ASSET PURCHASE AGREEMENT
BETWEEN
GREAT LAKES CARBON CORPORATION
AND
▇▇▇▇▇▇▇▇ METALS COMPANY
MARCH 27, 2002
TABLE OF CONTENTS
1. Definitions 1
2. Basic Transaction. 9
(a) Purchase and Sale of Assets 9
(b) Assumption of Liabilities 9
(c) Preliminary Purchase Price 9
(d) The Closing 9
(e) Deliveries at the Closing 9
(f) Preparation of Net Working Capital Statement. 10
(g) Adjustment to Preliminary Purchase Price 10
(h) Allocation 11
3. Representations and Warranties of the Seller 11
(a) Organization of the Seller 11
(b) Authorization of Transaction 11
(c) Noncontravention 11
(d) Brokers' Fees 12
(e) Title to Assets 12
(f) Financial Statements 12
(g) Events Subsequent to January 31, 2001 12
(h) Undisclosed Liabilities 14
(i) Legal Compliance 14
(j) Tax Matters 14
(k) Real Property 14
(l) Intellectual Property 15
(m) Tangible Assets 16
(n) Inventory 16
(o) Contracts 16
(p) Powers of Attorney 17
(q) Insurance 17
(r) Litigation 18
(s) Employees 18
(t) Employee Benefits. 18
(u) Environmental, Health, and Safety Matters. 19
(v) Knowledgeable Persons 21
(w) Investment 21
(x) No Other Representations or Warranties 21
4. Representations and Warranties of the Buyer 21
(a) Organization of the Buyer 21
(b) Authorization of Transaction 21
(c) Noncontravention 21
(d) Brokers' Fees 22
5. Pre-Closing Covenants 22
(a) General 22
(b) Notices and Consents 22
(c) Operation of Business 22
(d) Preservation of Business 22
(e) Full Access 22
(f) Notice of Developments 22
(g) Maintenance of Real Property 22
(h) Leases 23
6. Post-Closing Covenants 23
(a) General 23
(b) Litigation Support 23
(c) Mail and Payments 23
(d) Confidentiality 24
(e) Covenant Not to Compete 24
(f) Buyer Notes 25
7. Conditions to Obligation to Close. 25
(a) Conditions to Obligation of the Buyer 25
(b) Conditions to Obligation of the Seller 27
8. Remedies for Breaches of This Agreement 28
(a) Survival of Representations and Warranties 28
(b) Indemnification Provisions for Benefit of the Buyer 28
(c) Indemnification Provisions for Benefit of the Seller 29
(d) Matters Involving Third Parties 29
(e) Determination of Losses 30
(f) Offset 30
(g) Other Indemnification Provisions 30
9. Termination. 31
(a) Termination of Agreement 31
(b) Effect of Termination 31
10. Miscellaneous. 31
(a) Press Releases and Public Announcements 31
(b) No Third-Party Beneficiaries 32
(c) Entire Agreement 32
(d) Succession and Assignment 32
(e) Counterparts 32
(f) Headings 32
(g) Notices 32
(h) Governing Law 33
(i) Taxes 33
(j) Amendments and Waivers 34
(k) Severability 34
(l) Expenses 34
(m) Risk of Loss 34
(n) Construction 35
(o) Incorporation of Exhibits and Schedules 35
(p) Specific Performance 35
(q) Employee Matters. 35
Exhibit A - Transition Services Agreement
Exhibit B - [Intentionally omitted]
Exhibit C - Form of Buyer Notes
Exhibit D-1 - D-2 - Forms of Assignments
Exhibit E - Form of Assumption
Exhibit F - Historical Financial Statements
Exhibit G - [Intentionally omitted]
Exhibit H - Form of Opinion of Counsel to the Seller
Exhibit I - Form of Opinion of Counsel to the Buyer
Disclosure Schedule - Exceptions to Representations and Warranties
ASSET PURCHASE AGREEMENT
Agreement entered into as of March 27, 2002 by and between Great Lakes
Carbon Corporation, a Delaware corporation (the "Buyer"), and ▇▇▇▇▇▇▇▇ Metals
Company, a Delaware corporation (the "Seller"). The Buyer and the Seller are
referred to collectively herein as the "Parties".
The Seller owns and operates a facility in Baton Rouge, Louisiana (the
"Baton Rouge Facility") engaged in the purchase of anode grade green petroleum
coke and the manufacture of calcined petroleum coke (as operated by the Seller
at the Baton Rouge Facility, the "Business"). This Agreement contemplates a
transaction in which the Buyer will purchase all of the assets (and assume
certain of the liabilities) of the Business from the Seller in return for cash
and the Buyer Notes (as defined below).
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and the plural forms of the terms defined):
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Acquired Assets" means all right, title, and interest in and to all of
the assets constituting the Business, including all of its (a) Real Property,
(b) tangible personal property used in the operation of the Business (such as
machinery, equipment, inventories of raw materials and supplies, manufactured
and purchased parts, goods in process and finished goods, furniture, and
vehicles, (c) the Business Intellectual Property, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions, except to the extent that
any required third-party consents are not obtained with respect to the transfer
of such Business Intellectual Property, as to which the provisions of 6(a) shall
apply, (d) leases, subleases, and rights thereunder, (e) agreements, contracts,
instruments, Security Interests, guaranties, other similar arrangements, and
rights thereunder, (f) claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of recoup-
ment (including any such item relating to the payment of Taxes to the extent
included on the Closing Date Net Working Capital Statement), (g) franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies, and (h)
all books, records, ledgers, files, documents, correspondence, lists, plats,
architectural plans, drawings, specifications, studies, reports, and other
printed or written materials used exclusively by the Business; provided,
however, that the Acquired Assets shall not include, except to the extent
otherwise included on the Closing Date Net Working Capital Statement (the
"Excluded Assets"), (i) Cash and any bank accounts used by the Business, (ii)
the corporate charter, qualifications to conduct business as a foreign corpora-
tion, arrangements with registered agents relating to foreign qualifications,
taxpayer and other identification numbers, seals, minute books, stock transfer
books, blank stock certificates, and other documents relating to the organiza-
tion, maintenance, and existence of the Seller as a corporation,(iii) any of the
rights of the Seller under this Agreement (or under any Ancillary Agreement) and
all intellectual property rights of the Seller or any of its Affiliates used by
the Business on a non-exclusive basis, (iv) all employee benefit plans of the
Business, including, without limitation, employee pension, profit sharing,
401(k), medical benefit or health plans and trusts and related trust accounts,
funds, investments or other assets, (v) all claims, rights and interests in and
to any refunds for any Taxes, assessments, charges or fees for periods prior to
the Closing Date, (vi) all railcars leased or owned by Seller or its Affiliates
(including all railcars leased under that certain Master Railcar Lease dated as
of October 29, 1998), (vii) all claims (and benefits associated with such
claims) against third parties to the extent the claims exclusively relate to
non-assumed liabilities or the Excluded Assets, (viii) all Seller "intercompany"
accounts, where the obligee is the Seller or any of its Affiliates, (ix) all
work product, attorney client privilege and related legal privileges of the
Seller, (x) all legal, accounting and tax records of the Seller, (xi) except to
the extent included within the definition of "Business Intellectual Property,"
all the Seller's proprietary computer programs or other software which are not
used primarily in the Business and all non-assignable, non-transferable computer
leases and software licenses, (xii) all property, casualty, worker's compensa-
tion and other insurance policies or related insurance services contracts
relating to the Seller or any of its Affiliates, and any rights of the Seller
or any of its Affiliates under any such insurance policy or contract, including,
without limitation, rights to any cancellation value, (xiii) all accounts
receivable, notes receivable, negotiable instruments and chattel paper of
Seller, including, without limitation, those arising from the Business, or
(xiv) the Retained Contracts.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Alcoa CPC Agreements" shall collectively refer to the following agree-
ments, each dated as of the date hereof, pursuant to which Alcoa and its
affiliates shall purchase Calcined Coke from GLC: (i) Agreement for the Purchase
and Sale of Calcined Petroleum Coke, by and between GLC and Aluminerie de
Becancour, Inc.; (ii) Agreement for the Purchase and Sale of Calcined Petroleum
Coke, by and between GLC and Alcoa LTD/Alcoa LTEE; (iii) Calcined Coke Supply
Agreement by and between GLC and Alumax of South Carolina, Inc.; (iv) Calcined
Coke Supply Agreement by and between GLC and AlcoaInc.; (v) Calcined Coke
Supply Agreement by and between GLC and Eastalco Aluminum Company; (vi) Agree-
ment for the Purchase and Sale of Calcined Petroleum Coke, by and among GLC and
Alcoa Italia S.p.A.; and (vii) Agreement for the Purchase and Sale of Calcined
Petroleum Coke, by and among GLC and Aluminio Espanol, S.A.
"Ancillary Agreements" means the Buyer Notes and the Transition
Services Agreement substantially in the form attached hereto as Exhibit A.
"Applicable Rate" means the corporate base rate of interest publicly
announced from time to time by Bank of America.
