EXHIBIT 99.1
STOCK AND ASSET PURCHASE AGREEMENT
between
UCB SA
and
CYTEC INDUSTRIES INC.
Dated as of October 1, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions....................................................................1
Section 1.2 Other Terms...........................................................................26
Section 1.3 Other Definitional Provisions.........................................................26
ARTICLE II
PURCHASE AND SALE OF THE SHARES, THE GMBH SHARES AND THE BUSINESS
Section 2.1 Purchase and Sale of the Shares, the GmbH Shares and Transferred Assets...............27
Section 2.2 Retained Assets and Excluded Assets...................................................28
Section 2.3 Buyer's Assumption of Liabilities.....................................................29
Section 2.4 Seller's Assumption of Liabilities; Excluded Liabilities..............................30
Section 2.5 Purchase Price........................................................................30
Section 2.6 Determination of Final Closing Net Working Capital Value and Final DBO Variance Amount31
Section 2.7 Closing...............................................................................33
Section 2.8 Deliveries by Buyer...................................................................33
Section 2.9 Deliveries by Seller..................................................................34
Section 2.10 Nonassignability of Assets............................................................35
Section 2.11 Intercompany Receivables and Intercompany Payables....................................37
Section 2.12 Allocation of Purchase Price..........................................................38
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Organization and Qualification........................................................38
Section 3.2 The Transferred Subsidiaries..........................................................39
Section 3.3 Corporate Authorization...............................................................40
Section 3.4 Consents and Approvals................................................................41
Section 3.5 Non-Contravention.....................................................................42
Section 3.6 Binding Effect........................................................................42
Section 3.7 Financial Statements..................................................................42
Section 3.8 Absence of Liabilities................................................................43
Section 3.9 Absence of Changes....................................................................44
Section 3.10 Litigation and Claims.................................................................44
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Section 3.11 Compliance with Laws..................................................................44
Section 3.12 Taxes.................................................................................44
Section 3.13 Environmental Matters.................................................................48
Section 3.14 Intellectual Property and IT Assets...................................................49
Section 3.15 Employee Benefits.....................................................................52
Section 3.16 Labor.................................................................................56
Section 3.17 Contracts.............................................................................57
Section 3.18 Sufficiency of Assets.................................................................58
Section 3.19 Title to Property.....................................................................59
Section 3.20 Real Property.........................................................................59
Section 3.21 Warranties and Product Liability......................................................60
Section 3.22 Insurance.............................................................................60
Section 3.23 No Payments or Benefits to Government Officials.......................................61
Section 3.24 Customers and Suppliers...............................................................61
Section 3.25 Toxicological Information.............................................................61
Section 3.26 EINECS and TSCA.......................................................................61
Section 3.27 Return of Products....................................................................62
Section 3.28 Restructuring Transactions............................................................62
Section 3.29 Acquisition of Purchase Price Shares for Investment...................................62
Section 3.30 Ownership of Securities...............................................................63
Section 3.31 Finders' Fees.........................................................................63
Section 3.32 No Other Representations or Warranties................................................63
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1 Organization and Qualification........................................................63
Section 4.2 Corporate Authorization...............................................................63
Section 4.3 Capital Structure of Buyer............................................................64
Section 4.4 Consents and Approvals................................................................65
Section 4.5 Non-Contravention.....................................................................65
Section 4.6 Binding Effect........................................................................66
Section 4.7 Buyer Reports; Financial Statements...................................................66
Section 4.8 Absence of Liabilities................................................................66
Section 4.9 Absence of Changes....................................................................66
Section 4.10 Litigation and Claims.................................................................67
Section 4.11 Anti-takeover Statute.................................................................67
Section 4.12 Required Financing....................................................................67
Section 4.13 Finders' Fees.........................................................................67
Section 4.14 No Other Representations or Warranties................................................67
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ARTICLE V
COVENANTS
Section 5.1 Access and Information................................................................67
Section 5.2 Confidentiality.......................................................................69
Section 5.3 Seller's Conduct of Business..........................................................70
Section 5.4 Buyer's Conduct of Business...........................................................74
Section 5.5 Consents and Conditions...............................................................74
Section 5.6 Tax Matters...........................................................................79
Section 5.7 Employee Matters......................................................................84
Section 5.8 Intellectual Property Matters.........................................................89
Section 5.9 Ancillary Agreements and Stockholder's Agreement......................................96
Section 5.10 Assignment of Retained Assets and Assumption of Retained Liabilities..................96
Section 5.11 Insurance Proceeds....................................................................97
Section 5.12 Restructuring Transactions............................................................97
Section 5.13 Supplemental Listing Application......................................................97
Section 5.14 Additional Financial Statements.......................................................97
Section 5.15 Updating of Information...............................................................99
Section 5.16 Certain Guarantees and Indebtedness...................................................99
Section 5.17 Disposition of Retained Surface Specialties Trademark Filings........................100
Section 5.18 Intergroup Agreements................................................................101
Section 5.19 Standstill...........................................................................103
Section 5.20 Further Assurances...................................................................103
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Conditions to the Obligations of Buyer and Seller....................................104
Section 6.2 Conditions to the Obligations of Buyer...............................................105
Section 6.3 Conditions to the Obligations of Seller..............................................106
ARTICLE VII
SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 Survival.............................................................................107
Section 7.2 Indemnification by Seller............................................................107
Section 7.3 Indemnification by Seller for Environmental Damages..................................109
Section 7.4 Indemnification by Buyer.............................................................114
Section 7.5 Third Party Claim Indemnification Procedures.........................................114
Section 7.6 Calculation of Damages...............................................................116
Section 7.7 Adjustments to Losses................................................................116
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Section 7.8 Payments.............................................................................117
Section 7.9 Characterization of Indemnification Payments.........................................117
Section 7.10 Remedies.............................................................................118
Section 7.11 Tax Matters..........................................................................118
ARTICLE VIII
TERMINATION
Section 8.1 Termination..........................................................................118
Section 8.2 Effect of Termination................................................................119
Section 8.3 Termination Fee......................................................................119
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..............................................................................120
Section 9.2 Amendment; Waiver....................................................................121
Section 9.3 No Assignment or Benefit to Third Parties............................................121
Section 9.4 Entire Agreement.....................................................................122
Section 9.5 Public Disclosure....................................................................122
Section 9.6 Expenses.............................................................................122
Section 9.7 Bulk Sales...........................................................................123
Section 9.8 Governing Law; Arbitration...........................................................123
Section 9.9 Counterparts.........................................................................124
Section 9.10 Headings.............................................................................124
Section 9.11 Severability.........................................................................124
Section 9.12 Release of Obligations...............................................................124
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Stockholder's Agreement
Exhibit B IT/IS Services Agreement
Exhibit C Transition Services Agreement
Exhibit D Buyer's Assumption Agreement
Exhibit E Seller's Assumption Agreement
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STOCK AND ASSET PURCHASE AGREEMENT (as it may be amended or
supplemented from time to time in accordance with the terms hereof, this
"AGREEMENT"), dated as of October 1, 2004, among UCB SA, a Belgian SOCIETE
ANONYME (the "SELLER") and Cytec Industries Inc., a Delaware corporation
("BUYER").
W I T N E S S E T H:
WHEREAS, Seller and certain of its affiliates, including the
Transferred Subsidiaries (as defined herein), are engaged worldwide in the
Business; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller and its affiliates, 1,559,630 ordinary shares (the "SHARES") of
Surface Specialties S.A., a Belgian SOCIETE ANONYME (the "COMPANY"), which
constitute all of the issued and outstanding shares of capital stock of the
Company and the GmbH Shares (as defined herein) and purchase and assume certain
assets and liabilities of the Business as more particularly set forth herein;
and
WHEREAS, in connection with the closing of the transactions
contemplated hereby, Seller and Buyer will enter into a Stockholder's Agreement
(the "STOCKHOLDER'S AGREEMENT"), substantially in the form set forth as Exhibit
A to this Agreement; and
WHEREAS, in connection with the closing of the transactions
contemplated hereby, Seller and Buyer or certain of their respective affiliates
will enter into each of the Ancillary Agreements (as defined herein); and
WHEREAS, the respective boards of directors (or similar bodies) of each
of Seller and Buyer have approved the execution and delivery of, and performance
under, this Agreement and each of the Ancillary Agreements by such party and
certain of its affiliates party thereto, in each case upon the terms and subject
to the conditions set forth in this Agreement; and
WHEREAS, Seller and Buyer desire to make certain representations,
warranties, covenants and undertakings in connection with this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
ARTICLE II
Section 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms have the meanings set forth below:
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"ACCEPTABLE CASH" means, with respect to a Transferred
Subsidiary, the amount of cash and cash equivalents (as determined in accordance
with Belgian GAAP applying the same principles, practices, methodologies and
policies used in the preparation of the Financial Statements) of such
Transferred Subsidiary that is specified with respect to such Transferred
Subsidiary on Schedule 1.1(a).
