EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
BY AND AMONG
STAMFORD FHI ACQUISITION CORP.,
FIBERITE, INC.,
FIBERITE HOLDINGS, INC.
AND
CYTEC INDUSTRIES INC.
DATED AS OF AUGUST 25, 1997
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TABLE OF CONTENTS
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ARTICLE I
PURCHASE AND SALE OF
ASSETS AND ASSUMPTION OF LIABILITIES 2
Section 1.1 Purchase and Sale...................................... 2
Section 1.2 Consideration.......................................... 9
Section 1.3 Closing................................................ 10
Section 1.4 Deliveries by Fiberite................................. 10
Section 1.5 Deliveries by Buyer.................................... 11
ARTICLE II-A
REPRESENTATIONS AND WARRANTIES OF
STAMFORD 11
Section 2A.1 Organization........................................... 11
Section 2A.2 Authority.............................................. 11
Section 2A.3 No Violations...........................................12
ARTICLE II-B
REPRESENTATIONS AND WARRANTIES OF
FIBERITE 13
Section 2B.1 Organization........................................... 13
Section 2B.2 Authority.............................................. 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER 13
Section 3.1 Organization........................................... 13
Section 3.2 Authority.............................................. 14
Section 3.3 No Violations.......................................... 14
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ARTICLE IV
COVENANTS 15
Section 4.1 Conduct of Business.................................. 15
Section 4.2 Access to Information................................ 19
Section 4.3 Commercially Reasonable Efforts;
Other Actions....................................... 20
Section 4.4 Public Announcements................................. 20
Section 4.5 Notification of Certain Matters...................... 20
Section 4.6 Expenses............................................. 21
Section 4.7 Affected Employees................................... 21
Section 4.8 Insurance............................................ 22
Section 4.9 Sums Received in Respect of Acquired
Businesses and Excluded Business.................... 23
Section 4.10 Name................................................. 23
Section 4.11 Books and Records.................................... 23
Section 4.12 Allocation of the Purchase Price..................... 24
Section 4.13 Assignment of Contracts; Nonassignability............ 24
Section 4.14 Assignment of Certain Indemnification
Rights.............................................. 25
Section 4.15 Continuation of Certain Plans........................ 26
Section 4.16 Tax Cooperation...................................... 26
Section 4.17 Multiemployer Plan Matters........................... 27
Section 4.18 No Dissolution........................................28
Section 4.19 Directors' and Officers' Insurance....................28
Section 4.20 Closing of Stock Purchase Agreement...................29
Section 4.21 Closing of Hexcel Agreement...........................29
Section 4.22 Alternative Transaction...............................29
Section 4.23 Indemnification for Notices...........................30
ARTICLE V
TERMINATION AND ABANDONMENT 30
Section 5.1 Termination...........................................30
Section 5.2 Procedure for Termination.............................30
Section 5.3 Effect of Termination and Abandonment.................31
ARTICLE VI
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION 31
Section 6.1 Survival of Representations and Warranties,
Covenants, etc.......................................31
Section 6.2 Fiberite's and Stamford's Agreements to
Indemnify............................................31
Section 6.3 Buyer's Agreement to Indemnify........................33
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Section 6.4 Indemnification Based on Net Damage....................33
Section 6.5 Third Party Claims.....................................33
ARTICLE VII
MISCELLANEOUS 34
Section 7.1 Fees, Expenses and Taxes...............................34
Section 7.2 Further Assurances.....................................35
Section 7.3 Notices................................................35
Section 7.4 Severability...........................................37
Section 7.5 Binding Effect; Assignment.............................37
Section 7.6 Bulk Sales Law.........................................37
Section 7.7 No Third Party Beneficiaries...........................37
Section 7.8 Interpretation.........................................38
Section 7.9 Jurisdiction and Consent to Service....................38
Section 7.10 Governing Law..........................................38
Section 7.11 Entire Agreement.......................................38
Section 7.12 Amendment, Modification and Waiver.....................39
Section 7.13 Specific Performance...................................39
Section 7.14 Counterparts...........................................39
Section 7.15 Effective Date.........................................39
Section 7.16 Risk of Loss...........................................39
ARTICLE VIII
CERTAIN DEFINITIONS 40
EXHIBITS
Exhibit A Stock Purchase and Sale Agreement
Exhibit B Xxxx of Sale and Assignment
Exhibit C Undertaking
SCHEDULES
Schedule 1.1(a)(xiii) Warranties/Indemnification Provisions
Schedule 1.1(b)(ii) Deeds for Certain Properties
Schedule 1.1(c)(iii) Certain Satellite Business Assets
Schedule 1.1(c)(v) Certain Excluded Assets
Schedule 1.1(e)(xii) Certain Excluded Employment Agreements
Schedule 2B.3(b)(ii) Certain Consents, Orders and Filings of
Fiberite
Schedule 3.3(b)(ii) Certain Consents, Orders and Filings of
Buyer
Schedule 4.1(c) Management
The Company agrees to furnish supplementally to the Commission upon its request,
any and all of the foregoing schedules and exhibits.
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
August 25, 1997 is by and among Fiberite, Inc., a Delaware corporation
("Fiberite"), Fiberite Holdings, Inc., a Delaware corporation ("Fiberite
Holdings"), Stamford FHI Acquisition Corp., a Delaware corporation ("Stamford"),
and Cytec Industries Inc., a Delaware corporation ("Buyer", and together with
Fiberite, Fiberite Holdings and Stamford, the "Parties").
RECITALS
A. Stamford has entered into a Stock Purchase and Sale
Agreement (the "Stock Purchase Agreement"), dated as of April 20, 1997, by and
among Stamford, Fiberite Holdings and the Selling Stockholders (as defined
herein) providing for, among other things, the purchase and sale of all of the
outstanding shares of Common Stock of Fiberite Holdings and which is attached
hereto as Exhibit A.
B. Upon the closing of the transactions contemplated by the
Stock Purchase Agreement, Fiberite Holdings and Fiberite desire to sell to
Buyer, and Buyer desires to purchase from Fiberite Holdings and Fiberite,
certain assets and operations of Fiberite Holdings and Fiberite as more fully
described herein, upon the terms and subject to the conditions set forth herein.
C. Capitalized terms used but not otherwise defined herein are
defined in Article VIII hereof.
Now, therefore, in consideration of the mutual agreements
herein and in reliance upon the representations and warranties herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and intending to be legally bound hereby, the Parties hereby
agree as follows:
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ARTICLE I
PURCHASE AND SALE OF
ASSETS AND ASSUMPTION OF LIABILITIES
Section 1.1 Purchase and Sale. (a) Subject to the terms and
conditions of this Agreement, at the Closing, Fiberite (and Fiberite Holdings to
the extent provided below) will (and Fiberite Holdings and Fiberite will cause
each Domestic Subsidiary to) sell, convey, assign, transfer and deliver to Buyer
(or one or more affiliates of Buyer designated by Buyer prior to the Closing
Date (the "Buyer Designees"), including in the case of Intellectual Property,
Cytec Technology Corp.), and Buyer (or Buyer Designees) will purchase, acquire
and accept from Fiberite (and Fiberite Holdings and each Domestic Subsidiary),
all of its (and their) rights, title and interests in and to all properties,
contracts and other assets (of every kind, nature, character and description,
whether real, personal or mixed, whether tangible or intangible, whether
accrued, contingent or otherwise and wherever situated), goodwill and business
as a going concern of Fiberite and each Domestic Subsidiary (and in the case of
Fiberite Holdings, the rights of Fiberite Holdings specifically referenced
below) other than the Excluded Assets, including, without limitation, the
following assets (collectively, the "Acquired Assets"):
(i) all real property, together with all buildings, fixtures and
improvements erected thereon, owned by Fiberite or Fiberite Holdings;
(ii) all leases of real property and all contracts, commitments or
other agreements relating thereto to which Fiberite or Fiberite
Holdings is a party or by which Fiberite or Fiberite Holdings is bound;
(iii) all computer hardware and software, computer programs and
systems, databases, documentation and resource material relating
thereto, of Fiberite or Fiberite Holdings;
(iv) all inventory, wherever located, including raw materials,
work-in-progress, finished goods, supplies and other inventories (the
"Inventory"), and any rights of Fiberite or Fiberite Holdings to the
warranties received from suppliers and any related claims, credits,
rights of recovery and setoff with respect to such Inventory;
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(v) all furniture, fixtures, vehicles, spare parts, tools,
supplies, leasehold improvements, plant and equipment and all other
tangible property of Fiberite or Fiberite Holdings;
(vi) all rights in, to and under all contracts, licenses, leases
(other than leases for real property), commitments, purchase orders and
other agreements to which Fiberite or Fiberite Holdings is a party or
by which Fiberite or Fiberite Holdings is bound;
(vii) all customer lists of Fiberite or Fiberite Holdings;
(viii) all cash and cash equivalents of Fiberite or Fiberite
Holdings;
(ix) all accounts receivable of Fiberite or Fiberite Holdings;
(x) all Intellectual Property rights and other proprietary rights
of Fiberite or Fiberite Holdings (the "Acquired Intellectual
Property");
(xi) all permits, licenses, approvals and authorizations by
governmental authorities or third parties which are transferable by
Fiberite or Fiberite Holdings;
(xii) all of the books of account and other accounting records (or
copies thereof) of Fiberite or Fiberite Holdings;
(xiii) all warranties, rights to indemnification, insurance or
similar rights, whether arising by contract, operation of law or
otherwise in favor of Fiberite or Fiberite Holdings including, without
limitation, rights to indemnification under the contracts listed on
Schedule 1.1(a)(xiii);
(xiv) all rights, claims and causes of action (including, without
limitation, claims and causes of action under insurance policies) of
Fiberite or Fiberite Holdings;
(xv) all rights to claims available to or being pursued by Fiberite
or Fiberite Holdings for refunds of income Taxes for taxable periods,
or portions thereof, ending prior to the closing of the Stock Purchase
Agreement;
(xvi) all of the capital stock and all rights, title, and
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interests in and to all properties, contracts, and other assets,
goodwill and operations of the business as a going concern of each of
(A) Fiberite France SARL, a corporation formed under the laws of France
("Fiberite France"), and (B) Fiberite Europe GmbH, a corporation formed
under the laws of Germany (the "German Subsidiary");
(xvii) subject to Section 4.10 hereof, the name "Fiberite" and all
derivatives and extensions thereof and all associated goodwill; and
(xviii) all rights, title and interests in and to all of the
properties, contracts and other assets, goodwill and operations of the
business as a going concern of any subsidiary of Fiberite Holdings
(other than Fiberite) or Fiberite organized under a jurisdiction within
the United States of America (each a "Domestic Subsidiary").
