreement of
any Divested Subsidiary (other than Accounts Payable
incurred in the ordinary course of business) that is owed to
Ciba or any of its Subsidiaries (other than another Divested
Subsidiary), cause all such intercompany indebtedness to be
transferred to Hexcel and all documents evidencing such
indebtedness to be included as Acquired Contracts.
SECTION 4.23. Supplemental Disclosure. (a) Ciba
and Hexcel shall have the continuing obligation until the
Closing promptly to notify each other with respect to any
matter hereafter arising or discovered that, if existing or
known at the date of this Agreement, would have been
required to be set forth or described in such Schedules
hereto and to provide each other with revised Schedules
reflecting any such matter, provided, that no such revision
shall have any effect for purposes of determining the
satisfaction of the conditions set forth in Article V
hereto.
(b) Ciba and Hexcel shall promptly notify each
other of, and furnish each other with any information that
may reasonably be requested with respect to, the occurrence
to Hexcel's or Ciba's knowledge, as the case may be, of any
event or condition or the existence to Hexcel's or Ciba's
knowledge, as the case may be, of any fact that would cause
any of the conditions to the other party's obligation to
consummate the transactions contemplated by this Agreement
and the Ancillary Agreements not to be fulfilled.
SECTION 4.24. Non-Competition and Related
Matters. (a) Notwithstanding any other provision of this
Agreement to the contrary, for a period of five years from
the Closing Date, Ciba and its Subsidiaries shall not,
directly or indirectly:
(i) engage in activities or businesses that
compete with the development, manufacture, marketing,
distribution or sale on a worldwide basis of
composites, including structures and interiors,
fabrics, laminates, prepregs, adhesive films, honeycomb
core, sandwich panels and fabricated components, in
each case as conducted on the Closing Date (the
"Composites Field"), provided, however, that Ciba and
its Subsidiaries shall retain the right to develop,
manufacture, market, distribute and/or sell adhesive
films, resins systems, additives and pigments for use
in the Composites Field, except that such adhesive
films and resins systems shall not include any specific
adhesive films or prepreg formulations (or derivations
thereof), whether or not patented, used by the
Transferred Business on or prior to the Closing Date,
unless such adhesive films or prepreg formulations have
been sold by Ciba and its Subsidiaries to third parties
prior to the Closing Date; and
(ii) engage in any of the following without the
prior written approval of Hexcel or any of its relevant
affiliates (other than Ciba or its Subsidiaries):
(A) soliciting or recruiting any employees of Hexcel
who were employees of the Transferred Business on the
Closing Date, and (B) soliciting or encouraging any
employees of Hexcel who were employees of the
Transferred Business on the Closing Date to leave the
employment of Hexcel other than any employees of Hexcel
who were employees of the Transferred Business on the
Closing Date that are released or terminated by Hexcel
or any of its affiliates or voluntarily terminated
prior to such solicitation or recruitment. Ciba and
CGC acknowledge that the services performed by the
employees of the Transferred Business are of a
character giving them a special, unique and
extraordinary value and that Hexcel would not have
entered into this Agreement if Ciba and CGC had not
agreed to a five-year restriction on their ability to
solicit for employment employees of the Transferred
Business.
(iii) Ciba and CGC acknowledge that the five year
non-competition and no-solicitation covenants provided
for in this Section 4.24(a) are reasonable covenants
under the circumstances. Moreover, it is the desire
and intent of the parties that the provisions of such
covenants shall be enforceable to the fullest extent
permissible under the laws and public policies applied
in each jurisdiction in which enforcement is sought.
Accordingly, the parties agree that, should a court or
administrative body subsequently determine that the
terms of such covenants are greater than reasonably
necessary to protect Hexcel's interests, the parties
will request that such court or administrative body
reform such covenants specifying the greatest time
period and/or geographic area that would not render
such covenants unenforceable. Ciba and CGC
specifically agree that in the event of a breach or
threatened breach by them or any of their Subsidiaries
or Affiliates of the covenants provided for in this
Section 4.24(a), Hexcel would suffer irreparable injury
and shall be entitled to seek equitable relief by way
of temporary or permanent injunction or any other
equitable remedies, and that such relief may be granted
without the necessity of proving actual damage, Ciba
and CGC further agree that the foregoing provision
regarding equitable relief shall not diminish Hexcel's
right to also claim and recover monetary damages.
(b) Notwithstanding anything to the contrary
contained in this Section 4.24, Hexcel hereby agrees that
the provisions set forth in Section 4.24(a) shall not be
deemed breached as a result of (x) the ownership by Ciba or
any of its Subsidiaries of less than an aggregate of 5% of
any class of stock or 10% in value of any instrument of
indebtedness of a Person engaged, directly or indirectly, in
the Composites Field or (y) the acquisition by Ciba or any
of its Subsidiaries of a Person which engages, directly or
indirectly, in the Composites Field if such activities
account for less than 10% of such Person's consolidated
annual revenues; provided that Hexcel is offered the
opportunity to purchase, promptly following the consummation
of such acquisition and on commercially reasonable terms,
the business of such Person in the Composites Field.
(c) (i) Hexcel acknowledges, as a result of the
transactions contemplated by this Agreement and because of
the sharing of common facilities with, and the cooperation
and access of employees of the Transferred Business prior to
the Closing to, businesses of Ciba other than the
Transferred Business, that Hexcel will acquire or have
access to a substantial amount of confidential and
proprietary information and technology belonging to Ciba and
its Subsidiaries relating to areas outside the Composites
Field. Hexcel acknowledges that such information and
technology is and will remain proprietary to Ciba and CGC,
and Hexcel agrees and agrees to cause Hexcel's present and
future Subsidiaries as well as its and their respective
employees, agents and representatives to hold such
information and technology in strict confidence for a period
of ten years from the Closing and during said period to make
no use of such information and technology except in
manufacturing for, and teaching customers solely in, the
Composites Field and except as set forth in the proviso to
Section 4.24(e)(i).
(ii) Ciba and CGC acknowledge they may be in
possession of a substantial amount of confidential and
proprietary information and technology belonging to the
Transferred Business relating to the Composites Field. Ciba
and CGC acknowledge that such information and technology is
and will remain proprietary to Hexcel, and Ciba and CGC
agree and agree to cause their respective present and future
Subsidiaries as well as its and their respective employees,
agents and representatives to hold such information and
technology in strict confidence for a period of ten years
from the Closing and during said period to make no use of
such information and technology except in manufacturing for,
and teaching customers solely outside of the Composites
Field and except as set forth in the proviso in Section
4.24(a)(i).
(d) The provisions set forth in this Section 4.24
relating to confidential or proprietary information shall
not apply (or shall cease to apply) with respect to
information and technology that:
(i) is or hereafter becomes generally available to
the public otherwise than through breach of this
Section 4.24; or
(ii) has been received from a third party who did
not acquire it directly or indirectly from a party
hereto.
(e) In order to further protect the use of the
proprietary information referred to in paragraph (c)(i)
above, for a period of five years from the Closing Date,
Hexcel and its Subsidiaries shall not, directly or
indirectly:
(i) engage in activities or businesses that
compete with the research, development, manufacture,
marketing, distribution or sale on a worldwide basis of
syntactics and liquid and/or paste adhesives as
conducted on the Closing Date (the "Polymers Field") ;
provided, however, that Hexcel and its Subsidiaries
shall be permitted to (x) research, develop and
manufacture products in the Polymers Field for internal
use in the products that it researches, develops,
manufactures, markets, distributes and sells;
(y) continue the development, manufacture, marketing,
distribution and sale of existing products in the
Polymers Field manufactured at Hexcel's Casa Grande,
Arizona, Livermore, California and Welkenraedt, Belgium
facilities (or such facilities, if any, as to which the
manufacture of such products may be relocated) solely
for the use or sale of such products as auxiliaries to,
or in combination with, Hexcel's products in the
Composites Field; and (z) incorporate products in the
Polymers Field as intermediate products into prepregs,
panels, parts and honeycomb; and
(ii) engage in any of the following without the
prior written approval of Ciba or any of its affiliates
(other than Hexcel or its
Subsidiaries): (A) soliciting or recruiting any
employees of Ciba or its Subsidiaries who are employees
of Ciba's worldwide Polymers Division ("Polymers
Employees"), and (B) soliciting or encouraging any
Polymers Employees to leave the employment of Ciba or
any of its Subsidiaries other than any Polymers
Employees who are released or terminated by Ciba or any
of its Subsidiaries or voluntarily terminated prior to
such solicitation or recruitment. Hexcel acknowledges
that the services performed by the employees of Ciba
and CGC (other than employees of the Transferred
Business) are of a character giving them a special,
unique and extraordinary value and that Ciba and CGC
would not have entered into this Agreement if Hexcel
had not agreed to a five-year restriction on its
ability to solicit for employment such employees.
(iii) Hexcel acknowledges that the five year
non-competition and no-solicitation covenants provided
for in this Section 4.24(e) are reasonable covenants
under the circumstances. Moreover, it is the desire
and intent of the parties that the provisions of such
covenants shall be enforceable to the fullest extent
permissible under the laws and public policies applied
in each jurisdiction in which enforcement is sought.
Accordingly, the parties agree that, should a court or
administrative body subsequently determine that the
terms of such covenants are greater than reasonable
necessary to protect Ciba's and CGC's interests, the
parties will request that such court or administrative
body reform such covenants specifying the greatest time
period and/or geographic area that would not render
such covenants unenforceable. Hexcel specifically
agrees that in the event of a breach or threatened
breach by it or any of its Subsidiaries or Affiliates
of the covenants provided for in this Section 4.24(e),
Ciba and CGC would suffer irreparable injury and shall
be entitled to seek equitable relief by way of
temporary or permanent injunction or any other
equitable remedies, and that such relief may be granted
without the necessity of proving actual damage, Hexcel
further agrees that the foregoing provision regarding
equitable relief shall not diminish Ciba's or CGC's
right to also claim and recover monetary damages.
(f) Notwithstanding anything to the contrary
contained in this Section 4.24, Ciba and CGC agree that the
provisions set forth in Section 4.24(e) shall not be deemed
breached as a result of the (x) ownership by Hexcel or any
of its Subsidiaries of less than an aggregate of 5% of any
class of stock or 10% in value of any instrument of
indebtedness of a Person engaged, directly or indirectly, in
the Polymers Field, or (y) the acquisition by Hexcel or any
of its Subsidiaries of a Person which engages, directly or
indirectly, in the Polymers Field if such activities account
for less than 10% of such Person's consolidated revenues;
provided that Ciba is offered the opportunity to purchase,
promptly following the consummation of such acquisition and
on commercially reasonable terms, the business of such
Person in the Polymers Field.
(g) Notwithstanding anything herein to the
contrary, nothing in this Agreement shall prevent (x) the
worldwide Polymers Division, Additives Division and
Pigments Division of Ciba from conducting their respective
businesses in all respects as conducted immediately prior to
the Closing Date and (y) Hexcel from conducting in all
respects the Transferred Business or the business of Hexcel,
in each case, as conducted immediately prior to the Closing
Date.
ARTICLE V
Conditions Precedent
SECTION 5.01. Conditions to Each Party's
Obligation. The obligation of Hexcel and Ciba to consummate
the transactions contemplated to occur at the Closing shall
be subject to the satisfaction prior to the Closing of each
of the following conditions, each of which may be waived
only if it is legally permissible to do so:
(a) HSR and Other Approvals. Any applicable
waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or
been terminated, and all other material authorizations,
consents, orders or approvals of, or regulations,
declarations or filings with, or expirations of
applicable waiting periods imposed by, any Governmental
Entity necessary for the consummation of the
transactions contemplated hereby, including filings and
consents required pursuant to applicable antitrust and
competition law statutes and regulations in each of the
Applicable Jurisdictions, shall have been obtained or
filed or shall have occurred.
(b) No Litigation, Injunctions, or Restraints.
No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent
injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental
Entity or other legal restraint or prohibition
preventing the consummation of the transactions
contemplated by this Agreement or any Ancillary
Agreement shall be in effect.
(c) Security Approvals. All necessary
authorizations, consents, orders or approvals shall
have been obtained from all relevant Governmental
Entities with respect to security clearance and other
similar matters in any relevant jurisdiction, including
all those necessary to retain existing security
clearances and continue to conduct activities subject
thereto as currently conducted (including any requisite
consent of the Departement de Securite in France and
the of Defense Investigative Service in the United
States).
(d) Stockholders Vote. The issuance of the
Hexcel Shares and the Required Amendment shall have
been approved by the requisite vote of Hexcel's
stockholders.
(e) NYSE Listing. The Hexcel Shares shall have
been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(f) Adequate Financing. Hexcel shall have
obtained adequate financing on commercially reasonable
terms in order to (x) deliver the Cash Price at the
Closing, (y) to support the operations of Hexcel and
its Subsidiaries assuming the transactions contemplated
by this Agreement and the Ancillary Agreements are
consummated and (z) to the extent desired by Hexcel, to
repay currently outstanding indebtedness of Hexcel and
its Subsidiaries under the Citibank Revolver and to
refinance the BNP Reimbursement Agreement.
SECTION 5.02. Conditions to the Obligation of
Hexcel. The obligation of Hexcel to consummate the
transactions contemplated to occur at the Closing shall be
subject to the satisfaction or waiver thereof prior to the
Closing of each of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Ciba and CGC and, if
applicable, any other Subsidiary of Ciba set forth in
this Agreement, the Employment Matters Agreement and
the UK Employment Matters Agreement that are qualified
as to materiality shall be true and correct, and those
that are not so qualified shall be true and correct in
all material respects, as of the date of this Agreement
and as of the time of the Closing as though made at and
as of such time, except to the extent such
representations and warranties expressly relate to an
earlier date (in which case such representations and
warranties that are qualified as to materiality shall
be true and correct, and those that are not so
qualified shall be true and correct in all material
respects, on and as of such earlier date) and Hexcel
shall have received a certificate signed by authorized
officers of Ciba and CGC to such effect.
(b) No Litigation. There shall not be pending by
any Governmental Entity any suit, action or proceeding
(or by any other Person any suit, action or proceeding
which has a reasonable likelihood of success),
(A) challenging or seeking to restrain or prohibit the
transactions contemplated by this Agreement or any
Ancillary Agreement or seeking to obtain in connection
with the transactions contemplated by this Agreement or
any Ancillary Agreement any damages that would
reasonably be expected to have a Hexcel Material
Adverse Effect or a Material Adverse Effect or
(B) seeking to prohibit or limit the ownership or
operation by Hexcel, Ciba or both of them or any of
their respective Subsidiaries of any material portion
of the business or assets of Hexcel or the Transferred
Business, or to compel Hexcel, Ciba or both of them or
any of their respective Subsidiaries to dispose of or
hold separate any material portion of the business or
assets of Hexcel or the Transferred Business or
(C) seeking to prohibit Hexcel from exercising its
rights under or otherwise enjoying the benefits of the
Governance Agreement.
(c) Performance of Obligations of Ciba, CGC and
the Divested Subsidiaries. Ciba, CGC and each of
Ciba's other Subsidiaries shall each have performed or
complied in all material respects with all obligations
and covenants required to be performed or complied with
by them under this Agreement and the Employment Matters
Agreement prior to the Closing, and Hexcel shall have
received a certificate signed by authorized officers of
Ciba and CGC to such effect.
(d) Opinion of Ciba's Counsel. Hexcel shall have
received an opinion dated the Closing Date of Cravath,
Swaine & Xxxxx (who may rely as to certain matters,
including questions of law of foreign countries, on
local counsel retained by Ciba or counsel who are
employees of Ciba or its Subsidiaries), counsel to Ciba
and CGC, reasonably satisfactory to Hexcel and its
counsel.
(e) Bills of Sale; Deeds. Ciba, CGC and each of
Ciba's other Subsidiaries, as applicable, shall have
delivered to Hexcel bills of sale or other conveyancing
documents conveying the personal property, in each
case in form and substance reasonably satisfactory to
Hexcel and its counsel, and Real Property Deeds for the
real property included in the Acquired Assets.
(f) Ancillary Agreements. Ciba, CGC and each of
Ciba's other Subsidiaries, as applicable, shall have
executed and delivered all Ancillary Agreements.
(g) Other Documents. Ciba, CGC, the Divested
Subsidiaries and each of Ciba's other Subsidiaries, as
applicable, shall have furnished to Hexcel such other
documents relating to their corporate existence and
authority (including copies of resolutions of the
respective boards of directors thereof), absence of
Liens, receipt of all necessary permits and waivers in
respect of material Contracts and such other matters as
Hexcel or its counsel may reasonably request.
(h) Material Adverse Change. There shall not
have been any development or event or series of events
occurring since the date of this Agreement that would
reasonably be expected to have a Material Adverse
Effect.
SECTION 5.03. Conditions to the Obligation of
Ciba and CGC. The obligation of Ciba, CGC and the Divested
Subsidiaries to consummate the transactions contemplated to
occur at the Closing shall be subject to the satisfaction or
waiver thereof prior to the Closing of each of the following
conditions:
(a) Representations and Warranties. The
representations and warranties of Hexcel set forth in this
Agreement and the Employment Matters Agreement that are
qualified as to materiality shall be true and correct, and
those that are not so qualified shall be true and correct in
all material respects, as of the date of this Agreement and
as of the time of the Closing as though made at and as of
such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which
case such representations and warranties that are qualified
as to materiality shall be true and correct, and those that
are not so qualified shall be true and correct in all
material respects, on and as of such earlier date), and Ciba
shall have received a certificate signed by an authorized
officer of Hexcel to such effect.
(b) No Litigation. There shall not be pending by
any Governmental Entity any suit, action or proceeding (or
by any other Person any suit, action or proceeding which has
a reasonable likelihood of success), (A) challenging or
seeking to restrain or prohibit the transactions
contemplated by this Agreement or any Ancillary Agreement or
seeking to obtain in connection with the transactions
contemplated by this Agreement or any Ancillary Agreement
any damages that would reasonably be expected to have a
Material Adverse Effect or a Hexcel Material Adverse Effect,
(B) seeking to prohibit or limit the ownership or operation
by Hexcel, Ciba or both of them or any of their respective
Subsidiaries of any material portion of the business or
assets of Hexcel or the Transferred Business, or to compel
Hexcel, Ciba or both of them or any of their respective
Subsidiaries to dispose of or hold separate any material
portion of the business or assets of Hexcel or the
Transferred Business, (C) seeking to impose limitations on
the ability of Ciba to acquire or hold, or exercise full
rights of ownership of, the Hexcel Shares, including the
right to vote the Hexcel Shares on all matters properly
presented to the stockholders of Hexcel (other than those
limitations provided for in the Governance Agreement) or
(D) seeking to prohibit Ciba or any Ciba Entity (as defined
in the Governance Agreement) from exercising its rights or
otherwise enjoying the benefits of the Governance Agreement.
(c) Performance of Obligations of Hexcel. Hexcel
shall have performed or complied in all material respects
with all obligations and covenants required to be performed
or complied with by Hexcel under this Agreement and the
Employment Matters Agreement prior to the Closing, and Ciba
shall have received a certificate signed by an authorized
officer of Hexcel to such effect.
(d) Opinion of Hexcel's Counsel. Ciba shall have
received an opinion dated the Closing Date of Skadden, Arps,
Slate, Xxxxxxx & Xxxx (who may rely as to certain matters,
including questions of law of foreign countries, on local
counsel retained by Hexcel or counsel who are employees of
Hexcel or its Subsidiaries) counsel to Hexcel, reasonably
satisfactory to Ciba and its counsel.
(e) Ancillary Agreements. Hexcel shall have
executed and delivered all Ancillary Agreements.
(f) Other Documents. Hexcel shall have furnished
to Ciba and CGC such other documents relating to Hexcel's or
its Subsidiaries' corporate existence and authority
(including copies of resolutions of the respective boards of
directors of Hexcel and its Subsidiaries), absence of Liens,
receipt of all necessary permits and waivers in respect of
material Contracts and such other matters as Ciba or its
counsel may reasonably request.
(g) Sale of Hexcel's U.S. Resins Business.
Hexcel shall have consummated the sale to a Person other
than Hexcel or its Subsidiaries of its United States resins
business.
(h) Material Adverse Change. There shall not
have been any development or event or series of events
occurring since the date of this Agreement that would
reasonably be expected to have a Material Adverse Effect.
ARTICLE VI
Termination, Amendment and Waiver
SECTION 6.01. Termination. (a) Notwithstanding
anything to the contrary in this Agreement, this Agreement
and the Employment Matters Agreement may be terminated and
the transactions contemplated hereby and thereby abandoned
at any time prior to the Closing, (i) by mutual written
consent of Ciba and Hexcel, (ii) by Ciba if any of the
conditions set forth in Sections 5.01 or 5.03 shall have
become incapable of fulfillment, and shall not have been
waived by Ciba; (iii) by Hexcel, if any of the conditions
set forth in Sections 5.01 or 5.02 shall become incapable of
fulfillment, and shall not have been waived by Hexcel or
(iv) by Ciba or Hexcel, if the Closing does not occur on or
prior to April 1, 1996; provided, however, that the party
seeking termination pursuant to clauses (ii) or (iii) is
without fault in connection with the applicable condition or
conditions having become incapable of fulfillment and is
otherwise in material compliance with this Agreement and the
Employment Matters Agreement.
(b) In the event of termination by Ciba or Hexcel
pursuant to this Section 6.01, written notice thereof shall
forthwith be given to the other party and the transactions
contemplated by this Agreement and the Employment Matters
Agreement shall thereupon be terminated, without further
action by either party. If the transactions contemplated by
this Agreement and the Employment Matters Agreement are
terminated as provided herein:
(i) (A) Hexcel shall promptly return to Ciba all
documents and other material received from Ciba or its
Subsidiaries relating to the transactions contemplated
hereby and (B) Ciba and CGC shall promptly return to
Hexcel all documents and other material received from
Hexcel or its Subsidiaries relating to the transactions
contemplated hereby, in either case, whether obtained
before or after the execution hereof, and
(ii) (A) all confidential information received by
Hexcel with respect to the businesses of Ciba or its
Subsidiaries and (B) all confidential information
received by Ciba and CGC with respect to the business
of Hexcel or its Subsidiaries shall be treated in
accordance with the Confidentiality Agreement, which
shall remain in full force and effect notwithstanding
the termination of this Agreement.
(c) If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described
in this Section 6.01, this Agreement and the Employment
Matters Agreement shall become null and void and of no
further force and effect, except for the following
provisions of this Agreement (i) Section 4.02 relating to
the confidentiality of certain information and data,
(ii) this Section 6.01, and (iii) Section 8.10 regarding
certain expenses. Nothing in this Section 6.01 shall be
deemed to release any party from any liability for any
breach by such party of the terms and provisions of this
Agreement or the Employment Matters Agreement.
SECTION 6.02. Amendments and Waivers. This
Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Hexcel or Ciba and CGC may, by an instrument in writing
signed on behalf of such party or parties, waive compliance
by the other party or parties with any term or provision
(other than any provisions that may not be legally waived)
of this Agreement that they were or are obligated to comply
with or perform.
ARTICLE VII
Indemnification
SECTION 7.01. Indemnification by Ciba. Except to
the extent that specific indemnification provisions
contained in any Ancillary Agreement provide for
indemnification with respect to any particular matter that
is different than the indemnification provided for hereunder
with respect to such matter, Ciba shall indemnify Hexcel,
its Subsidiaries and their affiliates and their respective
current and future officers, directors, employees,
stockholders, agents and representatives against, and shall
hold them harmless from, any loss, liability, claim, damage
or expense (including reasonable legal fees and expenses),
as incurred (payable quarterly upon written request), for or
on account of or arising from or in connection with or
otherwise with respect to (i) any Excluded Assets or
Excluded Liabilities; or (ii) any breach of any covenant of
Ciba or CGC contained in this Agreement or in any Ancillary
Agreement to be performed after the Closing.