"Assumed Liabilities" means the following Liabilities of the Business
(a) all Liabilities of the Business set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto), (b) all Liabilities of the
Business which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (other than any Liability resulting from, arising
out of, relating to, in the nature of, or caused by any breach of contract,
breach of warranty, tort, infringement, violation of law, or environmental
matter, including without limitation those arising under Environmental, Health,
and Safety Requirements), (c) all obligations of the Business under the agree-
ments, contracts, leases, licenses, and other arrangements referred to in the
definition of Acquired Assets and (d) all other Liabilities and obligations of
the Business set forth on Schedule 1(a) of the Disclosure Schedules under an
express statement (that the Buyer has initialed) to the effect that the
definition of Assumed Liabilities will include the Liabilities and obligations
so disclosed; provided, however, that the Assumed Liabilities shall not include,
except to the extent otherwise included on the Closing Date Net Working Capital
Statement ("Excluded Liabilities") (i) any Liability of the Seller for unpaid
Taxes (with respect to the Business or otherwise) for periods prior to the
Closing, (ii) any Liability for income Taxes arising in connection with the
consummation of the transactions contemplated hereby, (iii) any Liability of the
Seller for the unpaid Taxes of any Person other than the Seller under Reg.
Sec. 1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract or otherwise, (iv) any obligation of the
Seller to indemnify any Person by reason of the fact that such Person was a
director, officer, employee, or agent of the Seller or was serving at the
request of the Seller as a partner, trustee, director, officer, employee, or
agent of another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or other-
wise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (v) any Liability of the Seller for
costs and expenses incurred in connection with this Agreement and the trans-
actions contemplated hereby, (vi) any Liability or obligation of the Seller
under this Agreement (or under any side agreement between the Seller, on the one
hand, and the Buyer, on the other hand, entered into on or after the date of
this Agreement), (vii) any Liability the obligee of which is the Seller or any
of its Affiliates, or (viii) any Liability arising out of personal injury liti-
gation pending on the Closing Date related to exposure to asbestos at the Baton
Rouge Facility.
"Base" means that portion of the Businesses' green petroleum coke
inventory consisting of an operation base and a static base, as set forth in
the Baton Rouge Green Coke Inventory Detail report dated December 2001 provided
to the Buyer by the Seller.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Baton Rouge Facility" has the meaning set forth in the preface above.
"Brazilian Competition Law" means the Brazilian Antitrust Law of
June 11, 1994.
"Brazilian Filing" means the filing(s) required to be made in connection
with the transactions contemplated by this Agreement pursuant to the Brazilian
Competition Law.
"Business" has the meaning set forth in the preface above.
"Business Intellectual Property" means the Intellectual Property set
forth on the attached Schedule 1(b).
"Buyer" has the meaning set forth in the preface above.
"Buyer Change of Control" means the first date on which one of the
following occur: (a) the acquisition, directly or indirectly, by a person or
group (as such terms are defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended) other than American Industrial Partners Fund II, L.P. or
its Affiliates, in a single transaction or a series of transactions, of (i)
fifty percent (50%) or more of the outstanding stock of the Buyer or an entity
owned by the Buyer or its Affiliates which owns the assets of the Business or
(ii) fifty percent (50%) or more of the assets or operations of the Buyer or the
Business or; (b) any merger, consolidation, reorganization, recapitalization,
business combination, joint venture, lease, or other transaction pursuant to
which the Buyer or the Business or fifty percent (50%) or more of the assets or
operations of the Buyer or the Business are transferred to, acquired by, or
combined with, a Person other than American Industrial Partners Fund II, L.P. or
its Affiliates.
"Buyer Notes" has the meaning set forth inSsec. 2(c) below.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"CBA" has the meaning set forth in Sec. 10(q)(i) below.
"Closing" has the meaning set forth in Sec. 2(d) below.
"Closing Date" has the meaning set forth in Sec. 2(d) below.
"Closing Date Net Working Capital" means an amount, which may be
positive or negative, equal to Current Assets minus Current Liabilities, in each
case determined as of the Closing Date.
"Closing Date Net Working Capital Statement" has the meaning set forth
in Sec. 2(f)(ii) below.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code Sec. 4980B and of any similar state law.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of the Business that is not already generally available
to the public.
"Controlled Group" has the meaning set forth in Code Sec. 1563.
"Current Assets" means that portion of the Acquired Assets consisting of
current assets (which, for the avoidance of doubt, shall exclude (i) Cash, and
(ii) all accounts receivable, notes receivable, negotiable instruments and
chattel paper arising from the Business), as determined in accordance with GAAP;
provided, however, that, for all purposes hereunder, the value of the Base shall
be deemed to be $0.00.
"Current Liabilities" means that portion of the Assumed Liabilities
consisting of current liabilities (excluding all inter-company balances between
the Seller and any of its Affiliates), as determined in accordance with GAAP.
"Dell" has the meaning set forth in Sec. 7(a)(xv) below.
"Dell Lease" has the meaning set forth in Sec. 7(a)(xv) below.
"Disclosure Schedule" has the meaning set forth in Sec. 3 below.
"Draft Net Working Capital Statement" has the meaning set forth in
Sec. 2(f)(i) below.
"Employee Benefit Plan" means any "employee benefit plan" (as such term
is defined in ERISA Sec. 3(3)) and any other employee benefit plan, program or
arrangement of any kind.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Sec. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Sec. 3(1).
"Environmental, Health, and Safety Requirements" shall mean all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants, conta-
minants, toxic chemicals, petroleum products or byproducts, asbestos, poly-
chlorinated biphenyls, noise or radiation, each as amended and as now or here-
after in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each entity which is treated as a single
employer with the Seller for purposes of Code Sec. 414.
"Estimated Net Working Capital" means $23,000,000.00.
"Excluded Assets" has the meaning set forth in the definition of
"Acquired Assets" above.
"Excluded Liabilities" has the meaning set forth in the definition of
"Assumed Liabilities" above.
"Financial Statements" has the meaning set forth in Sec. 3(f) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improve-
ments Act of 1976, as amended.
"HSR Filing" means the filing(s) required to be made in connection with
the transactions contemplated by this Agreement pursuant to the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Act.
"Improvements" means all buildings, structures, fixtures, building
systems and equipment, and all components thereof, including the roof, founda-
tion, load-bearing walls and other structural elements thereof, heating,
ventilation, air conditioning, mechanical, electrical, plumbing and other
building systems, environmental control, remediation and abatement systems;
sewer, storm and waste water systems, irrigation and other water distribution
systems, parking facilities; fire protection, security and surveillance systems,
and telecommunications, computer, wiring and cable installations, included in
the Real Property.
"Indemnified Party" has the meaning set forth in Sec. 8(d)(i) below.
"Indemnifying Party" has the meaning set forth in Sec. 8(d)(i) below.
"Independent Accounting Firm" means KPMG Peat Marwick, or such other
accounting firm mutually agreed to by the Parties.
"Intellectual Property" means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexamina-
tions thereof, (b) all trademarks, service marks, trade dress, logos, slogans,
trade names, corporate names, Internet domain names, and rights in telephone
numbers, together with all translations, adaptations, derivations, and combina-
tions thereof and including all goodwill associated therewith, and all applica-
tions, registrations, and renewals in connection therewith, (c) all copyright-
able works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including source code, executable code, data, data-
bases and related documentation), (g) all advertising and promotional materials,
(h) all other proprietary rights, and (i) all copies and tangible embodiments
thereof (in whatever form or medium).
"Interim Agreement" has the meaning set forth in sec. 10(q)(ii)(B)
below.
"Knowledge" means actual knowledge after reasonable investigation of
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇, each of whom is referred to herein as a
"Knowledgeable Person."
"Knowledgeable Person" has the meaning set forth in the definition of
"Knowledge" above.
"Lake ▇▇▇▇▇▇▇ Agreement" means that certain Green Coke Supply and
Tolling Agreement, dated as of the date hereof, by and between the Buyer and
Seller (d/b/a Alcoa Carbon Products).
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Liens" has the meaning set forth in Sec. 3(k)(i) below.
"Losses" means costs, claims, losses, Liabilities, obligations
(including corrective and remedial obligations), damages and expenses (includ-
ing reasonable legal fees and expenses but excluding any liability relating to
consequential damages, lost profits or punitive damages).
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" means the Financial Statements as of
the Most Recent Fiscal Month End.
"Most Recent Fiscal Month End" has the meaning set forth in Sec. 3(f)
below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Notice of Objection" has the meaning set forth in sec. 2(f)(ii) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" means with respect to each parcel of Real
Property: (a) real estate taxes, assessments and other governmental levies, fees
or charges imposed with respect to such Real Property which are not due and
payable as of the Closing Date; (b) mechanics liens and similar liens for
labor, materials or supplies provided with respect to such Real Property
incurred in the ordinary course of business for amounts which are not due and
payable; (c) zoning, building codes and other land use laws regulating the use
or occupancy of such Real Property or the activities conducted thereon which
are imposed by any governmental authority having jurisdiction over such Real
Property which are not violated by the current use or occupancy of such Real
Property or the operation of the Business as currently conducted thereon; (d)
easements, covenants, conditions, restrictions and other similar matters of
record affecting title to such Real Property which do not or would not
materially impair the use or occupancy of such Real Property in the operation
of the Business as currently conducted thereon; and (e) exceptions to the title
policy that the Title Company is willing to issue, as described in Sec. 7(a)(x).