(b) Such sale, assignment, transfer and delivery of the
Acquired Assets will be effected by delivery by each of Fiberite, Fiberite
Holdings and each Domestic Subsidiary to Buyer or the applicable Buyer Designee
of (i) duly executed bills of sale and assignment agreements (each a "Xxxx of
Sale and Assignment") substantially in the form set forth as Exhibit B attached
hereto, (ii) properly executed and acknowledged deeds without covenants against
grantor's acts for the properties listed on Schedule 1.1(b)(ii), each in
recordable form, effective to convey fee title to each such property to Buyer in
the state in which each such property is located such that a reputable title
insurance company licensed to do business in the state in which each such
property is located would issue a title insurance policy insuring Buyer's fee
title to each such property (the "Deeds"), and (iii) such other duly executed,
good and sufficient instruments of conveyance, transfer and assignment as shall
be necessary to convey to Buyer all of Fiberite's, Fiberite Holdings' and each
Domestic Subsidiary's rights, title and interests in and to the Acquired Assets
(collectively, the "Other Instruments").
(c) Notwithstanding anything contained herein to the contrary,
Fiberite and Fiberite Holdings shall not sell, convey, assign, transfer or
deliver, or cause to be sold, conveyed, assigned, transferred or delivered, to
Buyer or any Buyer Designee, and Buyer and each Buyer Designee shall not
purchase,
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acquire or accept from Fiberite, the rights, title and interests in all of the
following properties, contracts and other assets (collectively, the "Excluded
Assets"):
(i) all capital stock of Fiberite or the Domestic Subsidiaries held
by Fiberite Holdings, Fiberite, Stamford or any of their subsidiaries;
(ii) all rights, title, and interests in and to the assets (of
every kind, nature, character and description, whether accrued,
contingent or otherwise and wherever situated), technology, goodwill,
operations and business relating exclusively to the Satellite Business,
other than (A) any real property or buildings, fixtures or improvements
erected thereon, (B) leases or real property or contracts, commitments
or other agreements relating to real property, (C) equipment or (D)
accounts receivable (the foregoing being the "Excluded Business");
(iii) the assets of Fiberite listed on Schedule 1.1(c)(iii);
(iv) all rights, claims and causes of action (including, without
limitation, claims and causes of action under insurance policies) of
Fiberite or Fiberite Holdings to the extent related to the Excluded
Business, the Excluded Assets or the Excluded Liabilities;
(v) all Intellectual Property used or under development for use
exclusively in the Satellite Business (which is acknowledged to include
all of Fiberite's cyanate ester resin/prepreg technology);
(vi) any amounts received by Fiberite or Stamford pursuant to
Section 1.2 of the Hexcel Agreement;
(vii) the assets listed on Schedule 1.1(c)(v);
(viii) any Unrelated Assets; and
(ix) all rights to the funds delivered into the escrow contemplated
by Section 1.02 of the Stock Purchase Agreement.
(d) On and as of the Closing Date, Buyer shall assume and
agree to perform, pay and discharge, all of the obligations and liabilities of
Fiberite Holdings and Fiberite (whether liquidated or unliquidated, known or
unknown, contingent or otherwise) which exist as of or arise out of events
occurring on
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or prior to the Closing Date and, in the case of the Acquired Businesses or the
Acquired Assets, which arise out of events occurring on or prior to or after the
Closing Date, other than the Excluded Liabilities, including, without
limitation, the following (collectively, the "Assumed Liabilities"):
(i) any and all obligations and liabilities arising from the
Acquired Businesses or relating to the Acquired Assets;
(ii) all post-retirement liabilities for medical, dental and life
insurance programs (other than multi-employer programs and plans), for
U.S. employees or former U.S. employees of Fiberite Holdings and its
subsidiaries who retire (or have retired) before the Closing Date;
(iii) any and all liabilities and obligations, direct or indirect,
fixed or contingent, for Federal income Taxes of Fiberite Holdings or
Fiberite or any of their respective subsidiaries or any member of any
affiliated group (within the meaning of Section 1504 of the Code other
than any corporation becoming affiliated with Fiberite Holdings or
Fiberite as a result of the closing of the Stock Purchase Agreement) or
any similar state, local or foreign group of which such entities are or
have been a member, for taxable periods, or portions thereof ending
prior to the closing of this Agreement;
(iv) all environmental liabilities and obligations, including,
without limitation, those arising from or relating to the following
sites: (A) Xxxxxxxxxxxx Landfill, Xxxx Avon, California; (B) Xxxxx X.
Xxxxxxxx Landfill (formerly known as Bee Canyon Landfill) near Irvine,
Orange County, California; (C) Olinda/Olinda Alpha Landfill, Brea,
Orange County, California; (D) Xxxxxxxx Canyon Landfill, Orange County,
California; (E) American Chemical Services, Griffith, Indiana; (F)
Artel Chemical, Nitro, West Virginia; (G) P.C.B. Treatment, Inc.,
Kansas City, Kansas and Kansas City, Missouri; (H) an unspecified local
municipal landfill, Winona, Minnesota; and (I) any property formerly
owned or operated by Fiberite which relates to the Acquired Businesses;
(v) any and all liabilities and obligations under or in connection
with the Collective Bargaining Agreement (whether accrued or incurred
prior to, on or after the Closing Date), including, without limitation,
the obligation to contribute to the Western Conference of Teamsters
Pension Trust Fund (the "Multiemployer Plan") and the Teamsters Manager
Trust
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Fund; and
(vi) any liability with respect to the Affected Employees arising
from the notice to be given pursuant to Section 4.7 hereof.
(e) On and as of the Closing Date, Buyer shall not assume or
agree to perform, pay or discharge and Fiberite (and to the extent applicable,
Fiberite Holdings and Stamford) shall retain all of the following obligations
and liabilities (whether liquidated or unliquidated, known or unknown,
contingent or otherwise) (collectively, the "Excluded Liabilities"):
(i) any and all obligations and liabilities arising exclusively
from the Excluded Business or relating exclusively to the Excluded
Assets;
(ii) (A) any and all liabilities and obligations, direct or
indirect, fixed or contingent, for Federal income Taxes of Stamford,
Fiberite Holdings, Fiberite or any of their subsidiaries or any member
of any affiliated group (within the meaning of Section 1504 of the
Code) or any similar state, local or foreign group of which any of such
entities is or has been a member on or prior to the date hereof, for
taxable periods (or portions thereof) beginning on or after the Closing
Date; (B) any and all liabilities and obligations, direct or indirect,
fixed or contingent, for Federal income Taxes of Stamford or any other
corporation becoming a member of an affiliated group (within the
meaning of Section 1504 of the Code) or any similar state, local or
foreign group with Fiberite Holdings or Fiberite as a result of the
closing of the Stock Purchase Agreement, for taxable periods (or
portions thereof) ending prior to the Closing Date; and (C)
notwithstanding anything in this Agreement to the contrary, any and all
liabilities and obligations, direct or indirect, fixed or contingent,
for federal, state, local or foreign income taxes due as a result of
any of the transactions contemplated by this Agreement or the Hexcel
Agreement;
(iii) all collective bargaining agreements other than the Collective
Bargaining Agreement, including, without limitation, the Agreement
Between ICI Fiberite, A Business Unit of ICI Composites, Inc. and
General Drivers, Helpers, Warehousemen, and Inside Employees Local
Union No. 160 affiliated with the International Brotherhood of
Teamsters, effective January 1, 1993 to December 31, 1997; and
Agreement Between ICI Fiberite, A Business Unit of ICI Composites, Inc.
and United Steelworkers of America, XXX-
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XXX, Xxxxx Xx. 00000, effective March 28, 1993 to March 29, 1998;
(iv) the settlement agreement between Fiberite and Xxxx Xxxxxxx;
(v) all outstanding indebtedness for borrowed money of Fiberite
Holdings or Fiberite or any of their subsidiaries (together with all
interest accrued thereon) to the extent deducted from the $360,000,000
payable under Section 1.02 of the Stock Purchase Agreement;
(vi) all Expenses (as defined in the Stock Purchase Agreement);
(vii) the 11.3% Zero Coupon Subordinated Notes of Fiberite Holdings
due in 2002 and 2003;
(viii) all obligations and liabilities of Stamford, Fiberite
Holdings (or any successor thereof) or Fiberite which may arise in
connection with the transactions contemplated by the Stock Purchase
Agreement, the proposed sale of Fiberite Holdings or Fiberite, or this
Agreement to indemnify, defend and hold harmless the present and
former officers, directors, employees and agents of Fiberite Holdings,
Fiberite and the Selling Stockholders; provided, that this clause
(viii) shall not impair Buyer's obligation to maintain insurance
pursuant to Section 4.19 hereof;
(ix) all obligations and liabilities of Stamford, Fiberite Holdings
or Fiberite arising under this Agreement, the Hexcel Agreement or the
Stock Purchase Agreement (other than obligations and liabilities under
the Stock Purchase Agreement to be performed after the Closing Date and
other than obligations and liabilities under the Hexcel Agreement
pursuant to the Three Party Agreement to the extent requiring
performance after the Closing Date);
(x) all obligations and liabilities of Stamford, Fiberite Holdings
(or any successor) or Fiberite arising in connection with the
employment agreements set forth on Schedule 1.1(e)(xii), including,
without limitation, obligations and liabilities relating to the
payment of "excess parachute payments" within the meaning of Section
280G of the Code; and
(xi) all obligations and liabilities arising from the Unrelated
Assets.
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(f) Buyer's assumption of the Assumed Liabilities hereunder is
an indemnity and accordingly, upon any payment by Buyer in respect thereof Buyer
shall have the right by way of subrogation to pursue any and all claims that
Fiberite Holdings or Fiberite may assert against any third party for
indemnification or insurance in respect thereof, and Buyer shall be entitled to
pursue any such claim, in the name and on behalf of Stamford, Fiberite Holdings
or Fiberite, as the case may be, and to retain any recovery in respect thereof.
To the extent, if any, that Fiberite Holdings or Fiberite has a claim against a
third party in respect of an Assumed Liability, then, notwithstanding payment by
Buyer in respect of such Assumed Liability, (i) Buyer's liability shall be
secondary to the primary obligation of said third party and, accordingly, (ii)
Buyer shall be entitled to reimbursement from Fiberite Holdings or Fiberite, as
the case may be, to the extent that such indemnitee recovers from the third
party, in respect of the Assumed Liability, any amount in excess of its costs
and expenses; provided that nothing in this sentence shall impair Buyer's
obligations pursuant to Section 6.3 hereof.
Section 1.2 Consideration. The consideration to be paid for
the Acquired Assets and Acquired Businesses shall consist of the following (and
Buyer's obligation to pay the same shall be irrespective of whether Buyer is
prohibited from acquiring any of the Acquired Assets or Acquired Businesses):
(a) $344,000,000 (the "Purchase Price"), payable as provided
below, by wire transfer of immediately available funds to such bank account as
shall be designated by Fiberite at least two business days prior to the
applicable payment date provided below against delivery of a receipt duly
executed by Fiberite acknowledging receipt of the same; provided that Fiberite
hereby designates that the portions of the Purchase Price represented by the
Deposit (less $1,000,000) and the Remainder be paid on the applicable payment
dates directly to the creditors in respect of the outstanding principal amount
of the Permitted Debt (in the case of the Remainder, with the excess over the
outstanding principal amount of the Permitted Debt on the payment date being
delivered to the foregoing account designated by Fiberite). The Purchase Price
shall be paid in two installments as follows:
(i) $173,000,000 (the "Deposit") shall be paid on the first
business day after the closing of the Stock Purchase Agreement; and
(ii) $171,000,000 (the "Remainder") shall be paid at the
Closing; provided, that if the Regulatory Approvals shall not have been
obtained within 180 days after the closing of
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the Stock Purchase Agreement, then the Remainder shall be paid on the
first business day following the expiration of such 180-day period.