"ACCEPTABLE INDEBTEDNESS" means, with respect to a Transferred
Subsidiary, the amount of Indebtedness of such Transferred Subsidiary that is
specified with respect to such Transferred Subsidiary on Schedule 1.1(b).
"ACQUIRED PLANS" means the plans and individual pension
promises set forth on Schedule 1.1(c).
"ACQUIRED PLAN GROUP" means, with respect to each jurisdiction
in which an Acquired Plan is maintained, all of the Acquired Plans that are
maintained in such jurisdiction, collectively.
"ACTUAL ACCEPTABLE CASH AMOUNT" has the meaning set forth in
Section 2.6(a).
"ACTUAL ACCEPTABLE INDEBTEDNESS AMOUNT" has the meaning set
forth in Section 2.6(a).
"AFFILIATE" means, with respect to any Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with that Person; PROVIDED
THAT neither CYRO Industries nor American Melamine Industries shall be deemed to
be an Affiliate of Buyer for purposes of the representations and warranties set
forth in Article IV. As used in this definition, "control" (including, with
correlative meanings, "controlled by" and "under common control with") shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise). Without limiting the generality of the foregoing, each Seller
Subsidiary shall be deemed to be an Affiliate of Seller, and each Buyer
Subsidiary shall be deemed to be an Affiliate of Buyer.
"AGREEMENT" has the meaning set forth in the Preamble.
"ALLOCATION STATEMENT" has the meaning set forth in Section
2.12.
"ANCILLARY AGREEMENTS" means the Transition Services
Agreement and the IT/IS Services Agreement.
"APPLICABLE REMEDIATION STANDARD" means, with respect to a
Remediation Activity, the relevant cleanup standard for any Hazardous Substance
present in soil or groundwater as required by any Environmental Law as in effect
at the time of the Remediation Activity.
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"ARBITRAL TRIBUNAL" has the meaning set forth in Section
9.8(b).
"ARBITRATION REQUEST" has the meaning set forth in Section
9.8(b).
"ASSET TRANSFER PLANS" means the plan set forth on Schedule
1.1(d).
"ASSUMED LIABILITIES" means those Liabilities of Seller and
its Affiliates (other than the Transferred Subsidiaries) that are Related to the
Business, other than the Excluded Liabilities.
"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 5.14(c).
"BANKRUPTCY AND EQUITY EXCEPTION" has the meaning set forth in
Section 3.6.
"BASE DBO VARIANCE AMOUNT" means the difference (whether
positive or negative) between (i) the sum of the Base Deficiency, if any, with
respect to each Acquired Plan Group and the Asset Transfer Plans and (ii) the
sum of the Base Excess, if any, with respect to each Acquired Plan Group and the
Asset Transfer Plans, as the case may be; provided that the Base Excess with
respect to an Acquired Plan Group or the Asset Transfer Plans shall be taken
into account only if, under applicable Law and the rules and regulations of
applicable Government Entities, Buyer or any Affiliate of Buyer may derive any
economic benefit from such Base Excess, including any reduced contribution
obligations to any plan included in an Acquired Plan Group or among the Asset
Transfer Plans, following and assuming the transfer of such Base Excess to a
Buyer Benefit Plan pursuant to Section 5.7(c).
"BASE DEFICIENCY" means separately, in respect of each
Acquired Plan Group and the Asset Transfer Plans, the excess, but not below
zero, of (i) the aggregate DBO for such Acquired Plan Group or the Asset
Transfer Plans, as the case may be, as of the Most Recent Balance Sheet Date
over (ii) the sum of the book reserve as reflected on the Most Recent Balance
Sheet and amounts funded as of the Most Recent Balance Sheet Date for
obligations under such Acquired Plan Group or for the Transferred Employees
under the Asset Transfer Plans, respectively, in each case, calculated in
accordance with Schedule 1.1(e). For purposes of the preceding sentence,
"amounts funded" means, in the case of the Acquired Plans, the fair market value
as of the Most Recent Balance Sheet Date of the assets which have been set aside
to fulfill obligations under such Acquired Plans and, in the case of the Asset
Transfer Plans, such portion of assets which has been set aside to fulfill
obligations under the Asset Transfer Plans for the Transferred Employees.
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"BASE EXCESS" means separately, in respect of each Acquired
Plan Group and the Asset Transfer Plans, the excess, but not below zero, of (i)
the sum of the book reserve as reflected on the Most Recent Balance Sheet and
amounts funded as of the Most Recent Balance Sheet Date for obligations under
such Acquired Plan Group or for the Transferred Employees under the Asset
Transfer Plans, as the case may be, over (ii) the aggregate DBO for such
Acquired Plan Group or Asset Transfer Plans, respectively, as of the Most Recent
Balance Sheet Date, in each case, calculated in accordance with Schedule 1.1(e);
provided that the aggregate Base Excess taken into account for all funded plans
included in any single Acquired Plan Group or in the Asset Transfer Plans, as
applicable, shall not exceed (euro)1 million. For purposes of the preceding
sentence, "amounts funded" has the same meaning as in "Base Deficiency."
"BASE NET WORKING CAPITAL VALUE" means (euro)224,885,000,
which represents (i) the total Current Assets shown on the Most Recent Balance
Sheet, MINUS (ii) the total Current Liabilities shown on the Most Recent Balance
Sheet.
"BELGIAN GAAP" means Belgian accounting Laws and generally
accepted accounting principles.
"BELGIAN GAAP AUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 5.14(b).
"BENEFICIALLY OWN" means, with respect to any securities,
having "beneficial ownership" of such securities for purposes of Rule 13d-3 or
13d-5 under the Exchange Act (or any successor statute or regulation), and
"Beneficial Ownership" has a correlative meaning.
"BENEFIT PLANS" means the Non-U.S. Benefit Plans and the
U.S. Benefit Plans.
"BOOKS AND RECORDS" means all books, ledgers, files, reports,
plans, records, manuals and other materials (in any form or medium) of, or
maintained for, the Business, but excluding any such items to the extent (i)
they are related to any Retained Assets, Retained Liabilities, Excluded Assets
or Excluded Liabilities, (ii) any Law prohibits their transfer or (iii) any
transfer thereof otherwise would subject Seller or any of its Affiliates to any
material liability.
"BRAZILIAN AND SPANISH PLANTS" has the meaning set forth in
Section 5.5(c)(iii).
"BUSINESS" means the worldwide business of researching,
developing, manufacturing, marketing and selling resins, additives, adhesives
and coatings, including without limitation, liquid coating resins, radiation
curing resins, powder coating resins, technical resins, additives and specialty
products, multipolymer resins used for pressure sensitive adhesives and adhesive
technologies (including free radical polymerizations, crosslinkers and
formulation components), for the paints and coatings, inks and overprint
varnishes, building and construction, mechanical engineering, automotive body
and parts, wood and furniture, sports and leisure goods, tires and rubber goods
and electronic components manufacturing industries, among others, and including
the Seller Amino Resins Business, but not including methylamines, the Films
Business or any other businesses, plants, properties or other assets divested by
Seller or its Affiliates prior to the Closing Date.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banks in the City of New York or Brussels, Belgium are
authorized or obligated by Law or executive order to close.