SECTION 7.02. Indemnification by Hexcel. Except
to the extent that specific indemnification provisions
contained in any Ancillary Agreement provide for
indemnification with respect to any particular matter that
is different than the indemnification provided for hereunder
with respect to such matter, Hexcel shall indemnify Ciba,
CGC, their affiliates and their respective current and
future officers, directors, employees, stockholders, agents
and representatives against, and shall hold them harmless
from, any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses), as incurred
(payable quarterly upon written request), for or on account
of or arising from or in connection with or otherwise with
respect to (i) any Acquired Assets or Assumed Liabilities or
(ii) any breach of any covenant of Hexcel contained in this
Agreement or in any Ancillary Agreement to be performed
after the Closing.
SECTION 7.03. Losses Net of Insurance, etc. The
amount of any loss, liability, claim, damage or expense for
which indemnification is provided under Section 4.07(e),
Section 4.10 or this Article VII shall be net of any amounts
recovered or recoverable by the Person indemnified pursuant
to this Article VII (the "Indemnified Party") under
insurance policies with respect to such loss, liability,
claim, damage or expense and shall be (i) increased to take
account of any net Tax cost incurred by the Indemnified
Party and arising from the receipt or accrual of indemnity
payments hereunder (grossed up for such increase) and (ii)
reduced to take account of any net Tax benefit realized by
the Indemnified Party and arising from the incurrence or
payment of any such loss, liability, claim, damage or
expense. Any indemnification payment hereunder shall
initially be made without regard to this paragraph and shall
be reduced by any such insurance proceeds and increased or
reduced, as the case may be, to reflect any such net Tax
cost (including gross-up) or net Tax benefit only after the
Indemnified Party has actually realized such cost or
benefit. For purposes of this Agreement, an Indemnified
Party shall be deemed to have "actually realized" a net Tax
cost or net Tax benefit to the extent that, and at such time
as, the amount of Taxes payable by such Indemnified Party is
increased above or reduced below, as the case may be, the
amount of Taxes that such Indemnified Party would be
required to pay but for the receipt of the indemnity payment
or the incurrence or payment of such loss, liability, claim,
damage or expense.
SECTION 7.04. Termination of
Indemnification. The obligations to indemnify and hold
harmless any party pursuant to Sections 7.01, 7.02, 4.07(e)
and 4.10 and the Indemnified Individuals pursuant to
Section 4.14 shall not terminate.
SECTION 7.05. Indemnification Procedures. With
respect to third party claims (other than Tax Claims), all
claims for indemnification by any Indemnified Party
hereunder shall be asserted and resolved as set forth in
this Section 7.05. In the event that any third party claim
or demand for which an indemnifying party, Ciba, CGC or
Hexcel as the case may be (an "Indemnifying Party"), may be
liable to any Indemnified Party hereunder is asserted
against or sought to be collected from any Indemnified
Party, such Indemnified Party shall promptly, but in no
event more than 15 days following such Indemnified Party's
receipt of such claim or demand, notify the Indemnifying
Party of such claim or demand and the amount or the
estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such
claim and demand) (the "Claim Notice"); provided, however,
that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a
result of such failure. The Indemnifying Party shall have
45 days from the effective date (determined in accordance
with Section 8.01) of the Claim Notice (the "Notice Period")
to notify the Indemnified Party (a) whether or not the
Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with
respect to such claim or demand and (b) whether or not it
desires to defend the Indemnified Party against such claim
or demand. All costs and expenses incurred by the
Indemnifying Party in defending such claim or demand shall
be the liability of, and shall be paid by, the Indemnifying
Party. Except as hereinafter provided, in the event that
the Indemnifying Party notifies the Indemnified Party within
the Notice Period that it desires to defend the Indemnified
Party against such claim or demand, the Indemnifying Party
shall have the right to defend the Indemnified Party by
appropriate proceedings and shall have the sole power to
direct and control such defense; provided, however, that the
Indemnified Party shall have the right to employ separate
counsel (including local counsel), and the Indemnifying
Party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by
the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of,
any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have
reasonably concluded that there may be legal defenses
available to it and/or other Indemnified Parties that are
different from or additional to those available to the
Indemnifying Party, (iii) the Indemnifying Party shall not
have employed counsel to represent the Indemnified Party
within a reasonable time after notice of the institution of
such action or (iv) the Indemnifying Party shall authorize
the Indemnified Party to employ separate counsel at the
expense of the Indemnifying Party and provided, further,
that the Indemnifying Party shall not settle or otherwise
dispose of any claim or demand without the prior written
consent of the Indemnified Party (i) if as a result thereof
the Indemnified Party could become subject to injunctive or
other equitable relief or the business of the Indemnified
Party could be adversely affected in any nonmonetary manner
or (ii) such settlement or disposition does not include as
an irrevocable and unconditional term thereof a release of
all liabilities in respect of such claim or demand in favor
of the Indemnified Party. If any Indemnified Party desires
to participate in any such defense it may do so at its sole
cost and expense. The Indemnified Party shall not settle a
claim or demand for which it is indemnified by the
Indemnifying Party without the written consent of the
Indemnifying Party (which consent shall not be unreasonably
withheld). If the Indemnifying Party elects not to defend
or ceases to defend the Indemnified Party against any such
claim or demand, whether by not giving the Indemnified Party
timely notice as provided above or otherwise, then the
amount of any such claim or demand, or, if the same be
contested by the Indemnified Party, then that portion
thereof as to which such defense is unsuccessful (and the
reasonable costs and expenses pertaining to such defense,
including attorneys' fees) shall be the liability of the
Indemnifying Party hereunder. To the extent the
Indemnifying Party shall direct, control or participate in
the defense or settlement of any third party claim or
demand, the Indemnified Party will give the Indemnifying
Party and its counsel reasonable access to, during normal
business hours, the relevant business records and other
documents, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The
Indemnified Party and the Indemnifying Party shall each use
all commercially reasonable efforts in the defense of all
such claims or demands.
SECTION 7.06. Indemnification Procedures for Tax
Claims; Tax Returns. With respect to Tax Claims (as defined
below), all claims for indemnification by any Indemnified
Party hereunder shall be asserted and resolved as set forth
in this Section 7.06. In the event that any written claim
or demand for which an Indemnifying Party would be liable to
any Indemnified Party hereunder is asserted against or
sought to be collected from any Indemnified Party by a
Taxing Authority (a "Tax Claim") , such Indemnified Party
shall promptly, but in no event more than 15 days following
such Indemnified Party's receipt of such Tax Claim, notify
the Indemnifying Party of such Tax Claim with a Claim
Notice; provided, however, that failure to give such Claim
Notice shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall
have been actually prejudiced as a result of such failure.
The Indemnifying Party shall have the Notice Period to
notify the Indemnified Party (a) whether or not the
Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with
respect to such Tax Claim and (b) whether or not it desires
to participate in or control (as the case may be) the
defense of the Indemnified Party against such Tax Claim.
All costs and expenses incurred by the Indemnifying Party in
participating in or controlling such Tax Claim shall be a
liability of, and shall be paid by, the Indemnifying Party.
The Indemnified Party shall control any proceedings relating
to such Tax Claim; provided, however, that if Ciba or any of
its Subsidiaries is the Indemnifying Party, and a Tax Claim
relates to a Tax Return of Ciba or its Subsidiaries (other
than a separate Tax Return of a Divested Subsidiary), then
Ciba shall control any proceedings relating to such Tax
Claim. The party controlling a proceeding relating to a Tax
Claim shall permit the other party to participate in such
proceeding and shall not settle such Tax Claim without the
written consent of the other party, which consent shall not
be unreasonably withheld. The Indemnified Party and the
Indemnifying Party shall cooperate in contesting or
otherwise resolving any Tax Claim, and each shall give the
other reasonable access to, during normal business hours,
any relevant business records and other documents, and shall
permit the other to consult with the employees and counsel
of the other. If Hexcel or Ciba or their respective
Subsidiaries would or might be entitled to a refund from a
Taxing Authority and under the terms of this Agreement the
party receiving such refund would be required to pay such
refund to the other party, then the parties shall cooperate
in using their reasonable efforts to obtain such refund and
the party receiving such refund shall promptly forward it to
the party entitled to it. Hexcel shall prepare and file all
Tax Returns of or with respect to each of the Divested
Subsidiaries and the other Acquired Assets, which relate to
taxable periods beginning after the Closing Date or
transactions that occur after the Closing Date. Ciba shall
prepare and file all Tax Returns of or with respect to each
of the Divested Subsidiaries and the other Acquired Assets
which relate to taxable periods ending on or before the
Closing Date. Ciba and Hexcel shall jointly prepare and
Hexcel shall file all Tax Returns of or with respect to each
of the Divested Subsidiaries and the other Acquired Assets
which relate to taxable periods including (but not ending
on) the Closing Date.
SECTION 7.07. Adjustment to Transferred Business
Consideration. Ciba and Hexcel shall treat any indemnity
payment under this agreement as an adjustment to the
Transferred Business Consideration for Tax purposes, unless
a final determination causes any such payment not to be
treated as an adjustment to the Transferred Business
Consideration for United States Federal Income Tax purposes.
ARTICLE VIII
General Provisions
SECTION 8.01. Notices. All notices and other
communications hereunder shall be in writing (including fax)
and shall be sent, delivered or mailed, addressed, or faxed:
(a) if to Hexcel, to:
Hexcel Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx,XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
Attention of Xxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
(b) if to Ciba to:
Ciba-Geigy Limited
XX 0000
Xxxxx, Xxxxxxxxxxx
(T) (00) 00 000-0000
(F) (00) 00 000-0000
Attention of Mr. John M. D. Xxxxxxxxx
with a copy to:
Ciba-Geigy Limited
XX 0000
Xxxxx, Xxxxxxxxxxx
T (00) 00 000-0000
F (00) 00 000-0000
Attention of Xx. Xxxxx Xxxxxx
(c) if to CGC:
Ciba-Geigy Corporation
000 Xxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
(T) (000) 000-0000
(F) (000) 000-0000
Attention of Xxxx X. XxXxxx, Esq.
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
Each such notice, request or other communication shall be
given (i) by hand delivery, (ii) by nationally recognized
courier service or (iii) by fax, receipt confirmed. Each
such notice, request or communication shall be effective
(A) if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this
Section 8.01 (or in accordance with the latest unrevoked
written direction from the party to whom such notice is
delivered) and (B) if given by fax, when such fax is
transmitted to the fax number specified in this Section 8.01
(or in accordance with the latest unrevoked written
direction from the party to whom such notice is
transmitted), and the appropriate confirmation is received.
SECTION 8.02. Interpretation. When a reference
is made in this Agreement to a Section, Appendix, Schedule
or Exhibit, such reference shall be to a Section, Appendix,
Schedule or Exhibit of this Agreement unless otherwise
indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Whenever the words "included", "includes" or
"including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". All
accounting terms not defined in this Agreement shall have
their meanings under U.S. GAAP.
SECTION 8.03. Nonsurvival of Representations and
Warranties. None of the representations and warranties in
this Agreement, the Ancillary Agreements or any instrument
delivered pursuant to this Agreement shall survive the
Closing. This Section 8.03 shall not limit any covenant or
agreement of the parties which by its terms contemplates
performance after the Closing.
SECTION 8.04. Severability. The provisions of
this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is
found to be invalid or unenforceable in any jurisdiction,
(a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or
enforceability of such provision, or the application
thereof, in any other jurisdiction.
SECTION 8.05. Counterparts. This Agreement may
be executed in one or more counterparts, each of which shall
be deemed an original and all of which shall, taken
together, be considered one and the same agreement, it being
understood that both parties need not sign the same
counterpart.
SECTION 8.06. Entire Agreement; No Third Party
Beneficiaries. This Agreement and the Ancillary Agreements
(a) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and
thereof (other than the Confidentiality Agreement, which
shall not be affected by any provisions of this Agreement)
and (b) are not intended to confer upon any person other
than the parties hereto (and the Indemnified Individuals
pursuant to Section 4.14) any rights or remedies hereunder
or thereunder, including any employees of the Transferred
Business pursuant to any provisions of this Agreement or the
Employment Matters Agreement.
SECTION 8.07. Governing Law. This Agreement
shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of
conflicts of law.
SECTION 8.08. Consent to Jurisdiction. Each of
Hexcel , Ciba and CGC irrevocably submits to the exclusive
jurisdiction of the United States District Court for the
Southern District of New York located in the borough of
Manhattan in the City of New York, or if such court does not
have jurisdiction, the Supreme Court of the State of
New York, New York County, for the purposes of any suit,
action or other proceeding arising out of this Agreement or
any transaction contemplated hereby. Each of Hexcel, Ciba
and CGC further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's
respective address set forth in Section 8.01 (as it may be
changed from time to time) shall be effective service of
process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding
sentence. Each of Hexcel, Ciba and CGC irrevocably and
unconditionally waives any objection to the laying of venue
of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (a) the
United States District Court for the Southern District of
New York or (b) the Supreme Court of the State of New York,
New York County, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding
brought in any such court has been brought in an
inconvenient forum.
SECTION 8.09. Publicity. Except as may be
required by applicable law, rule, regulation or legal
process, so long as this Agreement is in effect, none of
Ciba, CGC, Hexcel or any of their respective Subsidiaries or
affiliates shall issue or cause the publication of any press
release or other public announcement with respect to the
transactions contemplated by this Agreement or any Ancillary
Agreement without the consent of the other party, which
consent shall not be unreasonably withheld or withdrawn.
SECTION 8.10. Expenses. (a) Whether or not the
Closing takes place, all costs and expenses incurred in
connection with this Agreement, the Ancillary Agreements and
the transactions contemplated hereby and thereby shall be
borne by the party incurring such expense, except as set
forth in the next paragraph.
(b) Notwithstanding the foregoing, if (i) the
stockholders of Hexcel in a vote at the meeting of
stockholders called pursuant to Section 4.18 fail to approve
the issuance of the Hexcel Shares and/or the Required
Amendment or if this Agreement is terminated by Hexcel
pursuant to Section 6.01(a)(iv) (other than due to the fault
of Ciba or any of its Subsidiaries) prior to such meeting
taking place and prior to such vote or termination Hexcel
received a proposal for or became aware of an Interfering
Transaction (a "Trigger Event"), Hexcel shall reimburse Ciba
for the out-of-pocket expenses (including fees and expenses
of legal counsel and of CS First Boston Corporation)
incurred by Ciba or any of its Subsidiaries in connection
with this Agreement and the Ancillary Agreements or the
matters contemplated hereby and thereby up to a maximum of
$1,000,000 and (ii) if during the period ending 12 months
after any Trigger Event Hexcel consummates, becomes a party
to or enters into an agreement relating to or publicly
announces, a transaction that is or if consummated prior to
termination of this Agreement would have been an Interfering
Transaction, then promptly after Hexcel consummates such
transaction, Hexcel shall pay Ciba an alternative
transaction fee of $1,000,000.
SECTION 8.11 Assignment. Neither this Agreement
nor any of the rights or obligations hereunder shall be
assigned by any of the parties hereto without the prior
written consent of each of the other parties, except that
after the Closing any party may assign all its rights and
obligations to a corporate successor by merger,
consolidation or comparable transaction of all or
substantially all of the assets of such party, provided that
such party shall in no event be released from its
obligations hereunder without the prior written consent of
each of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their
respective successors and assigns. Any purported assignment
of this Agreement other than in accordance with this
Section 8.11 shall be null and void and of no force or
effect.
IN WITNESS WHEREOF, Ciba, CGC and Hexcel have each
caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first
written above.
CIBA-GEIGY LIMITED,
by /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: President of Polymers
Division
CIBA-GEIGY LIMITED,
by /s/ XXXX M. D. XXXXXXXXX
Name: Xxxx M. D. Xxxxxxxxx
Title: Senior Vice President,
Head of Regional Finance
and Control
CIBA-GEIGY CORPORATION,
by /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: Vice President -- Finance
& Information Services
HEXCEL CORPORATION,
by /s/ XXXX X. XXX
Name: Xxxx X. Xxx
Title: Chief Executive Officer
Appendix A
As used in the Agreement, the following terms
shall have the following meanings:
"Accounting Firm" shall have the meaning set forth
in Section 2.04.
"Accounts Payable" shall mean all accounts payable
owed by Ciba or any of its Subsidiaries on the Closing Date
that relate exclusively or primarily to, or arise
exclusively or primarily out of the Transferred Business.
"Accounts Receivable" shall mean all accounts
receivable of Ciba or any of its Subsidiaries on the Closing
Date that relate exclusively or primarily to, or arise
exclusively or primarily out of the Transferred Business.
"Acquired Assets" shall have the meaning set
forth in Section 1.01(a).
"Acquired Contracts" shall mean (a) all Contracts
to which Ciba or any of its Subsidiaries (other than a
Divested Subsidiary) is a party or by which Ciba or any of
its Subsidiaries (other than a Divested Subsidiary) is bound
that (A) relate exclusively or primarily to, arise
exclusively or primarily out of or are used exclusively or
primarily in connection with the Transferred Business or
(B) that are listed on Schedule 3.01(k) and (b) subject to
Section 1.03(c), all Contracts to which any Divested
Subsidiary is party or by which any Divested Subsidiary is
bound.
"Acquired Equipment" shall mean all equipment of
Ciba or any of its Subsidiaries, other than equipment
included in the Excluded Assets, that relates exclusively or
primarily to, arises exclusively or primarily out of, or is
used exclusively or primarily in connection with, the
Transferred Business.
"Acquired Intellectual Property" shall mean (i)
all Intellectual Property (other than Trademarks and the
Ciba Tradenames) owned by Ciba or any of its Subsidiaries
that relates exclusively or primarily to, arises exclusively
or primarily out of or is used exclusively or primarily in
connection with, the Transferred Business (other than the
patent application on Schedule 4.13(b)(ii)), and (ii) all
Trademarks set forth in Schedule 3.01(i).
"Acquired Inventory" shall mean all Inventory held
by Ciba or any of its Subsidiaries at any location that
relates exclusively or primarily to, arises exclusively or
primarily out of or is used exclusively or primarily in
connection with, the Transferred Business.
"Acquired Permits" shall mean all Permits owned or
held by Ciba or any of its Subsidiaries that relate
exclusively or primarily to, arise exclusively or primarily
out of or are used exclusively or primarily in connection
with, the Transferred Business.
An "affiliate" of any Person shall mean any other
Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under
common Control with, such first Person. "Control" shall
have the meaning specified in Rule 12b-2 under the Exchange
Act as in effect on the date hereof.
"Allocation Statement" shall have the meaning set
forth in Section 1.04.
"Ancillary Agreements" shall mean the Governance
Agreement, the Trademark License Agreement, the Registration
Rights Agreement, the Transitional Services Agreements, the
Employment Matters Agreement, the UK Employment Matters
Agreement, the Indenture, the Distribution Agreement, the
Assignment and Assumption Agreement, the Supply and Tolling
Agreements and the UK Agreements.
"Applicable Jurisdictions" shall mean Austria,
Belgium, Germany, Italy and the United Kingdom.
"Assignment and Assumption Agreement" shall have
the meaning set forth in Section 4.12.
"Assumed Liabilities" shall have the meaning set
forth in Section 1.03(a).
"Assumed Tax Liabilities" shall have the meaning
set forth in Section 2.04.
"Austrian Shares Contract" shall mean the
Shareholders Agreement (also referred to as the Syndication
Agreement) dated as of January 1, 1990 and amended as of
August 1, 1994 between Ciba and PCD Polymere Gesellschaft
m.b.H.
"Balance Sheet" shall have the meaning set forth
in Section 2.04.
"BNP Reimbursement Agreement" shall mean the
Amended and Restated Reimbursement Agreement dated
February 1, 1995 between Hexcel and Banque Nationale
de Paris covering seven letters of credit in principal
amount of $15.7 million.
"Books and Records" shall mean all books, ledgers,
files, invoices, customers' and suppliers' lists and
operating records relating exclusively or primarily to,
arising exclusively or primarily out of, or used exclusively
or primarily in connection with the Transferred Business.
"Business" shall have the meaning set forth in the
recitals to the Agreement.
"Business Tax Returns" shall mean (i) any Tax
Returns filed by or on behalf of any Divested Subsidiary
(including the relevant portions of any unitary, combined,
consolidated or similar Tax Returns), (ii) any Tax Returns
of Ciba and its Subsidiaries relating exclusively or
primarily to Taxes attributable to the Transferred Business
and (iii) the copies of the portions of Tax Returns not
described in (ii) above that relate to the Transferred
Business.
"Cash Price" shall have the meaning set forth in
Section 1.02.
"CERCLA" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended.
"CGC" shall mean Ciba-Geigy Corporation, a
New York corporation and a wholly owned subsidiary of Ciba.
"Ciba" shall mean Ciba-Geigy Limited, a Swiss
corporation.
"Ciba Closing Items" shall have the meaning set
forth in Section 2.04.
"Ciba's Continuing Business" shall mean all
businesses, operations and affairs of any kind or nature of
Ciba and any of its Subsidiaries other than the Transferred
Business.
"Ciba Distributor" shall have the meaning set
forth in Section 4.07.
"Ciba Notice of Disagreement" shall have the
meaning set forth in Section 2.04.
"Ciba Statement" shall have the meaning set forth
in Section 2.04.
"Ciba Tradenames" shall mean any names owned or
used by Ciba or any of its Subsidiaries other than names set
forth on Schedule 3.01(i).
"Ciba UK" shall have the meaning set forth in
Section 1.03(c).
"Citibank Revolver" shall mean the Credit
Agreement dated as of February 8, 1995 among Hexcel, the
lenders and issuing banks thereunder and Citicorp USA, Inc.,
as agent, and related agreements.
"Claim" has the meaning set forth in Section 4.14.
"Claim Notice" shall have the meaning set forth in
Section 7.05.
"Closing" shall have the meaning set forth in
Section 2.01.
"Closing Date" shall mean the date of the Closing.
"Closing Working Capital" shall have the meaning
set forth in Section 2.04.
"CML" shall have the meaning set forth in
Section 1.03(i).
"Code" shall mean the Internal Revenue Code of
1986, as amended.
"Composite Products" shall have the meaning set
forth in Section 4.13.
"Composites Field" shall have the meaning set
forth in Section 4.24.
"Confidentiality Agreement" shall mean the
Confidentiality Agreement dated as of May 1, 1995, between
CGC and Hexcel.
"Contracts" shall mean all contracts, leases,
indentures, agreements, commitments and all other legally
binding arrangements, whether in existence on the date
hereof or subsequently entered into, including any and all
amendments thereto.
"Contributed Shares" shall mean all capital stock
of or other equity interests in any Divested Subsidiary
owned directly or indirectly by Ciba.
"Copyright" shall mean copyrights in works
(including computer programs) published or unpublished,
whether registered or capable of being registered, and such
rights as may exist through marking or publication.
"Current Assets" shall have the meaning set forth
in Section 2.04.
"Current Liabilities" shall have the meaning set
forth in Section 2.04.
"Danutec" shall mean Danutec Werkstoff
Gesellschaft m.b.H., an Austrian corporation.
"Danutec Agreement" shall mean any agreement
between Ciba or any of its Subsidiaries and Petrochemie
Danubia GesmbH relating to the sale to Ciba or any of its
Subsidiaries of the 49% interest in Danutec not owned by
Ciba on the date hereof and which provides for the
consummation of such sale on or prior to the first
anniversary of the Closing Date.
"Danutec Amount" shall have the meaning set forth
in Section 2.04.
"Danutec Closing" shall have the meaning set forth
in Section 2.05.
"Danutec Equity" shall have the meaning set forth
in Section 1.01(x).
"Danutec Price" shall have the meaning set forth
in Section 2.04.