(b) an undertaking substantially in the form set forth as
Exhibit C attached hereto (the "Undertaking"), whereby Buyer will assume and
agree to pay and discharge the Assumed Liabilities as provided in the
Undertaking.
(c) Notwithstanding anything in this Agreement to the
contrary, Buyer agrees that the obligation of Buyer to pay the Purchase Price
and deliver the Undertaking as provided in Sections 1.2(a) and (b) is absolute
and is in no way contingent on the occurrence or nonoccurrence of any event,
including, without limitation, the receipt of any necessary consents or
approvals of any United States or any other governmental authority that are
required for the consummation of the transactions contemplated by this
Agreement, the transfer of any of the Acquired Assets by Fiberite to Buyer, the
breach of any representation or warranty by any Party, the failure to perform or
comply with any agreement or covenant by any Party or the termination of this
Agreement (other than pursuant to Article VII of this Agreement).
Section 1.3 Closing. The Closing of the transactions
contemplated by this Agreement shall take place five business days after receipt
of the Regulatory Approvals at the offices of Cravath, Swaine & Xxxxx, Worldwide
Plaza, 825 Eighth Avenue, New York, New York, or on such other date and at such
other time or place as the Parties may agree. The date of the Closing is
sometimes referred to herein as the "Closing Date."
Section 1.4 Deliveries by Fiberite. At the Closing, Fiberite
will deliver or cause to be delivered to Buyer (unless delivered previously) the
following:
(a) duly executed Bills of Sale and Assignments;
(b) the books and records of Fiberite and Fiberite
Holdings;
(c) a Certificate of Non-Foreign Status (the "FIRPTA
Certificate"); provided, however, that if Fiberite fails to provide the FIRPTA
Certificate, the transaction shall nonetheless close and Buyer shall withhold
from the Purchase Price and pay over to the appropriate taxing authorities the
amount required to be withheld under Section 1445 of the Code as determined by
Buyer;
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(d) the Deeds;
(e) certain affidavits and certificates required in connection
with the recordation of the Deeds;
(f) a duly executed and acknowledged assignment and assumption
agreement of Fiberite with respect to the ground lease for the property located
at 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx; and
(g) all other documents, instruments and writings (including,
if necessary, the Other Instruments) required to be delivered by Stamford,
Fiberite Holdings and Fiberite at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith.
Section 1.5 Deliveries by Buyer. At the Closing, Buyer will
deliver or cause to be delivered to Fiberite (unless previously delivered) the
following:
(a) the Remainder referred to in Section 1.2(a) hereof;
(b) the duly executed Undertaking; and
(c) all other documents, instruments or writings required to
be delivered by Buyer at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.
ARTICLE II-A
REPRESENTATIONS AND WARRANTIES OF
STAMFORD
Stamford represents and warrants to Buyer as follows:
Section 2A.1 Organization. Stamford is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. True and complete copies of the certificate of
incorporation and by-laws of Stamford, as they are currently in effect and as
they will be in effect at Closing, have been made available to Buyer.
Section 2A.2 Authority. Stamford has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the
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transactions contemplated hereby have been duly authorized and approved by
Stamford. No other proceedings on the part of Stamford are necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Stamford, and, assuming this Agreement constitutes a legal, valid and binding
agreement of Buyer, constitutes a legal, valid and binding agreement of
Stamford, enforceable against Stamford in accordance with its terms, except that
enforcement thereof may be subject to (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought.
Section 2A.3 No Violations. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
to be performed by Stamford nor compliance by Stamford with any of the
provisions hereof will (i) violate any provision of Stamford's certificate of
incorporation or by-laws, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default, or give rise to
any right of termination, cancelation or acceleration or any right that becomes
effective upon the occurrence of a merger, consolidation, sale of assets or
change in control, under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, other instrument of indebtedness for money
borrowed, license, franchise, permit or agreement to which Stamford is a party,
or by which Stamford or any of its properties is bound immediately prior to the
closing of the Stock Purchase Agreement or (iii) violate any statute, rule,
regulation, order or decree of any public body or authority by which Stamford or
any of its properties is bound immediately prior to the closing of the Stock
Purchase Agreement, excluding from the foregoing clauses (ii) and (iii)
violations, breaches, defaults or rights that, either individually or in the
aggregate, would not have a Material Adverse Effect or materially impair its
ability to consummate the transactions contemplated hereby or for which it has
received, or prior to the Closing shall have received, appropriate consents or
waivers.
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ARTICLE II-B
REPRESENTATIONS AND WARRANTIES OF
FIBERITE
Fiberite (as of the Effective Date) represents and warrants to
Buyer as follows:
Section 2B.1 Organization. Fiberite is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and Fiberite has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. True and complete copies of the certificate of
incorporation and by-laws of Fiberite, as they are currently in effect and as
they will be in effect at Closing, have been made available to Buyer.
Section 2B.2 Authority. Fiberite has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized and approved by Fiberite. No other proceedings on the part of
Fiberite are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Fiberite, and, assuming this Agreement constitutes a
legal, valid and binding agreement of Buyer, constitutes a legal, valid and
binding agreement of Fiberite enforceable against Fiberite in accordance with
its terms, except that enforcement thereof may be subject to (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Stamford and Fiberite as
follows:
Section 3.1 Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its
14
properties and to carry on its business as now being conducted.
Section 3.2 Authority. Buyer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by Buyer, and no other proceedings on the part
of Buyer are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and, assuming this Agreement constitutes a
legal, valid and binding agreement of the other parties hereto, constitutes a
legal, valid, and binding agreement of Buyer, enforceable against Buyer in
accordance with its terms, except that enforcement thereof may be subject to (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws nor or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
Section 3.3 No Violations. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
nor compliance by Buyer with any of the provisions hereof will (i) violate any
provision of the certificate of incorporation or by-laws of Buyer, (ii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default, or give rise to any right of termination,
cancelation or acceleration or any right that becomes effective upon the
occurrence of a merger, consolidation, sale of assets or change in control,
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, other instrument of indebtedness for money borrowed, license,
franchise, permit or agreement to which Buyer is a party, or by which any of
their respective properties is bound, or (iii) violate any statute, rule,
regulation, order or decree of any public body or authority by which Buyer or
any of its properties is bound, excluding from the foregoing clauses (ii) and
(iii), violations, breaches, defaults or rights that, either individually or in
the aggregate, would not materially impair Buyer's ability to consummate the
transactions contemplated hereby or for which Buyer has received or, prior to
the Closing, shall have received appropriate consents or waivers.
15
ARTICLE IV
COVENANTS
Section 4.1 Conduct of Business.
(a) During the period from the date of the closing of the
Stock Purchase Agreement to the Closing Date, Stamford, Fiberite Holdings and
Fiberite shall instruct management of Fiberite (but shall not be liable for such
management's acts or omissions) to (i) operate the Acquired Businesses only in
the ordinary course of business consistent with past practice, (ii) use their
reasonable efforts to preserve intact the Acquired Assets (except for wear and
tear in the ordinary course of business) and the Acquired Businesses and keep
available the services of the Affected Employees (as defined in Section 4.7(a)
herein), (iii) preserve and maintain the Acquired Assets and use their
reasonable efforts to preserve and maintain satisfactory relationships with
suppliers, distributors and customers in connection with the Acquired
Businesses, and (iv) take all commercially reasonable steps to protect the
Intellectual Property rights of the Acquired Businesses and the Acquired
Intellectual Property and prevent any of it from falling into the public domain.
Neither Stamford nor Fiberite Holdings shall take any actions to prevent or
otherwise interfere with any of the foregoing.
(b) During the period from the date of the closing of the
Stock Purchase Agreement to the Closing Date, Stamford, Fiberite Holdings and
Fiberite shall instruct management of Fiberite not to (but shall not be liable
for such management's acts or omissions), and Stamford, Fiberite Holdings and
Fiberite shall instruct management of Fiberite to (but shall not be liable for
such management's acts or omissions) cause Fiberite France, the German
Subsidiary and each Domestic Subsidiary not to, and Stamford and Fiberite
Holdings shall not cause Fiberite Holdings, Fiberite, Fiberite France, the
German Subsidiary or any Domestic Subsidiary to:
(i) declare, set aside, or pay any dividend or make any other
distribution to its stockholders whether or not upon or in respect of
any shares of its capital stock;
(ii) purchase, redeem or otherwise acquire any shares of (or
options, warrants or rights relating to) its capital stock or other
securities or issue any capital stock or any option, warrant or right
relating thereto or any securities convertible into or exchangeable for
any shares of capital stock;
16
(iii) incur any indebtedness for borrowed money or guarantee
any such indebtedness of any other person (other than short-term
indebtedness incurred in the ordinary course of business consistent
with past practice), issue or sell any debt securities or warrants or
other rights to acquire any debt securities or guarantee any debt
securities of any other person;
(iv) make any payments in respect of any indebtedness for
borrowed money other than scheduled interest payments under the
Permitted Debt;
(v) make or incur any capital expenditure (other than capital
expenditures budgeted for as of the closing of the Stock Purchase
Agreement);
(vi) make any loans, advances or capital contributions to, or
investments in, any other person (other than loans or advances to
employees for normal business expenses in the ordinary course of
business consistent with past practice);
(vii) pay, loan or advance any amount to, or enter into any
agreement or arrangement with, Fiberite Holdings or Stamford or any
Affiliate of Stamford;
(viii) cancel any indebtedness or waive any claims or rights
of substantial value;
(ix) pay, discharge, satisfy or settle any claims, liabilities
or obligations, other than amounts under $25,000 in the ordinary course
of business consistent with past practice;
(x) make any Tax election or settle or compromise any income
Tax liability;
(xi) employ outside counsel in respect of, or make
determinations as to the handling of, any pending or threatened
litigation (other than litigation arising in the ordinary course of
business) involving amounts in excess of $25,000 or criminal liability
without consulting in good faith with Buyer in respect thereof
(including as to the identity of any such counsel);
(xii) cancel or permit to lapse any policies of insurance;
(xiii) (A) increase in any manner the compensation or fringe
benefits of any of its directors, officers or other
17
employees, including, without limitation, Affected Employees; (B) pay,
modify or amend any pension, retirement allowance or other employee
benefit not required, or enter into or agree to enter into any
agreement or arrangement with such director, officer or employee,
whether past or present, relating to any such pension, retirement
allowance or other employee benefit, except as required by law or under
agreements, plans or arrangements existing on the date of the closing
of the Stock Purchase Agreement; (C) amend (except as required by
applicable law, with notice to Buyer) or terminate any of the Plans as
they apply to any of the Affected Employees or increase the amount or
accelerate the payment or vesting of any benefits payable thereunder;
(D) grant any severance or termination pay to, or enter into any
employment, consulting or severance agreement with any of its
directors, officers or other employees, including, without limitation,
Affected Employees; (E) become obligated under any new pension plan,
welfare plan, multiemployer plan, employee benefit plan, benefit
arrangement or similar plan or arrangement that was not in existence on
the date of the closing of the Stock Purchase Agreement or amend any of
such plans or arrangements in existence on such date; (F) announce or
implement any layoffs; or (G) terminate the employment of or reassign
or change the duties of any of its officers or make any change in its
management or the composition of its board of directors;
(xiv) authorize, recommend, propose or announce an intention
to authorize, recommend or propose, or enter into any agreement in
principle or an agreement with respect to, or consummate, (A) any plan
of liquidation or dissolution; (B) any acquisition of assets (other
than inventory); (C) any acquisition of an interest in any business or
business organization; (D) any merger or consolidation with any person;
or (E) any sale, transfer, lease, license, pledge, mortgage, the
subjection to any Lien other than Permitted Liens, or other disposition
or encumbrance of, any of the Acquired Assets (other than sales of
inventory in the ordinary course of business consistent with past
practice);
(xv) grant any license or sublicense or any rights under or
with respect to any Intellectual Property rights of the Acquired
Businesses or any Acquired Intellectual Property or otherwise provide
any of the foregoing or any other confidential or proprietary
information with respect to the Acquired Businesses or the Acquired
Assets to any person;
(xvi) enter into, amend, modify or terminate any material
contract (including, without limitation, the material
18
contracts listed on Schedule 1.1(a) (xiii)), or take any action or fail
to take any action that, to its knowledge, with or without notice or
lapse of time, would constitute a default under any such contract, or
waive, release or assign any material rights or claims under any such
contract, or enter into any classified Government Contract;
(xvii) change any of the accounting principles or practices
applied with respect to the Acquired Assets or the Acquired Businesses;
(xviii) take any action which could be reasonably expected to
prevent or materially delay the consummation of the transactions
contemplated by this Agreement or to materially impair the value of the
Acquired Assets or the Acquired Businesses or which would make any
representation or warranty of Fiberite contained in this Agreement
untrue or incorrect as of the date when made or as of the Closing Date
or which would reasonably be expected to prevent or materially delay
the satisfaction of any condition to Closing set forth in Article V
hereof; or
(xix) agree to do any of the foregoing.