"BUSINESS DESIGNATED EMPLOYEE" has the meaning set forth in
Section 3.15(a).
"BUSINESS INTELLECTUAL PROPERTY" means the Owned Intellectual
Property, the Licensed IP and the Licensed-In Intellectual Property.
"BUSINESS MATERIAL ADVERSE EFFECT" means any change or changes
in, or effect on, Seller or its Affiliates that individually or taken together
with one or more other events is materially adverse to the business, assets,
financial condition or results of operations of the Business, taken as a whole;
PROVIDED, HOWEVER, that the following shall not constitute a Business Material
Adverse Effect: (a) changes in Laws or accounting principles or changes in the
enforcement thereof applicable to the Business or changes resulting from the
application of a different set of accounting principles, (b) changes resulting
from the announcement of the execution of this Agreement or the identity of
Buyer, to the extent that a causal relationship is demonstrated to exist between
such announcement and such change, (c) changes resulting from any action
required to be taken pursuant to this Agreement (including Section 5.5), or (d)
changes resulting from events beyond the control of Seller or its Affiliates,
which by their nature could not have been reasonably foreseen by Seller or its
Affiliates or, if they could have been foreseen, were unavoidable by Seller,
which changes described in this clause (d) in each case are not durationally
significant and do not disproportionately affect the Business as compared to the
chemical industry generally.
"BUYER" has the meaning set forth in the Preamble.
"BUYER ADVERSE CONDITION" has the meaning set forth in Section
5.5(d).
"BUYER AUDIT DATE" means December 31, 2003.
"BUYER BENEFIT PLANS" has the meaning set forth in Section
5.7(c).
"BUYER COMMON STOCK" has the meaning set forth in Section 4.3.
"BUYER DISCLOSURE SCHEDULES" has the meaning set forth in the
preamble of Article IV.
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"BUYER INDEMNIFIED PARTIES" has the meaning set forth in
Section 7.2(a).
"BUYER MANAGEMENT PERIOD" has the meaning set forth in Section
7.3(f).
"BUYER MATERIAL ADVERSE EFFECT" means any change or changes
in, or effect on, Buyer or the Buyer Subsidiaries (other than the Transferred
Subsidiaries) that individually or taken together with one or more other events
is materially adverse to the business, assets, financial condition or results of
operations of Buyer and the Buyer Subsidiaries (other than the Transferred
Subsidiaries), taken as a whole; PROVIDED, HOWEVER, that the following shall not
constitute a Buyer Material Adverse Effect: (a) changes in Laws or accounting
principles or changes in the enforcement thereof applicable to Buyer or its
Affiliates or changes resulting from the application of a different set of
accounting principles, (b) changes resulting from the announcement of the
execution of this Agreement or the identity of Seller, to the extent that a
causal relationship is demonstrated to exist between such announcement and such
change, (c) changes resulting from any action required to be taken pursuant to
this Agreement (including Section 5.5), (d) changes resulting from events beyond
the control of Buyer or its Affiliates, which by their nature could not have
been reasonably foreseen by Buyer or its Affiliates or, if they could have been
foreseen, were unavoidable by Buyer, which changes described in this clause (d)
in each case are not durationally significant and do not disproportionately
affect Buyer as compared to the chemical industry generally, or (e) changes in
the market price of the Buyer Common Stock.
"BUYER REPORTS" has the meaning set forth in Section 4.7.
"BUYER SUBSIDIARY" means any Person (i) whose securities or
other ownership interests, having by their terms the power to elect a majority
of the board of directors or other Persons performing similar function, are
owned or controlled, directly or indirectly, by Buyer, (ii) whose business and
policies Buyer has the power, directly or indirectly, to direct, or (iii) of
which 50% or more of the securities, partnership or other ownership interests
are owned, directly or indirectly, by Buyer, PROVIDED THAT for purposes of the
representations and warranties set forth in Article IV, neither CYRO Industries
nor American Melamine Industries shall be deemed to be a Buyer Subsidiary.
"BUYER'S ENVIRONMENTAL DAMAGES PERCENTAGE ALLOCATION" has the
meaning set forth in Section 7.3(d).
"CAP" has the meaning set forth in Section 7.2(b).
"CASH PURCHASE PRICE" has the meaning set forth in Section
2.5(a).
"CHANGE OF CONTROL TRANSACTION" means any (1) merger,
consolidation or other business combination transaction a result of which the
stockholders of Buyer prior to such transaction would cease to hold at least 60%
of the voting securities of the entity surviving or resulting from such
transaction (or the ultimate parent entity thereof), (2) acquisition by any
Person of at least 30% of the outstanding voting securities of Buyer, (3) sale,
lease, exchange or other disposition of at least 40% of the assets of Buyer and
the Buyer Subsidiaries, taken as a whole, (4) transaction a result of which the
directors on Buyer's board of directors immediately prior to such transaction
would cease to represent a majority of the directors comprising Buyer's board of
directors or the board of directors of the entity surviving or resulting from
such transaction (or the ultimate parent entity thereof) or (5) tender offer
commenced by a third party seeking to acquire at least 50% of the outstanding
Buyer Common Stock the acceptance of which is recommended to the holders of
Buyer Common Stock by a majority of Buyer's board of directors.
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"CLAIM NOTICE" has the meaning set forth in Section 7.5.
"CLOSING" means the closing of the stock and asset sale that
is the subject of this Agreement.
"CLOSING DATE" has the meaning set forth in Section 2.7.
"CLOSING DATE NET WORKING CAPITAL STATEMENT" means the net
working capital statement that sets forth the Current Assets and Current
Liabilities of the Business as of the Closing, prepared, or caused to be
prepared, by Buyer in accordance with Section 2.6 hereof and, in the event of a
Seller's Objection, as adjusted by either the agreement of Buyer and Seller, or
by the CPA Firm, acting pursuant to Section 2.6.
"CLOSING PURCHASE PRICE ADJUSTMENT AMOUNT" has the meaning set
forth in Section 2.5(c).
"CODE" means the United States Internal Revenue Code of 1986,
as amended, or any successor law.
"COMPANY" has the meaning set forth in the Recitals.
"COMPUTER SOFTWARE" means computer software and databases.
"CONFIDENTIALITY AGREEMENT" means the Secrecy Agreement
between Seller and Buyer, dated February 20, 2004.
"CONTRACTS" means all agreements, contracts, leases and
subleases, purchase orders, arrangements, commitments and licenses (other than
this Agreement, the Stockholder's Agreement, the Ancillary Agreements, and those
governing the Seller Leased Property) (i) to which any of the Transferred
Subsidiaries is a party or under which any Transferred Subsidiary derives,
grants or forbears rights, or (ii) to which Seller and/or any of its Affiliates
(other than the Transferred Subsidiaries) is a party, or under which Seller
and/or any of its Affiliates (other than the Transferred Subsidiaries) otherwise
derives, grants or forbears rights, and, in each case, that are Related to the
Business, in each case whether written or oral.
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"COPYRIGHTS" has the meaning set forth in the "Intellectual
Property" definition.
"CPA FIRM" means Ernst & Young or such other firm of
independent certified public accountants to which Seller and Buyer shall
mutually agree.
"CURRENT ASSETS" means, as of any date, the current assets of
the Business, as determined in accordance with Belgian GAAP applying the same
principles, practices, methodologies and policies used in the preparation of the
Financial Statements, excluding (i) cash and cash equivalents, (ii) any assets
other than cash and cash equivalents that would otherwise be Retained Assets or
Excluded Assets if the measurement date were the Closing Date, (iii) any
Intercompany Receivables, (iv) any current and deferred Tax assets, (v) any
assets intended to fund pension, savings or welfare benefit obligations under a
Benefit Plan for which Seller will have a reimbursement obligation or will
otherwise remain responsible after the Closing pursuant to the terms of Section
5.7, and (vi) any insurance proceeds collected between the date of the Most
Recent Balance Sheet and the Closing in respect of any Transferred Asset or
asset of a Transferred Subsidiary (other than a Retained Asset), PROVIDED THAT
such proceeds shall not be excluded for purposes of calculating the Base Net
Working Capital Value.