"Danutec Shares" shall mean the 51% equity
interest of Ciba-Geigy AG in Danutec.
"Deferred Assets" shall mean the assets of or held
by the Ciba Distributors that relate exclusively or
primarily to, arise exclusively or primarily out of or are
used exclusively or primarily in connection with, the
Transferred Business and that are located in the Excluded
Jurisdictions.
"Deferred Closings" shall have the meaning set
forth in Section 2.03.
"Deferred Consideration" shall mean the amount
payable by Hexcel for any Deferred Assets calculated in
accordance with the Distribution Agreement.
"Deferred Consideration Payment Date" shall have
the meaning set forth in Section 2.03(e).
"Distribution Agreement" shall mean the
distribution agreement between Ciba and Hexcel dated the
Closing Date substantially in the form attached hereto as
Exhibit C.
"Divested Subsidiary" shall mean CML, Brochier
S.A., a French corporation ("Brochier"), Salver S.r.l., an
Italian corporation ("Salver"), Confection et Diffusion de
Stores et Xxxxxxx ("CDSR"), a French corporation and
Danutec.
"Employment Matters Agreement" shall mean the
agreement governing United States employment matters dated
as of the date of this Agreement between Hexcel and CGC and
attached hereto as Exhibit D.
"Environmental Laws" shall mean any applicable
federal, state, local or foreign treaty, law (including
applicable principles of common and civil law), statute,
ordinance, rule, regulation, permit, license, code, order,
judgment, writ, common law, decree, standard or injunction
enacted, promulgated or issued by any Governmental Entity
relating to (i) the presentation, protection and cleanup of
the environment, including the air, the ground, surface
soils, and surface and subsurface waters and natural
resources, (ii) soil and ground water contamination and
(iii) health and safety of persons or property and exposure
to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labelling, release or
disposal of, Hazardous Substances.
"Environmental Permits" means all permits,
licenses or authorizations from any Governmental Entity
required under Environmental Laws for the operation of the
Transferred Business or the business of Hexcel, as the case
may be.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Excluded Assets" shall have the meaning set forth
in Section 1.01(b).
"Excluded Contract" shall mean any Contract to
which Ciba or any of its Subsidiaries is a party or by which
Ciba or any of its Subsidiaries is bound and which is not an
Acquired Contract.
"Excluded Jurisdictions" shall mean Australia,
Denmark, Finland, Germany, Hong Kong, India, Indonesia,
Japan, Malaysia, New Zealand, Norway, Singapore, Spain,
South Africa, Sweden, Switzerland, Taiwan, Thailand,
The Netherlands, The Peoples Republic of China and Vietnam.
"Excluded Liabilities" shall have the meaning set
forth in Section 1.03(b).
"Excluded Stock" shall mean all capital stock and
other equity interests, other than the Contributed Shares,
held by Ciba and its Subsidiaries in any Person.
"Excluded Tax Assets" shall mean any current
assets of the Transferred Business attributable to Taxes of
CGC (except to the extent any such current asset will
actually benefit Hexcel or its Subsidiaries after the
Closing).
"Excluded Tax Liabilities" shall have the meaning
set forth in Section 1.03(b).
"Exon-Xxxxxx Amendment" shall mean Section 721 of
the Defense Production Act of 1950, as amended, and the
rules and regulations promulgated thereunder.
"Financial Statements" shall have the meaning set
forth in Section 3.01(c).
"Governance Agreement" shall mean the governance
agreement between Ciba and Hexcel dated the Closing Date in
substantially the form attached hereto as Exhibit A.
"Governmental Entity" shall mean any court,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign.
"Hazardous Substances" means all explosive or
radioactive substances or wastes, hazardous or toxic
substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing equipment, radon gas,
and all other substances or wastes regulated pursuant to any
Environmental Law.
"Hexcel" shall mean Hexcel Corporation, a Delaware
corporation.
"Hexcel Balance Sheet" shall have the meaning set
forth in Section 2.04.
"Hexcel Common" shall mean the common stock of
Hexcel Corporation, par value $0.01 per share.
"Hexcel Material Adverse Change" shall mean any
material adverse change in the business, assets, financial
condition or results of operations of Hexcel and its
Subsidiaries taken as a whole, other than changes relating
to the economy in general or changes relating to the
Business' industry in general.
"Hexcel Material Adverse Effect" shall mean any
effect causing a Hexcel Material Adverse Change.
"Hexcel Material Intellectual Property" shall have
the meaning set forth in Section 3.02(l).
"Hexcel Notice of Disagreement" shall have the
meaning set forth in Section 2.04.
"Hexcel Permitted Liens" shall mean
(A) mechanics', carriers', workmen's, repairmen's, and other
like Liens arising or incurred in the ordinary course of
business and which would not, individually or in the
aggregate, reasonably be expected to have a Hexcel Material
Adverse Effect, (B) Liens for Taxes, assessments and other
governmental charges that are not yet due and payable, or
that may thereafter be paid without penalty, or that are
being contested in good faith by appropriate proceedings
(which proceedings are listed on Schedule 3.02(o)),
(C) Liens under lien retention agreements entered into in
the ordinary course of business and which would not,
individually or in the aggregate, reasonably be expected to
have a Hexcel Material Adverse Effect, (D) imperfections of
title and other encumbrances that are not substantial in
character or amount and do not materially detract from, or
interfere with the use of the assets of Hexcel and its
Subsidiaries in its business as currently conducted and
(E) Liens imposed pursuant to the Citibank Revolver.
"Hexcel Preferred" shall mean the preferred stock,
no par value, of Hexcel.
"Hexcel Shares" shall mean shares of Hexcel
Common, representing 49.9% of the issued and outstanding
shares of Hexcel Common after giving effect to the issuance
thereof.
"Hive-Down Agreements" shall have the meaning set
forth in Section 1.03(c).
"Hexcel Statement" shall have the meaning set
forth in Section 2.04.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder.
"Income Tax" shall mean all Federal, state, local,
foreign or other Taxes imposed upon or measured by net
income.
"Income Tax Claims" shall mean all rights to
claims for refunds of Income Taxes with respect to
liabilities for Income Taxes relating to the Transferred
Business for any taxable period ending on or before the
Closing Date or the portion ending on the Closing Date of
any taxable period that includes (but does not end on) such
date.
"Income Tax Liabilities" shall mean (i) with
respect to the Divested Subsidiaries, any Income Taxes for
any taxable period ending on or before the Closing Date, and
any Income Taxes for any portion of any taxable period that
includes but does not end on the Closing Date (determined as
if such taxable period ended as of the close of business on
the Closing Date) and (ii) with respect to Acquired Assets
(other than the Divested Subsidiaries and assets held by the
Divested Subsidiaries) sold by Ciba or any of its
Subsidiaries, all obligations or liabilities of Ciba or any
of its Subsidiaries for Income Taxes attributable to the
Transferred Business accruing, or with respect to the
activities of the Transferred Business occurring, on or
before the Closing Date (in each case described in (i) and
(ii) above, other than Income Taxes resulting from any
action taken by Hexcel or its affiliates after or concurrent
with the Closing (other than the acquisition of the Acquired
Assets, Danutec Equity and Deferred Assets)).
"Indemnified Individuals" has the meaning set
forth in Section 4.14.
"Indemnified Party" shall have the meaning set
forth in Section 7.03.
"Indemnifying Party" shall have the meaning set
forth in Section 7.05.
"Indenture" shall mean the Subordinated Debt
indenture between Hexcel and the trustee to be named therein
for the Subordinated Debt, which shall include terms
substantially similar to the summary terms attached hereto
as Exhibit B.
"Intellectual Property" shall mean throughout the
world (i) Patents, (ii) Trademarks, (iii) Trade Names,
(iv) Know-how, (v) shop rights and (vi) copyrights.
"Interfering Transaction" shall have the meaning
set forth in Section 4.04.
"Inventory" means all raw materials, work in
process, finished goods, supplies, parts and other
inventories.
"Know-how" shall mean all trade secrets, know-how
(including product know-how and use and application
know-how), formulas, processes, product designs,
specifications, quality control procedures, manufacturing,
engineering and other drawings, technology, technical
information, safety information, lab journals, engineering
data and design and engineering specifications, research
records, market surveys and all promotional literature,
customer and supplier lists and similar data.
"Lien" shall mean any mortgage, claim, charge,
lien, security interest, easement, right-of-way, pledge or
other encumbrance.
"Material Adverse Change" shall mean any material
adverse change in the business, assets, financial condition
or results of operations of the Transferred Business taken
as a whole, other than changes relating to the economy in
general or changes relating to the Business' industry in
general.
"Material Adverse Effect" shall mean any effect
causing a Material Adverse Change.
"Notice Period" shall have the meaning set forth
in Section 7.05.
"Other Tax Liabilities" shall mean all obligations
and liabilities for Taxes attributable to the Transferred
Business (other than Income Tax Liabilities).
"Patents" shall mean patents (including all
reissues, divisions, re-examinations, continuations,
continuations in part and extensions thereof), patent
applications and patent disclosures docketed and all other
patent rights.
"PCBs" shall have the meaning set forth in the
definition of Hazardous Substances.
"Permits" shall mean all permits, licenses,
franchises, approvals and authorizations by Governmental
Entities.
"Permitted Liens" shall mean (A) mechanics',
carriers', workmen's, repairmen's, and other like Liens
arising or incurred in the ordinary course of business and
which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect,
(B) Liens for Taxes, assessments and other governmental
charges that are not yet due and payable or that may
thereafter be paid without penalty, or that are being
contested in good faith by appropriate proceedings (which
proceedings are disclosed in Schedule 3.01(m)), (C) Liens
under lien retention agreements entered into in the ordinary
course of business and which would not, individually or in
the aggregate, reasonably be expected to have a Material
Adverse Effect and (D) imperfections of title (other than
title to real property) and other encumbrances that are not
substantial in character or amount and do not materially
detract from, or interfere with the use of, the Acquired
Assets and the Deferred Assets in the Transferred Business
as presently conducted.
"Person" shall mean any individual, group,
corporation, partnership, joint venture, trust, business
association, organization, Governmental Entity or other
entity.
"Polymers Employees" shall have the meaning set
forth in Section 4.24(e)(ii).
"Polymers Field" shall have the meaning set forth
in Section 4.24(e)(i).
"Prepaid Taxes" shall have the meaning set forth
in Section 2.04.
"Real Property Deeds" shall have the meaning set
forth in Section 2.02(a).
"Recalls" shall have the meaning set forth in
Section 3.01(u).
"Registration Rights Agreement" shall have the
meaning set forth in Section 4.12.
"Required Amendment" shall have the meaning set
forth in Section 3.02(b).
"RTM" shall have the meaning set forth in
Section 4.13.
"Satellite Personnel" shall have the meaning set
forth in Section 3.01(a).
"Scheduled Real Property" shall mean all real
property, leaseholds and other interests in real property of
Ciba or its Subsidiaries listed in Schedule 3.01(h)(1) or
3.01(h)(2), in each case together with Ciba's and its
Subsidiaries' right, title and interest in all buildings,
improvements, fixtures and all other appurtenances thereto
and all easements, rights of way, licenses, privileges,
zoning and development rights and other rights and benefits
thereunto belonging to the extent used in connection with
the Transferred Business, including all surveys, plans,
specifications and other architectural and engineering
drawings and all condemnation awards and insurance proceeds
payable to Ciba and/or any of its Subsidiaries with respect
to such interests for casualties or takings occurring
between the date hereof and the Closing Date or, in respect
of South Africa, the Deferred Closing Date.
"SEC" shall mean the Securities and Exchange
Commission.
"SEC Documents" shall have the meaning set forth
in Section 3.02(e).
"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
"Subordinated Debt" shall mean the subordinated
notes of Hexcel to be issued under the Indenture in the
aggregate principal amounts and on the dates provided in
Sections 2.03(e), 2.04(g) and 2.05.
"Subsidiary" shall mean, with respect to any
Person, as of any date of determination, any other Person as
to which such Person owns, directly or indirectly, or
otherwise controls, more than 50% of the voting shares or
other similar interests.
"Supply and Tolling Agreements" shall have the
meaning set forth in Section 4.12.
"Tax" or "Taxes" shall mean all Federal, state,
local, foreign or other governmental taxes, assessments,
duties, fees, levies or similar charges of any kind,
including all income, environmental, excise, property,
occupation, use, intangibles, sales, registration, value
added, payroll, employment and other withholding taxes, and
including all interest, penalties and additions imposed with
respect to such amounts.
"Tax Claim" shall have the meaning set forth in
Section 7.06.
"Tax Return" shall mean any return (including
information returns), report, declaration or statement
relating to Taxes or otherwise required to be filed with any
Taxing Authority, including any schedule or attachment
thereto or amendment thereof.
"Taxing Authority" shall mean any governmental or
quasi-governmental body exercising any taxing authority or
any other body exercising Tax regulatory authority.
"Trademark License Agreement" shall have the
meaning set forth in Section 4.13.
"Trademarks" shall mean trademarks and service
marks, registrations thereof, pending applications therefor
and such unregistered rights as may exist through use.
"Trade Names" shall mean trade names, brand marks,
trade dress, brand names, logos and all other names and
slogans or product goodwill for which no trademark
registration has been obtained and for which no application
is pending.
"Transferred Business" shall mean the global
composites division of Ciba and CGC consisting of the
development, manufacture, marketing, sale and distribution
on a world-wide basis of composites, including structures
and interiors, fabrics, laminates, prepregs, adhesive films,
honeycomb core, sandwich panels and fabricated components,
other than to the extent, if any, such activities are
conducted on the Closing Date by the worldwide Polymers
Division, Additives Division or Pigments Division of Ciba.
"Transferred Business Consideration" shall have
the meaning set forth in Section 1.02.
"Transfer Taxes" shall mean all transfer,
documentary, sales, use, registration, value-added and other
similar Taxes (including all applicable real estate transfer
Taxes and real property transfer gains Taxes) and related
amounts incurred as a result of the transfer of the Acquired
Assets, Danutec Equity or Deferred Assets to Hexcel or its
designated Subsidiaries pursuant to this Agreement.
"Transitional Services Agreements" shall have the
meaning set forth in Section 4.12.
"Trigger Event" shall have the meaning set forth
in Section 8.10.
"UK Agreements" shall have the meaning set forth
in Section 4.12.
"UK Employment Matters Agreement" shall have the
meaning set forth in Section 4.12.
"U.S. GAAP" shall mean United States generally
accepted accounting principles.
Exhibit A
GOVERNANCE AGREEMENT dated as of
[ ], 1995, between CIBA-GEIGY LIMITED, a
to the Strategic Alliance Agreement
Swiss corporation ("Ciba"), and HEXCEL
CORPORATION, a Delaware corporation
("Hexcel").
WHEREAS Hexcel, Ciba and Ciba-Geigy Corporation, a
New York corporation ("CGC"), are parties to a Strategic
Alliance Agreement dated as of September 29, 1995 (the
"Strategic Alliance Agreement") and upon consummation of the
transactions contemplated therein (the "Transactions"), Ciba
will Beneficially Own approximately 49.9% of the Total
Voting Power of Hexcel (as such terms are defined below);
and
WHEREAS the parties hereto wish to further
establish the nature of their strategic alliance and set
forth their agreement concerning the governance of Hexcel
following consummation of the Transactions as well as
certain matters relating to Ciba's ownership of Voting
Securities (as such term is defined below).
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein and for good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this
Agreement, the following terms shall have the following
meanings:
An "affiliate" of any Person means any other
Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under
common Control with, such first Person. "Control" has the
meaning specified in Rule 12b-2 under the Exchange Act as in
effect on the date of this Agreement.
"associate" has the meaning set forth in
Rule 12b-2 under the Exchange Act as in effect on the date
of this Agreement.
Any Person shall be deemed to "Beneficially Own",
to have "Beneficial Ownership" of, or to be "Beneficially
Owning" any securities (which securities shall also be
deemed "Beneficially Owned" by such Person) that such Person
is deemed to "beneficially own" within the meaning of
Rule 13d-3 under the Exchange Act as in effect on the date
of this Agreement.
"Board" means the board of directors of Hexcel.
"Broad Distribution" means a distribution of
Voting Securities that, to the knowledge, after due inquiry,
of the Person on whose behalf such distribution is being
made, will not result in the acquisition by any other Person
of any such Voting Securities to the extent that, after
giving effect to such acquisition, such acquiring Person
would hold in excess of the greater of (x) 5% of the Total
Voting Power of Hexcel or (y) if such acquiring Person is an
institutional investor eligible to file a Statement on
Schedule 13G (or any successor form) with respect to its
investment in Hexcel, 7% of the Total Voting Power of
Hexcel.
"Buyout Transaction" means a tender offer, merger,
sale of all or substantially all Hexcel's assets or any
similar transaction that offers each holder of Voting
Securities (other than, if applicable, the Person proposing
such transaction) the opportunity to dispose of all Voting
Securities Beneficially Owned by each such holder or
otherwise contemplates the acquisition of all (but not less
than all) Voting Securities Beneficially Owned by each such
holder.
"CGC" has the meaning set forth in the recitals to
this Agreement.
"Chairman" means the Chairman of the Board and
Chief Executive Officer of Hexcel.
"Ciba" has the meaning set forth in the recitals
to this Agreement.
"Ciba Directors" means Ciba Nominees who are
elected or appointed to serve as members of the Board in
accordance with this Agreement.
"Ciba Entity" means any Subsidiary of Ciba that
holds Voting Securities.
"Ciba Nominees" means such Persons as are so
designated by Ciba, as such designations may change from
time to time in accordance with this Agreement, to serve as
members of the Board pursuant to Section 2.02 hereof.
"Closing Date" means the date of the closing of
the Transactions.
"Customary Acquisition/Control Premium" means the
aggregate realizable value for all Voting Securities
(including Voting Securities owned by Ciba or any Ciba
Entity), assuming a sale of Hexcel in its entirety in a
transaction or series of related transactions to a third
party or parties on an arm's length basis in a controlled
auction process designed to maximize shareholder value by
attracting all possible bidders, including Ciba and its
affiliates.
"Election Date" means the tenth anniversary of the
Closing Date and, if Ciba exercises its right to extend this
Agreement for one or more successive two year periods
thereafter pursuant to Section 5.01(a)(i), the date on which
each such extension period expires.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Governmental Entity" means any court,
administrative agency, regulatory body, commission or other
governmental authority, board, bureau or instrumentality,
domestic or foreign and any subdivision thereof.
"group" has the meaning set forth in Section 13(d)
of the Exchange Act as in effect on the date of this
Agreement.
"Hexcel" has the meaning set forth in the recitals
to this Agreement.
"Hexcel Common" means the common stock of Hexcel,
par value $0.01 per share.
"Independent Director" means a director of Hexcel
who is not a Ciba Director and who (i) is not and has never
been an officer, employee or director of Ciba or any
affiliate (other than Hexcel) or associate of Ciba and
(ii) has no affiliation or compensation, consulting or
contractual relationship with Ciba or any of its affiliates
(other than Hexcel) such that a reasonable person would
regard such director as likely to be unduly influenced by
Ciba or any of its affiliates (other than Hexcel).
"Other Holders" means the holders of the Other
Shares.
"Other Shares means Voting Securities not
Beneficially Owned by Ciba or any Ciba Entity.
"Person" means any individual, group, corporation,
firm, partnership, joint venture, trust, business
association, organization, Governmental Entity or other
entity.
"President" means the President and Chief
Operating Officer of Hexcel.
"Registration Rights Agreement" means the
Registration Rights Agreement dated as of the date hereof
between Ciba and Hexcel.
"Requisite Consideration" means consideration that
is (i) approved by (x) a majority of the Independent
Directors acting solely in the interests of the Other
Holders, after the receipt of an opinion of an independent
nationally recognized investment banking firm retained by
them or (y) a majority in interest of the Other Holders by
means of a Stockholder Vote solicited pursuant to a proxy
statement containing the information required by
Schedule 14A under the Exchange Act (it being understood
that the Independent Directors shall, consistent with their
fiduciary duties, be free to include in such proxy
statement, if applicable, the reasons underlying any failure
by them to approve a Buyout Transaction by the requisite
vote, including whether a fairness opinion was sought by
the Independent Directors and any opinions or
recommendations expressed in connection therewith) and (ii)
in the opinion of an independent nationally recognized
investment banking firm (including such a firm retained by
Ciba), fair to the Other Holders from a financial point of
view. In connection with the retention of any investment
banking firm referred to herein, the Independent Directors
shall instruct such investment banking firm, unless the
Independent Directors conclude, after consultation with
their outside legal and financial advisors, that such
instructions are not appropriate, to (a) value Hexcel's
businesses taking into account a premium for control and
(b) assume for purposes of such opinion that the Other
Holders are entitled to their proportionate part of a
Customary Acquisition/Control Premium.
"Requisite Distribution" means a public offering
registered under the Securities Act or a non-registered
distribution conducted pursuant to an applicable exemption
from registration under the Securities Act, in each case
that is conducted in a manner calculated to achieve a Broad
Distribution.
"SEC" means the Securities and Exchange Commission
or any successor Governmental Entity.
"Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations promulgated
thereunder.
"Significant Subsidiary" has the meaning set forth
in Rule 1-02 of Regulation S-X under the Securities Act as
in effect on the date of this Agreement.
"Standstill Period" means the five-year period
commencing on the Closing Date.
"Stockholder Vote" means as to any matter to be
presented to holders of Voting Securities, a vote at a duly
called and held annual or special meeting of the holders of
Voting Securities entitled to vote on such matter.
"Strategic Alliance Agreement" has the meaning set
forth in the recitals to this Agreement.
"Subsidiary" means, with respect to any Person, as
of any date of determination, any other Person as to which
such Person owns, directly or indirectly, or otherwise
controls, more than 50% of the voting shares or other
similar interests.
"Third Party Offer" means a bona fide offer to
enter into a Buyout Transaction by a Person other than Ciba
or any of its affiliates or any other Person acting on
behalf of Ciba or any of its affiliates that does not treat
Ciba or any Ciba Entity differently than the Other Holders.
"Total Voting Power of Hexcel" means the total
number of votes that may be cast in the election of
directors of Hexcel if all Voting Securities outstanding or
treated as outstanding pursuant to the final sentence of
this definition were present and voted at a meeting held for
such purpose. The percentage of the Total Voting Power of
Hexcel Beneficially Owned by any Person is the percentage of
the Total Voting Power of Hexcel that is represented by the
total number of votes that may be cast in the election of
directors of Hexcel by Voting Securities Beneficially Owned
by such Person. In calculating such percentage, the Voting
Securities Beneficially Owned by any Person that are not
outstanding but are subject to issuance upon exercise or
exchange of rights of conversion or any options, warrants or
other rights Beneficially Owned by such Person shall be
deemed to be outstanding for the purpose of computing the
percentage of the Total Voting Power represented by Voting
Securities Beneficially Owned by such Person, but shall not
be deemed to be outstanding for the purpose of computing the
percentage of the Total Voting Power represented by Voting
Securities Beneficially Owned by any other Person.
"Transactions" has the meaning set forth in the
recitals to this Agreement.
"Voting Securities" means Hexcel Common and any
other securities of Hexcel or any Subsidiary of Hexcel
entitled to vote generally in the election of directors of
Hexcel or such Subsidiary of Hexcel.
ARTICLE II
Corporate Governance
SECTION 2.01. Board of Directors. The Board
shall consist of ten members, two of whom shall be the
Chairman and the President.
SECTION 2.02. Ciba Board Representation. (a) If
Ciba Beneficially Owns 30% or more of the Total Voting Power
of Hexcel determined in accordance with Section 2.02(e), the
parties hereto shall exercise all authority under applicable
law to cause any slate of directors presented to
stockholders for election to the Board to consist of such
nominees that, if elected, would result in the Board
consisting of four Ciba Directors, the Chairman, the
President and four additional Independent Directors.