(c) Notwithstanding anything to the contrary contained in
Section 4.1(b), Stamford, Fiberite Holdings and Fiberite shall be permitted to,
and shall be permitted to cause each of their respective subsidiaries to take
such actions necessary to enable them to, (A) dividend or otherwise distribute
the $200,000 in cash in Fiberite's bank accounts on the closing of the Stock
Purchase Agreement (or the amount actually in such accounts, if less), (B) incur
and guarantee the Permitted Debt (but not to make any payments in respect
thereof other than scheduled interest payments), (C) consummate the transactions
contemplated by the Hexcel Agreement and the Hexcel License and perform its
obligations under such agreements and dividend or otherwise distribute the
amounts received pursuant to Section 1.2 thereof, (D) dividend or otherwise
distribute the Management Fee and $1,000,000 of the Deposit, (E) perform its
obligations under the Stock Purchase Agreement, and (F) consummate the Permitted
Merger. In no event shall Stamford, Fiberite Holdings or Fiberite or any of
their respective subsidiaries be deemed to have breached this Section 4.1 if
such breach arises from the performance by or compliance with any other
provision contained in this Agreement.
(d) Immediately after the closing of the Stock Purchase
Agreement and until the Closing Date, Stamford shall cause management of
Fiberite to be comprised solely of the persons
19
listed on Schedule 4.1(c) (with respect to each such person, in the positions
indicated on such Schedule).
(e) During the period from the date of the closing of the
Stock Purchase Agreement to the Closing Date, Stamford shall maintain Fiberite
Holdings as a wholly owned subsidiary of Stamford and Fiberite as a wholly owned
subsidiary of Fiberite Holdings; provided, that Stamford may consummate the
Permitted Merger.
(f) From and after the date of the closing of the Stock
Purchase Agreement, without the prior written consent of Buyer, none of
Stamford, Fiberite Holdings or Fiberite shall modify or otherwise alter, or
permit to be modified or otherwise altered, any post-retirement benefits for
present or former employees of Fiberite Holdings and its subsidiaries who retire
(or have retired) before the Closing Date.
Section 4.2 Access to Information. (a) From the date of this
Agreement until the closing of the Stock Purchase Agreement, Stamford shall
authorize and provide Buyer and Buyer's authorized representatives (including
counsel, financial advisers, environmental and other consultants, accountants
and auditors) full access to the information regarding Fiberite Holdings and its
subsidiaries provided to Stamford pursuant to Section 5.02 of the Stock Purchase
Agreement and agree to exercise its rights pursuant to such Section 5.02 to
obtain promptly such information as Buyer may reasonably request (or to
designate Buyer and Buyer's representatives as its authorized representatives to
obtain such information), subject to the limitations set forth therein.
(b) From the date of the closing of the Stock Purchase
Agreement until the Closing Date, Stamford and Fiberite shall authorize and
provide Buyer and Buyer's authorized representatives (including counsel,
financial advisors, environmental and other consultants, accountants and
auditors) full access to all properties, books, contracts, commitments,
personnel and records of Fiberite, Fiberite France, the German Subsidiary and
each Domestic Subsidiary, and shall furnish or cause to be furnished to Buyer
all other information concerning the Acquired Businesses and the Acquired Assets
as Buyer shall request.
(c) From the date of this Agreement until the Closing Date,
neither Stamford nor Fiberite shall permit Hexcel or any representative of
Hexcel to have any access to any properties, books, contracts, commitments,
personnel or records of Fiberite or any of its subsidiaries without the prior
consent of Buyer;
20
provided, however, that without such consent, Hexcel may be permitted access to
the extent provided under Section 4.2(b) of the Hexcel Agreement.
Section 4.3 Commercially Reasonable Efforts; Other Actions.
Subject to the terms and conditions herein provided and applicable law, Buyer,
on the one hand, and Stamford and Fiberite, on the other, shall use their
commercially reasonable efforts promptly to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper,
appropriate or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, (i) the filing of Notification and Report Forms under the
HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice (the "Antitrust Division") and using their
commercially reasonable efforts to respond as promptly as practicable to all
inquiries received from the FTC or the Antitrust Division for additional
information or documentation and (ii) the obtaining of all necessary consents,
approvals or waivers under applicable law or its material contracts; provided,
however, the agreement of the Parties contained herein shall not require Buyer
to take any action that would (i) require divestiture by Buyer of any of its
existing business operations or of a not insubstantial portion of the Acquired
Assets or Acquired Businesses, or (ii) impose a commercially unreasonable burden
on, or restriction upon, Buyer's existing business operations or the Acquired
Businesses or the Acquired Assets. Nothing in this Section 4.3 shall be deemed
to limit the obligations of Buyer to pay the Purchase Price in accordance with
Section 1.2 or take the actions required by Section 4.22 hereof.
Section 4.4 Public Announcements. Except as may be required by
applicable law, rule, regulation or legal process, so long as this Agreement is
in effect, none of Stamford, Fiberite, Buyer 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 without the consent of the other parties hereto,
which consent shall not be unreasonably withheld or withdrawn; provided,
however, nothing in this Section 4.4 shall limit or restrict Buyer from
communicating with customers, suppliers, advisors or analysts with respect to
the transactions contemplated by this Agreement or require the consent from any
other Party hereto.
Section 4.5 Notification of Certain Matters. Stamford
shall provide to Buyer within one business day of receipt thereof
a copy of any notification received by Stamford pursuant to
21
Section 5.05 of the Stock Purchase Agreement. Stamford shall provide to Buyer
such notification in the manner described in Section 7.3 hereof.
Section 4.6 Expenses. Except as provided herein, Buyer, on the
one hand, and Stamford, Fiberite Holdings and Fiberite, on the other hand, shall
bear their respective expenses incurred in connection with this Agreement and
the transactions contemplated hereby, and all fees and expenses of their
respective investment bankers, finders, brokers, agents, representatives,
counsel and accountants.
Section 4.7 Affected Employees.
(a) Buyer shall offer to employ (effective as of the Closing
Date) all employees (other than the Executives as defined in Section 4.7(d)
hereof) of Fiberite Holdings and its subsidiaries (the "Affected Employees").
Consistent with the foregoing, the Parties shall mutually agree between the date
of this Agreement and the Closing Date on appropriate mechanisms for the orderly
transition from Fiberite to Buyer of Affected Employees who accept employment
with Buyer.
(b) Buyer shall provide to each Affected Employee who is not
covered by a collective bargaining agreement, and who accepts Buyer's offer, a
compensation and benefits package which is generally comparable in the aggregate
to the compensation and benefits package provided such Affected Employee
immediately prior to the Closing Date, which compensation and benefits package
shall not be changed in any manner that would cause such package to not be
generally comparable at any time prior to January 1, 1998. Fiberite Holdings
and its subsidiaries which employ Affected Employees shall give notice to each
Affected Employee who is not covered by a collective bargaining agreement (in
compliance with Section 3.3(ii) of the ICI Composites Severance Plan or, if
applicable, its successor plan, the Fiberite, Inc. Severance Plan, as provided
in the draft thereof delivered to Buyer's counsel by Fiberite Holdings' counsel)
that Fiberite Holdings and its subsidiaries intend to terminate his or her
employment if he or she does not accept Buyer's offer (the form of which notice
shall be provided by Buyer to Fiberite Holdings). Buyer shall provide
compensation and benefits, on terms and conditions to be determined by Buyer, to
each Affected Employee who is covered by a collective bargaining agreement, and
who accepts Buyer's offer. Subject to compliance with the foregoing provisions
of this Section 4.7(b), Buyer reserves the right to establish, amend, modify or
terminate any terms or conditions of employment for such Affected Employees.
Nothing in this Section 4.7 shall be deemed (i) to require the employment of any
Affected
22
Employee to be continued for any particular period of time after the Closing
Date, or (ii) to require Buyer to assume any collective bargaining agreement.
(c) If any Affected Employee who is not covered by a
collective bargaining agreement and who accepts Buyer's offer becomes a
participant in any employee benefit or compensation plan of Buyer, such Affected
Employee shall be given credit under such plan for all prior service with
Fiberite Holdings and its subsidiaries, Affiliates and predecessors which is
recognized by Fiberite Holdings or its subsidiaries, solely for purposes of
determining eligibility and vesting (but not benefit accrual or any other
purposes); provided, however, that such service need not be credited to the
extent it would result in a duplication of benefits, including without
limitation, benefit accrual service under defined benefit plans. Nothing in this
Section 4.7(c) shall be construed to alter Buyer's obligations under Section
4.7(b) above.
(d) Fiberite will make available (on an exclusive basis, but
subject to the transactions contemplated by the Transition Services Agreement)
the services of Messrs. Ashton, Smith, Miller, XxXxxxx and Xxxxxx (collectively,
the "Executives") to work for Buyer in the Acquired Businesses for a period of
up to six (6) months from the closing of the Stock Purchase Agreement at their
salaries on the date hereof, including pro-rata target bonuses and benefits
packages (without changing their domicile) which such expenses will be allocated
between Fiberite and Buyer on a pro rata basis. In addition, Fiberite shall
cause the Executives to terminate their respective employment and severance
agreements and to waive all of their respective rights thereunder as of the
Closing Date. The provisions of Sections 4.7(a), 4.7(b) and 4.7(c) hereof do not
apply to the Executives.