"CURRENT LIABILITIES" means, as of any date, the current
liabilities of the Business, as determined in accordance with Belgian GAAP
applying the same principles, practices, methodologies and policies used in the
preparation of the Financial Statements, excluding (i) any liabilities that
would be Retained Liabilities or Excluded Liabilities if the measurement date
were the Closing Date, (ii) any Intercompany Payables, (iii) any short-term debt
for money borrowed or other similar financial debt, (iv) any current and
deferred Tax Liabilities, and (v) any Liabilities in respect of pension, savings
or welfare benefit obligations accrued under a Benefit Plan for which Seller
will have a reimbursement obligation or will otherwise remain responsible after
the Closing pursuant to the terms of Section 5.7.
"DBO" means, as of any date, (i) in respect of each Acquired
Plan, the total Defined Benefit Obligation under such Acquired Plan for all
participants in each such plan, including former employees and retirees, and
(ii) in respect of each Asset Transfer Plan, the total Defined Benefit
Obligations under each such plan in respect of any Transferred Employee, in each
case calculated as of such date in accordance with the assumptions set forth in
Schedule 1.1(e) in respect of the relevant plan.
"DEFINED BENEFIT OBLIGATION" means the present value of all
benefits attributed to past service. The actuarial method to be used to
calculate the Defined Benefit Obligation is projected unit credit. Thus, for
each future date at which a benefit might be payable under the plan, a projected
benefit value ("PBV") is calculated. If the benefit formula is based on future
compensation levels, then the PBV is calculated using an assumption as to future
compensation levels, as specified in Schedule 1.1(e). If the projected benefit
is to be paid out as an annuity, then the PBV is calculated by multiplying the
projected benefit by an annuity present value calculated taking into account the
mortality assumptions specified in Schedule 1.1(e). If benefits paid as an
annuity will be indexed for inflation, either under the terms of the plan or
under applicable law, then that indexation will also be included in the value of
the annuity, using the inflation assumption specified in Schedule 1.1(e). The
PBV so calculated is then divided into the portion attributed to past service
and the portion attributed to future service. Attribution of the PBV to past and
future service is on a straight-line basis from the date the employee was first
hired to the earlier of the date when the benefit is assumed to be paid or the
date when further service by the employee will lead to no further material
accumulation under the plan of the particular benefit being valued, other than
from future salary increases. To calculate the DBO, the present value of the PBV
attributable to past service is calculated using discount rates, turnover,
retirement, mortality, and such other assumptions as are appropriate, as
specified in Schedule 1.1(e).
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"DEDUCTIBLE" has the meaning set forth in Section 7.2(b).
"DISPUTE" has the meaning set forth in Section 9.8(b).
"EBITDA" means earnings before interest, taxes, depreciation
and amortization and before allocations for Seller's central corporate charges.
"EC MERGER REGULATION" means COUNCIL REGULATION (EC) No.
139/2004 of January 20, 2004 on the control of concentrations between
undertakings.
"EC TREATY" means the Treaty establishing the European
Community, as amended.
"EINECS" means the European Inventory of Existing Chemical
Substances created by European Commission Decision 81/437/EEC, as amended.
"ENCUMBRANCE" means any lien, pledge, charge, claim,
encumbrance, security interest, option, mortgage, easement, license or other
restriction or third party right of any kind, including any right of first
refusal or restriction on voting.
"ENVIRONMENTAL CAP" has the meaning set forth in Section
7.3(b).
"ENVIRONMENTAL DAMAGES" means any damages, liabilities, costs
and expenses, fines, penalties, and costs of monitoring, investigations,
remediation, restoration and cleanup arising under any Environmental Law (but
specifically excluding lost profits, loss in value of assets or shares, or
indirect or consequential, exemplary, treble or punitive damages) to the extent
that such arise out of or result from: (i) any Noncompliance, (ii) any
Remediation Activity or (iii) any Third Party Claim with respect to any
Remediation Activity or Noncompliance.
-9-
"ENVIRONMENTAL DEDUCTIBLE" has the meaning set forth in
Section 7.3(b).
"ENVIRONMENTAL INDEMNITY CLAIM PERIOD" means the period
starting as of the Closing Date and ending on the seventh anniversary of the
Closing.
"ENVIRONMENTAL LAW" means any Law, Governmental Authorization
or the relevant standard or guidance document that is consistently applied by
the relevant Government Entity relating to (i) the protection of the environment
(including air, water, land, natural resources and wetlands) or human health and
safety, (ii) the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, management, release or disposal of, any
Hazardous Substance or (iii) noise and odor.
"ERISA" has the meaning set forth in Section 3.15.
"ERISA AFFILIATE" has the meaning set forth in Section 3.15.
"ERISA PLAN" has the meaning set forth in Section 3.15.
"ESTIMATED ACCEPTABLE CASH AMOUNT" has the meaning set forth
in Section 2.5(b).
"ESTIMATED ACCEPTABLE INDEBTEDNESS AMOUNT" has the meaning set
forth in Section 2.5(b).
"ESTIMATED CLOSING NET WORKING CAPITAL VALUE" has the meaning
set forth in Section 2.5(b).
"EU" means the European Union constituted as of the date
hereof.
"EUROPEAN COMMISSION" means the Commission of the European
Communities.
"EUROPEAN COMPETITION LAW" means the EC Merger Regulation,
Council Regulation (EEC) No. 4064/89, Articles 81 and 82 of the EC Treaty, each
of the merger control Laws of the Member States and any other Law (civil or
criminal) of the EU or the Member States relating to competition, restrictive
trade practices, unfair competition, antitrust, monopolies, fair trading or
restraint of trade.
"EXCESS CASH" means, as of any date with respect to any
Transferred Subsidiary, the cash and cash equivalents (as determined in
accordance with Belgian GAAP applying the same principles, practices,
methodologies and policies used in the preparation of the Financial Statements)
of such Transferred Subsidiary in excess of the amount specified with respect to
such Transferred Subsidiary on Schedule 1.1(a).
"EXCESS INDEBTEDNESS" means, as of any date with respect to
any Transferred Subsidiary, the Indebtedness of such Transferred Subsidiary in
excess of the amount specified with respect to such Transferred Subsidiary on
Schedule 1.1(b).
-10-
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.2.
"EXCLUDED LIABILITIES" means the following:
(i) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) for any violation of, or
non-compliance with, any U.S. Antitrust Law, European Competition Law
or other similar Law of any jurisdiction;
(ii) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to the extent related to
either (a) the Nitro, West Virginia site of Solutia, Inc. or (b) the
Soborg, Denmark site, including Liabilities to the extent related to
the ownership or operation of, the properties and assets of, or
contractual obligations relating to such site;
(iii) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to the extent arising under
or as a result of, or relating to, to the ownership or operation of any
facility or assets, the conduct of any business or any acts or
omissions by Seller or any of its Affiliates prior to the Closing which
Liabilities are not Related to the Business;
(iv) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to the extent resulting from
Seller and its Affiliates having agreed to and/or having completed the
Pre-Signing Restructuring Transactions or the Post-Signing
Restructuring Transactions; PROVIDED that, (i) any Liabilities of
Seller and its Affiliates existing prior to the Pre-Signing
Restructuring Transactions, and (ii) any Tax Liabilities to be
indemnified by Buyer as provided in Section 5.6, shall not become
Excluded Liabilities solely by virtue of this clause (iv);
(v) All Indebtedness of Seller or its Affiliates
(other than the Transferred Subsidiaries);
(vi) All Tax Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to be indemnified by Seller
as provided in Section 5.6;
(vii) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to the extent arising out of
or resulting from the ownership of the Excluded Assets; and
-11-
(viii) All Liabilities of Seller and its Affiliates
(other than the Transferred Subsidiaries) to be retained by Seller and
its Affiliates (other than the Transferred Subsidiaries) as provided in
Section 5.7, including any Liabilities that arise out of or in
connection with any obligation in respect of a Retained Plan other than
a Liability in respect of a Transferred Employee to the extent such
Liability (i) relates to assets or book reserves transferred under or
in respect of a Retained Plan in accordance with Section 5.7 of this
Agreement or through operation of the Purchase Price adjustment
mechanism set forth under Section 2.5 of this Agreement, (ii) arises
under applicable Laws as a result of the separation of a Retained Plan
as contemplated under this Agreement or (iii) is reflected as a Current
Liability on the Closing Date Net Working Capital Statement.