(b) If Ciba Beneficially Owns less than 30% but
at least 20% of the Total Voting Power of Hexcel determined
in accordance with Section 2.02(e), the parties hereto shall
exercise all authority under applicable law to cause any
slate of directors presented to stockholders for election to
the Board to consist of such nominees that, if elected,
would result in the Board consisting of three Ciba
Directors, the Chairman, the President and five additional
Independent Directors.
(c) If Ciba Beneficially Owns less than 20% but
at least 15% of the Total Voting Power of Hexcel determined
in accordance with Section 2.02(e), the parties hereto shall
exercise all authority under applicable law to cause any
slate of directors presented to stockholders for election to
the Board to consist of such nominees that, if elected,
would result in the Board consisting of two Ciba Directors,
the Chairman, the President and six additional Independent
Directors.
(d) If Ciba Beneficially Owns less than 15% but
at least 10% of the Total Voting Power of Hexcel determined
in accordance with Section 2.02(e), the parties hereto shall
exercise all authority under applicable law to cause any
slate of directors presented to stockholders for election to
the Board to consist of such nominees that, if elected,
would result in the Board consisting of one Ciba Director,
the Chairman, the President and seven additional Independent
Directors.
(e) In order to determine (x) the number of Ciba
Nominees to be included in any slate of directors to be
presented to stockholders for election to the Board and
(y) the percentage of the Total Voting Power of Hexcel
Beneficially Owned by Ciba for purposes of Sections 2.04 and
2.06, Ciba shall be deemed to Beneficially Own a percentage
of the Total Voting Power of Hexcel that is no more than
(1) 49.9% of the Total Voting Power of Hexcel (or such
greater percentage as Ciba in fact hereafter Beneficially
Owns in accordance with the terms of this Agreement) less
(2) the percentage of the Total Voting Power of Hexcel
represented by any Voting Securities disposed of by Ciba or
any Ciba Entity since the Closing.
SECTION 2.03. Designation of Slate. Any Ciba
Nominees that are included in a slate of directors pursuant
to Section 2.02 shall be designated by Ciba, and any
Independent Director nominees who are to be included in any
slate of directors pursuant to Section 2.02 shall be
designated by majority vote by the then incumbent
Independent Directors (including the Chairman and the
President if he or she is an Independent Director).
Hexcel's nominating committee shall nominate each person so
designated. The initial Ciba Nominees shall be Xxxx M. D.
Xxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxxx
Xxxxxxx. The initial Chairman shall be Xxxx X. Xxx. The
initial President shall be Xxxxxxx Xxxxxxxxxx. Upon
consummation of the Transactions, the number of directors
constituting the entire Board will be fixed at ten and a
sufficient number of the then serving members of the Board
will resign in order to permit the appointment of the
initial Ciba Nominees and the initial President to fill the
vacancies thereby created. The remaining members of the
Board shall be Xxxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx,
Xxxxxx X. Xxxxxxxx and Xxxxxxxxx X. Xxxxxxx.
SECTION 2.04. Committee Membership. Ciba
Directors shall serve on each committee of the Board,
including the finance, audit, nominating, and compensation
committees of the Board. So long as Ciba Beneficially Owns
40% or more of the Total Voting Power of Hexcel determined
in accordance with Section 2.02(e), each committee of the
Board shall consist of the same number of Ciba Directors as
Independent Directors. At all other times, each such
committee shall be comprised such that Ciba's representation
on such committee is at least proportionate to its
representation on the Board unless the committee is
comprised of three members or less, in which case at least
one Ciba Director shall serve.
SECTION 2.05. Resignations and Replacements. (a)
If at any time a member of the Board resigns (pursuant to
this Section 2.05 or otherwise) or is removed, a new member
shall be designated to replace such member until the next
election of directors. If consistent with Section 2.02 the
replacement director is to be a Ciba Director, Ciba shall
designate the replacement Ciba Director. If the former
member was the Chairman or President, the replacement
Chairman or President, respectively, shall be the
replacement. Except as set forth in paragraph (c) below, if
consistent with Section 2.02, the replacement director is to
be an Independent Director (other than the Chairman or
President), the remaining Independent Directors (including
the Chairman and the President if he or she is an
Independent Director) shall designate the replacement
Independent Director.
(b) Subject to paragraph (c) below, if at any
time the percentage of the Total Voting Power of Hexcel
Beneficially Owned by Ciba decreases to a point at which the
number of Ciba Nominees entitled to be nominated to the
Board in accordance with this Agreement in an election of
directors presented to stockholders would decrease, within
10 days thereafter Ciba shall cause a sufficient number of
Ciba Directors to resign from the Board so that the number
of Ciba Directors on the Board after such resignation(s)
equals the number of Ciba Nominees that Ciba would have been
entitled to designate had an election of directors taken
place at such time. Ciba shall also cause a sufficient
number of Ciba Directors to resign from any relevant
committees of the Board so that such committees are
comprised in the manner contemplated by Section 2.04 after
giving effect to such resignations. Any vacancies created
by the resignations required by this Section 2.05(b) shall
be filled by Independent Directors.
(c) If at any time the percentage of the Total
Voting Power of Hexcel Beneficially Owned by Ciba decreases
as a result of an issuance of Voting Securities by Hexcel,
Ciba may notify Hexcel that Ciba intends to acquire a
sufficient amount of additional Voting Securities in
accordance with this Agreement necessary to maintain its
then current level of Board representation within 90 days,
provided, however, that if during such period (or any
extension under this proviso), Ciba is prohibited from
purchasing Voting Securities in order to comply with
applicable law or refrains from such purchases at Hexcel's
request, such period shall be extended by the number of days
during which Ciba is so prohibited or so refrains. In such
event, until the end of such period (and thereafter if Ciba
in fact restores its percentage of the Total Voting Power of
Hexcel during such period and provided that Ciba continues
to maintain the requisite level of Beneficial Ownership of
Voting Securities in accordance with Section 2.02) the Board
shall continue to have the number of Ciba Directors that
corresponds to the percentage of the Total Voting Power of
Hexcel Beneficially Owned by Ciba prior to such issuance of
Voting Securities by Hexcel.
SECTION 2.06. Approvals. (a) So long as Ciba
Beneficially Owns 40% or more of the Total Voting Power of
Hexcel determined in accordance with Section 2.02(e),
neither the Board nor any committee of the Board shall take
any action, including approval, authorization or
ratification of any action or inaction by officers, agents
or employees of Hexcel, without the affirmative vote of at
least one Ciba Director and one Independent Director.
(b) The Board shall not authorize, approve or
ratify any of the following actions without the approval of
a majority of the Ciba Directors (x) so long as Ciba
Beneficially Owns 33% or more of the Total Voting Power of
Hexcel determined in accordance with Section 2.02(e) and, if
Ciba's percentage ownership of the Total Voting Power of
Hexcel is reduced below 33% as so determined by an issuance
of Voting Securities by Hexcel, until 10 business days after
Hexcel notifies Ciba in writing of such issuance, and
(y) during the 90-day period following an issuance of Voting
Securities by Hexcel that causes Ciba to Beneficially Own
less than 33% of the Total Voting Power of Hexcel as so
determined if Ciba shall have notified Hexcel within
10 business days after Ciba's receipt of a written
notification of such issuance that Ciba intends to acquire a
sufficient amount of Voting Securities within such 90-day
period so that it will Beneficially Own at least 33% of the
Total Voting Power of Hexcel determined in accordance with
Section 2.02(e) by the end of such 90-day period:
(i) any merger, consolidation, acquisition or
other business combination involving Hexcel or any
Subsidiary of Hexcel if the value of the consideration
to be paid or received by Hexcel in any such individual
transaction or in such transaction when added to the
aggregate value of the consideration paid or received
by Hexcel in all other such transactions approved by
the Board during the prior 12 months exceeds the
greater of (x) $75 million or (y) 11% of Hexcel's total
consolidated assets;
(ii) any sale, transfer, assignment, conveyance,
lease or other disposition or any series of related
dispositions of any assets, business or operations of
Hexcel or any of its Subsidiaries if the value of the
assets, business or operations so disposed exceeds the
greater of (x) $75 million or (y) 11% of Hexcel's total
consolidated assets;
(iii) any issuance by Hexcel or any Significant
Subsidiary of Hexcel of equity securities (other than
pursuant to customary employee or director stock option
or incentive compensation or similar plans and other
than transactions solely among Hexcel and its
Subsidiaries) or of any bonds, debentures, notes or
other securities convertible into, exchangeable for or
exercisable for equity securities if the aggregate net
proceeds to Hexcel of such issuance or of such issuance
when added to the aggregate net proceeds of all such
issuances approved by the Board during the prior
12 months exceeds the greater of (x) $75 million or
(y) 11% of Hexcel's total consolidated assets; and
(iv) any new capital expenditure program or any
capital expenditure that is not part of a capital
expenditure program previously approved by the Board,
if the amount or anticipated amount of such program or
expenditure or of such program or expenditure when
added to the aggregate amount of capital expenditures
not so approved by the Board during the prior 12 months
exceeds the greater of (x) $50 million or (y) 7% of
Hexcel's total consolidated assets.
SECTION 2.07. Solicitation and Voting of
Shares. (a) Hexcel shall use reasonable efforts to solicit
from the stockholders of Hexcel eligible to vote for the
election of directors proxies in favor of the Board nominees
selected in accordance with Section 2.02.
(b) Except as provided in Section 3.03, until the
percentage of the Total Voting Power of Hexcel Beneficially
Owned by Ciba falls below either (x) 15% if and so long as
there is on file with the SEC any Statement on Schedule 13D
or 13G (or any comparable successor form) showing Beneficial
Ownership by any Person (other than Ciba or the Ciba
Entities) of 10% or more of the Total Voting Power of Hexcel
or (y) 10% in all other cases, (A) in any election of
directors or at any meeting of the stockholders of Hexcel
called expressly for the removal of directors, so long as
the Board includes (and will include after any such removal)
the Ciba Directors contemplated by Section 2.02, Ciba shall
and shall cause any Ciba Entity to be present for purposes
of establishing a quorum and shall vote and shall cause any
Ciba Entity to vote all its Voting Securities entitled to
vote (1) in favor of any nominee or director selected in
accordance with Section 2.02 and (2) otherwise against the
removal of any director designated in accordance with
Section 2.02 and (B) in any other matter submitted to
stockholders, Ciba shall and shall cause any Ciba Entity to
be present for purposes of establishing a quorum and shall
vote and shall cause any Ciba Entity to vote all its Voting
Securities entitled to vote either, at the discretion of
Ciba, (1) as recommended by the Board or (2) in proportion
to the votes cast with respect to the Other Shares;
provided, however, that, except as provided in Section 3.03,
Ciba and any Ciba Entity shall be free to vote all its
Voting Securities entitled to vote in its sole discretion on
the following matters submitted to stockholders so long as
such matters were not submitted to stockholders, without the
concurrence of the Board (or if with such concurrence so
long as such concurrence is not obtained by Ciba in
violation of this Agreement), at the request of Ciba or any
of its affiliates (other than Hexcel) or at the request of
any Person acting on behalf of Ciba or any of its affiliates
(other than Hexcel):
(i) any amendment to Hexcel's certificate of
incorporation (provided, however, that Ciba and any
Ciba Entity shall vote against any such amendment that
is inconsistent with Section 4.14 of the Strategic
Alliance Agreement);
(ii) any merger, consolidation, acquisition or
other business combination involving Hexcel or any
Subsidiary of Hexcel;
(iii) any sale, lease, transfer or other
disposition of the business operations or assets of
Hexcel;
(iv) any recapitalization, restructuring or
similar transaction or series of transactions involving
Hexcel or any Significant Subsidiary of Hexcel;
(v) any dissolution or complete or partial
liquidation or similar arrangement of Hexcel or any
Significant Subsidiary of Hexcel;
(vi) any issuance of equity securities (other than
pursuant to customary employee or director stock option
or incentive compensation or similar plans and other
than transactions solely among Hexcel and its
Subsidiaries approved by the Board in accordance with
this Agreement) or of any bonds, debentures, notes or
other securities convertible into, exchangeable for or
exercisable for equity securities; and
(vii) entering into any material joint venture,
collaboration or partnership by Hexcel or any
Subsidiary of Hexcel.
SECTION 2.08. Certificate of Incorporation and
By-Laws; Anti-takeover Measures. (a) The by-laws of Hexcel
shall be amended as of the Closing Date to include each of
the provisions set forth in Annex A hereto and such
provisions shall not thereafter be amended during the term
of this Agreement except with Ciba's written consent.
Hexcel and Ciba shall each take or cause to be taken all
lawful action necessary to ensure at all times that Hexcel's
certificate of incorporation and by-laws are not at any time
inconsistent with the provisions of this Agreement.
(b) Hexcel shall not adopt or implement any
takeover defense measures applicable to Ciba or any of its
affiliates, including the institution or amendment by Hexcel
or any of its Subsidiaries of any stockholders rights plan
or similar plan or device, or any change of control matters
(including provisions in future agreements or collaborations
(i) that contain any restrictions on Ciba by virtue of its
Beneficial Ownership of Voting Securities or (ii) that would
subject Ciba or Hexcel to any adverse effect if Ciba
increased the Total Voting Power of Hexcel Beneficially
Owned by it in accordance with this Agreement).
(c) Except as required by applicable law, rule or
regulation, Hexcel shall not approve or recommend to its
stockholders any transaction or approve, recommend or take
any other action (other than those expressly contemplated by
this Agreement and other than those that affect Ciba and
each Other Holder or each director at the same time in the
same manner) that would (1) impose limitations on the legal
rights of Ciba or its affiliates or associates as a
stockholder of Hexcel, including, any action that would
impose restrictions based upon the size of security holding,
nationality of a securityholder, the business in which a
securityholder is engaged or other considerations applicable
to Ciba or its affiliates or associates and not to
stockholders generally, (2) deny any benefit to Ciba or its
affiliates or associates, proportionately as a holder of any
class of Voting Securities, (3) otherwise materially
adversely discriminate against Ciba, its affiliates or
associates as stockholders of Hexcel or (4) restrict the
right of any Ciba Director to vote on any matter as such
director believes appropriate in light of his or her duties
as a director or the manner in which a Ciba Director may
participate in his or her capacity as a director in
deliberations or discussions at meetings of the Board or any
committee thereof, except with respect to (i) entering into
contractual or other business relationships with Ciba or any
of its affiliates (other than in their capacity as
stockholders of Hexcel), (ii) disputes with Ciba or any of
its affiliates (including disputes under this Agreement),
(iii) interpretation or enforcement of this Agreement or any
other agreement with Ciba or any of its affiliates or
(iv) any other matter involving an actual or potential
conflict of interest due to such director's relationship
with Ciba or any of its affiliates.
ARTICLE III
Standstill
SECTION 3.01. Standstill. (a) Except as
otherwise expressly provided in this Agreement (including
this Section 3.01, Section 2.02 or Section 3.03) or as
specifically approved by a majority of the Independent
Directors (so long as such approval was not obtained by Ciba
in violation of this Agreement), neither Ciba nor any of
Ciba's controlled affiliates shall, directly or indirectly,
(i) by purchase or otherwise, acquire, agree to acquire or
offer to acquire Beneficial Ownership of any Voting
Securities or direct or indirect rights or options to
Beneficially Own Voting Securities (including any voting
trust certificates representing such securities),
(ii) enter, propose to enter into, solicit or support any
merger or business combination or similar transaction
involving Hexcel or any of its Subsidiaries, or purchase,
acquire, propose to purchase or acquire or solicit or
support the purchase or acquisition of any portion of the
business or assets of Hexcel or any of its Subsidiaries
(except (x) for purchases or acquisitions in the ordinary
course of business and (y) for proposals to purchase or
acquire a nonmaterial portion of the assets of Hexcel or any
of its Subsidiaries that are not required to be publicly
disclosed), (iii) initiate or propose any securityholder
proposal without the approval of the Board granted in
accordance with this Agreement or make, or in any way
participate in, any "solicitation" of "proxies" (as such
terms are used in the proxy rules promulgated by the SEC
under the Exchange Act) to vote, or seek to advise or
influence any Person with respect to the voting of, any
Voting Securities or request or take any action to obtain
any list of securityholders for such purposes with respect
to any matter other than those upon which Ciba and the Ciba
Entities may vote in their sole discretion under
Section 2.07 (or, as to such matters, solicit any Person in
a manner that would require the filing of a proxy statement
under Regulation 14A of the Exchange Act), (iv) form, join
or in any way participate in a group (other than a group
consisting solely of Ciba and its affiliates) formed for the
purpose of acquiring, holding, voting or disposing of or
taking any other action with respect to Voting Securities
that would be required under Section 13(d) of the Exchange
Act to file a Statement on Schedule 13D with respect to such
Voting Securities, (v) deposit any Voting Securities in a
voting trust or enter into any voting agreement or
arrangement with respect thereto (other than this
Agreement), (vi) seek representation on the Board, the
removal of any directors from the Board or a change in the
size or composition of the Board, (vii) make any request to
amend or waive any provision of this Section 3.01, which
request would require public disclosure under applicable
law, rule or regulation, (viii) disclose any intent,
purpose, plan, arrangement or proposal inconsistent with the
foregoing (including any such intent, purpose, plan,
arrangement or proposal that is conditioned on or would
require the waiver, amendment, nullification or invalidation
of any of the foregoing) or take any action that would
require public disclosure of any such intent, purpose, plan,
arrangement or proposal, (ix) take any action challenging
the validity or enforceability of the foregoing or
(x) assist, advise, encourage or negotiate with any Person
with respect to, or seek to do, any of the foregoing.
(b) Nothing in this Section 3.01 shall
(i) prohibit or restrict Ciba from responding to any
inquiries from any shareholders of Hexcel as to Ciba's
intention with respect to the voting of any Voting
Securities Beneficially Owned by Ciba so long as such
response is consistent with the terms of this Agreement;
(ii) prohibit the purchase or other acquisition of
Beneficial Ownership of any Voting Securities, including
pursuant to Section 3.02 or in open market purchases, so
long as after giving effect to such purchase or other
acquisition the percentage of the Total Voting Power of
Hexcel Beneficially Owned by Ciba does not exceed the
greater of (A) 49.9% until the third anniversary of the
Closing, or 57.5% thereafter, and (B) the highest percentage
of the Total Voting Power of Hexcel Beneficially Owned by
Ciba immediately following any action by Hexcel (including a
purchase by Hexcel of Voting Securities) that increases the
percentage of the Total Voting Power of Hexcel Beneficially
Owned by Ciba due to a reduction in the amount of Voting
Securities outstanding as a result of such action;
(iii) restrict the right of each Ciba Director on the Board
or any committee thereof to vote on any matter as such
individual believes appropriate in light of his or her
duties as a director or committee member or the manner in
which a Ciba Nominee may participate in his or her capacity
as a director in deliberations or discussions at meetings of
the Board or as a member of any committee thereof;
(iv) prohibit Ciba from Beneficially Owning Voting
Securities issued as dividends or distributions in respect
of, or issued upon conversion, exchange or exercise of,
securities which Ciba is permitted to Beneficially Own under
this Agreement; (v) prohibit any officer, director, employee
or agent of Ciba and its Subsidiaries from purchasing or
otherwise acquiring Voting Securities so long as he or she
is not a member of a group that includes Ciba or any of its
affiliates or is not otherwise acting on behalf of Ciba or
any of its affiliates; or (vi) prohibit Ciba or any of its
affiliates from disclosing in accordance with its
obligations (if any) under the federal securities laws or
other applicable law its desire (if any) that Hexcel become
the subject of a Buyout Transaction.
(c) After the Standstill Period, nothing in this
Section 3.01 shall prohibit or restrict Ciba or its
affiliates from proposing, participating in, supporting or
causing the consummation of a Buyout Transaction, including
a transaction with Ciba or any of its affiliates, if all
Other Holders are entitled to receive Requisite
Consideration upon consummation of such Buyout Transaction.
SECTION 3.02. Ciba Right to Maintain Position.
Hexcel hereby grants to Ciba the following irrevocable
option:
If, at any time after the Closing for so long as
Ciba shall be entitled to designate one or more Ciba
Nominees for election to the Board, Hexcel shall issue for
cash any additional Voting Securities (except for any
issuances described in the following sentence), then Hexcel
shall notify Ciba of such issuance and the price and terms
thereof, and Ciba shall have the option, for a period of
45 days after receipt of such notice, to purchase from
Hexcel an Amount (as defined below) of such Voting
Securities for the same consideration per security and on
the same terms as were applicable to such issuance by
Hexcel. The foregoing option shall not apply to any
issuance of Voting Securities in connection with employee or
director stock option or incentive compensation or similar
plans. An "Amount" shall mean the smallest number of
securities that would allow Ciba to Beneficially Own the
same percentage of the Total Voting Power of Hexcel as Ciba
Beneficially Owned immediately prior to such issuance.
SECTION 3.03. Third Party Offers. (a) In the
event that Hexcel becomes the subject of a Third Party Offer
that is made after the third anniversary of the Closing and
that is approved by two-thirds of the Independent Directors,
promptly after such approval, Hexcel shall deliver a written
notice to Ciba, briefly describing the material terms of
such Third Party Offer. Ciba shall, within 10 business days
after receipt of such notice, either (i) offer to acquire
the Other Shares on terms at least as favorable to the Other
Holders as those contemplated by such Third Party Offer (in
which event Hexcel shall endorse such offer by Ciba rather
than such Third Party Offer; provided, however, that if
Hexcel becomes the subject of another Third Party Offer that
provides for greater currently realizable value to Hexcel's
stockholders (including Ciba and the Ciba Entities) than
such previously proposed Third Party Offer, Hexcel shall be
free to pursue such newly proposed Third Party Offer; and
provided, further, that such newly proposed Third Party
Offer shall be subject to Ciba's rights pursuant to this
Section 3.03(a)(i) and obligations pursuant to
Section 3.03(a)(ii)) or (ii) confirm in writing that it will
support, and at the appropriate time Ciba shall actually
support, such Third Party Offer (or an alternative Third
Party Offer providing greater currently realizable value to
all Other Holders) by voting and causing each Ciba Entity to
vote all its Voting Securities eligible to vote thereon in
favor of such Third Party Offer or, if applicable, tendering
or selling and causing each such Ciba Entity to tender or
sell all its Voting Securities to the Person making such
Third Party Offer.
(b) In the event that Hexcel becomes the subject
of a Third Party Offer, neither Ciba nor any of the Ciba
Entities may support such Third Party Offer, vote in favor
of such Third Party Offer or tender or sell its Voting
Securities to the Person making such Third Party Offer
unless such Third Party Offer is approved by (x) a majority
of the Independent Directors acting solely in the interest
of the Other Holders or (y) a majority in interest of the
Other Holders in a Stockholder Vote solicited pursuant to a
proxy statement containing the information required by
Schedule 14A under the Exchange Act (it being understood
that the Independent Directors shall, consistent with their
fiduciary duties, be free to include in such proxy
statement, if applicable, the reasons underlying any failure
by them to approve such Third Party Offer by the requisite
vote, including whether a fairness opinion was sought and
any opinions or recommendations expressed in connection
therewith).
(c) Notwithstanding Section 3.03(b), if Ciba has
exercised the right to require Hexcel to solicit a Buyout
Transaction pursuant to Section 5.01, Ciba and the Ciba
Entities may vote in favor of or tender or sell their Voting
Securities pursuant to any Third Party Offer made as a
result of or during such solicitation so long as such Third
Party Offer offers the same consideration to all Hexcel
stockholders. Unless Hexcel shall have accepted another
Third Party Offer providing at least equivalent value to all
Hexcel stockholders, Hexcel shall not take any action to
interfere with Ciba's right to vote in favor of or tender
into such a Third Party Offer (it being understood that
Hexcel shall remain free to pursue alternative Third Party
Offers that provide for at least equivalent currently
realizable value to Hexcel's stockholders (including Ciba
and the Ciba Entities) as such previously proposed Third
Party Offer).