Section 4.8 Insurance. Subsequent to the Closing, neither
Fiberite Holdings (or any successor) nor Fiberite shall surrender their
respective rights under any policies of insurance which were in effect at the
time immediately prior to the Closing Date in respect of risks and losses
arising out of events or occurrences occurring prior to the Closing Date in the
course or as a result of the conduct of the Acquired Businesses with respect to
the Acquired Assets, Assumed Liabilities or Buyer Allocated Liabilities ("Prior
Occurrences"); provided, however, that nothing herein shall be deemed to require
Fiberite Holdings (or any successor) or Fiberite to maintain any insurance with
respect to events or occurrences occurring after the Closing Date. Fiberite
Holdings (or any successor) and Fiberite shall cause Buyer to be designated as
loss payee under such policies
23
with respect to the Prior Occurrences, and shall assign to Buyer, or designate
Buyer as their agent with respect to, all claims and other rights to enforce or
assure insurance coverage under such policies with respect to Prior Occurrences;
provided, further, that in the event Fiberite Holdings (or any successor) or
Fiberite is unable to designate Buyer as loss payee under such policies,
Fiberite Holdings (or any successor) and Fiberite shall cooperate with Buyer and
use their commercially reasonable efforts to provide Buyer the equivalent
benefits of such policies.
Section 4.9 Sums Received in Respect of Acquired Businesses
and Excluded Business. Fiberite shall pay or cause to be paid over to Buyer,
promptly after the receipt thereof after the Closing Date, all sums received in
respect or on account of the Acquired Assets and the Acquired Businesses, other
than the Purchase Price and any other amounts paid to Stamford by Buyer pursuant
to this Agreement. Buyer shall pay or cause to be paid over to Fiberite,
promptly after the receipt thereof after the Closing Date, all sums received in
respect or on account of the Excluded Assets and the Excluded Businesses, other
than amounts paid to Buyer by Fiberite, Fiberite Holdings or Stamford pursuant
to this Agreement.
Section 4.10 Name. From and after the Closing Date and
consistent with the terms hereof (but subject to Section 4.8 of the Hexcel
Agreement), Buyer shall possess, to the exclusion of Stamford, Fiberite Holdings
and Fiberite and their respective subsidiaries and Affiliates, all rights to the
use of the Acquired Intellectual Property (except as set forth in Section 4.13
hereof), including, without limitation, the name "Fiberite", and Fiberite
Holdings, Fiberite and their respective subsidiaries shall each, as promptly as
commercially practicable following the Closing Date, change its name to a name
which does not contain either "Fiberite" or any word confusingly similar with
such word. For avoidance of doubt, none of Stamford, Fiberite Holdings and
Fiberite and their respective subsidiaries and Affiliates shall retain any
copies of any of the Acquired Intellectual Property and all such copies shall be
delivered to Buyer or the applicable Buyer Designee on the Closing Date.
Section 4.11 Books and Records. Each of the Parties agrees
that all books and records of Fiberite Holdings and Fiberite, wherever located,
which a Party acquires hereunder (including, but not limited to, correspondence,
memoranda, books of account, personnel and payroll records and the like) (the
"Business Records") shall be preserved by such Party for a period of at least
seven (7) years following the Closing Date. Following such seven (7) year
period, neither Stamford, Fiberite
24
Holdings and Fiberite (or any successor thereof), on the one hand, nor Buyer, on
the other hand, will dispose of any such books and records without first
offering such books and records to the other Party. After the Closing Date,
where there is some legitimate business purpose, the Party in possession of any
Business Records shall provide the other Party and its authorized
representatives with access, upon prior reasonable notice specifying the need
therefor, during regular business hours, to the Business Records, and the other
Party or its representatives shall have the right to examine and make copies of
such Business Records; provided, that the foregoing right shall not be
exercisable in such a manner as to unreasonably interfere with the normal
operations of such Party.
Section 4.12 Allocation of the Purchase Price. As soon as
practicable after the date hereof, but in no event less than 10 days prior to
the Closing Date, Buyer and Stamford shall mutually agree on an allocation (the
"Allocation Statement") of the Purchase Price payable by Buyer pursuant to
Section 1.2 hereof plus the amount of any Assumed Liabilities (collectively, the
"Allocable Amount") for Federal income tax purposes in accordance with their
fair market values and with the requirements of Section 1060 of the Code. Each
of Buyer and Fiberite shall (i) report for all Tax purposes the purchase of the
Acquired Assets in a manner consistent with the Allocation Statement and in a
manner consistent with all applicable rules and regulations; (ii) timely file a
Form 8594 in accordance with the requirements of Section 1060 of the Code and
this Section 4.12; (iii) not assert, in connection with any Return, Tax audit or
similar proceedings, any allocation of the Allocable Amount that differs from
that agreed to herein; and (iv) notify the other in the event any taxing
authority is taking or proposing to take a position inconsistent with such
allocation. Each of Buyer and Stamford shall deliver to the other a copy of its
Form 8594 at least 10 days prior to the filing thereof.
Section 4.13 Assignment of Contracts; Nonassignability. From
and after the Closing Date, Fiberite shall use commercially reasonable efforts
to obtain all necessary consents, approvals or waivers required for the transfer
to Buyer of the agreements, contracts and commitments, and any other property
interest or right that is included in the Acquired Assets. Notwithstanding the
foregoing, to the extent that any contract, agreement or commitment, or any
other property interest or right included in the Acquired Assets, is not capable
of being assigned or transferred without the consent or waiver of the other
party thereto, or any third person (including a government or governmental
unit), or if such assignment or transfer or attempted assignment or transfer
would constitute a breach
25
thereof or a violation of any law, decree, order, regulation or other
governmental edict or is otherwise not practicable, this Agreement shall not
constitute an assignment, transfer or sublease thereof, or an attempted
assignment, transfer or sublease thereof prior to the time that the appropriate
consent or waiver is obtained. To the extent that any contract, agreement or
commitment or any other property interest or right included in the Acquired
Assets is not assigned hereby (the "Non-Assigned Contracts"), then Fiberite
shall, and Stamford shall cause Fiberite to, use commercially reasonable efforts
to provide to Buyer the economic benefit of the Non-Assigned Contracts. The
parties acknowledge that to the extent the rights under an agreement are validly
assigned or to the extent that Buyer receives the economic benefit of any such
agreement, the Buyer will assume the obligations under such agreement; provided,
that Buyer will use commercially reasonable efforts, including where appropriate
partial performance, to assist Stamford and Fiberite to provide to Buyer the
economic benefit of any agreement. Furthermore, the Parties hereto acknowledge
and agree that to the extent the transactions contemplated by this Agreement
have closed and there exists any Non-Assigned Contracts, Buyer does not waive
any rights to receive any assignment of or to receive the economic benefit from
the Non-Assigned Contracts. In the event a contract relating to raw materials is
used by both the Acquired Businesses and the Excluded Businesses as of the
Closing, the Buyer and Fiberite agree for a commercially reasonable period to
share or otherwise allocate the benefits and obligations under such contract in
the proportion used by the respective businesses over the recent past.
Section 4.14 Assignment of Certain Indemnification Rights.
From and after the Closing Date, Fiberite shall use commercially reasonable
efforts to obtain the consents and approvals necessary to assign all rights of
Fiberite Holdings (and any successor) and Fiberite to indemnification from any
party under the agreements listed on Schedule 1.1(a)(xiii). Stamford, Fiberite
and Buyer shall each cooperate and use commercially reasonable efforts to
provide for the allocation of all indemnification rights available under the
agreements listed on Schedule 1.1(a)(xiii) such that the Party who has assumed
any liability for which any such agreement provides indemnification may exercise
rights directly to obtain such indemnification. To the extent that a Party may
not directly seek indemnification under an agreement listed on Schedule
1.1(a)(xiii) or, to the extent consent to assignment cannot be obtained for any
such agreement, then the Party who may seek such indemnification directly shall
use commercially reasonable efforts to obtain such indemnification from the
third party and to provide to the Party subject to such liability the economic
benefit of such indemnification received from such third party.
26
Section 4.15 Continuation of Certain Plans. Without limiting
Buyer's obligations under Section 1.1(d), upon written request from the Buyer
delivered to Fiberite within the first ninety (90) days immediately following
the Closing Date, Fiberite shall take, or shall cause the sponsoring employer to
take, all necessary or appropriate actions reasonably requested by the Buyer
with respect to the Fiberite, Inc. 401(k) Plan I and the Fiberite, Inc. 401(k)
Plan II (collectively the "Fiberite 401(k) Plans") to cause and facilitate the
transfers of any assets related to Affected Employees who accept employment with
Buyer from the respective trustees of the Fiberite, Inc. 401(k) Plans to the
trustee(s) of one or more retirement plans qualified under Code Sections 401(a)
and 401(k) which are designated or established by Buyer (the "Buyer's 401(k)
Plans"). Upon the transfer, each Buyer's 401(k) Plan shall indemnify and hold
harmless the corresponding Fiberite 401(k) Plan from and against all liabilities
attributable to the account balances transferred to such Buyer's 401(k) Plan.
Section 4.16 Tax Cooperation. The Parties and their respective
Affiliates shall cooperate in the preparation of all Returns relating in whole
or in part to taxable periods ending on or before or including the Closing Date
("Straddle Periods") that are required to be filed after such date. Such
cooperation shall include, but not be limited to, furnishing prior years'
Returns or return preparation packages illustrating previous reporting practices
or containing historical information relevant to the preparation of such
Returns, providing reasonable access to employees with knowledge of such Returns
during regular business hours and furnishing such other information within such
Party's possession requested by the Party filing such Returns as is relevant to
their preparation. Additionally, Buyer shall prepare the initial draft of any
such Straddle Period Return to the extent relating to the Acquired Businesses
(provided that Buyer shall have no liability to any other Party for the accuracy
thereof) and a Party filing any such Returns (the "Filing Party") shall mail a
draft copy of such Returns to the other party (the "Non-Filing Party"), not less
than 30 days prior to the expected filing date and shall provide the Non-Filing
Party and its representatives, advisors and agents with such materials and such
access to the books and records of the Filing Party related to such Return so
that the Non-Filing Party may review and comment on such Return prior to the
filing thereof. The Filing Party and the Non-Filing Party shall mutually agree
on the final preparation content and filing of any Return referred to in this
Section 4.16.
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Section 4.17 Multiemployer Plan Matters.