"Person" means an individual, a partnership, a corporation, an associa-
tion, a joint stock company, a trust, a joint venture, an unincorporated organ-
ization, or a governmental entity (or any department, agency, or political sub-
division thereof).
"Preliminary Purchase Price" has the meaning set forth in Sec. 2(c)
below.
"Purchase Price" has the meaning set forth in sec. 2(g) below.
"Real Property" has the meaning set forth in sec. 3(k)(i) below.
"Reportable Event" has the meaning set forth in ERISA sec. 4043.
"Retained Contracts" means (i) that certain Calcined Petroleum Coke
Supply Contract, dated effective as of December 1, 1999, by and between the
Seller (as Seller thereunder) and Mitsubishi International Corporation (as Buyer
thereunder); ( ii) that certain Long Term Sales and Purchase Agreement for Green
Petroleum Coke, dated effective as of July 1, 1997, by and between Sinopec
International Jinling Company, China, Mitsubishi Corporation Japan and ▇▇▇▇▇▇▇▇;
(iii) Calcined Petroleum Coke Supply Contract, dated effective as of December 1,
1999, by and between the Seller (as Seller thereunder) and Mitsubishi Interna-
tional Corporation (as Buyer thereunder); that certain Coke Supply Agreement,
dated effective as of May 1, 1999, by and between the Seller (as Seller there-
under) and Billiton Raw Materials B.V. (as Buyer thereunder); (iv) that certain
Master Agreement, dated May 16, 1970, as amended on November 1982, by and
between PHH Leasing, Inc. (as Lessor thereunder) and Seller (as Lessee there-
under) and any lease schedules or agreements under such Master Agreement; and
(v) that certain Engineering Procurement and Construction Management Services
Agreement, dated as of October 3, 2002, between Alcoa, Inc. and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Engineers.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in sec. 8(d)(i) below.
"Title Company" has the meaning set forth in sec. 7(a)(x) below.
"Union" has the meaning set forth in sec. 10(q)(i) below.
"Unit Employees" has the meaning set forth in sec. 10(q)(i) below.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
Sec.2.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing. The Buyer will not assume or
have any responsibility, however, with respect to any other obligation or
Liability of the Seller not included within the definition of Assumed
Liabilities.
(c) Preliminary Purchase Price. The Buyer agrees to pay to the
Seller at the Closing $43,000,000.00 (the "Preliminary Purchase Price") by
delivery of (i) its promissory notes (the "Buyer Notes") in the form of Exhibit
C attached hereto in the aggregate principal amount of $20,000,000.00 with
interest at a rate equal to 5% per annum whereby the first Buyer Note of
$10,000,000.00 is payable on November 30, 2002 and the second Buyer Note of
$10,000,000.00 is payable on May 31, 2003, and (ii) cash of $23,000,000.00
payable by wire transfer or delivery of other immediately available funds. The
Preliminary Purchase Price will be subject to post-Closing adjustment as set
forth below in this Sec. 2.
(d) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ in Washington, DC, commencing at 9:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Parties may mutually determine
(the "Closing Date"); provided, however, that the Closing Date shall be no
later than March 31, 2002.
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Sec. 7(a) below; (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Sec. 7(b) below;
(iii) the Seller will execute, acknowledge (if appropriate), and deliver to the
Buyer (A) assignments (including real property and Intellectual Property
transfer documents) in the forms attached hereto as Exhibits D-1 through D-2 and
(B) such other instruments of sale, transfer, conveyance, and assignment as the
Buyer and its counsel reasonably may request; (iv) the Buyer will execute,
acknowledge (if appropriate), and deliver to the Seller (A) an assumption in
the form attached hereto as Exhibit E and (B) such other instruments of assump-
tion as the Seller and its counsel reasonably may request; and (v) the Buyer
will deliver to the Seller the consideration specified in Sec. 2(c) above.
(f) Preparation of Net Working Capital Statement.
(i) Within sixty (60) days after the Closing Date, the Buyer
will prepare and deliver to the Seller a statement (the "Draft Net Working
Capital Statement") that sets forth the amount of the Closing Date Net Working
Capital.
(ii) If the Seller has any objections to the Draft Net Working
Capital Statement, it will deliver a detailed statement describing its objec-
tions to the Buyer within thirty (30) days after receiving the Draft Net Working
Capital Statement (the "Notice of Objection"). If the Seller does not deliver a
Notice of Objection within such thirty (30) day period, the Draft Net Working
Capital Statement shall be final. If the Seller does deliver a Notice of
Objection, the Buyer and the Seller will use reasonable efforts to resolve any
such objections themselves. If the Parties do not obtain a final resolution
within thirty (30) days after the Buyer has received the Notice of Objection,
however, the Buyer and the Seller shall engage the Independent Accounting Firm
to resolve any remaining objections. The determination of the Independent
Accounting Firm will be set forth in writing and will be conclusive and binding
upon the Parties; provided, however, that, in making any such determination, the
Independent Accounting Firm shall have no authority to apply a value to the Base
greater than $0.00. The Buyer will revise the Draft Net Working Capital
Statement as appropriate to reflect the resolution of any objections thereto
pursuant to this Sec. 2(f)(ii). The "Closing Date Net Working Capital
Statement" shall mean the Draft Net Working Capital Statement together with any
revisions thereto pursuant to this Sec. 2(f)(ii).
(iii) In the event the Parties submit any unresolved objections
to the Independent Account Firm for resolution as provided in sec. 2(f)(ii)
above, the fees and expenses of the Independent Accounting Firm shall be borne
equally by the Buyer and the Seller.
(iv) The Buyer will make the work papers and back-up materials
used in preparing the Draft Net Working Capital Statement available to the
Seller and its accountants and other representatives at reasonable times and
upon reasonable notice at any time during (A) the preparation by the Buyer of
the Draft Net Working Capital Statement, (B) the review by the Seller of the
Draft Net Working Capital Statement, and (C) the resolution by the Parties of
any objections thereto.
(g) Adjustment to Preliminary Purchase Price. The Preliminary
Purchase Price will be adjusted as follows:
(i) If the Closing Date Net Working Capital exceeds the Esti-
mated Net Working Capital, the Buyer will pay to the Seller an amount equal to
such excess (plus interest thereon at the Applicable Rate from the Closing Date)
by wire transfer or delivery of other immediately available funds within three
(3) business days after the date on which the Closing Date Net Working Capital
finally is determined pursuant to Sec. 2(f) above.
(ii) If the Closing Date Net Working Capital is less than the
Estimated Net Working Capital, the Seller will pay to the Buyer an amount equal
to such deficiency (plus interest thereon at the Applicable Rate from the
Closing Date) by wire transfer or delivery of other immediately available funds
within three (3) business days after the date on which the Closing Date Net
Working Capital finally is determined pursuant to Sec. 2(f) above. The
Preliminary Purchase Price as so adjusted is referred to herein as the
"Purchase Price."
(h) Allocation. Within 90 days after the Closing, Buyer and
Seller will agree as to the allocation of the Purchase Price and the Assumed
Liabilities among the Purchased Assets. Seller and Buyer will jointly complete
and separately file Form 8594, Asset Acquisition Statement, as required under
the Internal Revenue Code Section 1060, with their respective federal income tax
returns for the tax year in which the Closing Date occurs in accordance with the
agreed allocation.
3. Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyer that the statements contained in this Sec. 3 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Sec. 3), except as
set forth in the disclosure schedule accompanying this Agreement and initialed
by the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Sec. 3.
(a) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the juris-
diction of its incorporation.
(b) Authorization of Transaction. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Seller has duly
authorized the execution, delivery, and performance of this Agreement by the
Seller. This Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in sec. 2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government, govern-
mental agency, or court to which the Seller is subject or any provision of the
charter or bylaws of the Seller or (ii) except as set forth in Schedule 3(c)
(ii), conflict with, result in a breach of, constitute a default under, result
in the acceleration of, or to the Seller's Knowledge, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other arrangement to
which the Seller is a party (including the Acquired Assets) or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Security Interest upon any of its assets). Other than with respect to the
HSR Filing (which the Parties acknowledge has been made and with respect to
which the applicable waiting period has expired) and the Brazilian Filing, the
Seller does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Sec. 2
above).
(d) Brokers' Fees. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(e) Title to Assets. The Seller has good and marketable title to,
or a valid leasehold interest in, all of the Acquired Assets (other than Real
Property, which is separately addressed in sec. 3(k) below), free and clear of
any Security Interest or restriction on transfer, other than Permitted Encum-
brances.
(f) Financial Statements. Attached hereto as Exhibit F are the
following financial statements with respect to the Business (collectively the
"Financial Statements"): (i) unaudited balance sheets and statements of income
as of and for the fiscal years ended December 31, 2000 and December 31, 2001;
and (ii) unaudited balance sheet and statement of income as of and for the month
ended January 31, 2002 (the "Most Recent Fiscal Month End"). Except as
described on Schedule 3(f), the Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the Business as of
such dates and the results of operations of the Business for such periods, are
correct and complete in all material respects, and are consistent with the books
and records of the Business (which books and records are correct and complete in
all material respects); provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and the Financial Statements lack
footnotes and other presentation items.