ARTICLE IV
Transfer Restrictions
SECTION 4.01. Restrictions. (a) Except in
connection with a Third Party Offer that has been approved
by the Independent Directors or the Other Holders in
accordance with Section 3.03 or as provided in
Section 3.03(c), Ciba shall not, and shall not permit any
Ciba Entity, directly or indirectly, to sell, transfer or
otherwise dispose of any Voting Securities except (i)
transfers solely among Ciba and its wholly owned
Subsidiaries, (ii) in accordance with the volume and manner-
of-sale limitations of Rule 144 under the Securities Act
(regardless of whether such limitations are applicable) and
otherwise subject to compliance with the Securities Act or
(iii) in a registered public offering or a non-registered
offering subject to an applicable exemption from the
registration requirements of the Securities Act, in the case
of clauses (ii) and (iii), in a manner calculated to achieve
a Broad Distribution.
(b) Ciba shall not sell, transfer or otherwise
dispose of any of the capital stock of any Ciba Entity,
except to another direct or indirect wholly owned Subsidiary
of Ciba; provided, however, that nothing in this Agreement
shall prohibit Ciba from effecting (x) a pro rata
distribution to Ciba's stockholders or (y) a sale in a
manner calculated to achieve a Broad Distribution of up to
20%, of the equity securites of a Ciba Entity if (1) such
distribution or sale has a bona fide business purpose (other
than the sale or distribution of Voting Securities), (2) the
Voting Securities Beneficially Owned by such Ciba Entity do
not constitute a material portion of the total assets of
such Ciba Entity and (3) in the case of clause (x), such
Ciba Entity agrees in writing to be bound by the terms and
provisions of this Agreement to the same extent that Ciba
would be bound if it Benefically Owned the Voting Securities
Beneficially Owned by such Ciba Entity. Ciba shall not
permit any Subsidiary of Ciba that is not a direct or
indirect wholly owned Subsidiary of Ciba to become a Ciba
Entity.
SECTION 4.02. Legends. (a) Except as set forth
in paragraph (b) below, during the term of this Agreement
all certificates representing Voting Securities Beneficially
Owned by Ciba shall bear an appropriate restrictive legend
indicating that such Voting Securities are subject to
restrictions pursuant to this Agreement and that such Voting
Securities were not issued pursuant to a public offering
registered pursuant to the Securities Act.
(b) Upon any transfer or proposed transfer of
Beneficial Ownership by Ciba or any Ciba Entity of any
Voting Securities to any Person other than Ciba or a Ciba
Entity that is permitted pursuant to this Agreement, Hexcel
shall, upon receipt of timely notice and such certificates,
opinions and other documentation as shall be reasonably
requested by Hexcel, cause certificates representing such
transferred Voting Securities to be issued not later than
the time needed to effect such transfer (x) without any
restrictive legend if upon consummation of such transfer
such Voting Securities are no longer "restricted securities"
as defined in Rule 144 under the Securities Act or
(y) without any reference to this Agreement if upon
consummation of such transfer such Voting Securities
continue to be "restricted securities".
SECTION 4.03. Effect. Any purported transfer of
Voting Securities that is inconsistent with the provisions
of this Article IV shall be null and void and of no force or
effect.
ARTICLE V
Extension and Termination
SECTION 5.01. Ciba Election. (a) If the
percentage of the Total Voting Power of Hexcel Beneficially
Owned by Ciba on any Election Date is greater than 10% but
less than 100%, Ciba shall take either of the following
actions on such Election Date:
(i) extend this Agreement for an additional
two year period, in which case so long as Ciba
Beneficially Owns 25% or more of the Total Voting Power
of Hexcel, on one occasion during each such two-year
period Ciba may require Hexcel to solicit in good faith
a Buyout Transaction in which Ciba, the Ciba Entities
and the Other Holders receive the same consideration
per Voting Security (in which event the provisions of
this Agreement shall continue in full force and effect
until the consummation of such a Buyout Transaction);
or
(ii) undertake to sell a sufficient number of
Voting Securities so that the percentage of the Total
Voting Power of Hexcel Beneficially Owned by Ciba falls
below 10% during the subsequent 18 months pursuant to
one or more Requisite Distributions (in which event the
provisions of this Agreement shall continue until the
percentage of the Total Voting Power of Hexcel
Beneficially Owned by Ciba falls below 10%).
(b) If at any time in accordance with this
Agreement the percentage of the Total Voting Power of Hexcel
Beneficially Owned by Ciba is either (x) 10% or less or (y)
100%, this Agreement shall automatically terminate.
(c) If either party to this Agreement is in
breach of or violates any material obligation under this
Agreement and fails to cure such breach or violation
within 60 days after delivery of written notice from the
other party specifying such breach and requesting its cure,
such other party may terminate its obligations under this
Agreement.
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices. All notices, requests and
other communications hereunder shall be in writing
(including fax) and shall be sent, delivered or mailed,
addressed, or faxed:
(a) if to Hexcel, to:
Hexcel Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx,XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
Attention of Xxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
(b) if to Ciba, to:
Ciba-Geigy Limited
XX 0000
Xxxxx, Xxxxxxxxxxx
(T) (00) 00 000-0000
(F) (00) 00 000-0000
Attention of Mr. John M.D. Xxxxxxxxx
with copies to:
Ciba-Geigy Corporation
000 Xxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
(T) (000) 000-0000
(F) (000) 000-0000
Attention of Xx. Xxxxxxx Xxxxxxx and
Attention of Xxxx X. XxXxxx, Esq.
and
Ciba-Geigy Limited
XX0000
Xxxxx, Xxxxxxxxxxx
(T) (00) 000-0000
(F) (00) 000-0000
Attention of Xx. Xxxxx Xxxxxx
and
Xxxxxx X. Xxxxxxx, Esq.
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(T) (000) 000-0000
(F) (000) 000-0000
Each such notice, request or other communication shall be
given (i) by hand delivery, (ii) by nationally recognized
courier service or (iii) by fax, receipt confirmed. Each
such notice, request or communication shall be effective
(A) if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this
Section 6.01 (or in accordance with the latest unrevoked
written direction from such party) and (B) if given by fax,
when such fax is transmitted to the fax number specified in
this Section 6.01 (or in accordance with the latest
unrevoked written direction from such party), and the
appropriate confirmation is received.
SECTION 6.02. Interpretation. The headings
contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
"included", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation".
SECTION 6.03. Severability. The provisions of
this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is
found to be invalid or unenforceable in any jurisdiction,
(a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of
such provision, or the application thereof, in any other
jurisdiction.
SECTION 6.04. Counterparts. This Agreement may
be executed in one or more counterparts, each of which shall
be deemed an original and all of which shall, taken
together, be considered one and the same agreement, it being
understood that both parties need not sign the same
counterpart.
SECTION 6.05. Entire Agreement; No Third Party
Beneficiaries. This Agreement together with the
Registration Rights Agreement and the Strategic Alliance
Agreement (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon
any Person, other than the parties hereto and, solely with
respect to the proviso in Section 2.07(b)(i), the
Indemnified Individuals (as defined in the Strategic
Alliance Agreement), any rights or remedies hereunder.
SECTION 6.06. Further Assurances. Each party
shall execute, deliver, acknowledge and file such other
documents and take such further actions as may be reasonably
requested from time to time by the other party hereto to
give effect to and carry out the transactions contemplated
herein.
SECTION 6.07. Governing Law; Equitable Remedies.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under
applicable principles of conflicts of law. The parties
hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to equitable relief,
including in the form of injunctions, in order to enforce
specifically the provisions of this Agreement, in addition
to any other remedy to which they are entitled at law or in
equity.
SECTION 6.08. Consent to Jurisdiction. Each
party hereto irrevocably submits to the exclusive
jurisdiction of the United States District Court for the
Southern District of New York located in the borough of
Manhattan in the City of New York, or if such court does not
have jurisdiction, the Supreme Court of the State of
New York, New York County, for the purposes of any suit,
action or other proceeding arising out of this Agreement or
any transaction contemplated hereby. Each party hereto
further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party's
respective address set forth in Section 6.01 shall be
effective service of process for any action, suit or
proceeding in New York with respect to any matters to which
it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each party hereto
irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated
hereby in (a) the United States District Court for the
Southern District of New York or (b) the Supreme Court of
the State of New York, New York County, and hereby further
irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit
or proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 6.09. Amendments; Waivers. (a) No
provision of this Agreement may be amended or waived unless
such amendment or waiver is in writing and signed, in the
case of an amendment, by the parties hereto, or in the case
of a waiver, by the party against whom the waiver is to be
effective; provided that no such amendment or waiver by
Hexcel shall be effective without the approval of a majority
of the Independent Directors. Notwithstanding any provision
herein to the contrary, if a majority of the Independent
Directors determine in good faith to do so, such Independent
Directors may seek to enforce, in the name and on behalf of
Hexcel, the terms of this Agreement against Ciba.
(b) No failure or delay by any party in
exercising any right, power or privilege hereunder shall
operate as waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 6.10. Assignment. Neither this Agreement
nor any of the rights or obligations hereunder shall be
assigned by either of the parties hereto without the prior
written consent of the other party, except that either party
may assign all its rights and obligations to the assignee of
all or substantially all of the assets of such party,
provided that such party shall in no event be released from
its obligations hereunder without the prior written consent
of the other party. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and
be enforceable by the parties and their respective
successors and assigns.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered, all as of the
date first set forth above.
CIBA-GEIGY LIMITED,
by
Name:
Title:
HEXCEL CORPORATION,
by
Name:
Title:
Exhibit B
Hexcel Corporation
Increasing Rate Senior Subordinated Notes due 2003
to the Strategic Alliance Agreement
Summary of Terms
Issuer: Hexcel Corporation, a Delaware
corporation (the "Company").
Notes: Increasing Rate Senior Subordinated
Notes due 2003 (the "Securities").
Coupon: The Securities shall bear interest at
the initial rate of 9% per annum,
which rate shall be increased by 50
basis points annually. Interest
shall accrue from the date of the
Closing as defined in the Strategic
Alliance Agreement among Ciba-Geigy
Limited, Ciba-Geigy Corporation and
the Company.
Redemption: The Company may redeem the Securities
whole at any time or in part from
time to time at a redemption price
equal to 100% of the principal amount
of the Securities to be redeemed,
plus accrued interest.
Covenants: (a) Limitation on indebtedness to
the extent consolidated coverage
ratio is equal to or less than
2.0 to 1.0. The Company and its
Subsidiaries (as defined) may
incur (i) indebtedness under the
Company's Credit Agreement (as
defined); (ii) other
indebtedness in aggregate
principal amount not in excess
of $20,000,000; (iii)
indebtedness owing to and held
by the Company or its Wholly
Owned Subsidiaries (as defined);
(iv) existing indebtedness;
(v) indebtedness of any
Subsidiary incurred or
outstanding prior to the date
such Subsidiary became a
Subsidiary of the Company;
(vi) refinancing indebtedness
relating to clauses (ii), (iv)
or (v) above; (vii) indebtedness
in an amount not to exceed
$10,000,000 in the aggregate at
any time outstanding under
hedging obligations relating to
permitted indebtedness or
entered into in the ordinary
course of business;
(viii) indebtedness in an amount
not to exceed $5,000,000 in the
aggregate secured by purchase
money liens; and
(ix) capitalized lease
obligation incurred in any year
in an aggregate amount not to
exceed $5,000,000 for such year.
(b) Limitation on dividends,
redemptions of capital stock,
retirement of subordinated
obligations and investments
(collectively, "Restricted
Payments). The Company may make
Restricted Payments if (x) a
Default (as defined) is not
pending and would not result
therefrom, (y) the Company could
incur any Indebtedness under the
consolidated coverage ratio test
and (z) the aggregate amount of
Restricted Payments do not
exceed $15,000,000 plus 50% of
Consolidated Net Income (as
defined) (minus 100% of any
deficit), plus net cash proceeds
from the sale of stock plus the
amount by which the Company and
its Subsidiaries reduce their
Indebtedness. Notwithstanding
the foregoing, the Company may
(i) purchase or redeem capital
stock with the proceeds of sales
of capital stock; (ii) purchase
or redeem subordinated
obligations with the proceeds of
the sale of permitted
indebtedness; (iii) purchase or
redeem subordinated obligations
with the proceeds of asset
dispositions; (iv) pay permitted
dividends within 60 days after
the date of declaration thereof;
(v) pay dividends, redeem
capital stock and retire
subordinated obligations
aggregating less than
$15,000,000; and (vi) make
scheduled payments in respect of
[DIC Technology or HDP].
(c) Limitation on restrictions on
distributions from subsidiaries,
subject to customary exceptions.
(d) Limitation on sales of assets
and Subsidiary stock in excess
of $1,000,000 and a requirement
that the Company use the
proceeds of such sales to repay
senior indebtedness or
indebtedness of Wholly Owned
Subsidiaries, make investments
or, under certain circumstances,
to offer to redeem the
Securities for 100% of their
principal amount plus accrued
interest.
(e) Limitation on transactions with
Affiliates (as defined) in
excess of $100,000, subject to
exceptions relating to
transactions with (i) Ciba-Geigy
Limited or its affiliates,
(ii) American Body Armor and
Equipment Inc. or (iii) Hexcel
Foundation, and with possible
further exceptions relating to
existing agreements.
(f) Offer to repurchase Securities
upon a Change of Control (as
defined) at 101% of principal
amount plus accrued and unpaid
interest.
(g) Limitation on issuance of stock
of Subsidiaries and sale of
stock of Subsidiaries accounting
for 5% or more of Consolidated
Net Income unless all such
shares are sold.
(h) Limitation on mergers and
transfers of substantially all
the assets of the Company, with
provisions allowing Wholly Owned
Subsidiaries to consolidate
with, merge into or transfer
assets to the Company, and with
a possible further exception
relating to the status under the
Governance Agreement.
Defaults: Failure to pay interest or principal
when due, breach of covenants,
cross-acceleration to indebtedness in
excess of $10,000,000, bankruptcy of
the Company or any Significant
Subsidiary (as defined) and
judgements in excess of $10,000,000
that are not discharged, waived or
stayed. The foregoing are subject to
notice and/or grace periods in
certain instances.
Subordination: The Securities shall be subordinated
in right of payment to the prior
payment of all senior indebtedness.
Exhibit C
DISTRIBUTION AGREEMENT (this
"Agreement"), dated as of __________ 1995,
to the Strategic Alliance Agreement
among HEXCEL CORPORATION, a Delaware
corporation ("Hexcel"), BROCHIER S.A., a
French corporation ("Brochier"), COMPOSITE
MATERIALS LIMITED, a United Kingdom
corporation ("CML"), SALVER, S.r.l., an
Italian corporation ("Salver", together with
Brochier and CML, the "Hexcel Subsidiaries"),
and CIBA-GEIGY LIMITED, a Swiss corporation
("Ciba").
WHEREAS, Ciba and Hexcel have entered into a
Strategic Alliance Agreement dated as of September 29, 1995
(the "SAA") pursuant to which Ciba and Hexcel have agreed to
combine the transferred business with Hexcel's business;
WHEREAS, in connection with the SAA, the Hexcel
Subsidiaries desire Ciba to continue to have Ciba's
affiliates act as distributors for products of the
Transferred Business in the territories referred to on
Schedule 1 attached hereto (the "Distributors");
WHEREAS, Hexcel and Ciba are interested in a
smooth transition of the Transferred Business to Hexcel; and
WHEREAS, Ciba is willing to have its affiliates
provide their services as Distributors for products of the
Transferred Business.
NOW, THEREFORE, in consideration of the
undertakings set forth herein and for other good and
valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto have therefore
agreed as follows:
SECTION 1. Terms not specifically defined herein
shall have the meaning assigned to them in the SAA.
SECTION 2. (a) Ciba commits that the affiliates
of Ciba listed in Schedule 1 hereto shall continue to act as
Distributors for products of the Transferred Business in the
countries listed in Schedule 1 under the terms and
conditions at which they have cooperated with the
Transferred Business during the six-month period immediately
prior to the date of this agreement. The Distributors shall
act as independent distributors and are in no way authorized
to bind Hexcel and/or the Hexcel Subsidiaries.
(b) In the event that Danutec is acquired by
Hexcel on or before December 31, 1996, Danutec shall be
deemed to be a Hexcel Subsidiary under this Agreement
entitled to all the rights and benefits thereof.
(c) A list of the employees currently working for
each Distributor in connection with the Transferred Business
(the "Employees") is attached hereto as Schedule 2.
SECTION 3. (a) The Distributors shall use all
commercially reasonable efforts to continue to solicit and
serve customers for the Transferred Business by using the
assets and employees dedicated to the Transferred Business
at present and reflected in the Balance Sheet. The
Distributors shall also provide the necessary administrative
support and related services.
(b) The Hexcel Subsidiaries shall use all
commercially reasonable efforts to continue to supply the
Distributors.
(c) The Distributors shall report to Hexcel via
the existing regional management structure of the
Transferred Business.
(d) The Distributors shall continue to provide
budgets, latest estimates, monthly reports and one-year
plans in the format and in accordance with the timetable to
be agreed with Hexcel and the Hexcel Subsidiaries.
(e) The Distributors shall continue monthly third
party sales reporting as per the Ciba Form G02 currently
used, including the end of month Ciba "quick" report.
(f) The Distributors shall visit customers
regularly and provide to Hexcel and the appropriate Hexcel
Subsidiaries reports on key customers and assist the
personnel of Hexcel and the Hexcel Subsidiaries in obtaining
access to customers.
(g) The Distributors shall manage local stocks,
consignment stocks and the assets of the Transferred
Business in the countries listed on Schedule I hereto in the
best interest of Hexcel and the Hexcel Subsidiaries in
accordance with the direction of the regional management
structure of the transferred business.
SECTION 4. Hexcel and all the Hexcel Subsidiaries
shall provide the Distributors with price lists for the
products of the transferred business to be handled by the
Distributors and use their commercially reasonable efforts
to fulfill all orders of the Distributors as requested in
accordance with the terms hereof and at list prices.
Hexcel, the Hexcel Subsidiaries and the regional management
structure of the transferred business together with the
Distributors shall coordinate dealing with key customers in
the countries.
SECTION 5. (a) The Distributors shall not,
without the prior agreement of Hexcel, which agreement shall
not be unreasonably withheld, transfer key employees
providing services to the Transferred Business hereunder to
other businesses of the Ciba Group.
(b) The Hexcel Subsidiaries shall ship orders
either to the Distributors or, if requested, directly to
customers.
(c) The Distributors shall not provide customers
with warranties exceeding the warranties provided to the
Distributors by Hexcel and the Hexcel Subsidiaries.
SECTION 6. (a) This Agreement shall become
effective on the Closing Date and shall remain in effect
until December 31, 1996. Hexcel shall be entitled to give
two (2) months written notice effective at the end of any
calendar month to terminate this Agreement for one or more
specified Distributors at any time.
(b) Upon termination of this Agreement in its
entirety or for specified Distributors, Hexcel and/or the
Divested Subsidiaries shall acquire the Inventory and Fixed
Assets of the Distributor(s) which constitute the Deferred
Assets. Such Inventory shall consist of those products of
the Transferred Business purchased from the Hexcel
Subsidiaries by the Distributor(s). Such Inventory shall be
acquired by the Hexcel Subsidiaries at a purchase price
equal to the landed cost of such Inventory to the
Distributor(s). Fixed Assets shall consist of the assets
listed on Schedule 3 hereto. Such fixed assets shall be
transferred to the Hexcel Subsidiaries free of charge, with
the exception of the fixed assets in South Africa for which
Hexcel shall pay Ciba U.S.$457,500.
(c) Upon termination of this Agreement in its
entirety or with respect to one or more specified
Distributors, Hexcel and/or the Hexcel Subsidiaries shall
have the right to offer and where by law obliged to actually
offer employment to the relevant Employees. Employment
shall be offered on compensation and benefit terms that are
reasonably competitive considering the country involved,
then prevailing economic conditions, the industry sector in
which the relevant Employees are engaged and the relevant
Employees' skills and experience. Prior to employment by
Hexcel or any of the Hexcel Subsidiaries, the Distributor(s)
(or if applicable, Ciba) shall fully vest the relevant
Employees in any pension scheme or other employee benefit
program in which such Employees have participated and
Distributor(s) (of if applicable, Ciba) shall retain any and
all liabilities with respect thereto. If Hexcel and the
Hexcel Subsidiaries fail to offer employment to one or more
of such Employees and within three (3) months thereafter the
applicable Distributor(s) terminates the employment of any
such Employee, then Hexcel shall contribute an amount up to
the amount specified by law and if no such law exists an
amount to be agreed to by the parties, which amount shall
not exceed one year's total compensation for the respective
Employee(s). Except as otherwise provided in this
Agreement, Hexcel shall treat all Employees no less
favorably than other employees of Hexcel who are employed in
comparable positions in comparable locations.
(d) Hexcel and the Hexcel Subsidiaries shall be
free to negotiate either an extension of this Agreement or
one or more new agreements with any of the Distributors.
(e) Sections 8.07 and 8.08 of the SAA are
incorporated by reference herein and shall be deemed to
constitute part of this Agreement.
SECTION 7. Notices. All notices and other
communications hereunder shall be in writing (including fax)
and shall be sent, delivered or mailed, addressed, or faxed:
(a) if to Hexcel or any of the Hexcel
Subsidiaries, to:
Hexcel Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx,XX 00000
(T) (000) 000-0000 (x4257)
(F) (000) 000-0000
Attention of Xxxxxxx X. Xxxxxxx
and
Xx. Xxxxxx X. Xxxxx
(T) 510 847-9500 (x4383)
(F) 000 000-0000
(b) if to Ciba to:
Ciba-Geigy Limited
XX 0000
Xxxxx, Xxxxxxxxxxx
(T) (00) 00 000-0000
(F) (00) 00 000-0000
Attention of Xx. Xxxxx Xxxxxx
Each such notice, request or other communication shall be
given (i) by hand delivery, (ii) by nationally recognized
courier service or (iii) by fax, receipt confirmed. Each
such notice, request or communication shall be effective
(A) if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this
Section 7 (or in accordance with the latest unrevoked
written direction from the party to whom such notice is
delivered) and (B) if given by fax, when such fax is
transmitted to the fax number specified in this Section 7
(or in accordance with the latest unrevoked written
direction from the party to whom such notice is
transmitted), and the appropriate confirmation is received.
IN WITNESS WHEREOF, the parties hereto have caused
this Distribution Agreement to be duly executed by their
respective authorized officers as of the date first above
written.