(a) Buyer acknowledges and agrees that it is assuming
hereunder the Collective Bargaining Agreement and, hence the obligations of
Fiberite under the Multiemployer Plan in effect pursuant to such Collective
Bargaining Agreement commencing on and after the Closing Date. With respect to
such Multiemployer Plan, to avoid imposition of withdrawal liability on
Fiberite, Buyer shall, (A) by virtue of its assumption of the Collective
Bargaining Agreement have an obligation as of the Closing Date to contribute to
the Multiemployer Plan (with respect to operations conducted with the Acquired
Assets) for substantially the same number of contribution base units for which
Fiberite had an obligation to contribute and (B) for a period of five plan years
commencing with the first plan year beginning after the Closing Date, provide or
deliver to, or establish in favor of, the Multiemployer Plan any required bond,
required escrow or any other security required pursuant to or under ERISA
Section 4202(a)(1)(B). Such Bond, escrow or other security shall be paid in
accordance with ERISA Section 4204(a)(1)(B), if required. If Buyer withdraws in
a complete or partial withdrawal with respect to operations conducted with
assets acquired pursuant to this Agreement during such first five plan years,
Fiberite shall be secondarily liable for any withdrawal liability it would have
had to the Multiemployer Plan if the liability of the Buyer is not paid.
(b) Fiberite agrees to cooperate with Buyer with respect to
any request that any Multiemployer Plan waive the bond, escrow or security
requirements of Section 4204(a)(1)(B) of ERISA so as to eliminate any
requirement that Buyer provide such bond, escrow or security described above in
subparagraph (a) above. In the event any such variance or exemption is granted,
Buyer's obligation to provide the bond, escrow or other security shall be
eliminated during the period that such variance or exemption is in effect.
(c) Fiberite agrees to cooperate with any request by Buyer, on
Seller's behalf, for a variance or exemption from any bond, escrow or security
requirements under Section 4201(a)(3) of ERISA and Fiberite agrees to cooperate
with Buyer in making such request.
(d) Buyer shall pay all costs and expenses of Fiberite in
connection with any bond or other security which Fiberite is obligated to obtain
or provide pursuant to this Section 4.19 or to satisfy Section 4204 of ERISA;
provided, however, that Buyer may, at Buyer's expense, obtain or provide such
bond or security on Fiberite's behalf. Buyer shall remain primarily liable to
28
Fiberite for any liabilities, costs and expenses which are incurred or become
payable by Fiberite which would not have otherwise been incurred or payable by
Fiberite to the Multiemployer Plan but for the transaction contemplated by this
Agreement or Buyer's withdrawal from the Multiemployer Plan. Buyer and Fiberite
shall promptly notify the other party of any demand for payment of withdrawal
liability received by it or any of its Affiliates from the Multiemployer Plan.
Section 4.18 No Dissolution. Stamford agrees not to cause the
dissolution of Fiberite or Fiberite Holdings or otherwise cause the corporate
existence of Fiberite or Fiberite Holdings to cease, and Fiberite and Fiberite
Holdings agree not to dissolve or otherwise cause its corporate existence to
cease, in each case if such action would adversely affect Buyer, including,
without limitation, in respect of any indemnification rights assigned to Buyer
hereunder or to be provided to Buyer pursuant to Section 4.15; provided, that
under no circumstances shall Fiberite or Fiberite Holdings be dissolved prior to
the second anniversary of the Closing Date. Notwithstanding the foregoing,
Fiberite Holdings, Stamford and Fiberite may consummate the Permitted Merger.
Section 4.19 Directors' and Officers' Insurance. Buyer agrees
to maintain in effect for not less than six years after the Closing Date the
current policies of directors' and officers' liability insurance maintained by
Fiberite with respect to matters occurring prior to the Closing Date; provided,
however, that (i) Buyer may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous to the
covered officers and directors and (ii) Buyer shall not be required to pay an
annual premium for such insurance coverage in excess of one hundred and
twenty-five percent (125%) of the current annual premium paid by Fiberite for
its existing coverage, but in such case shall purchase as much coverage as
possible for such amount. If Buyer proposes to change the liability insurance
coverage referred to in this Section 4.19 such change shall become effective
upon obtaining the consent from a duly appointed representative of the persons
covered by such liability insurance (which consent shall not be unreasonably
withheld). In addition, Buyer hereby waives any and all claims that Buyer may
have against the current and former officers and directors of Fiberite and its
subsidiaries in their capacities as such.
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Section 4.20 Closing of Stock Purchase Agreement.
(a) Stamford shall not consummate the transactions
contemplated by the Stock Purchase Agreement unless each of the conditions
contained in Article VI and VII of the Stock Purchase Agreement shall have been
satisfied and complied with to the satisfaction of Buyer and Buyer shall have
delivered written notice to such effect to Stamford (it being understood that
the Satisfaction Notice shall be irrevocable) (the "Satisfaction Notice") (it
being agreed that none of such conditions shall be waived without Buyer's prior
written consent). Upon such closing, Stamford shall cause Fiberite Holdings and
Fiberite to execute and deliver this Agreement.
(b) If Hexcel shall have terminated the Hexcel Agreement
pursuant to Section 5.1(a), (c) or (d) thereof, then this Agreement shall be
amended to include within the Acquired Assets the assets which were to be
acquired by Hexcel under the Hexcel Agreement and include within the Assumed
Liabilities the liabilities which were to be assumed by Hexcel under the Hexcel
Agreement, and in such event, the Purchase Price shall be increased by the
amount that would have been paid under Section 1.2 of the Hexcel Agreement.
Section 4.21 Closing of Hexcel Agreement. Stamford shall not
permit the closing of the transactions contemplated by the Hexcel Agreement to
occur prior to the earlier of (x) the Closing Date and (y) 60 days after the
closing of the Stock Purchase Agreement. Stamford shall not amend or modify any
provision of the Hexcel Agreement without the prior written consent of Buyer.
Buyer acknowledges that it has reviewed the terms and conditions of the Hexcel
Agreement, the Hexcel License and the Transition Services Agreement. As a
result, Buyer agrees that it shall not hold Stamford, Fiberite Holdings or
Fiberite or any of their Affiliates liable or pursue any action against any such
person or entity for any breach, violation or failure to comply with any of the
terms of this Agreement which result from the compliance or performance by
Stamford, Fiberite Holdings or Fiberite or any of their subsidiaries with the
terms and conditions of the Hexcel Agreement, the Hexcel License and the
Transition Services Agreement.
Section 4.22 Alternative Transaction. If the Regulatory
Approvals have not been obtained or have been denied and Buyer shall determine
to cease seeking such approvals or any writ, order, decree or injunction of a
court of competent jurisdiction, governmental entity or regulatory body shall be
in effect against any of the Parties or their respective subsidiaries which
prohibits or restricts the consummation of the
30
transactions contemplated by this Agreement, then (i) Buyer shall be permitted
to assign its rights under this Agreement to any person or persons selected by
Buyer and (ii) Stamford and Fiberite shall take all actions (and execute all
documents and agreements) reasonably requested by Buyer (at Buyer's expense) and
shall otherwise cooperate with Buyer in the disposition of all or any part of
the Acquired Assets and the Assumed Liabilities to any person or persons
selected by Buyer (an "Alternative Transaction") in each case for the account
and benefit of Buyer and as determined by Buyer in its sole discretion;
provided, that Buyer shall have paid the Purchase Price and Buyer shall
indemnify and hold harmless Stamford, Fiberite and each of their respective
Affiliates for any losses or liability that is incurred by any such person to
the extent arising out of or resulting from the consummation of an Alternative
Transaction. Buyer shall be required to consummate an Alternative Transaction no
later than the 270th day after the closing of the Stock Purchase Agreement if
the Closing shall not have theretofore occurred.
Section 4.23 Indemnification for Notices. Whether or not the
transactions contemplated by this Agreement are consummated, if any notices are
transmitted to, or any other action is taken with respect to, any Affected
Employee at the request of Buyer, Buyer agrees to indemnify Fiberite and
Stamford for any liability that arises as a result of any such notice or action.
ARTICLE V
TERMINATION AND ABANDONMENT
Section 5.1 Termination. This Agreement may be terminated at
any time prior to the closing of the Stock Purchase Agreement:
(a) by mutual written consent of Stamford and Buyer;
(b) by either Stamford or Buyer if the Stock Purchase
Agreement shall have been terminated; or
(c) by Buyer or Stamford if Buyer shall not have delivered the
Satisfaction Notice to Stamford pursuant to Section 4.20 hereof.
Section 5.2 Procedure for Termination. In the event of
termination and abandonment of the transactions contemplated by this Agreement
by Stamford or Buyer pursuant to this
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Article V, written notice thereof shall forthwith be given to the other.
Section 5.3 Effect of Termination and Abandonment. In the
event of proper termination of this Agreement and abandonment of the
transactions contemplated by this Agreement pursuant to this Article V, no Party
hereto (or any of its directors or officers) shall have any liability or further
obligation to any other Party to this Agreement, except that in such event
nothing herein shall relieve any Party from liability for any breach of this
Agreement.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 6.1 Survival of Representations and Warranties,
Covenants, etc. Except for the respective covenants and other agreements of the
Parties made in this Article VI and Article VII hereof, the respective
representations, warranties, covenants and other agreements of the Parties shall
not survive the Closing or any termination of this Agreement. Notwithstanding
the foregoing, this Section 6.1 shall not limit any covenant or agreement of the
Parties which contemplates performance after the Closing, including, without
limitation, any such covenants and agreements set forth in Article IV hereof and
in the Undertaking; provided, however, that with respect to covenants and
agreements of Stamford, Fiberite Holdings, Fiberite and each of their respective
subsidiaries, the Parties hereto agree that irrespective of whether or not any
such covenant or agreement contemplates performance after the Closing, if such
performance cannot be performed as a result of the transactions contemplated by
the Hexcel Agreement, the Hexcel License or the Transition Services Agreement,
such covenant or agreement shall be deemed not to have survived the Closing for
purposes of determining whether such covenant or agreement has been breached or
violated by Stamford, Fiberite Holdings, Fiberite or any of their respective
subsidiaries.
Section 6.2 Fiberite's and Stamford's Agreements to
Indemnify.
(a) Subject to the terms, conditions and limitations set forth
in Sections 4.21, 6.1, 6.2(b), 6.2(c) and 6.5, from and after the Closing Date,
Stamford and Fiberite, jointly and severally, shall defend, indemnify and hold
harmless Buyer, its Affiliates and if applicable, their respective directors,
officers, employees, attorneys, representatives and agents, and
32
each of the heirs, executors, successors and assigns of any of the foregoing
(each a "Buyer Indemnitee") of Buyer from and against any costs or expenses
(including, without limitation, reasonable attorneys' fees, investigation costs
and remediation costs), judgments, fines, losses, actions, claims, damages and
assessments of any nature (collectively, the "Losses") imposed on, sustained,
incurred or suffered by or asserted against any Buyer Indemnitee that arise out
of or relate to (i) any breach of or failure to perform any covenant to be
performed on or after the closing of the Stock Purchase Agreement made by or on
behalf of Stamford or Fiberite under this Agreement, the Other Instruments or in
any certificate, exhibit or other instrument contemplated by this Agreement and
delivered by Stamford or Fiberite in connection herewith (a "Stamford Covenant")
and (ii) (except as otherwise provided in Section 6.2(b)) the Excluded
Liabilities.
(b) Notwithstanding anything in this Agreement to the
contrary, to the extent that (i) any Losses are sustained, incurred or suffered
by or asserted against any Buyer Indemnitee and (ii) such Losses arise out of or
relate to any Excluded Liabilities which are assumed by Hexcel pursuant to the
Hexcel Agreement, the Parties agree that (A) neither Stamford nor Fiberite shall
have any liability under this Agreement or any obligation pursuant to the terms
of this Agreement or otherwise to defend, indemnify or hold harmless any Buyer
Indemnitee with respect to any such Losses and (B) no Buyer Indemnitee shall
have any right to indemnification hereunder with respect to any such Losses.