(g) Events Subsequent to January 31, 2001. Since January 31, 2002,
there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of the
Business. Without limiting the generality of the foregoing, since that date:
(i) except as set forth in Schedule 3(g)(i), the Seller has
not sold, leased, transferred, or assigned any of the assets of the Business,
tangible or intangible, other than for a fair consideration in the Ordinary
Course of Business;
(ii) except as set forth in Schedule 3(g)(ii), the Seller has
not entered into any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) related to the Business
involving more than $50,000;
(iii) except as set forth in Schedule 3(g)(iii), to the
Seller's Knowledge, no party (including the Seller) has accelerated, term-
inated, modified, or cancelled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) in any material
respect related to or involving the Business involving more than $50,000 to
which the Seller is a party or by which it is bound;
(iv) the Seller has not imposed any Security Interest except
for Permitted Encumbrances upon any of the Acquired Assets;
(v) except as set forth in Schedule 3(g)(v), the Seller has
not made any capital expenditure (or series of related capital expenditures)
related to or involving the Business either involving more than $50,000;
(vi) the Seller has not made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions) related to
or involving the Business involving more than $50,000;
(vii) the Seller has not issued any note, bond, or other debt
or security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation related to or involving the
Business involving more than $50,000 singly or $150,000 in the aggregate;
(viii) the Seller has not delayed or postponed the payment of
accounts payable involving more than $50,000 (either singly or in the aggregate)
and other Liabilities related to or involving the Business outside the Ordinary
Course of Business;
(ix) the Seller has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and claims) related to
or involving the Business involving more than $50,000;
(x) the Seller has not granted any license or sublicense of
any rights under or with respect to any Business Intellectual Property;
(xi) except as set forth in Schedule 3(g)(xi), the Seller has
not experienced any damage, destruction, or loss (whether or not covered by
insurance) to any property related to or involving the Business which materially
adversely affects the operation of the Business;
(xii) except as set forth in Schedule 3(g)(xii), the Seller has
not entered into any employment contract or collective bargaining agreement,
written or oral, related to or involving the Business, or modified the terms of
any existing such contract or agreement;
(xiii) the Seller has not granted any increase in the base
compensation of any of the directors, officers, and employees of the Business
outside the Ordinary Course of Business;
(xiv) except as set forth in Schedule 3(g)(xiv), the Seller
has not adopted, amended, modified, or terminated any bonus, profit sharing,
incentive, severance, or other plan, contract, or commitment for the benefit of
any of the officers and employees of the Business, or taken any such action with
respect to any other Employee Benefit Plan related to or involving the Business;
(xv) the Seller has not made any other change in employment
terms for any of the officers and employees of the Business outside the Ordinary
Course of Business; and
(xvi) the Seller has not committed to any of the foregoing.
(h) Undisclosed Liabilities. To the Seller's Knowledge, the Seller
has no Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability) related to or involving the Business,
except for (i) Liabilities related to or involving the Business set forth on the
face of the Most Recent Balance Sheet,(ii) Liabilities related to or involving
the Business which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law) and (iii) all other
Liabilities and obligations of the Business set forth in an appendix to the
Disclosure Schedule under an express statement (that the Buyer has initialed) to
the effect that the definition of Assumed Liabilities will include the
Liabilities and obligations so disclosed.
(i) Legal Compliance. In connection with the operation of the
Business, the Seller is in material compliance with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply that
would materially adversely affect the operation of the Business.
(j) Tax Matters.
(i) All Taxes owed by the Seller in respect of its ownership
and operation of the Business and Acquired Assets that have been legally
required to be paid have been paid. To the Seller's Knowledge, there are no
Security Interests on any of the Acquired Assets that arose in connection with
any failure (or alleged failure) to pay any Tax. To the Seller's Knowledge,
there are no Taxes of the Seller, or deficiencies in Taxes or claims for Taxes
against the Seller for any taxable period (including, without limitation, unpaid
Taxes of any Person other than the Seller under Reg. Sec. 1.1502-6 (or any
similar provision of state, local, or foreign law) as a transferee or successor,
by contract or otherwise) that could become a Liability of or a tax claim
against, or which could be assessed or collected against the Buyer or become a
Security Interest on any Acquired Assets.
(ii) The Seller has withheld and paid all Taxes required to
have been withheld and paid in connection with its ownership and operation of
the Business and the Acquired Assets in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party.
(k) Real Property.
(i) Sec. 3(k)(i) of the Disclosure Schedule sets forth the
address and description of each parcel of real property owned by the Seller in
connection with its operation of the Business (the "Real Property"). The Seller
has good and marketable fee simple title in and to all of the Real Property,
subject to no liens, encroachments, encumbrances, claims, leases, rights of
possession or other defects in title (collectively, "Liens" ), except Permitted
Encumbrances.
(ii) the Seller does not lease or sublease, or otherwise use
or occupy pursuant to any license, concession or other agreement (written or
oral), any real property which is used or intended to be used, or otherwise
related to, the Business.
(iii) The Real Property constitutes all of the real property
owned, leased, occupied or otherwise utilized by the Business. Other than the
Seller, to the Seller's Knowledge, there are no parties in possession or parties
having any current or future right to occupy any of the Real Property. The Real
Property has been maintained in accordance with normal industry practice and is
sufficient and appropriate for the conduct of the Business as currently
conducted. The Real Property and all Improvements located thereon conform to
all applicable building, zoning and other laws, ordinances, rules and regula-
tions in all material respects. All permits, licenses and other approvals
necessary to the current occupancy and use of the Real Property have been
obtained, are in full force and effect and have not been violated in such a
matter as to materially adversely affect the operation of the Business. There
exists no violation of any covenant, condition, restriction, easement, agreement
or order materially adversely affecting any portion of the Real Property. The
Real Property has direct access to a public road adjoining such Real Property.
No such Improvements or accessways encroach on land not included in the Real
Property and no such Improvement is dependent for its access, operation or
utility on any land, building or other Improvement not included in the Real
Property. There is no pending or, to the Knowledge of the Seller, any
threatened condemnation proceeding affecting any portion of the Real Property.
Other than the right of the Buyer pursuant to this Agreement, there are no out-
standing options, rights of first offer or rights of first refusal to purchase
the Real Property or any portion thereof or interest therein.
(l) Intellectual Property.
(i) The Seller owns and possesses or has the right to use
pursuant to a valid and enforceable, written license, sublicense, agreement, or
permission all Business Intellectual Property. Each item of Business
Intellectual Property owned or used by the Seller immediately prior to the
Closing hereunder will be owned or available for use by the Buyer on substan-
tially similar terms and conditions immediately subsequent to the Closing here-
under. The Seller has taken all necessary and desirable action to maintain and
protect each item of Business Intellectual Property that it owns or uses.
(ii) The Seller has not, in connection with its ownership and
operation of the Business, interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of third
parties in a manner that materially adversely affects the operation of the
Business, and none of the directors and officers (and employees with responsi-
-bility for Intellectual Property matters) of the Seller and its Subsidiaries
has ever received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation (including any
claim that the Seller must license or refrain from using any Intellectual
Property rights of any third party) in connection with its ownership and opera-
tion of the Business. To the Knowledge of the Seller, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Business Intellectual Property rights of the Seller.
(iii) Sec. 3(l)(iii) of the Disclosure Schedule identifies
each patent or registration which has been issued to the Seller with respect to
any of its Business Intellectual Property, identifies each pending patent
application or application for registration which the Seller has made with
respect to any of the Business Intellectual Property, and identifies each
license, sublicense, agreement, or other permission which the Seller has granted
to any third party with respect to any of the Business Intellectual Property
(together with any exceptions). The Seller has delivered to the Buyer correct
and complete copies of all such patents, registrations, applications, licenses,
sublicenses, agreements, and permissions (as amended to date) and has made
available to the Buyer correct and complete copies of all other written documen-
tation evidencing ownership and prosecution (if applicable) of each such item.
Sec. 3(l)(iii) of the Disclosure Schedule also identifies each unregistered
trademark, service ▇▇▇▇, trade name, corporate name or Internet domain name,
computer software item (other than commercially available off-the-shelf software
purchased or licensed for less than a total cost of $1,000 in the aggregate) and
each material unregistered copyright used by the Seller exclusively in connec-
tion with the Business.
(iv) Sec. 3(l)(iv) of the Disclosure Schedule identifies
each item of Intellectual Property that any third party (which shall exclude any
Affiliate of the Seller) owns and that the Seller uses, in connection with the
operation of the Business, pursuant to license, sublicense, agreement, or
permission. The Seller has delivered to the Buyer correct and complete copies
of all such licenses, sublicenses, agreements, and permissions (as amended to
date).
(m) Tangible Assets. The Seller owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the conduct of the
Business as presently conducted. Each such tangible asset has been maintained in
accordance with normal industry practice.
(n) Inventory. The inventory of the Seller related to or involving
the Business consists of raw materials and supplies, goods in process, and
finished goods, all of which is (i) valued on the books of the Seller at the
lower of its cost or market value and (ii) is usable in the Business as
presently conducted.