HEXCEL CORPORATION,
by
Name:
Title:
CIBA-GEIGY LIMITED,
by
Name:
Title:
COMPOSITE MATERIALS LIMITED
by
Name:
Title:
BROCHIER, S.A.,
by
Name:
Title:
SALVER, S.r.l.,
by
Name:
Title:
SCHEDULE 1
to Distribution Agreement
CIBA AFFILIATES
Affiliate Countries of Responsibility
Ciba-Geigy Australia Limited Australia, New Zealand
Xxxxxxxxxxxxxx, XXX 0000
Ciba-Geigy A/S Denmark
DK-2100 Kopenhagen O
Denmark
Ciba-Geigy OY Finland
FIN-00241 Helsinki
Finland
Ciba-Geigy GmbH Germany, Switzerland
D-79662 Wehr/Baden
Germany
Ciba-Geigy BV The Netherlands
NL-6800L2 Amhem
The Netherlands
Ciba-Geigy (Hong Kong) Limited Hong Kong, Taiwan, People's
HK-Hong Kong Republic of China
Hindustan Ciba-Geigy Limited India
Bombay 400 020
India
Ciba-Geigy Limited Japan
Takarajuka 665
Hyogo Prefecture
Japan
Ciba-Geigy A/S Norway
N-0601 Oslo
Norway
Ciba-Geigy SE Asia (PK) Limited Singapore, Malaysia,
Jurong Town Thailand, Indonesia,
Singapore Vitenam
Ciba-Geigy SA Spain
Barcelona
Spain
Ciba-Geigy (Pty) Limited Africa (excluding the
0000-Xxxxxx Xxxxxx Xxxxx Xxxx)
Xxxxx Xxxxxx
Xxxx-Xxxxx XX Sweden
X-000 00 Xxxxxx Xxxxxxxxx
Xxxxxx
Ciba-Geigy Korea Limited South Korea
XXX 000-000 Xxxxx
Xxxxxxxx of Korea
SCHEDULE 2
to Distribution Agreement
EMPLOYEES
Country Name of Employee
Australia Xxxxx Xxxxxx
Xxx Xxxx
Xxxx Xxxxxxx
Demark Xxxxx Xxxxxxx replacement
Finland Per-Xxxx Xxxxxxxx 50% Composites
50% Poymers
Germany Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Lemokau
Xxxx-Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxxxx
Xxxxx Xxxxx Xxxxxxx
Xxxx-Xxxxxxx Xxxxx
Xxxxx Xxxxx
Holland (Beneluxe) Xxxx Xxxxx
Hong Kong Eva Jp
X. E. Lu
India Pancha Mitra
Japan Xxxxx Xxxxxxxx
Norway Xxxx Xxxxxxx 50% Composites
50% Polymers
Singapore Xxxx Xxx
Spain Xxxxxxx Xxxxx
Sweden Xxxxxx Xxxxxxxx 50% Composites
50% Polmers
South Africa Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx
Production Facility
Xxxx Wild (Manager)
T. J. Mabolaws
X. X. Xxxxxx
P. M. Moloi
S. I. Monena
M. D. Sibuyi
South Korea X. X. Xxx 50% Composites
50% Polymers
SCHEDULE 3
to Distribution Agreement
Identifiable Assets
[To come].
SCHEDULE 4
to Distribution Agreement
Group Company Assets
Australia (000 A$)
Commercial receivables 951
Commercial inventory 1,256
Commercial Payable (TP) 5
Fixed Assets
Computer equipment 8
Motor Vehicle 8
Other 3
Other Assets 0
Other Liabilities
Long service leave 13
Annual leave 8
Accruals 1
Denmark (000 DK)
Commercial receivables 5,578
Commercial inventory 971
Commercial Payable (TP) 59
Fixed Assets 0
Other Assets 0
Other Liabilities 0
Finland (000 FIM)
Commercial receivables 107
Commercial inventory 0
Commercial Payable (TP) (5)
Fixed Assets 0
Other Assets 0
Other Liabilities 0
Germany (000 DM)
Commercial receivables 5,100
Commercial inventory 1,850
Commercial Payable (TP) 0
Fixed Assets 0
Machinery/Equipment 123
Hardware 44
Software 1
Other Assets 0
Employee loan 12
Other Liabilities
Third Party Debt (25)
Accrued liabilities (243)
Pension liabilities (1,177)
Holland (000 NLG)
Commercial receivables 1,398
Commercial inventory 117
Commercial Payable (TP) 0
Fixed Assets 6
Other Assets 35
Other Liabilities (103)
Hong Kong (000 HK$)
Commercial receivables 2,551
Commercial inventory 441
Commercial Payable (TP) 0
Fixed Assets
Office equipment 40
Other Assets 0
Other Liabilities 0
India (000 IR)
Commercial receivables 2,900
Commercial inventory 0
Commercial Payable (TP) 0
Fixed Assets
Office equipment 600
Vehicle 400
Other Assets 0
Other Liabilities 0
Japan (000 YEN)
Commercial receivables 44,113
Commercial inventory 41,034
Commercial Payable (TP) (76)
Fixed Assets 0
Other Assets 0
Other Liabilities 0
New Zealand (000 NZ$)
Commercial receivables 23
Commercial inventory 47
Commercial Payable (TP) 0
Fixed Assets 0
Other Assets 0
Other Liabilities 0
Norway (000 $)
Commercial receivables 700
Commercial inventory 213
Commercial Payable (TP) 2
Fixed Assets 0
Other Assets
Employee loan 230
Other Liabilities 0
Singapore (000 S$)
Commercial receivables 1,007
Commercial inventory 0
Commercial Payable (TP) 0
Fixed Assets
Vehicle 35
IT 8
Other Assets 0
Other Liabilities 00
Xxxxx Xxxxxx (000 R$)
Commercial receivables 495
Commercial inventory 1,539
Commercial Payable (TP) (1)
Fixed Assets
Vehicles 142
Furniture/Equipment 16
Lab Equipment 2
Production Equipment 997
Fittings 11
Other Assets 27
Other Liabilities 0
Spain (000 P)
Commercial receivables 0
Commercial inventory 0
Commercial Payable (TP) 0
Fixed Assets
Photocopier/Fax/PC 1,000
Car 700
Other Assets 0
Other Liabilities 13,000
Sweden (000 SK)
Commercial receivables 1,571
Commercial inventory 0
Commercial Payable (TP) 0
Fixed Assets
Vehicle 16
Office equipment 25
Other Assets 0
Other Liabilities 0
South Korea (000 W)
Commercial receivables 0
Commercial inventory 0
Commercial Payable (TP) 0
Fixed Assets 0
Other Assets 0
Other Liabilities 0
Exhibit D
to the Strategic Alliance Agreement
AGREEMENT
GOVERNING UNITED STATES EMPLOYMENT MATTERS
dated as of September 29, 1995 among
CIBA-GEIGY CORPORATION
and
HEXCEL CORPORATION
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . 1
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
REGARDING BENEFIT PLANS AND LABOR
MATTERS . . . . . . . . . . . . . . . . . . 2
2.1 CGC Representation and
Warranties . . . . . . . . . . . . . . 2
2.2 Hexcel Representations and
Warranties . . . . . . . . . . . . . . 5
2.3 Covenants by CGC . . . . . . . . . . . 9
2.4 Covenants by Hexcel . . . . . . . . . . 9
2.5 Strategic Alliance Agreement . . . . . 10
ARTICLE 3. U.S. TRANSFERRED BUSINESS EMPLOYEES . . . . 10
ARTICLE 4. EMPLOYEE BENEFIT PLANS AND
ARRANGEMENTS . . . . . . . . . . . . . . . . 11
4.1 General . . . . . . . . . . . . . . . . 11
4.2 Back Service Credit . . . . . . . . . . 11
4.3 Pension Plans . . . . . . . . . . . . . 11
4.4 Savings Plans . . . . . . . . . . . . . 12
4.5 Medical and Dental Plans . . . . . . . 13
4.6 Disability . . . . . . . . . . . . . . 13
4.7 Severance . . . . . . . . . . . . . . . 14
4.8 Workers' Compensation . . . . . . . . . 14
4.9 Vacation Pay . . . . . . . . . . . . . 14
ARTICLE 5. COLLECTIVE BARGAINING AGREEMENT . . . . . . 14
ARTICLE 6. TERMINATION, MODIFICATION AND
AMENDMENT . . . . . . . . . . . . . . . . . 15
6.1 Termination . . . . . . . . . . . . . . 15
6.2 Modification and Amendment . . . . . . 15
ARTICLE 7. NO THIRD-PARTY RIGHTS . . . . . . . . . . . 15
ARTICLE 8. INDEMNIFICATION . . . . . . . . . . . . . . 15
ARTICLE 9. NOTICES . . . . . . . . . . . . . . . . . . 15
ARTICLE 10. CAPTIONS . . . . . . . . . . . . . . . 16
ARTICLE 11. ASSIGNMENT AND WAIVER . . . . . . . . 16
11.1 Assignment . . . . . . . . . . . . . . 16
11.2 Waiver . . . . . . . . . . . . . . . . 16
ARTICLE 12. APPLICABLE LAW . . . . . . . . . . . . 16
ARTICLE 13. FURTHER ASSURANCES . . . . . . . . . . 17
ARTICLE 14. CONSENT TO JURISDICTION . . . . . . . . 17
ARTICLE 15. SEVERABILITY . . . . . . . . . . . . . 17
ARTICLE 16. SCHEDULES . . . . . . . . . . . . . . . 17
ARTICLE 17. COUNTERPARTS . . . . . . . . . . . . . 17
ARTICLE 18. POST-CLOSING ACCESS TO BOOKS AND
RECORDS . . . . . . . . . . . . . . . . 17
SCHEDULE 2.1(a) . . . . . . . . . . . . . . . . . . . . 19
SCHEDULE 2.1(j) . . . . . . . . . . . . . . . . . . . . 22
SCHEDULE 2.2(a) . . . . . . . . . . . . . . . . . . . . 24
SCHEDULE 2.2(e) . . . . . . . . . . . . . . . . . . . . 26
SCHEDULE 2.2(f) . . . . . . . . . . . . . . . . . . . . 27
SCHEDULE 2.2(i) . . . . . . . . . . . . . . . . . . . . 28
SCHEDULE 2.2(j) . . . . . . . . . . . . . . . . . . . . 29
SCHEDULE 2.2(l) . . . . . . . . . . . . . . . . . . . . 31
SCHEDULE 2.2(m) . . . . . . . . . . . . . . . . . . . . 32
SCHEDULE 2.2(n) . . . . . . . . . . . . . . . . . . . . 33
SCHEDULE 3.1(a) . . . . . . . . . . . . . . . . . . . . 34
SCHEDULE 3.1(b) . . . . . . . . . . . . . . . . . . . . 35
AGREEMENT GOVERNING EMPLOYMENT MATTERS dated as of
September 29, 1995, between CIBA-GEIGY CORPORATION, a New
York corporation ("CGC") and HEXCEL CORPORATION, a Delaware
corporation ("Hexcel").
WHEREAS, CGC and Hexcel (collectively the
"Parties"), together with Ciba-Geigy Limited, have entered
into the Strategic Alliance Agreement, dated as of even date
herewith; and
WHEREAS, to effectuate the intent of the Parties
relating to employment and employee benefits matters with
respect to certain United States employees of CGC, the
Parties wish to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements, representations and warranties herein contained,
the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
Unless specifically provided otherwise, each term
used in this Agreement has the same meaning specified or
referred to in Appendix A of the Strategic Alliance
Agreement, or as otherwise set forth below:
"ASSUMED PLAN" -- See Section 2.1.
"CGC" -- shall mean Ciba-Geigy Corporation.
"CGC AFFILIATE" -- See Section 2.1.
"CGC INVESTMENT SAVINGS PLAN" -- See Section 4.4.
"CGC PLANS" -- See Section 2.1.
"CLOSING" -- See Section 2.01 of the Strategic
Alliance Agreement.
"CLOSING DATE" -- shall mean the date of the
Closing.
"ERISA" -- shall mean the Employee Retirement
Income Security Act of 1974, as amended.
"FSA" -- See Section 4.5.
"HEATH TECNA" -- shall mean the Heath Tecna
Aerospace Division of CGC.
"HEATH TECNA SALARIED SAVINGS PLAN" -- See Section
4.4.
"HEATH TECNA TRUST" -- See Section 4.4.
"HEATH TECNA UNION SAVINGS PLAN" -- See Section
4.4.
"HEXCEL" -- shall mean Hexcel Corporation;
provided that, for purposes of Articles 3 through 5, Hexcel
shall include any Hexcel Affiliate, where appropriate.
"HEXCEL BENEFIT PLANS" -- See Section 2.2.
"HEXCEL AFFILIATE" -- See Section 2.2.
"HEXCEL DEFINED BENEFIT PLAN" -- See Section 2.2.
"HEXCEL HOURLY PENSION PLAN" -- See Section 4.3.
"HEXCEL HOURLY SAVINGS PLAN" -- See Section 4.4.
"HEXCEL SALARIED SAVINGS PLAN" -- See Section 4.4.
"HEXCEL'S PLANS" -- See Section 4.1.
"MULTI-EMPLOYER PLAN" -- shall mean any plan
described in Section 4001(a)(3) of ERISA, as well as any
multi-employer Welfare Plan maintained pursuant to a
collective bargaining agreement.
"PBGC" -- See Section 2.2.
"PENSION PLAN" -- See Section 2.1.
"PROHIBITED TRANSACTION" -- See Section 2.1.
"RELATED EMPLOYER" -- See Section 2.1.
"REPORTABLE EVENT" -- See Section 2.1.
"STRATEGIC ALLIANCE AGREEMENT" -- The Strategic
Alliance Agreement dated as of September 29, 1995, between
Ciba-Geigy Limited, Ciba-Geigy Corporation and Hexcel
Corporation.
"U.S. TRANSFERRED BUSINESS" shall mean the portion
of the Transferred Business conducted by CGC in the United
States.
"U.S. TRANSFERRED BUSINESS EMPLOYEE" -- See
Section 3.1.
"WELFARE PLAN" -- See Section 2.1.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
REGARDING BENEFIT PLANS AND LABOR
MATTERS
2.1 CGC Representation and Warranties.
(a) Schedule 2.1(a) sets forth a list
of each "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) (hereinafter a "Pension Plan"),
"employee welfare benefit plan" (as defined in Section 3(1)
of ERISA) (hereinafter a "Welfare Plan"), and each other
plan, arrangement or policy (written or oral) relating to
stock options, stock purchases, deferred compensation,
severance, fringe benefits or other employee benefits, in
each case maintained or contributed to, or required to be
maintained or contributed to, by CGC or any other person or
entity that, together with CGC, is treated as a single
employer under Section 414 of the Code (a "CGC Related
Employer" and, together with CGC and its Subsidiaries, a
"CGC Affiliate") for the benefit of employees of the U.S.
Transferred Business (collectively the "CGC Plans")
(Schedule 2.1 lists only material plans with respect to non-
United States employees and does not include any foreign
governmental or governmental mandated plans). Schedule 2.1
also sets forth each CGC Plan (other than a Multi-Employer
Plan) as to which any obligations thereunder are assumed or
transferred to Hexcel or a Hexcel Plan (the "Assumed
Plans"). CGC has delivered to Hexcel true, complete and
correct copies of (1) each Assumed Plan (or, in the case of
any unwritten Assumed Plans, descriptions thereof) and
amendments thereto, (2) the most recent annual report on
Form 5500 filed with the Internal Revenue Service with
respect to each Assumed Plan (if any such report was
required by applicable law), (3) the most recent summary
plan description (or similar document) for each Assumed Plan
for which such a summary plan description is required by
applicable law or was otherwise provided to plan
participants or beneficiaries and (4) each trust agreement
and insurance or annuity contract relating to any Assumed
Plan.
(b) Each Assumed Plan has been
administered in all material respects in accordance with its
terms. All CGC Affiliates and all Assumed Plans are in
compliance in all material respects with the applicable
provisions of ERISA, the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable laws in
respect of such Assumed Plans. There are no investigations,
proceedings, suits or claims (other than claims in the
ordinary course) against or involving any Assumed Plan or
asserting any rights to or claims for benefits under any
Assumed Plan that could give rise to any material liability,
and, to the knowledge of CGC, there are not any facts that
could give rise to any material liability in the event of
any such investigation, claim, suit or proceeding.
(c) All contributions to, and payments
from, the Assumed Plans that may have been required to be
made in accordance with the terms of the Assumed Plans and
any applicable laws or agreements have been timely made or
accrued (where appropriate and permissible).
(d) Each Assumed Plan that is intended
to be a tax-qualified plan has been the subject of a
determination letter from the Internal Revenue Service to
the effect that such Assumed Plan is qualified and its
related trust is exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code; no
such determination letter has been revoked, and, to the
knowledge of CGC, revocation has not been threatened; no
event has occurred and no circumstances exist that would
adversely affect the tax-qualification of such Assumed Plan;
and such Assumed Plan has not been amended since the
effective date of its most recent determination letter in
any respect that might adversely affect its qualification,
materially increase its cost or require security under
Section 307 of ERISA. CGC has delivered to Hexcel a copy of
the most recent determination letter received with respect
to each Assumed Plan for which such a letter has been
issued, as well as a copy of any pending application for a
determination letter. CGC has also identified to Hexcel
those Assumed Plan amendments as to which a favorable
determination letter has not yet been received. No event
has occurred that could subject any Assumed Plan to tax
under Section 511 of the Code.
(e) To the best of CGC's knowledge:
(1) no "prohibited transaction" (as defined in Section 4975
of the Code or Section 406 of ERISA) (hereinafter a
"Prohibited Transaction") has occurred that involves the
assets of any Assumed Plan; (2) no Prohibited Transaction
has occurred that could subject any CGC Affiliate, any
employees of a CGC Affiliate, a trustee, administrator or
other fiduciary of any trust created under any Assumed Plan
to the tax or sanctions on Prohibited Transactions imposed
by Section 4975 of the Code or Title I of ERISA; (3) no
Assumed Plan has been terminated or has been the subject of
a "reportable event" (as defined in Section 4043 of ERISA
and the regulations thereunder) (hereinafter a "Reportable
Event"); and (4) no CGC Affiliate, any employees of a CGC
Affiliate, any trustee, administrator or other fiduciary of
any Assumed Plan or any agent of any of the foregoing has,
in respect of any such Plan, engaged in any transaction or
acted in a manner that could, or has failed to act so as to,
subject any CGC Affiliate, trustee, administrator or other
fiduciary to any liability for breach of fiduciary duty
under ERISA or any other applicable law.
(f) No Assumed Plan is a "defined
benefit pension plan" (as defined in Section 3(35) of ERISA.
(g) All "group health plans" (as such
term is defined in Section 5000(b)(1) of the Code)
maintained by any CGC Affiliate and applicable to employees
of the U.S. Transferred Business, have been operated in
material compliance with the group health plan continuation
coverage requirements of Section 4980B of the Code and
Section 601 of ERISA, to the extent such requirements are
applicable.
(h) No condition exists and no event
has occurred with respect to a Multi-Employer Plan
applicable to employees of the U.S. Transferred Business, to
which any CGC Affiliate is required to contribute, that
presents a material risk of any CGC Affiliate incurring any
liability under Title IV of ERISA.
(i) During the period beginning on
January 1, 1995 and ending on the date of this Agreement,
there has been no change in the manner in which
contributions to any Assumed Plan are made or the basis on
which such contributions are determined.
(j) (1) Schedule 2.1(j) contains a
list of all collective bargaining agreements to which CGC is
a party covering employees of the U.S. Transferred Business.
CGC has delivered to Hexcel true, complete and correct
copies of each agreement. Except as set forth in the
collective bargaining agreements listed in Schedule 2.1(j),
no union claims to represent or is seeking to represent any
unit of employees of the U.S. Transferred Business to the
best of CGC's knowledge.
(2) CGC is not a party to, or subject
to, any consent decree, settlement agreement, conciliation
agreement or any other arrangement with any governmental
body or current employee relating to claims of unfair labor
practices, employment discrimination, or other claims
relating to employment practices or policies of the U.S.
Transferred Business which has any current material effect
(or could have a future material effect) on the employment
practices and policies of the U.S. Transferred Business.
(3) Since January 1, 1992, there has
not occurred or, to the best knowledge of CGC, been
threatened, any strikes, slowdowns, work stoppages or other
similar disruptive labor activities with respect to
employees of the U.S. Transferred Business.
(4) With respect to employees of the
U.S. Transferred Business, CGC Affiliates (i) have complied
in all material respects with all applicable laws regarding
labor, employment and employment practices, terms and
conditions of employment, occupational safety and health and
wages and hours, including, without limitation, any
bargaining or other obligations under the National Labor
Relations Act and federal immigration laws; (ii) are not
parties to or bound by any oral contract concerning
employment, or any affirmative action plan established
pursuant to any local, state or federal law or order of any
Governmental Body or court; and (iii) have not been issued
any deficiency letters by any governmental body or entered
into any settlement agreements, conciliation agreements or
letters of commitment with any governmental body concerning
such employees which could reasonably be expected to have a
Material Adverse Effect on the U.S. Transferred Business.
Except as set forth in Schedule 2.1(j), there is no other
material action, suit, proceeding, dispute, claim or
investigation pending or, to the knowledge of CGC,
threatened arising exclusively or primarily out of or in
connection with employees of the U.S. Transferred Business
that are to be assumed by Hexcel pursuant to Section
1.03(a)(v) of the Strategic Alliance Agreement.
(5) CGC has made available to Hexcel
with respect to employees of the U.S. Transferred Business
(i) the name and total compensation of each officer and
employee (other than as described in clause (iv) below);
(ii) any employment agreements currently in effect;
(iii) the amount of any significant wage or salary increases
or bonuses granted by CGC to such persons since January 1,
1994; and (iv) the wage or salary rates for non-salaried and
non-executive salaried employees. Schedule 2.1(j) sets
forth the name of each officer or employee described in
(i) above. None of such persons has given notice to CGC to
cancel or otherwise terminate such person's employment
relationship with CGC.
(k) There is no amount that could be
received (whether in cash or property or the vesting of
property) as a result of any of the transactions
contemplated by the Strategic Alliance Agreement by any
employee of the U.S. Transferred Business who is a
"disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other
compensation arrangement or CGC Plan currently in effect
that would be characterized as an "excess parachute payment"
(as such term is defined in Section 280G(b)(1) of the Code).
2.2 Hexcel Representations and Warranties.
(a) (i) Schedule 2.2(a) is a list of
each Pension Plan, Welfare Plan and each other plan,
arrangement or policy (written or oral) relating to stock
options, stock purchases, deferred compensation, severance,
fringe benefits or other employee benefits, in each case
maintained or contributed to, or required to be maintained
or contributed to, by Hexcel, any of its Subsidiaries or any
other person or entity that, together with Hexcel, is
treated as a single employer under Section 414 of the Code
(an "Hexcel Related Employer" and, together with Hexcel and
its Subsidiaries, an "Hexcel Affiliate") for the benefit of
present or former officers, employees, agents, directors or
independent contractors of any Hexcel Affiliate in the
United States (all the foregoing being herein called "Hexcel
Benefit Plans"). Hexcel has delivered to CGC true, complete
and correct copies of (1) each Hexcel Benefit Plan (or, in
the case of any unwritten Hexcel Benefit Plans, descriptions
thereof) and amendments thereto, (2) the most recent annual
report on Form 5500 filed with the Internal Revenue Service
with respect to each Hexcel Benefit Plan (if any such report
was required by applicable law), (3) the most recent summary
plan description (or similar document) for each Hexcel
Benefit Plan for which such a summary plan description is
required by applicable law or was otherwise provided to plan
participants or beneficiaries and (4) each trust agreement
and insurance or annuity contract relating to any Hexcel
Benefit Plan.
(b) Each Hexcel Benefit Plan has been
administered in all material respects in accordance with its
terms. All Hexcel Affiliates and all Hexcel Benefit Plans
are in compliance in all material respects with the
applicable provisions of ERISA, the Code, and all other
applicable laws in respect of such Plans. There are no
investigations, proceedings, suits or claims (other than
claims in the ordinary course) against or involving any
Hexcel Benefit Plan or asserting any rights to or claims for
benefits under any Hexcel Benefit Plan that could give rise
to any material liability, and, to the knowledge of Hexcel,
there are not any facts that could give rise to any material
liability in the event of any such investigation, claim suit
or proceeding.
(c) (1) All contributions to, and
payments from, the Hexcel Benefit Plans that may have been
required to be made in accordance with the terms of the
Hexcel Benefit Plans and any applicable laws or agreements
have been timely made or accrued (where appropriate and
permissible);
(2) there has been no application for or
waiver of the minimum funding standards imposed by
Section 412 of the Code with respect to any Hexcel Benefit
Plan that is a Pension Plan (hereinafter an "Hexcel Pension
Plan"); and
(3) no Hexcel Pension Plan had an
"accumulated funding deficiency" within the meaning of
Section 412(a) of the Code as of the end of the most
recently completed plan year.