"FILMS BUSINESS" means the business of Seller and its
Affiliates (including only the Transferred Subsidiaries set forth on Schedule
1.1(f)) relating to the development, design, manufacture, improvement,
treatment, promotion, marketing, sale or other exploitation of cellulose film
and polypropylene film, and process equipment used for the manufacture,
treatment or use of such film(s).
"FILMS DISPOSITION AGREEMENT" means the Purchase Agreement,
dated as of July 19, 2004, between Seller, an affiliate of Seller and Hamsard
2724 Limited.
"FILMS SEPARATION" means (i) the sale, conveyance, transfer,
assignment and delivery by Seller and certain of its Affiliates of the Films
Business pursuant to, and to the extent contemplated by, the Films Disposition
Agreement, or (ii) in the event the transactions contemplated by the Films
Disposition Agreement are not completed prior to the Closing, the sale,
conveyance, transfer, assignment and delivery by the Transferred Subsidiaries to
Seller and its Affiliates (other than the Transferred Subsidiaries) of all of
the Transferred Subsidiaries' right, title and interest, as of the Closing, in
and to the assets, rights, shares and properties of the Transferred Subsidiaries
contemplated to be transferred, directly or indirectly, to Hamsard 2724 Limited
pursuant to the Films Disposition Agreement, and the assumption by Seller and
its Affiliates (other than the Transferred Subsidiaries) from the Transferred
Subsidiaries and other subsidiaries thereof, if any, of all of the Liabilities
contemplated to be assumed, directly or indirectly, by Hamsard 2724 Limited
pursuant to the Films Disposition Agreement, in each case pursuant to Section
5.12(b).
"FINAL CLOSING NET WORKING CAPITAL VALUE" means Current Assets
MINUS Current Liabilities, determined as of the Closing Date but using the same
currency exchange rates as were used in the calculations of Base Net Working
Capital Value.
"FINAL DBO VARIANCE AMOUNT" means the difference (whether
positive or negative) between (i) the sum of the Final Deficiency, if any, with
respect to each Acquired Plan Group and the Asset Transfer Plans and (ii) the
sum of the Final Excess, if any, with respect to each Acquired Plan Group and
the Asset Transfer Plans; provided that the Final Excess with respect to an
Acquired Plan Group or the Asset Transfer Plans shall be taken into account only
if, under applicable Law and the rules and regulations of applicable Government
Entities, Buyer or any Affiliate of Buyer may derive any economic benefit from
such Final Excess, including any reduced contribution obligations to any plan
included in an Acquired Plan Group or among the Asset Transfer Plans following
and assuming the transfer of such Final Excess to a Buyer Benefit Plan pursuant
to Section 5.7(c).
-12-
"FINAL DEFICIENCY" means separately, in respect of each
Acquired Plan Group and the Asset Transfer Plans, the excess, but not below
zero, of (i) the aggregate DBO for such Acquired Plan Group or the Asset
Transfer Plans, as the case may be, as of the Closing Date over (ii) the sum of
the book reserve as of the Closing Date and amounts funded as of the Closing
Date for obligations under such Acquired Plan Group or for the Transferred
Employees under the Asset Transfer Plans, respectively, in each case, calculated
in accordance with Schedule 1.1(e). For purposes of the preceding sentence,
"amounts funded" means, in the case of the Acquired Plans, the fair market
value, as of the Closing Date, of assets which have been set aside to fulfill
obligations under the Acquired Plans and, in the case of the Asset Transfer
Plans, such portion of assets which have actually been transferred to the Buyer
Benefit Plans in accordance with Section 5.7(c) to fulfill obligations under
such Asset Transfer Plans for the Transferred Employees.
"FINAL EXCESS" means separately, in respect of each Acquired
Plan Group and the Asset Transfer Plans, the excess, but not below zero, of (i)
the sum of the book reserve as of the Closing Date and amounts funded as of the
Closing Date for obligations under such Acquired Plan Group or for the
Transferred Employees under the Asset Transfer Plans, as the case may be, over
(ii) the aggregate DBO for such Acquired Plan Group or Asset Transfer Plans,
respectively, as of the Closing Date, in each case, calculated in accordance
with Schedule 1.1(e); PROVIDED that the aggregate Final Excess taken into
account for all funded plans included in any single Acquired Plan Group or in
the Asset Transfer Plans, as applicable, shall not exceed (euro)1 million. For
purposes of the preceding sentence, "amounts funded" has the same meaning as in
"Final Deficiency."
"FINANCIAL STATEMENTS" has the meaning set forth in Section
3.7.
"FINANCING COMMITMENTS" has the meaning set forth in Section
4.12.
"FORCE MAJEURE EVENT" means any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange, (ii) a general moratorium on commercial banking activities
declared by a United States federal, New York state, English national or City of
London Government Entity, (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, or (iv) the occurrence of a significant terrorist
event in the United States or directed at United States embassies or facilities
outside the United States.
"GMBH SHARES" means all of the shares of capital stock of
Surface Specialties Holding GmbH that are owned by UCB GmbH.
-13-
"GOVERNMENT ANTITRUST ENTITY" means any Government Entity with
jurisdiction over the enforcement of any U.S. Antitrust Law, European
Competition Law or other similar Law.
"GOVERNMENT ENTITY" means any federal, state or local
judicial, legislative or administrative body or other governmental or
quasi-governmental entity with competent jurisdiction.
"GOVERNMENTAL AUTHORIZATIONS" means all licenses, permits,
certificates and other clearances, authorizations and approvals Related to the
Business or of the Transferred Subsidiaries and issued by or obtained from a
Government Entity or Self-Regulatory Organization.
"HAZARDOUS SUBSTANCE" means any substance that is listed,
defined, designated or classified as hazardous, toxic or otherwise harmful under
any Environmental Law or is regulated under any Environmental Law, including
petroleum products and byproducts, asbestos-containing material, polychlorinated
biphenyls and lead-containing products.
"HISTORICAL FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.7.
"HSR ACT" means the United States ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"ICC" has the meaning set forth in Section 9.8(b).
"INDEBTEDNESS" means (i) all Liabilities for borrowed money,
whether current or funded, secured or unsecured, all obligations evidenced by
bonds, debentures, notes or similar instruments, and all Liabilities in respect
of mandatorily redeemable or purchasable capital stock or securities convertible
into capital stock; (ii) all Liabilities for the deferred purchase price of
property; (iii) all Liabilities in respect of any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which Liabilities are required to be classified and accounted for under Belgian
GAAP as capital leases; and (iv) all Liabilities for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction securing obligations of a type described in clause (i), (ii) or
(iii) above to the extent of the obligation secured, and all Liabilities as
obligor, guarantor, or otherwise, to the extent of the obligation secured
PROVIDED that, for the avoidance of doubt, the redeemable preferred capital
stock of Surface Specialties, Inc. shall not be deemed to be Indebtedness.
"INDEMNIFIED PARTIES" has the meaning set forth in Section
7.4.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.5.
"INTELLECTUAL PROPERTY" means all intellectual property
rights, including such rights in and to all (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a's, Internet domain names,
logos, symbols, trade dress, assumed names, fictitious names, trade names, and
other indicia of origin, all applications and registrations for the foregoing,
and all goodwill associated therewith and symbolized thereby, including all
renewals of same (collectively, "TRADEMARKS"); (ii) all patents, registrations,
invention disclosures and applications therefor, including divisions,
continuations, continuations-in-part and renewal applications, and including
renewals, extensions and reissues (collectively, "PATENTS") and inventions and
discoveries, whether patentable or not; (iii) trade secrets and confidential
information and know-how, including processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer lists and supplier
lists (collectively, "TRADE SECRETS"); (iv) published and unpublished works of
authorship, whether copyrightable or not (including without limitation databases
and other compilations of information), copyrights therein and thereto, and
registrations and applications therefor, and all renewals, extensions,
restorations and reversions thereof (collectively, "COPYRIGHTS"); (v) moral
rights, rights of publicity and rights of privacy; and (vi) Computer Software.