(o) Contracts. The Acquired Assets include, and Sec. 3(o) of the
Disclosure Schedule lists, all of the following contracts and other agreements
related to or involving the Business to which the Seller is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease payments in
excess of $50,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, which involve
consideration in excess of $50,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $50,000 or
under which it has imposed a Security Interest on any of its assets, tangible or
intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement between the Seller and any of its
Affiliates;
(vii) any agreement under which it has advanced or loaned any
amount to any of the directors, officers, and employees of the Seller and its
Subsidiaries outside the Ordinary Course of Business;
(viii) any agreement under which the consequences of a default
or termination are likely to have a material adverse effect on the business,
financial condition, operations, results of operations, or future prospects of
the Business; or
(ix) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000.
The Seller has delivered to the Buyer a correct and complete copy of each
written agreement (as amended to date) listed in Sec. 3(o) of the Disclosure
Schedule and a written summary setting forth the terms and conditions of
each oral agreement referred to in Sec. 3(o) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) to the Seller's Knowledge, the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the trans-
actions contemplated hereby (including the assignments and assumptions referred
to in Sec. 2 above); (C) to the Seller's Knowledge, no party is in material
breach or default, and no event has occurred which with notice or lapse of time
would constitute a material breach or default, or permit termination, modifica-
tion, or acceleration, under the agreement; and (D) to the Seller's Knowledge,
no party has repudiated any provision of the agreement.
(p) Powers of Attorney. To the Seller's Knowledge, except as set
forth in Schedule 3(p), there are no outstanding powers of attorney executed on
behalf of the Seller which are related to or involve the Business.
(q) Insurance. The Seller has been covered during the past five (5)
years by insurance in scope and amount customary and reasonable for the
Business.
(r) Litigation. Sec. 3(r) of the Disclosure Schedule sets forth
each instance in which the Seller (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge related to or involving the Business
or (ii) is a party or, to the Knowledge of the Seller, is threatened to be made
a party to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator related to or
involving the Business. None of the actions, suits, proceedings, hearings, and
investigations set forth in Sec. 3(r) of the Disclosure Schedule would
reasonably be expected to result in any material adverse change in the Business.
(s) Employees. To the Knowledge of the Seller, except as set forth
in Sec. 3(s) of the Disclosure Schedule, no executive, key employee, or group of
employees employed in connection with the operation by the Seller of the
Business has any plans to terminate employment with the Seller. Except as set
forth in Sec.3(s) of the Disclosure Schedule, the Seller is not a party to or
bound by any collective bargaining agreement in connection with its operation
of the Business, nor has it experienced any strikes, grievances, claims of
unfair labor practices, or other collective bargaining disputes related to the
operation of the Business. To the Seller's Knowledge, the Seller has not
committed any unfair labor practice in connection with its operation of the
Business. None of the directors and officers (and employees with responsibility
for employment matters) of the Seller and its Subsidiaries has any Knowledge of
any organizational effort presently being made or threatened by or on behalf of
any labor union with respect to employees of the Business.
(t) Employee Benefits.
(i) Sec. 3(t) of the Disclosure Schedule lists each Employee
Benefit Plan related to or involving the Business that the Seller maintains, to
which the Seller contributes or has any obligation to contribute, or with
respect to which the Seller has any Liability or potential Liability.
(A) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) has been maintained, funded and
administered in accordance with the terms of such Employee Benefit Plan and the
terms of any applicable collective bargaining agreement and complies in form and
in operation in all respects with the applicable requirements of ERISA, the
Code, and other applicable laws.
(B) Each such Employee Benefit Plan which is
intended to meet the requirements of a "qualified plan" under Code Sec.401(a)
has received a determination from the Internal Revenue Service that such
Employee Benefit Plan is so qualified, and nothing has occurred since the date
of such determination that could adversely affect the qualified status of any
such Employee Benefit Plan.
(C) The Seller has delivered to the Buyer correct
and complete copies of the plan documents and summary plan descriptions, the
most recent determination letter received from the Internal Revenue Service,
the most recent annual report (IRS Form 5500, with all applicable attachments),
and all related trust agreements, insurance contracts, and other funding
arrangements which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan related to or
involving the Business that any of the Seller, the Controlled Group and any
obligation to contribute, or with respect to which any of them has any Liability
or potential Liability:
(A) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer Plan) has been com-
pletely or partially terminated or been the subject of a Reportable Event. No
proceeding by the PBGC to terminate any such Employee Pension Benefit Plan
(other than any Multiemployer Plan) has been instituted or, to the Knowledge of
the directors and officers (and employees with responsibility for employee
benefits matters) of the Seller and its Subsidiaries, threatened.
(B) None of the Seller, the Controlled Group or any
ERISA Affiliate contributes or has any obligation to contribute to a Multi-
employer Plan, no withdrawal from a Multiemployer Plan has occurred during the
six (6) years preceding the Closing Date, and no liability or potential
liability (including liability which may arise under ERISA 4063 or Part I of
Subtitle E of Title IV of ERISA) otherwise may arise with respect to the Seller,
the Controlled Group or any ERISA Affiliate.
(C) None of the Seller and its Subsidiaries has
incurred, and none of the directors and officers (and employees with responsi-
bility for employee benefits matters) of the Seller and its Subsidiaries has any
reason to expect that any of the Seller and its Subsidiaries will incur, any
Liability with respect to the PBGC (other than with respect to PBGC premium
payments not yet due) or otherwise under Title IV of ERISA (including any with-
drawal liability as defined in ERISA Sec.4201) or under the Code with respect to
any such Employee Benefit Plan which is an Employee Pension Benefit Plan, or
under COBRA with respect to any such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(iii) The Seller does not maintain, contribute to or have an
obligation to contribute to, or have any Liability or potential Liability with
respect to, any Employee Welfare Benefit Plan related to or involving the
Business providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated directors, officers or
employees of the Business (or any spouse or other dependent thereof) other than
in accordance with COBRA that could become a Liability of the Buyer.
(u) Environmental, Health, and Safety Matters.
(i) The Seller has complied and is in compliance, in all
material respects, with all Environmental, Health, and Safety Requirements in
connection with the operation of the Business.
(ii) Without limiting the generality of the foregoing, the
Seller has obtained and complied with, and is in compliance with, in all
material respects, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of the Business; a list of all
such material permits, licenses and other authorizations is set forth on the
attached "Environmental and Safety Permits Schedule."
(iii) The Seller has not received any written or, to Seller's
Knowledge, oral notice, report or other information regarding any actual or
alleged violation of Environmental, Health, and Safety Requirements, or any
liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) related to or involving the Business, including any
investigatory, remedial or corrective obligations, relating to any of them or
its facilities arising under Environmental, Health, and Safety Requirements, in
each case to the extent any such violation or liability would reasonably be
expected to have a material adverse effect on the Business.
(iv) To Seller's Knowledge, except as set forth on Schedule
3(u)(iv), none of the following exists at any property or facility owned or
operated by the Seller and related to or involving the Business: (1) underground
storage tanks, (2) asbestos-containing material in any form or condition,
(3) materials or equipment containing polychlorinated biphenyls, or
(4) landfills, surface impoundments, or disposal areas.
(v) To Seller's Knowledge, it has not, in connection with
the ownership or operation of the Business, treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or owned or
operated any property or facility (and no such property or facility is contami-
nated by any such substance) in a manner that has given or would give rise to
liabilities, including any liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages or attorney
fees, pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as
amended ("SWDA") or any other Environmental, Health, and Safety Requirements.
(vi) To Seller's Knowledge, neither this Agreement nor the
consummation of the transaction that is the subject of this Agreement will
result in any obligations for site investigation or cleanup, or notification
to or consent of government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(vii) To Seller's Knowledge, it has not, in connection with
the ownership and operation of the Business, either expressly or by operation
of law, assumed or undertaken any liability, including without limitation any
obligation for corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(viii) At all times since the commencement of the operation of
the Business in 1963, the Seller has been the sole and exclusive operator of the
Business.
(v) Knowledgeable Persons. One or more of the Knowledgeable Persons
has responsibility for each subject matter addressed by the representations and
warranties set forth in this Sec.3 that are qualified to Seller's Knowledge.
(w) Investment. The Seller (i) understands that the Buyer Notes
have not been, and will not be, registered under the Securities Act, or under
any state securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public offering,
(ii) is acquiring the Buyer Notes solely for its own account for investment
purposes, and not with a view to the distribution therof and (iii) Accredited
Investor for the reasons set forth in Sec. 3(w) of the Disclosure Schedule.
(x) No Other Representations or Warranties. The Seller makes no
representations or warranties regarding the Acquired Assets, Assumed Liabilities
or the Business except as expressly set forth in this Agreement and disclaims
all other warranties, express or implied.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this Sec.4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Sec.4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Sec.4.
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the juris-
diction of its incorporation.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Buyer has duly
authorized the execution, delivery and performance of this Agreement by the
Buyer. This Agreement constitutes the valid and legally binding obligation of
the Buyer, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Sec.2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government, govern-
mental agency, or court to which the Buyer is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any agree-
ment, contract, lease, license, instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject. Other than with respect to the HSR Filing and the Brazilian Filing,
the Buyer does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Sec.2
above).