(d) Each Hexcel Pension Plan that is
intended to be a tax-qualified plan has been the subject of
a determination letter from the Internal Revenue Service to
the effect that such Hexcel Pension Plan is qualified and
its related trust is exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code; no
such determination letter has been revoked, and, to the
knowledge of Hexcel, revocation has not been threatened; no
event has occurred and no circumstances exist that would
adversely affect the tax-qualification of any Hexcel Pension
Plan; and each such Hexcel Pension Plan has not been amended
since the effective date of its most recent determination
letter in any respect that might adversely affect its
qualification, materially increase its cost or require
security under Section 307 of ERISA. Hexcel has delivered
to CGC a copy of the most recent determination letter
received with respect to each Hexcel Pension Plan for which
such a letter has been issued, as well as a copy of any
pending application for a determination letter. Hexcel has
also provided to CGC all Hexcel Pension Plan amendments as
to which a favorable determination letter has not yet been
received. No event has occurred that could subject any
Hexcel Pension Plan to tax under Section 511 of the Code.
(e) Schedule 2.2(e) discloses the
extent to which to the best of Hexcel's knowledge: (1) any
Prohibited Transaction has occurred that involves the assets
of any Hexcel Benefit Plan; (2) any Prohibited Transaction
has occurred that could subject any Hexcel Affiliate, any of
their employees, or, to the knowledge of Hexcel, a trustee,
administrator or other fiduciary of any trust created under
any Hexcel Benefit Plan to the tax or sanctions on
Prohibited Transactions imposed by Section 4975 of the Code
or Title I of ERISA; (3) any Hexcel Pension Plan has been
terminated or has been the subject of a Reportable Event;
and (4) any Hexcel Affiliate, any of its employees, or to
the knowledge of Hexcel, any trustee, administrator or other
fiduciary of any Hexcel Benefit Plan or any agent of any of
the foregoing has engaged in any transaction or acted in a
manner that could, or has failed to act so as to, subject
any Hexcel Affiliate, any trustee, administrator or other
fiduciary to any liability for breach of fiduciary duty
under ERISA or any other applicable law.
(f) Except as set forth in Schedule
2.2(f), as of the most recent valuation date for each Hexcel
Pension Plan that is a "defined benefit pension plan" (as
defined in Section 3(35) of ERISA and including both
qualified and nonqualified plans) (hereinafter an "Hexcel
Defined Benefit Plan"), there was not any amount of unfunded
benefit liabilities under any such Hexcel Defined Benefit
Plan, and Hexcel is not aware of any facts or circumstances
that would materially change the funded status of any such
Hexcel Defined Benefit Plan. Hexcel has furnished to CGC
the most recent actuarial report or valuation with respect
to each Hexcel Defined Benefit Plan. The information
supplied to the actuary by any Hexcel Affiliate for use in
preparing those reports or valuations was complete and
accurate in all material respects and Hexcel has no reason
to believe that the conclusions expressed in those reports
or valuations are incorrect.
(g) No Hexcel Affiliate has incurred
any liability to a Pension Plan (other than for
contributions not yet due) or to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums
not yet due) that, when aggregated with other such
liabilities, would result in a material liability to any
Hexcel Affiliate, which liability has not been fully paid as
of the date hereof.
(h) No Hexcel Affiliate has (a) engaged
in a transaction described in Section 4069 of ERISA that
could reasonably subject Hexcel to liability at any time
after the date hereof or (b) acted in a manner that could,
or failed to act so as to, result in material fines,
penalties, taxes or related charges under
(x) Section 502(c), (i) or (l) of ERISA, (y) Section 4071 of
ERISA or (z) Chapter 43 of the Code.
(i) Except as disclosed in Schedule
2.2(i), no condition exists and no event has occurred with
respect to a Multi-Employer Plan, to which Hexcel or any
Hexcel Affiliate is required to contribute, that presents a
material risk of a complete or partial withdrawal or any
Hexcel Affiliate incurring any liability under Title IV of
ERISA.
(j) The list of Welfare Plans in
Schedule 2.2(j) discloses whether each Welfare Plan is (i)
unfunded, (ii) funded through a Welfare Benefit Fund or
other funding mechanism or (iii) insured. All "group health
plans" (as such term is defined in Section 5000(b)(1) of the
Code) maintained by any Hexcel Affiliate, have been operated
in material compliance with the group health plan
continuation coverage requirements of Section 4980B of the
Code and Section 601 of ERISA to the extent such
requirements are applicable.
(k) During the period beginning on
January 1, 1995 and ending on the date of this Agreement,
there has been no change (a) in any actuarial or other
assumption used to calculate funding obligations with
respect to any Hexcel Pension Plan or (b) in the manner in
which contributions to any Hexcel Pension Plan are made or
the basis on which such contributions are determined.
(l) Except as set forth in Schedule
2.2(l), no compensation payable by any Hexcel Affiliate to
any of their employees under any existing contract, Hexcel
Benefit Plan or other employment arrangement or
understanding (including by reason of the transactions
contemplated hereby) will be non-deductible under
Section 162(m) of the Code.
(m) (1) Schedule 2.2(m) contains a
list of all collective bargaining agreements to which Hexcel
and its Subsidiaries are a party covering employees of
Hexcel and its Subsidiaries in the United States. Hexcel
has delivered to CGC true, complete and correct copies of
each agreement. Except as set forth in the collective
bargaining agreements listed in Schedule 2.2(m), no union
claims to represent or is seeking to represent any unit of
employees of Hexcel and its Subsidiaries in the United
States to the best of Hexcel's knowledge.
(2) Except as set forth in
Schedule 2.2(m), Hexcel and its Subsidiaries are not a party
to, or subject to, any consent decree, settlement agreement,
conciliation agreement or any other arrangement with any
governmental body or current or former employee relating to
claims of unfair labor practices, employment discrimination,
or other claims relating to employment practices or policies
of Hexcel and its Subsidiaries which has any current
material effect (or could have a future material effect) on
the employment practices and policies of Hexcel and its
Subsidiaries in the United States.
(3) Since January 1, 1992, there has
not occurred or, to the best knowledge of Hexcel, been
threatened, any strikes, slowdowns, work stoppages or other
similar disruptive labor activities with respect to
employees of Hexcel and its Subsidiaries.
(4) Except as set forth in
Schedule 2.2(m), Hexcel and its Subsidiaries (i) have
complied in all material respects with all applicable laws
regarding labor, employment and employment practices, terms
and conditions of employment, occupational safety and health
and wages and hours, including, without limitation, any
bargaining or other obligations under the National Labor
Relations Act and federal immigration laws; (ii) are not
parties to or bound by any oral contract concerning
employment, or any affirmative action plan established
pursuant to any local, state or federal law or order of any
governmental body or court; (iii) are not parties to any
agreements or arrangements or subject to any requirement
that in any manner restrict Hexcel and its Subsidiaries from
relocating, consolidating, merging or closing, in whole or
in part, any portion of their operations subject to
applicable law; and (iv) have not been issued any deficiency
letters by any governmental body or entered into any
settlement agreements, conciliation agreements or letters of
commitment with any governmental body concerning such
employees which have any present material effect (or could
have any future material effect) on Hexcel and its
Subsidiaries.
(5) Hexcel and its Subsidiaries have
made available to CGC (i) the name and total compensation of
each officer and employee in the United States (other than
as described in clause (iv) below); (ii) any employment
agreements currently in effect; (iii) the amount of any
significant wage or salary increases or bonuses granted by
Hexcel and its Subsidiaries to such persons since January 1,
1994; and (iv) the wage or salary rates for non-salaried and
non-executive salaried employees in the United States.
Schedule 2.2(m) sets forth the name of each officer or
employee described in (i) above. None of such persons has
given notice to Hexcel and its Subsidiaries to cancel or
otherwise terminate such person's employment relationship
with Hexcel and its Subsidiaries.
(n) Except as set forth on Schedule
2.2(n), no current or former employee of Hexcel or any of
its Subsidiaries will be entitled to any additional benefits
or any acceleration of the time of payment or vesting of any
benefits under any Hexcel Benefit Plan or any other
contract, arrangement or understanding as a result of the
transactions contemplated by the Strategic Alliance
Agreement. Any amount that could be received (whether in
cash or property or the vesting of property) as a result of
any of the transactions contemplated by the Strategic
Alliance Agreement by any employee, officer or director of
Hexcel or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance
or termination agreement, other compensation arrangement or
Benefit Plan currently in effect would not be characterized
as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
2.3 Covenants by CGC. From the date of this
Agreement and until the Closing Date, CGC shall not, without
the prior written consent of Hexcel (which consent shall not
be unreasonably withheld),
(a) adopt or amend in any material
respect or terminate any Assumed Plan, except as required by
law, or change any actuarial or other assumption used to
calculate funding obligations with respect to any such
Assumed Plan (except to the extent that failure to make such
change would result in noncompliance with GAAP, ERISA, or
the Code) or change the manner in which contributions to any
Assumed Plan are made or the basis of which such
contributions are determined, except as required by law;
(b) grant to any employee of the U.S.
Transferred Business any stock option or material increase
in compensation, except in the ordinary course of business
consistent with past practices or as may be required under
existing agreements; or
(c) take any action that would result
in any representations and warranties of CGC set forth in
this Agreement becoming untrue, except as required by law.
2.4 Covenants by Hexcel. From the date of this
Agreement and until the Closing Date, neither Hexcel nor any
Subsidiary shall, without the prior written consent of CGC
(which consent shall not be unreasonably withheld),
(a) adopt or amend in any material
respect or terminate any Hexcel Benefit Plan, except as
required by law, or change any actuarial or other assumption
used to calculate funding obligations with respect to any
Hexcel Pension Plan (except to the extent that failure to
make such change would result in noncompliance with GAAP,
ERISA or the Code) or change the manner in which
contributions to any Hexcel Pension Plan are made or the
basis of which such contributions are determined, except as
required by law;
(b) grant any stock options (except to
the extent permitted under Section 4.01(b)(i) of the
Strategic Alliance Agreement) or material increase in
compensation (except in the ordinary course of business
consistent with past practices or as may be required under
existing agreements); or
(c) take any action that would result
in any representations and warranties of Hexcel set forth in
this Agreement becoming untrue, except as required by law.
2.5 Strategic Alliance Agreement. Except to
the extent inconsistent with the terms of this Agreement,
the provision of the Strategic Alliance applicable to
Representations and Warranties (e.g., Article 5 and Section
8.03) are incorporated herein.
ARTICLE 3. U.S. TRANSFERRED BUSINESS EMPLOYEES
3.1 General.
(a) Hexcel shall offer employment to all
individuals employed by CGC exclusively or principally in
connection with the U.S. Transferred Business who continue
to be employees of CGC as of the Closing Date (including
those employees receiving salary continuation benefits under
any CGC short-term disability or salary continuation program
and active employees on military service or other approved
absences; provided that such employees are reasonably
expected to return to active service). Subject to the prior
written consent of CGC (which consent shall not be
unreasonably withheld) and in accordance with applicable
laws, Hexcel may require certain employees of the U.S.
Transferred Business to sign confidentiality agreements as a
condition of hiring. Except as set forth in Schedule 3.1(a)
or otherwise disclosed to Hexcel, CGC shall use reasonable
efforts to keep available the services of the current
employees of the U.S. Transferred Business as of the signing
date and no such employee shall be involuntarily terminated
or transferred by CGC without the prior written consent of
Hexcel (which consent shall not be unreasonably withheld).
(b) All such employees hired by Hexcel
shall become Hexcel's employees immediately following the
Closing Date (the "U.S. Transferred Business Employees").
In the event any U.S. Transferred Business Employee who is
receiving short-term disability or salary continuation
benefits as of the Closing Date becomes entitled to long-
term disability benefits prior to his/her return to active
employment, such employee will be covered under CGC's long-
term disability plan at CGC's expense. Except as otherwise
provided in this Agreement, Hexcel shall treat all U.S.
Transferred Business Employees no less favorably than other
employees of Hexcel who are in comparable positions in
comparable locations. Those individuals employed by CGC
whose employment is deemed by CGC to be principally but not
exclusively with the U.S. Transferred Business are set forth
on Schedule 3.1(b).
ARTICLE 4. EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS
4.1 General.
(a) Except as provided in Article 5,
Hexcel shall cover the U.S. Transferred Business Employees
under its own employee benefit plans, policies and
compensation arrangements immediately following the Closing
Date ("Hexcel's Plans"). Except as provided in Section
4.1(b) or Article 5, or unless otherwise agreed by the
parties, Hexcel will provide such U.S. Transferred Business
Employees with a level of compensation and benefits that is
substantially comparable to that provided to similarly
situated employees of Hexcel from time to time (including
any nonqualified plans, deferred compensation arrangements
and/or stock options).
(b) Notwithstanding anything in this
Article or Article 5 to the contrary, if Hexcel so elects
and notifies CGC in writing prior to December 1, 1995,
Hexcel shall provide such U.S. Transferred Business
Employees who immediately prior to the Closing Date were
employed by Heath Tecna with a level of compensation and
benefits that is substantially comparable to that provided
by CGC to such employees immediately prior to the Closing
Date (including but not limited to pension plans, welfare
plans, and vacation policies). If Hexcel so elects, Hexcel
shall immediately following the Closing Date enroll such
employees in such comparable employee benefit plans,
including a defined benefit pension plan that is
substantially comparable to the Heath Tecna Company
Retirement Plan. Notwithstanding anything to the contrary
in this Article, Hexcel shall not be required to enroll such
employees in any retiree medical program sponsored or
maintained by Hexcel. If Hexcel does not so elect, the
provisions of Section 4.1(a) apply, except with respect to
retiree medical benefits.
(c) Effective as of the Closing Date,
the benefits and participation of the U.S. Transferred
Business Employees in CGC's Plans shall be limited to
benefits accrued as of the Closing Date, and no further
benefit accruals shall occur by reason of their continued
employment with Hexcel. Except as otherwise provided in
this Agreement, CGC shall be responsible for all benefits
accrued as of the Closing Date.
4.2 Back Service Credit. To the extent
permitted by law, Hexcel shall cause Hexcel's Plans to give
the U.S. Transferred Business Employees full credit for
service recognized by CGC's Plans for all purposes other
than benefit accrual under any defined benefit plan.
4.3 Pension Plans.
(a) Hexcel. Except as provided in
Section 4.1(b), or unless otherwise agreed by the parties,
effective immediately following the Closing Date and subject
to the provisions of Section 4.2 above:
(1) any hourly paid U.S. Transferred
Business Employee who is not eligible to participate in a
Multi-Employer Plan pursuant to Article 5 shall be eligible
to participate in the Hexcel Corporation Hourly Employees
Pension Plan or such successor plan applicable to similarly
situated employees of Hexcel (the "Hexcel Hourly Pension
Plan") as of the first entry date he/she meets the
applicable eligibility requirements; and
(2) any salaried U.S. Transferred
Business Employee shall be eligible to participate in any
pension plan covering similarly situated salaried employees
of Hexcel as of the first entry date he/she meets applicable
eligibility requirements.
(b) CGC. CGC shall retain and be
responsible for all assets and liabilities relating to the
U.S. Transferred Business Employees under the (1) Pension
Plan for Salaried Employees of Ciba-Geigy Corporation and
Certain Affiliated Corporations and (2) Heath Tecna
Aerospace Company Retirement Plan. The accrued benefit of
each U.S. Transferred Business Employees under these Plans
shall be fully vested and nonforfeitable as of the Closing
Date. The benefits of U.S. Transferred Business Employees
shall be limited to benefits accrued as of the Closing Date
and no further benefit accruals shall occur by reason of
their continued employment with Hexcel.
4.4 Savings Plans. Unless otherwise agreed by
the parties, effective immediately following the Closing
Date, and subject to the provisions of Section 4.2 above (1)
any hourly paid U.S. Transferred Business Employee who is
not an "Eligible Employee" under the Heath Tecna Aerospace
Company Voluntary Savings Plan for Union Employees (the
"Heath Tecna Union Savings Plan") shall be immediately
eligible to participate in the Hexcel Corporation Hourly
Employees Retirement Savings Plan or such successor plan
applicable to similarly situated employees of Hexcel (the
"Hexcel Hourly Savings Plan") and (2) any salaried U.S.
Transferred Business Employee who is not an "Eligible
Employee" under the Heath Tecna Aerospace Company Voluntary
Savings Plan for Salaried Employees (the "Heath Tecna
Salaried Savings Plan") shall be immediately eligible to
participate in the Hexcel Corporation Salaried Employees
Retirement Program or such successor plan applicable to
similarly situated employees of Hexcel (the "Hexcel Salaried
Savings Plan"). Hexcel shall deliver to CGC prior to the
Closing Date certified copies of the current plan document
and any trust agreement which serves as the funding medium
for each of Hexcel's Savings Plans (to the extent not
previously delivered), along with the currently effective
favorable determination letter from the IRS with respect to
the Hexcel's Savings Plans (if available). In the absence
of such a favorable determination letter with respect to an
Hexcel Savings Plan, Hexcel shall disclose to CGC that the
Hexcel Savings Plan has been timely submitted to the
Internal Revenue Service, that Hexcel will make any changes
required by the IRS and that Hexcel knows of no reason why
the Plan is not qualified under Section 401(a) of the Code
and that the related trust is not exempt from federal income
tax under Section 501(a) of the Code.
Unless otherwise agreed by the parties, effective
immediately following the Closing Date, Hexcel shall adopt
and be substituted for CGC as the sponsoring employer of the
Heath Tecna Union Savings Plan, the Heath Tecna Salaried
Savings Plan and the Heath Tecna Aerospace Company Voluntary
Savings Plan Trust (the "Heath Tecna Trust"). Except as
otherwise provided in this Agreement, CGC shall have no
further liability with respect to the Heath Tecna Plans and
Trust.
Subject to any appropriate review of Hexcel's
Savings Plans and Trust (including investments thereunder)
and following receipt of the current Hexcel Savings Plan
documents, a reasonable period after the Closing Date, and
not less than 30 days following the filing with the IRS of
any required notices, CGC shall cause the trustee under the
CGC Investment Savings Plan to transfer the assets and all
liabilities representing the account balances of the U.S.
Transferred Business Employees under the Investment Savings
Plan for Salaried Employees of Ciba-Geigy Corporation (the
"CGC Investment Savings Plan") to the trustee of the
applicable Hexcel Savings Plan, determined as of a valuation
date no earlier than 30 days prior to the actual date of
transfer. Hexcel shall cause Hexcel's Savings Plans to
accept such transferred assets and benefit liabilities. The
assets to be transferred shall be in the form of cash and
any notes representing loans to the U.S. Transferred
Business Employees made by the CGC Investment Savings Plan.
After the Closing Date, subject to the ultimate transfer of
the assets as required herein, Hexcel and Hexcel's Savings
Plans shall be responsible for any benefits to which U.S.
Transferred Business Employees were entitled under the CGC
Investment Savings Plan, the Heath Tecna Union Savings Plan
and the Heath Tecna Salaried Savings Plan as of the Closing
Date, and to which any such employees shall thereafter
become entitled under Hexcel's Savings Plans. The account
balance of each employee of the U.S. Transferred Business as
of the Closing Date attributable to the Assumed Plans shall
be fully vested and nonforfeitable as of such date.
4.5 Medical and Dental Plans.
(a) Except as provided in Section
4.1(b) or Article 5, or unless otherwise agreed by the
parties, Hexcel shall enroll the U.S. Transferred Business
Employees and their dependents in medical and dental plans
(including any flexible spending accounts, hereinafter
referred to as a "FSA") immediately following the Closing
Date which are substantially comparable to the plans
covering similarly situated employees of Hexcel, without a
waiting period, and shall waive all restrictions and
limitations for pre-existing conditions under said plans
(other than any pre-existing condition that was not waived
by the CGC Plan). After the Closing Date, CGC shall no
longer have any responsibility for the payment of health
care benefits provided with respect to the U.S. Transferred
Business Employees and their dependents, including any
legally mandated continuation of health care coverage for
such employees and their dependents who have a loss of
health care coverage due to a qualifying event after the
Closing Date.
(b) After the Closing Date, except as
provided below or to the extent otherwise required by law or
a binding obligation with an employee, Hexcel will be
responsible for post-retirement welfare benefits with
respect to the U.S. Transferred Business Employees (and the
dependents of such employees) who retire after the Closing
Date under any of Hexcel's Plans. CGC will only be
responsible for post-retirement welfare benefits with
respect to any U.S. Transferred Business Employees who were
eligible to receive such benefits based on their age and
service as of the Closing Date. To the extent a U.S.
Transferred Business Employee is eligible for post-
retirement benefits under both CGC's and Hexcel's Plans,
such individual must elect prior to Closing to be covered by
the Hexcel Plan and absent such election shall be covered by
the CGC Plan.
4.6 Disability. Except as provided in Section
4.1(b) or Article 5, or unless otherwise agreed by the
parties and effective immediately following the Closing
Date, Hexcel shall enroll the U.S. Transferred Business
Employees in disability plans which are substantially
comparable to plans covering other similarly situated
employees of Hexcel, without a waiting period, and shall
waive all restrictions and limitations regarding pre-
existing conditions under such plans (other than any pre-
existing condition that was not waived by the CGC Plan).
After the Closing Date, except to the extent otherwise
provided in Section 3.1(b) or required by law, CGC shall no
longer have any responsibility for the payment of disability
benefits provided for the U.S. Transferred Business
Employees, whether or not the condition which gave rise to
the salary continuation obligation occurred before the
Closing Date.
4.7 Severance. Except as provided in Section
4.1(b) or Article 5, or unless otherwise agreed by the
parties and effective immediately following the Closing
Date, Hexcel shall cover the U.S. Transferred Business
Employees with a severance pay policy or arrangement which
is substantially similar to policies and arrangements
covering similarly situated employees of Hexcel. After the
Closing Date, except to the extent otherwise required by law
or a binding obligation with an employee, CGC will not be
responsible for severance benefits of any U.S. Transferred
Business Employee whose employment is terminated after the
Closing Date.
4.8 Workers' Compensation. Hexcel shall be
responsible for U.S. Transferred Business Employees eligible
for workers' compensation after the Closing Date, unless
such claim relates solely to an event that occurred prior to
the Closing Date. Hexcel shall, at its sole cost and
expense, administer (including defending, settling and
paying awards) any workers' compensation claims brought
against Hexcel or CGC by any U.S. Transferred Business
Employee after the Closing that relates to an occurrence
(including, without limitation, an aggravation of an injury
which occurred prior to the Closing Date) which took place
after the Closing Date.
4.9 Vacation Pay. CGC shall be responsible for
the accrued vacation pay of any U.S. Transferred Business
Employee as of the Closing Date.
ARTICLE 5. COLLECTIVE BARGAINING AGREEMENT
Notwithstanding anything to the contrary in this
Agreement and except as otherwise may be agreed by the
parties, Hexcel shall assume and be bound by the Agreement
Between Heath Tecna and the IAM District Lodge Number 160,
Local Lodge 1103 (the "IAM CBA"), including any obligation
thereunder to contribute to any Multi-Employer Plan. Hexcel
shall become a successor employer to any such collective
bargaining agreement, either by operation of law or fact,
and shall also be substituted as the contributing employer
under any Multi-Employer Plan and any Welfare Plan described
in the collective bargaining agreement. CGC shall continue
to be responsible for any and all obligations and
liabilities arising, accruing or attributable to service
with CGC before the Closing Date, or asserted to exist as of
the Closing Date with respect to any such collective
bargaining agreement. Hexcel shall indemnify, defend and
hold harmless CGC Affiliates and their agents from, and
shall reimburse CGC Affiliates and their respective agents,
for any loss, liability, claim, damage or expense (including
reasonable legal fees and expenses) arising from or in
connection with any claim asserted after the Closing Date
made by the collective bargaining unit or any representative
thereof relating to any act on or after the Closing.