-14-
"INTELLECTUAL PROPERTY CONTRACT" means a Contract relating
primarily to Intellectual Property, including licenses, Computer Software
maintenance, consent, coexistence and non-assertion Contracts, but excluding any
such Contract that is an Excluded Asset or Retained Asset.
"INTERCOMPANY PAYABLES" means all account, note or loan
payables recorded on the books of Seller or any of its Affiliates (other than
the Transferred Subsidiaries) for goods or services purchased by or provided to
the Business or the Transferred Subsidiaries, or advances (cash or otherwise) or
any other extensions of credit to the Business or the Transferred Subsidiaries
from Seller or any of its Affiliates (other than the Transferred Subsidiaries),
but shall not include any accounts, notes, loan payables, advances or other
extensions of credit arising under this Agreement or any of the Ancillary
Agreements.
"INTERCOMPANY RECEIVABLES" means all account, note or loan
receivables recorded on the books of Seller or any of its Affiliates (other than
the Transferred Subsidiaries) for goods or services sold or provided by the
Business or the Transferred Subsidiaries to Seller or any of its Affiliates
(other than the Transferred Subsidiaries) or advances (cash or otherwise) or any
other extensions of credit made by the Business or the Transferred Subsidiaries
to Seller or any of its Affiliates, but shall not include any accounts, notes,
loan payables, advances or other extensions of credit arising under this
Agreement or any of the Ancillary Agreements.
"INTERIM FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.7.
"IP FILING" means any filing required to be made with any
Government Entity or Internet domain name register in respect of Intellectual
Property.
"IP RECORDATIONS" has the meaning set forth in Section 5.8(k).
-15-
"IP-REGISTERED" means Intellectual Property that is issued by,
registered or the subject of a pending application for registration with a
Government Entity or an Internet domain name register.
"IT ASSETS" means computers, Computer Software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications
lines, and all other information technology equipment and elements, and all
associated documentation.
"IT HARDWARE" means IT Assets that are not Computer Software.
"IT HARDWARE CONTRACT" means a Contract relating to IT
Hardware, but excluding any such Contract that is an Excluded Asset or Retained
Asset.
"IT/IS SERVICES AGREEMENT" means the services agreement by and
between Seller and the Company for information technology and information
services substantially in the form attached hereto as Exhibit B.
"JAPANESE TRANSFERRED EMPLOYEE" has the meaning set forth in
Section 5.7(c)(vii).
"KNOWLEDGE" or any similar phrase means the collective actual
knowledge, as of the date of determination, of the employees of (i) Seller and
its Affiliates or (ii) Buyer and its Affiliates, as the case may be, listed on
Schedule 1.1(g).
"KNOWN CONDITION" means any condition, circumstance, source of
contamination, noncompliance, facts or other factual or non-speculative
information identified or disclosed in Schedules 3.13(a)-(f).
"LAW" means any law, including common law, statute, ordinance,
rule, regulation, code, order, judgment, adjudication, injunction, decision,
directive, declaration or decree enacted, issued, promulgated, enforced or
entered by a Government Entity or Self-Regulatory Organization, in each case, as
in effect on the date of this Agreement or at any time from now until Closing
or, with respect to prior periods, as in effect from time-to-time during such
periods.
"LEASED REAL PROPERTY" has the meaning set forth in Section
3.19.
"LIABILITIES" means any and all debts, liabilities,
commitments and obligations of any kind, whether fixed, contingent or absolute,
matured or unmatured, liquidated or unliquidated, accrued or not accrued,
asserted or not asserted, known or unknown, determined, determinable or
otherwise, whenever or however arising (including whether arising out of any
contract or tort based on negligence or strict liability) and whether or not the
same would be required by applicable accounting rules or principles to be
reflected in financial statements or disclosed in the notes thereto.
-16-
"LIBOR" means the Interbank Offering Rate for the nearest
comparable period with respect to deposits in Euros which appears on the
applicable Telerate Page as of 11:00 a.m., London time, on the day that is two
business days in London preceding the Closing.
"LICENSED COMPUTER SOFTWARE" has the meaning set forth in
Section 5.8(b).
"LICENSED IP" has the meaning set forth in Section
5.8(b)(iii).
"LICENSED TRADEMARK" has the meaning set forth in Section
5.8(a)(i).
"LICENSED-BACK COMPUTER SOFTWARE" has the meaning set forth in
Section 5.8(c).
"LICENSED-IN INTELLECTUAL PROPERTY" means the Intellectual
Property not owned by Seller or any of its Affiliates, which is licensed or
otherwise made available to Seller and/or any of its Affiliates pursuant to the
Intellectual Property Contracts.
"LOSSES" has the meaning set forth in Section 7.2(a).
"MANAGING PARTY" has the meaning set forth in Section 7.3(h).
"MATERIAL CONTRACTS" has the meaning set forth in Section
3.17(a).
"MEMBER STATE" means a member state of the EU.
"MOST RECENT BALANCE SHEET" means the unaudited combined
balance sheet of the Business dated as of the Most Recent Balance Sheet Date and
attached hereto as Schedule 1.1(h).
"MOST RECENT BALANCE SHEET DATE" means December 31, 2003.
"MULTIEMPLOYER PLAN" has the meaning set forth in Section
3.15.
"NONCOMPLIANCE" means a violation on or prior to the Closing
of an applicable Environmental Law relating to operations at the Owned Real
Property or the Leased Real Property.
"NON-GOVERNMENTAL AUTHORIZATIONS" means all licenses, permits,
certificates and other authorizations and approvals other than Governmental
Authorizations that are (i) held by Seller or any of its Affiliates (other than
the Transferred Subsidiaries) and Related to the Business or (ii) held by the
Transferred Subsidiaries.
"NON-MANAGING PARTY" has the meaning set forth in Section
7.3(h).
-17-
"NON-U.S. BENEFIT PLAN" has the meaning set forth in Section
3.15.
"NOTICE" has the meaning set forth in Section 9.8(b).
"NOTICE PERIOD" has the meaning set forth in Section 7.5(a).
"NYSE" means the New York Stock Exchange, Inc.
"ORDER" has the meaning set forth in Section 6.1(b).
"ORDINARY COURSE" means the conduct by a Person of the
relevant business in accordance with such Person's normal day-to-day customs,
practices and procedures.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any
corporation, its articles or certificate of incorporation and by-laws, and with
respect to any other type of entity, its organizational documents.
"OTHER ANTITRUST APPROVALS" means antitrust approvals in
Taiwan and Turkey.
"OTHER ANTITRUST FILINGS" has the meaning set forth in Section
3.4(a).
"OWNED INTELLECTUAL PROPERTY" means (i) all Intellectual
Property owned by Seller and/or any of its Affiliates (other than the
Transferred Subsidiaries) that is Related to the Business and (ii) all
Intellectual Property owned by any of the Transferred Subsidiaries.
"OWNED IT HARDWARE" means (i) all IT Hardware owned by Seller
and/or any of its Affiliates (other than the Transferred Subsidiaries) that is
Related to the Business and (ii) all IT Hardware owned by any of the Transferred
Subsidiaries.
"OWNED REAL PROPERTY" has the meaning set forth in Section
3.19.
"PATENT AND TRADEMARK OFFICES" has the meaning set forth in
Section 5.8(f).
"PATENTS" has the meaning set forth in the "Intellectual
Property" definition.
"PBV" has the meaning set forth in the "Defined Benefit
Obligation" definition.