(c) Notwithstanding anything in this Agreement to the
contrary, to the extent that any Losses are sustained, incurred or suffered by
or asserted against any Buyer Indemnitee and such Losses arise out of or relate
to any breach of or failure to perform any Stamford Covenant which, as the
result of the consummation of the transactions contemplated by the Hexcel
Agreement, the Hexcel License or the Transition Services Agreement, cannot be
performed by or on behalf of Stamford or Fiberite, the Parties agree that (A)
neither Stamford nor Fiberite shall have any obligation pursuant to the terms of
this Agreement to defend, indemnify or hold harmless any Buyer Indemnitee with
respect to any such Losses and (B) no Buyer Indemnitee shall have any right to
indemnification hereunder with respect to any such Losses. Moreover, the Parties
agree that it shall not constitute a breach of or a failure by Fiberite or
Stamford to perform any Stamford Covenant if the conduct or action taken or
failure to take any action which would have been the basis for such breach or
failure (but for this sentence) was required to be performed or omitted to be
performed in accordance
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with the terms of the Hexcel Agreement.
Section 6.3 Buyer's Agreement to Indemnify. Subject to the
terms, conditions and limitations set forth in Sections 6.1 and 6.5 hereof, from
and after the Closing, Buyer shall defend, indemnify and hold harmless Stamford
and Fiberite and their respective Affiliates, and if applicable, their
respective directors, officers, attorneys, representatives and agents and each
of the heirs, executors, successors and assigns of any of the foregoing (each a
"Seller Indemnitee") of Stamford, Fiberite Holdings and Fiberite from and
against any Losses imposed on, sustained, incurred or suffered by or asserted
against any Seller Indemnitee that arise out of or are the result of (i) any
breach of or failure to perform any covenant to be preformed prior to, on or
after the Closing Date made by or on behalf of Buyer under this Agreement, the
Other Instruments or in any certificate, exhibit or other instrument
contemplated by this Agreement and delivered by Buyer in connection herewith,
(ii) Buyer's pursuit of any claim pursuant to Section 1.1(f) hereof and (iii)
the Assumed Liabilities.
Section 6.4 Indemnification Based on Net Damage. In
calculating amounts payable from a party required to indemnify a party under
this Agreement (the "Indemnifying Party") to a party entitled to indemnification
under this Agreement (an "Indemnified Party"), the amount of the indemnified
Losses shall be computed net of payments received by the Indemnified Party under
any insurance policy or contract with respect to such Losses.
Section 6.5 Third Party Claims. In the event that a claim for
indemnification ("Claim") involves a claim by a Third Party against the
Indemnified Party, the Indemnifying Party shall notify the Indemnified Party in
writing within ten business days after receipt of written notice from the
Indemnified Party if it agrees to undertake the defense thereof. The written
notice provided to the Indemnifying Party from the Indemnified Party shall be
delivered promptly following the Indemnified Party's obtaining knowledge of the
Claim and shall state the basis of the Claim with reasonable specificity,
including the Section or Sections of this Agreement alleged to have been
breached. If the Indemnifying Party so notifies the Indemnified Party, then the
Indemnifying Party shall control such defense and shall bear all costs of such
defense, provided, that the Indemnified Party may participate in such settlement
or defense through counsel chosen by it (the fees and expenses of which shall be
borne by the Indemnified Party). Notwithstanding anything in this Section 6.5 to
the contrary, the Indemnifying Party may, with the consent of the Indemnified
Party (which consent shall not be unreasonably withheld), settle or compromise
any action or consent to the
34
entry of any judgment which includes as a term thereof the delivery by the
claimant or plaintiff to the Indemnified Party of a duly executed written
unconditional release of the Indemnified Party from all liability in respect of
such action, which release shall be reasonably satisfactory in form and
substance to counsel for the Indemnified Party. If the Indemnifying Party does
not notify the Indemnified Party within ten business days after the receipt of
the Indemnified Party's notice of a claim of indemnity hereunder that it elects
to undertake the defense thereof, the Indemnified Party shall have the right to
contest, settle or compromise the claim but shall not thereby waive any right to
indemnity therefor pursuant to this Agreement. Notwithstanding the foregoing,
the Indemnified Party, during the period the Indemnifying Party is determining
whether to elect to assume the defense of a matter covered by this Section 6.5,
may take such reasonable actions as it deems necessary to preserve any and all
rights with respect to the matter, without such actions being construed as a
waiver of the Indemnified Party's rights to defense and indemnification pursuant
to this Agreement. No failure to provide any notice required by this Section 6.5
shall relieve the Indemnifying Party of any obligation to indemnify the
Indemnified Party hereunder except to the extent that the Indemnifying Party is
actually prejudiced thereby.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Fees, Expenses and Taxes.
(a) Whether or not the transactions contemplated herein are
consummated pursuant hereto, except as otherwise provided herein, each of the
Parties shall pay all of its respective fees and expenses incurred by, or in
connection with, or in anticipation of, this Agreement and the consummation of
the transactions contemplated hereby and thereby. Each of the Parties shall
indemnify and hold harmless the other parties from and against any and all
claims or liabilities for brokerage commissions and financial advisory and
finders' fees incurred by reason of any action taken by such Party or otherwise
arising out of the transactions contemplated by this Agreement by any person
claiming to have been engaged by such Party. Notwithstanding Section 4.6 hereof,
Buyer shall be responsible for the payment of any fee, sales tax, transfer tax,
filing expense or other charge incurred in connection with the transfer of the
Acquired Assets and/or the Acquired Business (including legal expenses in
respect of the preparation of transfer documents).
35
(b) Each of Buyer and Fiberite shall provide the other with
such assistance and documents, without charge, as may be reasonably requested by
either of them in connection with the preparation of any Return, the conduct of
any audit or administrative or court proceeding, and any other Tax related
matter that is a subject of this Agreement. Such cooperation and assistance
shall be provided to the requesting Party promptly upon its request.
(c) Each of Buyer, Fiberite Holdings (or any successor) and
Fiberite shall notify the others in the event that it is taking, or any taxing
authority is taking or proposing to take, a position inconsistent with the
treatment of an indemnification payment, as an adjustment to the Allocable
Amount for Tax purposes, including, without limitation, in connection with all
income Tax Returns and all proceedings in connection with income Taxes.
Section 7.2 Further Assurances. From time to time after the
Closing Date, at the request of another Party hereto and at the expense of the
Party so requesting, each of the Parties hereto shall execute and deliver to
such requesting Party such documents and take such other action as such
requesting Party may reasonably request in order to consummate more effectively
the transactions contemplated hereby.
Section 7.3 Notices. All notices, requests, demands, waivers
and other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service.
Notices shall be sent to the appropriate Party at its address or facsimile
number given below (or at such other address or facsimile number for such Party
as shall be specified by notice given hereunder):
If to Stamford, to:
Stamford FHI Acquisition Corp.
000 Xxxxxxx Xx.
Xxxxxx, XX 00000
(000) 000-0000
Attention: President
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with copies to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx Xxxxx Xxxxx, Esq.
If to Fiberite Holdings or Fiberite, to:
Fiberite, Inc.
000 Xxxxxxx Xx.
Xxxxxx, XX 00000
(000) 000-0000
Attention: President
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx Xxxxx Xxxxx, Esq.
If to Buyer, to:
Cytec Industries Inc.
Five Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
with copies to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
All such notices, requests, demands, waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
thereof to the appropriate address or (iii) in the case of a facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In the case of
notices sent by facsimile transmission,
37
the sender shall contemporaneously mail a copy of the notice to the addressee at
the address provided for above. However, such mailing shall in no way alter the
time at which the facsimile notice is deemed received.
Section 7.4 Severability. Should any provision of this
Agreement for any reason be declared invalid or unenforceable, such decision
shall not affect the validity or enforceability of any of the other provisions
of this Agreement, which remaining provisions shall remain in full force and
effect and the application of such invalid or unenforceable provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable shall be valid and enforced to the fullest extent permitted by
law.
Section 7.5 Binding Effect; Assignment. This Agreement and all
of the provisions hereof shall be binding upon and shall inure to the benefit of
the Parties and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, directly or indirectly, including, without limitation, by operation of
law, by any Party hereto without the prior written consent of the other parties
hereto. Notwithstanding anything herein to the contrary, this Section 7.5 shall
not preclude and Buyer's consent shall not be required for (a) the Permitted
Merger and the transfer of Stamford's rights hereunder caused thereby or (b) the
assignment of Stamford's or Fiberite's rights hereunder to any lender of
Permitted Debt as collateral security for such Permitted Debt and Buyer agrees
to execute any customary agreements or instruments to effect such assignment
that Stamford or such lender shall reasonably request.
Section 7.6 Bulk Sales Law. Buyer hereby waives compliance by
Fiberite with the requirements and provisions of any "bulk-transfer" laws of any
jurisdiction that may otherwise be applicable with respect to the transactions
contemplated by this Agreement.
Section 7.7 No Third Party Beneficiaries. This Agreement is
solely for the benefit of Stamford, Fiberite and their respective successors and
permitted assigns, with respect to the obligations of Buyer under this
Agreement, and for the benefit of Buyer, and its respective successors and
permitted assigns, with respect to the obligations of Stamford and Fiberite,
under this Agreement, and this Agreement shall not be deemed to confer upon or
give to any other third party any remedy, claim, liability, reimbursement, cause
of action or other right.
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Section 7.8 Interpretation.
(a) The article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
(b) As used in this Agreement, the term "person" shall mean
and include an individual, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.
(c) As used in this Agreement, the term "Affiliate" shall have
the meaning set forth in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended.
Section 7.9 Jurisdiction and Consent to Service. Without
limiting the jurisdiction or venue of any other court, each of the Parties (i)
agree that any suit, action or proceeding arising out of or relating to this
Agreement may be brought solely in the state or Federal courts of New York; (ii)
consent to the exclusive jurisdiction of each such court in any suit, action or
proceeding relating to or arising out of this Agreement; (iii) waive any
objection which it may have to the laying of venue in any such suit, action or
proceeding in any such court; and (iv) agree that service of any court paper may
be made in such manner as may be provided under applicable laws or court rules
governing service of process.
Section 7.10 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
(regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof) as to all matters, including but not limited to
matters of validity, construction, effect, performance and remedies.
Section 7.11 Entire Agreement. This Agreement, the Schedules,
and the Exhibits and other documents referred to herein or delivered pursuant
hereto which form a part hereof constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the parties or any
of them with respect to the subject matter hereof. The confidentiality agreement
made prior to the date of this Agreement between Fiberite and Buyer is hereby
terminated effective as of the Closing Date with respect to the Acquired Assets.