ARTICLE 6. TERMINATION, MODIFICATION AND AMENDMENT
6.1 Termination. This Agreement shall be
considered terminated if the Strategic Alliance Agreement is
terminated pursuant to Section 6.01 of the Strategic
Alliance Agreement.
6.2 Modification and Amendment. On or prior to
the Closing Date, the parties shall have the right to
request modification of one or more provisions of this
Agreement, including any Schedule hereto. In the event that
either party makes such a request, the other party shall
negotiate in good faith a possible amendment to such
provision with the requesting party. Any such amendment
agreed to by the parties shall be reflected in a written
amendment to this Agreement, duly executed by the parties
hereto. This Agreement shall constitute a legally binding
commitment of the parties until so amended, after which it
shall constitute a legally binding commitment as so amended.
CGC or Hexcel may, by an instrument in writing signed on
behalf of such party, waive compliance by the other party
with any term or provision of this Agreement that such other
party was or is obligated to comply with or perform.
ARTICLE 7. NO THIRD-PARTY RIGHTS
No person or entity other than the parties hereto,
including, but not limited to any former or present employee
of CGC or any CGC Affiliates or of Hexcel (including any
assignee or beneficiary thereof) shall have any rights with
respect to any obligation of any entity under this
Agreement, and nothing in this Agreement, expressed or
implied, is intended to confer on any such employee any
rights or remedies.
ARTICLE 8. INDEMNIFICATION
Except to the extent inconsistent with Article 5,
the indemnification provisions of the Strategic Alliance
Agreement are incorporated herein.
ARTICLE 9. NOTICES
All notices and other communications hereunder
shall be in writing and deemed given when (a) delivered by
messenger, (b) sent by telecopier (with receipt confirmed),
provided that a copy is mailed by registered or certified
mail, postage prepaid, return receipt requested, or (c) when
received by the addressee, if sent by Express Mail, Federal
Express or other express delivery service (receipt
requested), in each case to the appropriate addresses or
telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate as
to itself by notice to the other party):
If to CGC, to it at:
Ciba-Geigy Corporation
000 Xxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Att: Xxxx X. XxXxxx, Esq.
If to Hexcel, to it at:
Hexcel Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Att: Xxxxxx X. Xxxxx, Esq.
ARTICLE 10. CAPTIONS
The headings contained in this Agreement,
including the Tables of Contents and Schedules, are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
ARTICLE 11. ASSIGNMENT AND WAIVER
11.1 Assignment. All of the terms and
provisions of this Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto
and their respective successors and permitted assigns. This
Agreement shall not be assignable or transferable by either
party.
11.2 Waiver. The failure of a party to insist
upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
ARTICLE 12. APPLICABLE LAW
To the extent not preempted by the laws of the
United States of America, this Agreement shall be construed
in accordance with the internal laws of the State of New
York, without giving effect to the principles of conflicts
of laws thereof.
ARTICLE 13. FURTHER ASSURANCES
Each party agrees that it will execute and
deliver, or cause to be executed and delivered, on or after
the date of this Agreement, all such other instruments and
will take all reasonable actions as the other party may
reasonably request from time to time in order to effectuate
the provisions and purposes of this Agreement.
ARTICLE 14. CONSENT TO JURISDICTION
The Consent to Jurisdiction provisions of the
Strategic Alliance Agreement (Section 8.08 thereof) are
incorporated herein.
ARTICLE 15. SEVERABILITY
The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of
the other provisions hereof. If any provision of this
Agreement, or the application hereof to any person, entity
or any circumstance, is found to be invalid or unenforceable
in any jurisdiction, (a) a suitable and equitable provision
shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
ARTICLE 16. SCHEDULES
The disclosure of any matter in any Schedule to
this Agreement shall be deemed to be a disclosure for all
purposes of this Agreement to which such matter could
reasonably be expected to be pertinent, but shall expressly
not be deemed to constitute an admission by CGC or Hexcel,
or to otherwise imply, that any such matter is material for
purposes of this Agreement.
ARTICLE 17. COUNTERPARTS
This Agreement may be executed in counterparts,
each of which shall be considered an original, but all of
which together shall constitute the same instrument.
ARTICLE 18. POST-CLOSING ACCESS TO BOOKS AND RECORDS
CGC shall, upon reasonable notice and during
normal business hours, allow Hexcel, its representatives and
outside attorneys full and complete access to its books,
records and information relevant to (a) any employment or
employee benefits claims asserted against Hexcel or any
Hexcel Plan or (b) any government investigation or inquiry
concerning employment or employee benefit matters. Hexcel
shall, upon reasonable notice and during normal business
hours, allow CGC, its representatives and outside attorneys
full and complete access to its books, records and
information relevant to (a) any employment or employee
benefits claims asserted against CGC or any CGC Plan or (b)
any government investigation or inquiry concerning
employment or employee benefits matters. Each party hereto
shall grant the other party's reasonable requests to
photocopy any such books, records and information for the
purposes herein stated. The obligations in this Article 18
shall survive the Closing Date and shall remain in effect
for a period of five years following the Closing Date.
Nothing in this Article 18 shall be construed as limiting
either party's access to the other party's books, records
and information pursuant to subpoena or any other lawful
means.
IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of the date first above written.
CIBA-GEIGY CORPORATION
By: /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: Vice President -- Finance
& Information Services
HEXCEL CORPORATION
By: /s/ XXXX X. XXX
Name: Xxxx X. Xxx
Title: Chief Executive Officer
SCHEDULE 2.1(A)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
LIST OF ASSUMED PLANS
Investment Savings Plan for Salaried Employees of Ciba-Geigy
Corporation and Certain Affiliated Corporations
Heath Tecna Aerospace Company Voluntary Savings Plan for
Union Employees
Heath Tecna Aerospace Company Voluntary Savings Plan for
Salaried Employees
Blue Cross of Washington and Alaska (Union Medical Plan) and
the Group Health Cooperative of Puget Sound (Union HMO)
LIST OF CGC PLANS
HEATH TECNA
A. Qualified Plans
1. Heath Tecna Aerospace Company Retirement Plan
2. Heath Tecna Aerospace Company Voluntary
Savings Plan for Salaried Employees
3. Heath Tecna Aerospace Company Voluntary
Savings Plan for Union Employees
4. Western Metal Industry Pension Plan
B. Welfare Plans
1. Northwest I.A.M. Benefit Trust Dental Program
2. Group Insurance Benefits for Machinists
Health and Welfare Trust Fund
3. Subscriber Benefits Xxxx Xxxxx xx Xxxxxxxxxx
xxx Xxxxxx 00000 Salaried, 13490 Union and
13488-01 Dental
4. Your States West Life Insurance Program
5. Group Health Cooperative of Puget Sound (HMO)
C. Bonus and Incentive Plans
1. Heath Tecna 1995 Management Incentive Plan
(MIP)
2. Heath Tecna 1995 Middle Management Incentive
Plan (MMIP)
3. Heath Tecna 1995 Deferred Incentive
Compensation Plan for Key Management
Personnel
COMPOSITES
A. Qualified Plans
1. Pension Plan for Salaried Employees of Ciba-
Geigy Corporation and Certain Affiliated
Corporations
2. Investment Savings Plan for Salaried
Employees of Ciba-Geigy Corporation and
Certain Affiliated Corporations
B. Welfare Plans
1. Ciba-Geigy Corporation Flexplan
2. Health Care Plan of Ciba-Geigy Corporation
and Participating Companies
3. Ciba-Geigy Dependent Care Assistance Plan
4. Ciba-Geigy Corporation Health Care
Reimbursement Plan
5. Health Maintenance Organizations
a. FHP HMO Contract
b. 1995 Group Medical and Hospital Service
Agreement from Xxxxxx Permanente
6. Medicare Supplement Plan and Summary Plan
Description for Eligible Retirees of Ciba-
Geigy Corporation and Participating Companies
Who Retired After December 31, 1986 and Prior
to January 1, 1993
7. Post-Retirement Medical Plan and Summary Plan
Description for Eligible Retirees of Ciba-
Geigy Corporation and Participating Companies
Who Retire on or After January 1, 1993
8. Severance Pay Plan for Salaried Employees of
Ciba-Geigy Corporation
9. Non-Contributory Accidental Death and
Dismemberment and Business Travel Programs
for Salaried Employees of Ciba-Geigy
Corporation
10. Non-Contributory Group Life Insurance Program
for Salaried Employees of Ciba-Geigy
Corporation
11. Non-Contributory Accidental Death &
Dismemberment and Business Travel Programs
for Salaried Employees of Ciba-Geigy
Corporation
12. Long-Term Disability Plan for Salaried
Employees of Ciba-Geigy Corporation and
Certain Affiliated Corporations
13. Short-Term Disability Plan for Salaried
Employees of Ciba-Geigy Corporation and
Certain Affiliated Corporations
14. Employee Assistance Program between P.P.C.,
Inc., Medco Behavioral Care of California,
Inc. and Ciba Composites
C. Bonus and Incentive Plans
1. Ciba-Geigy Corporation Management Incentive
Plan (MIP)
2. Ciba-Geigy Corporation Middle Management
Incentive Plan (MMIP)
3. Ciba-Geigy Corporation Long-Term Incentive
Plan (LTIP)
D. Non-qualified Deferred Compensation Plans
1. Excess Benefits Plan for Salaried Employees
of Ciba-Geigy Corporation and Certain
Affiliated Corporations
2. Supplemental Executive Retirement Plan for
Salaried Employees of Ciba-Geigy Corporation
and Certain Affiliated Corporations
3. Ciba-Geigy Corporation Supplemental Executive
Retirement Plan for Former Employees of
Foreign Affiliates (proposed plan effective
January 1, 1995)
SCHEDULE 2.1(J)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
CGC LIST OF COLLECTIVE BARGAINING AGREEMENTS AND OFFICERS
2.1(j)(1) - List of Collective Bargaining Agreements:
Collective Bargaining Agreement between Heath Tecna
Aerospace Company and Xxxxx Xxxxx Xx. 0000, Xxxxxxxx
Xxxxx No. 160 of the International Association of
Machinists and Aerospace Workers.
2.1(j)(4) - List of Assumed Employment Litigation, etc.:
Xxxxx Xxxxxx x. Xxxxx Tecna Aerospace Company and Ciba-
Geigy Corporation, C95-726Z (W.D. Wa)
Xxxxx X Xxxxxx v. Ciba Heath Tecna, Charge No.
380950683 (E.E.O.C., Seattle)
Xxxxxxx Xxxxxxxx x. Xxxxx Tecna Aerospace Company,
Charge No. 380920227 (E.E.O.C. Seattle)
Xxxxx X. Xxxxxx x. Xxxxx Tecna Aerospace Company,
Charge No. 17ES0598945 (E.E.O.C. and Washington State
Human Rights Commission)
Xxxxxxxx Xxxxxxx Xxxxxx v. Ciba-Geigy Corporation
Composite Materials Department, 8990K70588e (California
Department of Fair Employment and Housing)
Xxxx X. Xxxxxxx x. Xxxxx Tecna Aerospace Company, No.
94 2 01040-4 (Sup. Ct. Wash.)
Xxxx Xxxxxx v. Ciba-Geigy Corporation, No. 730864 (C.D.
Cal.)
Xxxxxx X. Xxxxxxxx and Xxx X. Xxxxxxxxxxx x. Xxxxx
Tecna Aerospace Company and Ciba-Geigy Corporation, Xx.
00-0 00000 0 (Xxx. Xx. Xxxx).
On September 9, 1995, there was an accident at Heath
Tecna's Auburn facility in which Xxxxx Xxxxxxxxxx
received a serious injury when operating machinery (TOW
Raceway Injection Press). CGC has received an
anonymous letter concerning alleged unsafe practices at
the Auburn facility. OSHA also received a copy of this
letter and an investigation by that agency is possible.
2.1(j)(5) - List of Officers and Executive Employees:
X. Xxxxxxxxx
X. Xxxxxxx
X. Xxxxxxxxxx
X. Xxxx
X. Xxxxxx
X. Xxxxxx
X. Xxxxxxx
SCHEDULE 2.2(A)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
LIST OF HEXCEL BENEFIT PLANS
I. QUALIFIED PLANS
1. Hexcel Corporation Hourly Employees' Pension Plan
2. Hexcel Corporation Hourly Employees' Retirement
Savings Plan (401k)
3. Hexcel Corporation Salaried Employees' Retirement
Program (401k and Profit Sharing)
II. WELFARE PLANS
1. Metropolitan Life Group Medical, Stop Loss, and
Prescription Drug Plan (including Retiree Health*)
2. Prudential Group Dental Plan
3. Metropolitan Life - Flexible Spending Accounts
- HealthCare Spending Account
- Dependent Day Care Account
4. CIGNA Travel/Accident/Terrorism Plan
5. CIGNA Basic and Supplemental Accidental Death and
Dismemberment (AD&D) Plan
6. CIGNA Voluntary AD&D Plan
7. Self-Insured Short-Term Disability Plan
8. Health Maintenance Organizations (including
Retiree Health*)
- MetLife HealthCare Network of Arizona, Inc.
- Capital Blue Cross (PA)
- Pottsville MediMet
- Xxxxxx Foundation Health Plan - Northern
California
- Xxxxxx Foundation Health Plan - Southern
California
- Lifeguard Health Care (CA)
- Intergroup (AZ)
- PHP Benefits System (OH)
9. Prudential Basic and Supplemental Life Plan
(including Retiree Life)
10. The Travelers Long-Term Disability Benefits Plan
11. Hexcel Insured Worker's Compensation Plan (TX, PA,
Sales Offices, Ex CA/AZ)
- Home Insurance Company
12. Hexcel Self-Insured Worker's Compensation Plan
(CA, AZ)
- Administered by Associated Claims Management,
Inc.
13. State of Washington State Worker's Compensation
Plan
14. State of Ohio - Bureau of Worker's Compensation
Plan
15. Employee Assistance Program (site specific)
16. Paid Time Off (vacation, holidays, sick days,
funeral, jury, military)
17. Severance Pay Policy for hourly and salaried
employees
III. NON-QUALIFIED PLANS
1. Executive Deferred Compensation & Consulting
Agreements (pre and post January 1, 1982)
2. 1988 Management Stock Program, terminated February
9, 1995, except for outstanding stock options,
discounted stock options and restricted stock
3. New Long-Term Incentive Plan effective as of
February 9, 1995: stock options, incentive stock
options, stock options in lieu of compensation
election, stock appreciation rights, restricted
shares, dividend or equivalent, and other stock-
based awards
4. ERISA Excess Salaried Employees' Benefit Plan
5. Directors' Retirement Plan
*Note: Retiree Health Plans include subsidies for
retirees (a) prior to January 1, 1992 and (b)
on or after January 1, 1992.
SCHEDULE 2.2(E)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
HEXCEL LIST OF PROHIBITED TRANSACTIONS, REPORTABLE EVENTS, ETC.
Hourly Employees' Pension Plan - Reportable Event:
On January 4, 1994, Hexcel Corporation notified the
Pension Benefit Guarantee Corporation that on December
6, 1993, Hexcel Corporation, a Delaware Corporation,
filed a voluntary petition for relief under the
provision of Chapter 11 of the United States Bankruptcy
Code. Hexcel emerged from bankruptcy on February 9,
1995.
SCHEDULE 2.2(F)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
HEXCEL LIST OF UNFUNDED BENEFIT LIABILITY
I. Qualified Plans
1. Hexcel Corporation Hourly Employees' Pension Plan
(partially funded)
II. Non Qualified Plans
1. Executive Deferred Compensation & Consulting
Agreements
2. Excess Salaried Employees' Retirement Plan
3. Directors' Retirement Plan
SCHEDULE 2.2(I)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
COMPLETE OR PARTIAL WITHDRAWAL LIABILITY
None
SCHEDULE 2.2(J)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
LIST OF HEXCEL WELFARE PLANS
WELFARE PLANS Not
Funded Unfunded Insured Applicable
1. Metropolitan Life Group X X
Medical, Stop Loss and
Prescription Drug Plan
(Including Retiree Health)
2. Prudential Group Dental Plan X X
3. Metropolitan Life - Flexible
Spending Accounts
- HealthCare Spending X
Account X
- Dependent Day Care
Account
4. CIGNA Travel/Accident X
Terrorism Plan
5. CIGNA Basic and Supplemental X
Accidental Death and
Dismemberment (AD&D) Plan
6. CIGNA Voluntary AD&D Plan X
7. Self-Insured Short-Term X
Disability Plan
8. Health Maintenance X
Organizations (including
Retiree Health Plans which
include subsidies for
retirees
(a) prior to January 1, 1992 X
and
(b) on or after January 1, X
1992): X
- MetLife Health Care X
Network of Arizona, Inc.
- Capital Blue Cross (PA) X
- Pottsville MediMet
- Kaiser Foundation Health X
Plan - Northern California X
- Kaiser Foundation Health X
Plan - Southern California
- Lifeguard Health Care (CA)
- Intergroup (AZ)
- PHP Benefits System (OH)
9. Prudential Basic and X
Supplemental Life Plan
(including Retiree Life)
10. The Travelers Long-Term
Disability Benefits Plan X
11. Hexcel Insured Worker's
Compensation Plan (TX, PA,
Sales Offices, Ex CA/AZ)
- Home Insurance Company X
12. Hexcel Self-Insured Worker's X X
Compensation Plan (CA, AZ)
- Admin by ACMI (Associated
Claims Management, Inc.)
13. State of Washington State X
Workers' Compensation Plan
14. State of Ohio - Bureau of X
Workers' Compensation Plan
15. Employee Assistance Program X
(site specific)
16. Paid Time Off (vacation, X
holidays, sick days,
funeral, jury, military)
17. Severance Pay Policy for X
Hourly and Salaried
Employees
SCHEDULE 2.2(L)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
LIST OF HEXCEL EMPLOYEES WHOSE COMPENSATION
MAY BE NON-DEDUCTIBLE UNDER SECTION 162(M) OF THE CODE
Xxxx X. Xxx - Options for 113,379 shares of Hexcel Common Stock
pursuant to the Plan of Reorganization.
SCHEDULE 2.2(M)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
HEXCEL LIST OF COLLECTIVE BARGAINING AGREEMENT, LABOR MATTERS, ETC.
(1) Collective Bargaining Agreement:
Agreement between Hexcel Corporation and Warehouse Union
Local 6-ILWU
(5) List of Officers and Executive Employees:
Xxxx X. Xxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxx
SCHEDULE 2.2(N)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
HEXCEL PARACHUTE PAYMENTS
Hexcel granted, on April 4, 1995, options for 40,000 shares of Hexcel
Common Stock to each of the nine directors. Vesting on the 360,000
shares accelerates and these shares become fully vested as of the
Closing Date.
SCHEDULE 3.1(A)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
CGC LIST OF EMPLOYEES EXPECTED TO TERMINATE EMPLOYMENT
ON OR BEFORE DECEMBER 31, 1995
May 1995 Reduction in Force
Expected
Termination Date
Xxxxxx Xxxxxx 12/31/95
Xxxxx Xxxxx 9/30/95
Xxxxxxx Xxxxxxxxxx 12/31/95
Xxxxx Kutzie 12/31/95
Ly Xxxxxx status pending
Xxxxxxx Xxxxxx 12/31/95
May 1995 Voluntary Package
Expected
Termination Date
Xxxx Xxxxxx 12/31/95
Xxxxx Xxxx-Xxxxx 12/31/95
Xxxxxx XxXxxxx 12/31/95
Xxxxxxx Xxxx 9/22/95
Xxxx Xxxxx 12/31/95
May 1995 Early Retirement Package
Expected
Retirement Date
Xxxxxxx Xxxxx Xxxxxxx 12/31/95
Xxxxxx Xxxxxxx 12/31/95
Xxxxx Xxxxxxx 12/31/95
Xxxxx Xxxxxxx 10/1/95
Xxxxxx XxXxxx 11/1/95
Xxxxx Xxxxxx 12/31/95
Xxxxx Xxxx 12/31/95
Note: The employees listed above will receive benefits relating to
their termination of employment from CGC during 1995 or
1996.
SCHEDULE 3.1(B)
TO THE
AGREEMENT GOVERNING
UNITED STATES EMPLOYMENT MATTERS
CGC EMPLOYEES DEEMED TO WORK
PRINCIPALLY FOR THE U.S. TRANSFERRED BUSINESS
Xxxxx X. Xxxxxxx
Exhibit E
to the Strategic Alliance Agreement
Form of U.S. Real Proerty Deeds
[WA Form of Deed]
Filed for Record at Request of
AFTER RECORDING MAIL TO:
Name:_____________________________________
Address:__________________________________
City, State Zip:__________________________
______________________________________________________________________
BARGAIN AND SALE DEED
THE GRANTOR, [CIBA-GEIGY CORPORATION], for and in consideration of
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, hereby bargains, sells and conveys to HEXCEL
CORPORATION the following described real estate situated in the County
of _____________; State of Washington:
SEE ATTACHED EXHIBIT A
The Grantor represents that, at the time of the making and delivery of
this Bargain and Sale Deed, it was lawfully seized of fee simple title
in and to the real estate herein described and had full power to
convey the same; provided, however, that the foregoing representations
shall in no event survive the delivery of this Bargain and Sale Deed.
The Grantor for itself and for its successors-in-interest does by
these presents expressly excludes all representations, warranties and
covenants arising by statutory or other implication, except for the
limited express representation set forth above.
Dated this _______ day of _______________, 1995
GRANTOR:
[CIBA-GEIGY CORPORATION]
By____________________________
Name:
Title:
STATE OF_________)
) ss:
COUNTY OF________)
I certify that I know or have satisfactory evidence
that________________ _______________________the
persons______________who appeared before me, and said
persons________acknowledged that______________signed this instrument
and acknowledged it to be___________free and voluntary act for the
uses and purposes mentioned in this instrument.
Dated:______________
____________________________________________________________
Notary Public in and for the State
of_______________________
Residing
at_________________________________________________
My appointment
expires:_____________________________________
EXHIBIT A
Legal Description
[CA Form of Deed]
Order No.
Escrow No.
Loan No.
WHEN RECORDED MAIL TO:
DOCUMENTARY TRANSFER TAX $......... SPACE ABOVE THIS LINE FOR
RECORDER'S USE
...Computed on the consideration or value of
property conveyed; OR
...Computed on the consideration or value
less liens or encumbrances remaining at
time of sale.
___________________________________________
Signature of Declarant or Agent
determining tax-Firm Name
______________________________________________________________________
____________________
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
[CIBA-GEIGY CORPORATION]
hereby GRANTS to HEXCEL CORPORATION the real property in the City of
Anaheim, County of Orange, State of California, described as:
SEE ATTACHED EXHIBIT A
The Grantor represents that, at the time of the making and delivery of
this Grant Deed, it was lawfully seized of fee simple title in and to
the real estate herein described and had full power to convey the
same; provided, however, that the foregoing representations shall in
no event survive the delivery of this Grant Deed.
The Grantor for itself and for its successors-in-interest does by
these presents expressly excludes all representations, warranties and
covenants arising by statutory or other implication, except for the
limited express representation set forth above.
GRANTOR:
[CIBA-GEIGY CORPORATION]
____________________________
Name:
Title:
Dated___________________________________
MAIL TAX STATEMENTS TO:
STATE OF )
) ss:
COUNTY OF____________________________)
On _____________, 1995, before me, [Name of Notary]
personally appeared____________________________________________,
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/sh/they executed the
same is his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the
entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
__________________________________________
Notary Public
[SEAL]
EXHIBIT A
Legal Description