"PERMITTED ENCUMBRANCES" means (i) Encumbrances specifically
reflected or specifically reserved against or otherwise disclosed in the Most
Recent Balance Sheet, (ii) Encumbrances incurred in the Ordinary Course since
the date of the Most Recent Balance Sheet that are not material in amount or
effect on the Business, (iii) mechanics', materialmen's, warehousemen's,
carriers', workers', or repairmen's liens or other similar common law or
statutory Encumbrances arising or incurred in the Ordinary Course that are not
material in amount or effect on the Business, (iv) liens for Taxes, assessments
and other governmental charges not yet due and payable or due but not delinquent
or being contested in good faith by appropriate proceedings, in each case, in an
amount that would not be material, (v) with respect to real property, (A)
easements, quasi-easements, licenses, covenants, rights-of-way, rights of
re-entry or other similar restrictions, including any other agreements,
conditions or restrictions that would be shown by a current title report or
other similar report or listing, (B) any conditions that may be shown by a
current survey or physical inspection and (C) zoning, building, subdivision or
other similar requirements or restrictions and (vi) with respect to Intellectual
Property, licenses of Intellectual Property rights (but, for the avoidance of
doubt, not liens, security agreements or assignments, or other Encumbrances)
granted by the Company or any of its Subsidiaries in the Ordinary Course (and,
without limitation, not in connection with the Films Separation) and not
interfering in any material respect with the conduct of the Business.
-18-
"PERSON" means an individual, a corporation, a partnership, an
association, a limited liability company, a Government Entity, a trust or other
entity or organization.
"POST-CLOSING PERIOD" has the meaning set forth in Section
5.6(c).
"POST-CLOSING PURCHASE PRICE ADJUSTMENT AMOUNT" has the
meaning set forth in Section 2.5(d).
"POST-CLOSING TAX ATTRIBUTES" has the meaning set forth in
Section 5.6(f).
"POST-SIGNING RESTRUCTURING TRANSACTION" has the meaning set
forth in Section 5.12.
"PRE-CLOSING ENVIRONMENTAL CONDITION" means (i) the amount and
volume of any Hazardous Substance present prior to the Closing in the soil,
groundwater, water, wetlands or any natural resources at the Owned Real Property
or the Leased Real Property; and (ii) the amount and volume of any Hazardous
Substance with respect to any real property other than the Owned Real Property
or the Leased Real Property that is present as a result of the ownership,
operation or occupancy of that real property by Seller or any of its Affiliates
or as a result of the storage, transportation or disposal of such Hazardous
Substance by Seller or any of its Affiliates in connection with the operation of
the Business prior to the Closing. In the event that any Hazardous Substances
present at any Owned Real Property, Leased Real Property or other real property
are alleged to have been caused by activities that commenced before and
continued after the Closing or by activities of multiple parties, the relative
shares of responsibility for such claims shall be allocated between Buyer and
Seller using customary and appropriate equitable factors including, but not
limited to, relative percentages of waste sent to a site by Buyer and Seller,
relative volumes of Hazardous Substances processed at a site by Buyer and
Seller, relative length of operation of the relevant process unit or facility by
Buyer and Seller or process methods.
-19-
"PRE-CLOSING PERIOD" has the meaning set forth in Section
5.6(b).
"PRE-SIGNING RESTRUCTURING TRANSACTION" has the meaning set
forth in Section 3.28.
"PRODUCT" has the meaning set forth in Section 3.21.
"PROPOSED ALLOCATION STATEMENT" has the meaning set forth in
Section 2.12.
"PURCHASE PRICE" has the meaning set forth in Section 2.5(a).
"PURCHASE PRICE CERTIFICATE" has the meaning set forth in
Section 2.5(b).
"PURCHASE PRICE SHARES" means 5,772,857 shares of Buyer Common
Stock, as such number may be equitably adjusted from time to time prior to the
Closing to take account of any reclassification, stock split (including a
reverse stock split), stock dividend or distribution, recapitalization, merger,
subdivision, issuer tender or exchange offer, or other similar transaction.
"REAL PROPERTY LEASES" has the meaning set forth in Section
3.20(a).
"RELATED TO THE BUSINESS" means primarily related to, or used
or held primarily in connection with, the Business as conducted by Seller and
its Affiliates.
"REMEDIATION ACTIVITY" means the investigation, monitoring,
correction and remediation of a Pre-Closing Environmental Condition to the
extent required by an Applicable Remediation Standard, including but not limited
to soil and groundwater sampling, activities associated with the construction,
operation or maintenance of remediation or treatment equipment and systems,
excavation and/or treatment of contaminated soil and groundwater, and measures
to contain, monitor or limit contamination in relation to any Pre-Closing
Environmental Condition.
"RESPONDENT" has the meaning set forth in Section 9.8(b).
"RESTRUCTURING TRANSACTION TAXES" has the meaning set forth in
Section 5.6(a).
"RETAINED ASSETS" means the following:
(i) those assets of the Transferred Subsidiaries set
forth on Schedule 1.1(i);
(ii) the Excess Cash of each of the Transferred
Subsidiaries as of the Closing;
-20-
(iii) those assets of any of the Transferred
Subsidiaries, including any right of any of the Transferred
Subsidiaries to be indemnified for Liabilities primarily related to any
current or former business, facility or assets of Seller and its
Affiliates, including the Films Business, that are not Related to the
Business;
(iv) all Tax assets (including duty and Tax refunds
and prepayments) of the Transferred Subsidiaries to the extent Seller
is entitled thereto under Section 5.6; and
(v) all Solutia Claims of the Transferred
Subsidiaries (A) identified on Schedule 3.7(f) under the heading
"Retained Contingent Solutia Assets" and (B) for indemnification under
the Stock and Asset Purchase Agreement, dated as of December 2, 2002,
between Seller and Solutia, Inc. to the extent related to (x) any
Solutia Claims identified on Schedule 3.7(f) under the heading
"Retained Contingent Solutia Assets" or (y) any other Retained Asset or
Retained Liability.
"RETAINED LIABILITIES" means the following:
(i) All Liabilities of any of the Transferred
Subsidiaries for any violation of, or non-compliance with, any U.S.
Antitrust Law, European Competition Law or other similar Law of any
jurisdiction before the Closing;
(ii) All Liabilities of the Transferred Subsidiaries
to the extent related to either (a) the Nitro, West Virginia site of
Solutia, Inc. or (b) the Soborg, Denmark site, including Liabilities to
the extent related to the ownership or operation of, the properties and
assets of, or contractual obligations relating to such site;
(iii) All Liabilities of any of the Transferred
Subsidiaries to the extent arising under or as a result of, or relating
to, the ownership or operation of any facility or assets, the conduct
of any business or any acts or omissions by any of the Transferred
Subsidiaries or their Affiliates or predecessors prior to the Closing
which Liabilities are not Related to the Business;
(iv) All Liabilities of any of the Transferred
Subsidiaries to the extent resulting from the Transferred Subsidiaries
having agreed to and/or having completed the Pre-Signing Restructuring
Transactions or the Post-Signing Restructuring Transactions; PROVIDED
that (i) any Liabilities of Seller and its Affiliates existing prior to
the Pre-Signing Restructuring Transactions, and (ii) any Tax
Liabilities to be indemnified by Buyer as provided in Section 5.6,
shall not become Retained Liabilities solely by virtue of this clause
(iv);
(v) All Excess Indebtedness of the Transferred
Subsidiaries as of the Closing, other than the Transferred Intercompany
Payables;
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(vi) All Liabilities of the Transferred Subsidiaries
identified on Schedule 3.7(f) under the heading "Retained Contingent
Solutia Liabilities";
(vii) All Liabilities of the Transferred Subsidiaries
to the extent arising out of or resulting from the ownership of the
Retained Assets;
(viii) All Tax Liabilities of the Transferred
Subsidiaries to be indemnified by Seller as provided in Section 5.6;
and
(ix) All Liabilities of the Transferred Subsidiaries
to be retained by Seller and its Affiliates (other than the Transferred
Subsidiaries) as provided in Section 5.7, including any Liabilities
that arise out of or in connection with any obligation in respect of a
Retained Plan other than a Liability in respect of a Transferred
Employee to the extent such Liability (i) relates to assets or book
reserves transferred under or in respect of a Retained Plan in
accordance with Section 5.7 of this Agreement or through operation of
the Purchase Price adjustment mechanism set forth under Section 2.5 of
this Agreement, (ii) arises under applicable Laws as a result of the
separation of a Retained Plan as contemplated under this Agreement or
(iii) is reflected as a Current Liability on the Closing Date Net
Working Capital Statement.