(d) Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the Closing conditions set
forth in Sec.7 below).
(b) Notices and Consents. The Seller will give any notices to third
parties, and the Seller will use its reasonable best efforts to obtain any third
party consents, that the Buyer may request in connection with the matters
referred to in Sec.3(c) above, including, without limitation, all third party
consents required in connection with the contracts and agreements set forth on
Schedule 3(c)(ii). Each of the Parties will give any notices to, make any
filings with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Sec.3(c) and Sec.4(c) above. Without limiting
the generality of the foregoing, each of the Parties will make the Brazilian
Filing, as necessary, and will make any further filings pursuant to the
Brazilian Competition Law that may be necessary, proper, or advisable in
connection therewith.
(c) Operation of Business. The Seller will not engage in any
practice, take any action, or enter into any transaction related to or in
connection with the Business outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, the Seller will not engage in any
practice, take any action, or enter into any transaction of the sort described
in Sec. 3(g) above.
(d) Preservation of Business. The Seller will keep the business
and properties related to the Business substantially intact, including its
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers, and employees.
(e) Full Access. The Seller will permit representatives of the
Buyer to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Seller, to all premises,
properties, personnel, books, records (including Tax records but excluding Tax
records regarding any consolidated group of which the Seller is a part and is
not the ultimate parent entity), contracts, and documents of or pertaining to
the Business.
(f) Notice of Developments. Each Party will give prompt written
notice to the other Party of any material adverse development causing a breach
of any of its own representations and warranties in Sec.3 and Sec.4 above. No
disclosure by any Party pursuant to this Sec.5(f), however, shall be deemed to
amend or supplement the Disclosure Schedule or to prevent or cure any misrepre-
sentation, breach of warranty, or breach of covenant.
(g) Maintenance of Real Property. The Seller will maintain the Real
Property of the Business, including all of the Improvements, in substantially
the same condition as of the date of this Agreement, ordinary wear and tear
excepted, and shall not demolish or remove any of the existing Improvements, or
erect new improvements on the Real Property of the Business or any portion
thereof other than in the Ordinary Course of Business, without the prior written
consent of the Buyer.
(h) Leases. The Seller will not enter into any new lease, sublease,
license or other agreement for the use or occupancy of any real property related
to or involving the Business, without the prior written consent of the Buyer.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other Party reason-
ably may request, all the sole cost and expense of the requesting Party (unless
the requesting Party is entitled to indemnification therefor under Sec.8 below).
The Seller and the Buyer agree that, in the event any consent, approval or
authorization necessary or desirable to obtain or preserve for the Business or
the Buyer any right or benefit under any lease, license, contract, commitment or
other agreement or arrangement to which the Seller is a party is not obtained
prior to the Closing, the Seller will, subsequent to the Closing, cooperate with
the Buyer in attempting to obtain such consent, approval or authorization as
promptly thereafter as practicable. If such consent, approval or authorization
cannot be obtained, the Seller shall use its best efforts to provide the Buyer
with the rights and benefits of the affected lease, license, contract, commit-
ment or other agreement or arrangement for the term of such lease, license,
contract or other agreement or arrangement, and, if the Seller provides such
rights and benefits, the Buyer shall assume the obligations and burdens there-
under. This Agreement and any assignment executed pursuant hereto shall not
constitute an assignment of any lease, license, contract, commitment or other
agreement or arrangement as to which any such consent, approval or authoriza-
tion is not obtained prior to the Closing.
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding, hear-
ing, investigation, charge, complaint, claim, or demand by a third party in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Business, the other Party will cooperate with
the contesting or defending Party and its counsel in the contest or defense,
make available its personnel, and provide such testimony and access to its books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending Party (unless the
Sec. 8 below).
(c) Mail and Payments. The Seller authorizes and empowers the Buyer
on and after the Closing Date to receive and open the mail and other communica-
tions received by the Buyer relating to the Business and the Acquired Assets
and to deal with the contents of such communications in any proper manner. The
Seller shall promptly deliver to the Buyer any mail or other communication
received by it after the Closing Date pertaining to the Business or the Acquired
Assets. The Seller and the Buyer shall promptly (but, in any event, not more
than five (5) business days after receipt thereof) pay or deliver to the other
party any cash or checks (including any payments in respect of the accounts
which are included among the Acquired Assets) which have been mistakenly sent to
it but which should properly have been sent to such other party. In connec-
tion with the foregoing, the Seller agrees that the Buyer has the right and
authority to endorse, without recourse, the name of the Seller on any check or
other evidence of indebtedness received by the Buyer in respect of the Business
or the Acquired Assets and to which the Buyer is entitled pursuant to this
Agreement, including any accounts which are included among the Acquired Assets.
(d) Confidentiality. The Seller will treat and hold as confi-
dential, in the same manner and with the same care as it treats its own confi-
dential information, all of the Confidential Information. In the event that the
Seller is requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Information, the Seller
will notify the Buyer promptly of the request or requirement so that the Buyer
may seek an appropriate protective order or waive compliance with the provisions
of this Sec.6(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, the Seller is, on the advice of counsel, compelled to disclose
any Confidential Information to any tribunal or else stand liable for contempt,
the Seller may disclose the Confidential Information to the tribunal; provided,
however, that the Seller shall use its reasonable best efforts to obtain, at the
reasonable request of the Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as the Buyer shall designate.
(e) Covenant Not to Compete. For the period from and after the
Closing Date through December 31, 2008, the Seller will not engage directly or
indirectly in any place in the world in any business that the Business conducts
as of the Closing Date; provided, however, that (i) the Seller may continue its
operations at the Lake ▇▇▇▇▇▇▇ facility consistent with the Lake ▇▇▇▇▇▇▇ Agree-
ment (and if Buyer breaches its obligation under the Lake ▇▇▇▇▇▇▇ Agreement to
(A) supply Lake ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coke to the Calciner during the Contract Period
(as "Lake ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coke", "Calciner" and "Contract Period" are defined in
the Lake ▇▇▇▇▇▇▇ Agreement), the Seller may procure from its Affiliates or third
parties that amount of Lake ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coke equal to the difference between
the amount of Lake ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coke required by the Calciner and the amount
of Lake ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coke that Buyer actually supplied to Seller during the
relevant portion of the Contract Period, or (B) take delivery of the annual GLC
Quantity of Calcined Coke during the Tolling Period (as "GLC Quantity",
"Calcined Coke" and "Tolling Period" are defined in the Lake ▇▇▇▇▇▇▇ Agreement),
Seller may sell to its Affiliates or third parties that amount of Calcined Coke
equal to the difference between the GLC Quantity and the Calcined Coke that
Buyer actually took delivery of during the relevant portion of the Tolling
Period, (ii) the Seller may perform its obligations under the contracts listed
in clauses (i), (ii) and (iii) of the definition of "Retained Contracts" (in
accordance with any limitations or restrictions set forth in the Lake ▇▇▇▇▇▇▇
Agreement), (iii) the Seller's activities and ownership of the Seller's
affiliate's interest in a calciner in the vicinity of Edmonton, Alberta are
excluded from the Seller's covenant not to compete, and (iv) ownership of a
Person who purchases green petroleum coke or calcines petroleum coke for its own
use or whose revenues from calcining petroleum coke do not exceed 20% of the
Person's revenues is not a breach of this covenant. If the final judgment of a
court of competent jurisdiction declares that any term or provision of this S
ec. 6(e) is invalid or unenforceable, the Parties agree that the court making
the determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
(f) Buyer Notes. The Buyer Notes will not be transferable and will
be imprinted with a legend substantially in the following form:
This Note was originally issued on March 27, 2002, and has note
been registered under the Securities Act of 1933, as amended or
applicable state securities laws. The transfer of this Note is
prohibited by the Agreement. The issuer of this Note will
furnish a copy of these provisions to the holder hereof without
charge upon written request.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Sec.3
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all
of its covenants hereunder in all material respects through the Closing;
(iii) the Seller shall have procured all of the third party
consents specified in Sec.5(b) above;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) materially affect adversely the right of the
Buyer to own the Acquired Assets, or to operate the business of the Business
(and no such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(v) the Seller shall have delivered to the Buyer a certifi-
cate to the effect that each of the conditions specified above in Sec.7(a)(i)-
(iv) is satisfied in all respects;
(vi) the Seller and the Buyer shall have received all author-
izations, consents, and approvals of governments and governmental agencies
referred to in Sec.3(c) and Sec.4(c) above;
(vii) the relevant parties shall have entered into the
Ancillary Agreements, and the same shall be in full force and effect;
(viii) the Buyer shall have received from counsel to the Seller
an opinion in form and substance as set forth in Exhibit H attached hereto,
addressed to the Buyer, and dated as of the Closing Date;
(ix) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Buyer;
(x) ▇▇▇▇▇▇▇ Title & Guaranty Company (the "Title Company")
shall be willing to insure at standard rates the Buyer's marketable title in and
to the Real Property in fee simple, in each case free and clear of Liens, other
than Permitted Encumbrances, and including such endorsements and affirmative
coverages as the Buyer shall reasonably require (including, without limitation,
non-imputation endorsements), and the Seller shall provide all such affidavits
and indemnities as the Title Company reasonably shall require in order to afford
such coverages and shall bear all of the cost of obtaining such title insurance;
(xi) the Buyer shall have received a survey of the Real
Property, in each case conforming to the Minimum Standard Detail Requirements
jointly established and approved in 1992 by ALTA and ACSM, certified to the
Buyer, the Buyer's lender, and the Title Company, and showing no Liens other
than Permitted Encumbrances, and the Buyer shall bear all of the cost of
obtaining such surveys;
(xii) all Real Property shall be in substantially the same
condition and repair as that on the date of this Agreement, reasonable wear and
tear excepted;
(xiii) the Seller shall have timely paid any and all real pro-
perty transfer, transfer gains, stamp and other similar taxes, if any, imposed
by law upon the Seller in connection with the transactions contemplated by this
Agreement and shall have delivered evidence satisfactory to the Buyer and the
Title Company of the payment of such taxes;
(xiv) the Seller shall deliver to the Buyer an affidavit dated
as of the Closing Date and in form and substance required under Section 1445 of
the Code so that the Buyer is not required to withhold any portion of the
Purchase Price thereunder;
(xv) the Seller (A) shall have prepaid all remaining lease
payments and other amounts due under that certain Master Lease No. 4480694,
dated as of November 11, 1997, by and among Dell Financial Services, L.P.