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Section 7.12 Amendment, Modification and Waiver. This
Agreement may be amended, modified or supplemented at any time only by mutual
written agreement of Stamford and Buyer. Any failure of Stamford and Fiberite,
on the one hand, or Buyer, on the other hand, to comply with any term or
provision of this Agreement may be waived, with respect to Buyer, by Stamford
and, with respect to Stamford or Fiberite, by Buyer, by an instrument in writing
signed by or on behalf of the appropriate party, but such waiver or failure to
insist upon strict compliance with such term or provision shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure to
comply.
Section 7.13 Specific Performance. The parties acknowledge and
agree that any breach of the terms of this Agreement would give rise to
irreparable harm for which money damages would not be an adequate remedy and
accordingly the parties agree that, in addition to any other remedies, each
shall be entitled to enforce the terms of this Agreement by a decree of specific
performance without the necessity of proving the inadequacy of money damages as
a remedy.
Section 7.14 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 7.15 Effective Date. This Agreement shall be deemed an
agreement between Stamford and Buyer until executed by Fiberite and Fiberite
Holdings at which time it shall be deemed to be an agreement between Buyer,
Stamford, Fiberite and Fiberite Holdings, and Stamford shall cause Fiberite and
Fiberite Holdings to execute this Agreement immediately following the closing of
the Stock Purchase Agreement (the "Effective Date"). Without limiting the
generality of the foregoing, all representations, warranties, covenants or other
obligations of any kind made or incurred by Fiberite as a result of the
execution and delivery of this Agreement shall be deemed to have been made as
of, and Fiberite shall deliver its Schedules applicable to the representations
and warranties it is making at, the time of its delivery of a signature page
hereto.
Section 7.16 Risk of Loss. From the date hereof through the
Closing Date, all risk of loss or damage to such properties shall be borne by
Buyer.
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ARTICLE VIII
CERTAIN DEFINITIONS
For the purposes of this Agreement, the following words and
phrases shall have the following meanings:
"Acquired Assets" has the meaning assigned in
Section 1.1(a).
"Acquired Businesses" means the entire business conducted by
Fiberite as of the Closing Date, other than the Excluded Business.
"Acquired Intellectual Property" has the meaning
assigned in Section 1.1(a)(x).
"Affected Employee" has the meaning assigned in
Section 4.7(a).
"Affiliate" has the meaning assigned in Section 7.8(c).
"Agreement" means this agreement, dated as of August 25, 1997,
together with any amendments hereto, by and among Fiberite, Fiberite Holdings,
Stamford and Buyer.
"Allocable Amount" has the meaning assigned in
Section 4.12.
"Allocation Statement" has the meaning assigned in
Section 4.12.
"Alternative Transaction" has the meaning assigned in
Section 4.22.
"Antitrust Division" has the meaning assigned in
Section 4.3.
"Assumed Liabilities" has the meaning assigned in
Section 1.1(d).
"Xxxx of Sale and Assignment" means the duly executed xxxx of
sale and assignment agreement, substantially in the form attached hereto as
Exhibit B, which each of Stamford, Fiberite, Fiberite Holdings and each Domestic
Subsidiary will deliver to Buyer effecting the sale, assignment, transfer and
delivery of the Acquired Assets.
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"Business Records" has the meaning assigned in
Section 4.11.
"Buyer" means Cytec Industries Inc., a Delaware
corporation.
"Buyer Designees" has the meaning assigned in
Section 1.1(a).
"Buyer Indemnitee" has the meaning assigned in
Section 6.2(a).
"Buyer's 401(k) Plans" has the meaning assigned in
Section 4.15.
"Claim" has the meaning assigned in Section 6.5.
"Closing" means the closing of the transactions
described in Section 1.3.
"Closing Date" means the date of the Closing as
determined pursuant to Section 1.3.
"Code" means the Internal Revenue Code of 1986, as amended.
All citations to the Code, or to the Treasury Regulations promulgated
thereunder, shall include any amendments or substitute or successor provisions
thereto.
"Collective Bargaining Agreement" means the collective
bargaining agreement, between Fiberite, Inc. and General Truck
Drivers, Office, Food & Warehouse Union, Teamsters Local 952.
"Common Stock" means the shares of common stock, par value
$.01 per share, of Fiberite Holdings.
"Deeds" has the meaning assigned in Section 1.1(b).
"Deposit" has the meaning assigned in
Section 1.2(a)(i).
"Domestic Subsidiary" has the meaning assigned in
Section 1.1(a)(xviii).
"Effective Date" has the meaning assigned in
Section 7.15.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
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"Excluded Assets" has the meaning assigned in
Section 1.1(c).
"Excluded Business" has the meaning assigned in
Section 1.1(c)(ii).
"Excluded Liabilities" has the meaning assigned in
Section 1.1(e).
"Executives" has the meaning assigned in
Section 7.4(d).
"Fiberite" means Fiberite, Inc., a Delaware
corporation.
"Fiberite France" has the meaning assigned in
Section 1.1(a)(xvi).
"Fiberite Holdings" means Fiberite Holdings, Inc., a
Delaware corporation.
"Fiberite 401(K) Plans" has the meaning assigned in
Section 4.15.
"Filing Party" has the meaning assigned in
Section 4.16.
"FIRPTA Certificate" has the meaning assigned in
Section 1.4(c).
"FTC" has the meaning assigned in Section 4.3.
"German Subsidiary" has the meaning assigned in
Section 1.1(a)(xvi).
"Government Contract" has the meaning assigned in the
Stock Purchase Agreement.
"Hexcel" means Hexcel Corporation, a Delaware
corporation.
"Hexcel Agreement" means the Asset Purchase Agreement dated as
of August 25, 1997, by and among Fiberite, Fiberite Holdings, Stamford and
Hexcel.
"Hexcel License" means the license contemplated by the
Hexcel Agreement.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
43
Improvements Act of 1976, as amended.
"Indemnified Party" has the meaning assigned in
Section 6.4.
"Indemnifying Party" has the meaning assigned in
Section 6.4.
"Intellectual Property" shall mean throughout the world (i)
Patents, (ii) Trademarks, (iii) Trade Names, (iv) Know-how, (v) shop rights and
(vi) copyrights.
"Inventory" has the meaning assigned in Sec
tion 1.1(a)(iv).
"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.
"Liens" means all mortgages, pledges, security interests,
liens, changes, options, easements, rights of way or other encumbrances.
"Losses" has the meaning assigned in Section 6.2(a).
"Management Fee" means a fee of $25,000 per month payable only
if the Closing Date has not occurred prior to December 1, 1997.
"Material Adverse Effect" means an event which has a material
adverse effect on the business, operations, financial condition or results of
operations of the Acquired Businesses taken as a whole, or materially impairs
the value or usefulness of the Acquired Assets taken as a whole.
"Multiemployer Plan" has the meaning assigned in
Section 1.1(d)(v).
"Non-Assigned Contracts" has the meaning assigned in
Section 4.13.
"Non-Filing Party" has the meaning assigned in
Section 4.16.
44
"Other Instruments" has the meaning assigned in
Section 1.1(b).
"Parties" has the meaning set forth in the preamble.
"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.
"Permitted Debt" means indebtedness to finance the
transactions contemplated by the Stock Purchase Agreement in an amount and on
terms approved by Buyer in writing.
"Permitted Liens" means mechanics', carriers', workers',
repairers', materialmens', warehousemens' and other similar Liens arising or
incurred in the ordinary course of business consistent with past practice and
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
"Permitted Merger" means the merger of Stamford and Fiberite
Holdings with and into Fiberite, with Fiberite as the surviving corporation
immediately following the closing of the Stock Purchase Agreement.
"person" has the meaning assigned in Section 7.8(b).
"Plans" means the Fiberite, Inc. Pension Plan, the
Fiberite, Inc. Service Related Pension Plan, the Fiberite, Inc.
401(k) Plan I, and the Fiberite, Inc. 401(k) Plan II.
"Prior Hexcel Agreement" means the Asset Purchase Agreement,
dated as of April 21, 1997, by and among Stamford, Fiberite and Hexcel.
"Prior Occurrences" has the meaning assigned in
Section 4.8.
"Purchase Price" has the meaning assigned in
Section 1.2(a).
"Regulatory Approvals" means all necessary consents and
approvals of any United States or any other governmental authority that are
required for the consummation of the transactions contemplated by this Agreement
and the expiration or termination of any waiting period applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act and under any applicable Antitrust and competition law
45
statutes and regulations of foreign jurisdictions, or other applicable law.
"Remainder" has the meaning assigned in
Section 1.2(a)(ii).
"Return" means any report, return or other information filed
with or required to be supplied to a taxing authority in connection with Taxes.
"Satellite Business" means Fiberite's business of developing,
manufacturing and selling composite materials, or components thereof, for
incorporation into satellites as of the date of the closing of the Hexcel
Agreement.
"Satisfaction Notice" has the meaning assigned in
Section 4.20(a).
"Seller Indemnitee" has the meaning assigned in
Section 6.3.
"Selling Stockholders" shall refer to the stockholders and
optionholders of Fiberite Holdings existing immediately prior to the closing of
the Stock Purchase Agreement.
"Stamford" means Stamford FHI Acquisition Corp., a
Delaware corporation.
"Stamford Covenant" has the meaning assigned in
Section 6.2(a).
"Stock Purchase Agreement" means the Stock Purchase and Sale
Agreement, dated as of April 20, 1997, by and among Stamford, Fiberite and the
Selling Stockholders.
"Straddle Periods" has the meaning assigned in
Section 4.16.
"Taxes" means all taxes, assessments, charges, duties, fees,
levies or other governmental charges, including, without limitation, all
Federal, state, local, foreign and other income, gross receipts, franchise,
profits, capital gains, capital stock, transfer, sales, use, occupation,
property, excise, severance, windfall profits, stamp, license, payroll,
withholding, social security and other taxes, assessments, charges, duties,
fees, levies or other governmental charges of any kind whatsoever (whether
payable directly or by withholding and whether or not requiring the filing of a
Return), and all estimated taxes, deficiency assessments, additions to tax,
penalties and interest.
46
"Third Parties" means any parties other than the Parties to
this Agreement and their respective Affiliates.
"Three Party Agreement" means the agreement among Fiberite,
Hexcel and Buyer contemplated by the Hexcel Agreement.
"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.
"Transition Services Agreement" means the Transition
Services Agreement contemplated by the Hexcel Agreement.
"Undertaking" means the duly executed undertaking,
substantially in the form attached hereto as Exhibit C, whereby Buyer will
assume and agree to pay and discharge the Assumed Liabilities.
"Unrelated Assets" means assets acquired by Fiberite after the
closing of the Stock Purchase Agreement from third parties (i) that are
unrelated to, and are not acquired by or for or with funds of, the Acquired
Businesses or the Excluded Business and (ii) the acquisition of which is funded
solely by Stamford.
47
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first above written.
STAMFORD FHI ACQUISITION CORP.
By:/s/Xxxxx Xxxx
-----------------------------------
Title: Vice President
------------------------------
FIBERITE, INC.
By: /s/Xxxxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President
------------------------------
FIBERITE HOLDINGS, INC.
By: /s/Xxxxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President
------------------------------
CYTEC INDUSTRIES INC.
By:/s/X. X. Xxxxxx
-----------------------------------
Title: Executive Vice President and
Chief Financial Officer
------------------------------