("Dell"), as Lessor, and the Seller, as Lessee (the "Dell Lease"), and (B)
shall have purchased from Dell all computer equipment leased by the Seller
under the Dell Lease and shall have received from Dell free and clear title to
the same (which equipment shall be part of the Acquired Assets hereunder); and
(xvi) the Seller shall have paid to Wonderware Corporation an
administrative fee in the amount of $4,101.00 in connection with the assignment
by Seller and assumption by Buyer of the Wonderware Corporate License Agreement,
dated as of August 30, 2001, by and among Seller and Wonderware Corporation.
The Buyer may waive any condition specified in this Sec. 7(a) if it executes a
writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Sec. 4
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(iv) the Buyer shall have delivered to the Seller a certifi-
cate to the effect that each of the conditions specified above in Sec. 7(b)(i)-
(iii) is satisfied in all respects;
(v) the Seller and the Buyer shall have received all author-
izations, consents, and approvals of governments and governmental agencies
referred to in Sec. 3(c) and Sec. 4(c) above;
(vi) the relevant parties shall have entered into the
Ancillary Agreements, and the same shall be in full force and effect;
(vii) the Seller shall have received from counsel to the Buyer
an opinion in form and substance as set forth in Exhibit I attached hereto,
addressed to the Seller, and dated as of the Closing Date;
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Seller;
and
(ix) the representations and warranties of the Seller set
forth in Sec. 3(u) of this Agreement shall be true and correct except with
respect to any fact, occurrence or event that would not reasonably be expected
to have a material adverse effect on the Business.
The Seller may waive any condition specified in this Sec. 7(b) if it executes a
writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the repre-
sentations and warranties of the Seller contained in Sec. 3(f)-(i) and Sec.
3(k)-(x) of this Agreement shall survive the Closing and continue in full force
and effect for a period of two (2) years thereafter. All of the other represen-
tations andwarranties of the Buyer and the Seller contained in this Agreement
(including the representations and warranties of the Seller contained in Sec.
3(a)-(e) and Sec. 3(j) hereof) shall survive the Closing and continue in full
force and effect forever thereafter (subject to any applicable statutes of
limitations).
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event the Seller breaches (or in the event any
third party alleges facts that, if true, would mean the Seller has breached) any
of its representations, warranties, and covenants contained in this Agreement,
and, if there is an applicable survival period pursuant to Sec. 8(a) above,
provided that the Buyer makes a written claim for indemnification against the
Seller pursuant to Sec. 10(g) below within such survival period, then the Seller
agrees to indemnify the Buyer from and against the entirety of any Losses the
Buyer may suffer through and after the date of the claim for indemnification
(including any Losses the Buyer may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach); provided, however, that the
Seller shall not have any obligation to indemnify the Buyer from and against any
Losses resulting from, arising out of, relating to, in the nature of, or caused
by the breach (or alleged breach) of any representation or warranty of the
Seller contained in Sec. 3(f)-(i) and Sec. 3(k)-(v) above until the Buyer has
suffered Losses by reason of all such breaches (or alleged breaches) in excess
of a $250,000 aggregate threshold (at which point the Seller will be obligated
to indemnify the Buyer from and against all such Losses relating back to the
first dollar; and, provided further, that the Seller's obligations under this
Sec. 8(b)(i) with respect to Losses resulting from, arising out of, relating
to, in the nature of or caused by, the breach (or alleged breach) of any repre-
sentation or warranty of the Seller contained in Sec. 3(f)-(i) and Sec.
3(k)-(v) above shall be limited to $20,000,000.00.
(ii) The Seller agrees to forever indemnify the Buyer from
and against the entirety of any Losses the Buyer may suffer resulting from,
arising out of, relating to, in the nature of, or caused by:
(A) any Liability of the Seller which is not an
Assumed Liability (including any Liability of the Seller that becomes a
Liability of the Buyer under any bulk transfer law of any jurisdiction, under
any common law doctrine of de facto merger or successor liability, under
Environmental, Health, and Safety Requirements, or otherwise by operation of
law);
(B) any Liability for unpaid Taxes with respect to
any Tax year or portion thereof ending on or before the Closing Date (or for any
Tax year beginning before and ending after the Closing Date to the extent
allocable to the portion of such period beginning before and ending on the
Closing Date); or
(C) any Liability for the unpaid Taxes of any Person
(including the Seller and its Subsidiaries) under Reg. Sec. 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
Notwithstanding the foregoing, from and after a Buyer Change of Control, the
Seller's obligation to indemnify the Buyer from the Losses described in this
Sec. 8(b)(ii) shall be limited to $15,000,000.00.
(c) Indemnification Provisions for Benefit of the Seller.
(i) In the event the Buyer breaches (or in the event any
third party alleges facts that, if true, would mean the Buyer has breached) any
of its representations, warranties, and covenants contained in this Agreement,
and, if there is an applicable survival period pursuant to Sec. 8(a) above,
provided that the Seller makes a written claim for indemnification against the
Buyer pursuant to Sec. 10(g) below within such survival period, then the Buyer
agrees to indemnify the Seller from and against the entirety of any Losses the
Seller may suffer through and after the date of the claim for indemnification
(including any Losses the Seller may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach).
(ii) The Buyer agrees to indemnify the Seller from and
against the entirety of any Losses the Seller may suffer resulting from, arising
out of, relating to, in the nature of, or caused by any Assumed Liability.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemn-
ified Party") with respect to any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against the other Party (the "Indemnifying
Party") under this Sec. 8, then the Indemnified Party shall promptly notify the
Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing within fifteen (15) days after
the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Losses the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim,
(B) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder, (C) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(D) settlement of, or an adverse judgment with respect to, the Third Party Claim
is not, in the good faith judgment of the Indemnified Party, likely to establish
a precedential custom or practice adverse to the continuing business interests
of the Indemnified Party, and (E) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Sec. 8(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Sec. 8(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, the Indemnifying Party in connection therewith), (B) the
Indemnifying Party will reimburse the Indemnified Party promptly and period-
ically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses), and (C) the Indemnifying Party will
remain responsible for any Losses the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this Sec. 8.
(e) Determination of Losses. The Parties shall take into account
the time cost of money (using the Applicable Rate as the discount rate) in
determining Losses for purposes of this Sec. 8. All indemnification payments
under this Sec. 8 shall be deemed adjustments to the Purchase Price.
(f) Offset. In the event that the Buyer fails to make any payments
under the Buyer Notes on or before the date on which such payments are due, the
Seller shall have the right to offset an amount equal to the amount of such
overdue payments against amounts due from the Buyer to the Seller or its
Affiliates under the Alcoa CPC Agreements and the Lake ▇▇▇▇▇▇▇ Agreement.
(g) Other Indemnification Provisions. The provisions of this Sec. 8
shall be the sole remedy of each Party with respect to any breach of any repre-
sentation or warranty set forth in this Agreement, other than any intentional
misrepresentation. Such indemnification provisions, however, shall be in
addition to, and not in derogation of, any statutory, equitable, or common law
remedy any Party may have (including without limitation any such remedy arising
under Environmental, Health, and Safety Requirements) for breach of any covenant
set forth in this Agreement.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, the Buyer has notified the Seller of
the breach, and the breach has continued without cure for a period of thirty
(30) days after the notice of breach; (B) if the Closing shall not have occurred
on or before March 31, 2002, by reason of the failure of any condition precedent
under Sec. 7(a) hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in this
Agreement); (C) pursuant to the provisions of Sec. 10(m) below; or (D) pursuant
to the provisions of Sec. 10(q) below; and
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Seller has notified the Buyer of the
breach, and the breach has continued without cure for a period of thirty (30)
days after the notice of breach or (B) if the Closing shall not have occurred on
or before March 31, 2002, by reason of the failure of any condition precedent
under Sec. 7(b) hereof (unless the failure results primarily from the Seller
itself breaching any representation, warranty, or covenant contained in this
Agreement); or (C) pursuant to the provisions of Sec. 10(m) below.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Sec. 9(a) above, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to the other Party (except
for any Liability of any Party then in breach).
10. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their respec-
tive successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they have related in any way
to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that the Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Buyer nonetheless
shall remain responsible for the performance of all of its obligations here-
under); and, provided further, that the Seller may (i) assign any or all of its
rights hereunder to one or more of its Affiliates and (ii) designate any such
Affiliate that acquires all of the Acquired Assets prior to the Closing here-
under to perform the Seller's obligations hereunder so long as such Affiliate's
financial condition is, to the reasonable satisfaction of the Buyer, not less
than that of the Seller as of the date hereof.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two (2) business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
if to the Seller:
▇▇▇▇▇▇▇▇ Metals Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President, Corporate Development
if to the Buyer:
Great Lakes Carbon Corporation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
American Industrial Partners
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇
- and -
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware with-
out giving effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the applica-
tion of the laws of any jurisdiction other than the State of Delaware.
(i) Taxes.
(i) The Seller shall bear and pay all applicable Taxes of
the United States and any other country, including any political subdivision of
any of them, with respect to the transactions contemplated by this Agreement, if
the Tax is based on or measured by gross receipts, capital employed or net
income.
(ii) The Buyer shall pay all value added Tax and sales and
use Tax (including any gross receipts Tax imposed similar to a sales and use
Tax) imposed by any foreign, national, state or local taxing authority on the
ultimate purchase price of all Acquired Assets under this Agreement. If the
Seller is required to collect such value added Tax or sales and use Tax on
behalf of any taxing jurisdiction, the Seller shall provide to the Buyer
invoices which separately state and clearly indicate the amount of Tax, and the
Buyer shall remit any such Tax to the Seller. The Seller shall have the
responsibility of complying with all applicable foreign, national, state or
local laws regarding value added Tax and sales and use Tax or substitutes
therefore including registration, collection of taxes and the filing of returns
where applicable. If applicable, in lieu of payment for any sales an use tax,
the Seller shall accept a properly executed exemption or direct pay certificate
from the Buyer. Notwithstanding the foregoing, each of the Seller and the Buyer
will treat and report the purchase and sale of the Acquired Assets pursuant to
this Agreement as an "occasional sale" for purposes of all applicable value
added, sales, use and gross receipts Tax.
(iii) All Taxes assessed by any taxing jurisdiction based on
the value of the Acquired Assets such as and including ad valorem, use, personal
property and inventory taxes shall be apportioned between the Parties based
upon the period of their ownership of the Acquired Assets. The Seller will
bare the cost of such Taxes as they relate to ownership of the Acquired Assets
prior to the Closing Date and the Buyer will bear the cost of such Taxes from
the Closing Date and thereafter.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresenta-
tion, or breach of warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Buyer and the Seller will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. Without limiting
the generality of the foregoing, all transfer, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees, recording charges
and other fees and charges (including any penalties and interest) incurred in
connection with the consummation of the transactions contemplated by this Agree-
ment shall be paid by the Party legally responsible for such Tax when due, and
such Party will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such Taxes, fees and charges, and, if required
by applicable law, the Parties will, and will cause their affiliates to, join
in the execution of any such Tax Returns and other documentation.
(m) Risk of Loss. The risk of loss, damage or destruction to any
of the Acquired Assets shall be borne by the Seller at all times until the
Closing. In the event of any such loss, damage, or destruction, the proceeds
of any claim for any loss, payable under any insurance policy with respect
thereto, shall be used to repair, replace, or restore any such property to its
former condition, subject to the conditions stated below. In the event of any
loss or damage to any of the Acquired Assets, the Seller shall notify the Buyer
thereof in writing immediately. Such notice shall specify with particularity the
loss or damage incurred, the cause thereof (if known or reasonably ascertain-
able), and the insurance coverage. If any part of the Acquired Assets are
damaged or destroyed by casualty loss prior to the Closing Date, and the cost of
restoring the damaged or destroyed Acquired Assets to a condition reasonably
comparable to their prior condition does not exceed $5,000,000, at the Buyer's
option, (i) the Seller shall perform such restoration, and in such event, the
Closing shall be postponed until restoration can be completed or (ii) the
amount of the Purchase Price shall be reduced by the estimated cost of such
incomplete restoration (as estimated by a qualified firm reasonably acceptable
to the Buyer) minus the amount of expected insurance proceeds attributable to
such casualty loss (not including any such proceeds received before the Closing
Date). If the cost of restoration is in excess of $5,000,000, the Closing shall
be postponed for a period of thirty (30) days, during which the Buyer and the
Seller will negotiate in good faith an appropriate reduction in the Purchase
Price or other mutually acceptable adjustments to the transactions contemplated
by this Agreement. If the Parties are unable to reach Agreement by the end of
such thirty (30) day period, either Party may terminate this Agreement upon
fifteen (15) days' prior written notice to the other Party.
(n) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with particularity and describes the relevant facts in detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any Party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
(o) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(p) Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
(q) Employee Matters.
(i) No Obligation to Offer Employment. Nothing in this
Agreement shall be construed to restrict or otherwise limit the Buyer's right to
establish the terms and conditions of employment to be offered to any current or
prospective employees of the Business, or to hire or terminate any employees of
the Business after the Closing Date. The Seller acknowledges that the Buyer
shall not assume or otherwise be bound by the collective bargaining agreement
between the Seller and Local 275 of the United Steelworkers of America (the
"Union"), as modified by a Memorandum of Understanding dated as of June 1, 2001
(as so modified, the "CBA"). Notwithstanding the foregoing, the Buyer agrees to
offer jobs defined as "bargaining unit jobs" in the CBA solely to active
employees presently working in the Seller's bargaining unit ("Unit Employees"),
at terms and conditions of the Buyer's choosing. The Buyer further agrees that
it will not offer bargaining unit jobs to anyone except Unit Employees, until
after all Unit Employees have received job offers from the Buyer.
(ii) Obligation to Bargain with Union.
(A) The Buyer acknowledges its obligation to
recognize and bargain with the Union for a new CBA in the event a majority of
the Buyer's employees accepting "bargaining unit jobs," at the date a represen-
tative complement of such employees is achieved and upon timely demand by the
Union, consist of former bargaining unit employees of the Seller.
(B) Prior to Closing, the Seller agrees to
facilitate meetings between the Buyer and the Union for purposes of discussing
an agreement between the Buyer and the Union that would, upon the Union's
attainment of representational status, establish interim employment terms and
conditions for bargaining unit employees during the six-month period immediately
following the Closing Date ("Interim Agreement").
(C) In the event either that (1) the Union fails to
attain representational status at the Baton Rouge Facility prior to the Closing,
or (2) the Buyer and the Union fails to reach an Interim Agreement, the Buyer
expressly reserves the right without penalty to withdraw its offer to buy the
Acquired Assets.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
Great Lakes Carbon Corporation
By:____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and CEO
▇▇▇▇▇▇▇▇ Metals Company
By:___________________________
Name:
Title:
Exhibit F
Baton Rouge Carbon Products Plant
Balance Sheet as of December 31, 2001
Assets
Current Assets
Cash $ 1,000
Receivables - Customers 10,487,000
Receivables - Related Parties 7,396,000
Inventories:
Raw Materials and Supplies $ 22,444,000
Work In Process 11,000
Finished Goods 10,299,000
______________
Total Inventories 32,754,000
______________
Total Current Assets 50,638,000
Other Assets
Receivables - Subsidiaries 19,700,000
Property, Plant and Equipment 23,755,000
Allowance for Depreciation (2,816,000)
Construction in Progress 466,000
______________
Net Property, Plant and Equipment 21,405,000
______________
Goodwill 13,611,000
Accumulated Amortization (554,000)
_______________
Net Goodwill 13,057,000
_______________
Total Other Assets 54,162,000
Total Assets $ 104,800,000
==============
Liabilities
Current Liabilities
Accounts Payable $ 5,506,000
Accrued Compensation 217,000
Taxes Payable 12,000
Other Liabilities ---
Related Party Payable 12,628,000
______________
Total Current Liabilities 18,363,000
______________
Payables - Subsidiaries (2,411,000)
Equity 88,848,000
Total Liabilities and Equity $ 104,800,000
==============
The Basis of Presentation set forth on Schedule 3(f) to the Agreement is an
integral part of these statements.
Baton Rouge Carbon Products Plant
Statement of Income for the Twelve Months Ended December 31, 2001
Revenue
Calcined Coke:
Customer $ 67,931,000
Internal 20,936,000
_______________
Total Revenue $ 88,867,000
_______________
Costs and Expenses
Cost of Goods Sold $ 73,337,000
Freight 4,844,000
Depreciation & Amortization 2,222,000
Selling, General & Administrative 611,000
_______________
Total Costs and Expenses 81,014,000
_______________
Income Before Income Tax $ 7,853,000
===============
The Basis of Presentation set forth on Schedule 3(f) to the Agreement is an
integral part of these statements.
I:\Corporate\Great Lakes\Proj Cola\Agts\APA\APA (final).doc
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