"RETAINED PLANS" means the plans set forth on Schedule 1.1(j).
"RULES" has the meaning set forth in Section 9.8(b).
"SEC" means the United States Securities and Exchange
Commission.
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations thereunder.
"SELF-REGULATORY ORGANIZATION" means the National Association
of Securities Dealers, Inc., the American Stock Exchange, the National Futures
Association, the Chicago Board of Trade, the NYSE, any national securities
exchange (as defined in the Exchange Act), any other securities exchange,
futures exchange, contract market, any other exchange or corporation or similar
self-regulatory body or organization.
"SELLER" has the meaning set forth in the Preamble.
"SELLER AMINO RESINS BUSINESS" has the meaning set forth in
Schedule 1.1(k).
"SELLER DC PLANS" means those Benefit Plans of Seller or any
of its Affiliates (other than the Transferred Subsidiaries) that are "employee
pension benefit plans," within the meaning of Section 3(2) of ERISA, whether or
not subject to ERISA, and that provide for an individual account for each
participant and for benefits based solely on the amounts contributed to such
account and any income, expenses, gains, losses or forfeitures allocated thereto
(other than the U.S. 401(k) Plan).
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"SELLER DISCLOSURE SCHEDULES" has the meaning set forth in the
preamble of Article III.
"SELLER INDEMNIFIED PARTIES" has the meaning set forth in
Section 7.4.
"SELLER INSURANCE POLICIES" has the meaning set forth in
Section 3.22(a).
"SELLER LEASED PROPERTY" means those assets or rights (i) not
Related to the Business or (ii) included in the Retained Assets or the Excluded
Assets, in each case that are to be leased, licensed or otherwise provided by
Seller and/or any of its Affiliates (other than the Transferred Subsidiaries) to
Buyer and/or any of its Affiliates pursuant to this Agreement or any Ancillary
Agreement, including the Licensed IP.
"SELLER MANAGEMENT PERIOD" has the meaning set forth in
Section 7.3(e).
"SELLER'S 401(K) PLAN" has the meaning set forth in Section
5.7(c).
"SELLER'S ENVIRONMENTAL DAMAGES PERCENTAGE ALLOCATION" has the
meaning set forth in Section 7.3(c).
"SELLER'S OBJECTION" has the meaning set forth in Section
2.6(b).
"SELLER SUBSIDIARY" means any Person (i) whose securities or
other ownership interests, having by their terms the power to elect a majority
of the board of directors or other Persons performing similar functions, are
owned or controlled, directly or indirectly, by Seller, (ii) whose business and
policies Seller has the power, directly or indirectly, to direct, or (iii) of
which 50% or more of the securities, partnership or other ownership interests
are owned, directly or indirectly, by Seller.
"SHARES" has the meaning set forth in the Recitals.
"SIGNIFICANT REMEDIATION OR COMPLIANCE ACTIVITY" has the
meaning set forth in Section 7.3(h).
"SOLUTIA AGREEMENTS" means the Stock and Asset Purchase
Agreement, dated as of December 2, 2002, between Seller and Solutia, Inc. and
the related agreements entered into by Seller and its Affiliates with Solutia,
Inc. and its Affiliates in connection with the transactions contemplated thereby
and listed on Schedule 1.1(l).
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"SOLUTIA CLAIMS" means any causes of action, lawsuits,
judgments, claims and demands of any nature arising under or related to the
Solutia Agreements and the transactions contemplated thereby, in each case that
are available to or being pursued by Seller or its Affiliates against Solutia,
Inc. or its Affiliates.
"STOCKHOLDER'S AGREEMENT" has the meaning set forth in the
Recitals.
"STRADDLE PERIOD" has the meaning set forth in Section 5.6(b).
"SURVIVING INTERGROUP AGREEMENTS" has the meaning set forth in
Section 5.17.
"TAX RETURNS" means any return, declaration, report, claim for
refund, estimates, declaration of estimated tax, or information return or
statement relating to, or required to be filed in connection with, any Taxes,
including any schedule or attachment thereto and amendments thereof, and
including any information return or report with respect to backup withholding
and other payments to third parties, but expressly excluding IP Filings.
"TAXES" means all taxes imposed by any taxing jurisdiction,
including income, profits, gains, capital stock, capital duty, stamp,
occupation, alternative minimum, estimated or other similar tax, gross receipts,
windfall profits, value added, severance, property, production, sales, use,
duty, license, excise, franchise, employment, real, tangible or intangible
property, withholding or similar taxes, levies or duties, together with any
interest, additions or penalties with respect thereto.
"TERMINATION FEE" has the meaning set forth in Section 8.3.
"THIRD PARTY CLAIM" has the meaning set forth in Section
7.5(a).
"TSCA" means the Toxic Substances Control Act of 1976, as
amended.
"TSCA INVENTORY" means the Chemical Substances Inventory
published by the U.S. Environmental Protection Agency pursuant to Section 8 of
the TSCA.
"TRADEMARKS" has the meaning set forth in the "Intellectual
Property" definition.
"TRADE SECRETS" has the meaning set forth in the "Intellectual
Property" definition.
"TRANSFER TAXES" has the meaning set forth in Section 5.6(a).
"TRANSFERRED ACCOUNTS RECEIVABLE" means all trade accounts and
notes receivable and other miscellaneous receivables of Seller or its Affiliates
(other than the Transferred Subsidiaries) that arise out of the sale or other
disposition of goods or services that are Related to the Business.
"TRANSFERRED ASSETS" has the meaning set forth in Section 2.1.
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"TRANSFERRED BOOKS AND RECORDS" means Books and Records of
Seller or any of its Affiliates (other than the Transferred Subsidiaries) that
are Related to the Business.
"TRANSFERRED CONTRACTS" means Contracts Related to the
Business to which Seller or any of its Affiliates (other than the Transferred
Subsidiaries) is a party, but excluding any such Contract that is an Excluded
Asset or Retained Asset.
"TRANSFERRED EMPLOYEES" has the meaning set forth in Section
5.7.
"TRANSFERRED FIXTURES AND EQUIPMENT" means all furniture,
furnishings, vehicles, equipment, tools and other tangible personal property
(other than Transferred Inventory and Transferred Intellectual Property Assets)
of Seller or any of its Affiliates (other than the Transferred Subsidiaries)
that are Related to the Business, wherever located, including any of the
foregoing purchased subject to any conditional sales or title retention
agreement in favor of any other Person.
"TRANSFERRED INSURANCE POLICIES" has the meaning set forth in
Section 3.22(a).
"TRANSFERRED INTELLECTUAL PROPERTY ASSETS" means all Owned
Intellectual Property and Owned IT Hardware (in each case other than those that
are owned by the Transferred Subsidiaries).
"TRANSFERRED INTERCOMPANY PAYABLES" has the meaning set forth
in Section 2.11.
"TRANSFERRED INVENTORY" means all inventory of Seller or its
Affiliates (other than the Transferred Subsidiaries) that is Related to the
Business, wherever located, including all finished goods, whether held at any
location or facility of Seller or any of its Affiliates or in transit to Seller
or any of its Affiliates, in each case as of the Closing Date.
"TRANSFERRED SUBSIDIARIES" means the Seller Subsidiaries set
forth on Schedule 3.2(a).
"TRANSFERRED SUBSIDIARY GUARANTEES" has the meaning set forth
in Section 5.16.
"TRANSITIONAL USE" has the meaning set forth in Section
5.8(a)(i).
"TRANSITION SERVICES AGREEMENT" means the transition services
agreement substantially in the form attached hereto as Exhibit C.
"U.K. EMPLOYEE PARTICIPANT" has the meaning set forth in
Section 5.7(c).
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"U.K. RETAINED PLAN" means the Retained Plan organized under
the laws of the U.K. for the benefit of U.K. Business Designated Employees and
other employees of Seller or its Affiliates.
"UNRESOLVED ITEMS" has the meaning set forth in Section
2.6(c).
"U.S. ANTITRUST LAWS" means the ▇▇▇▇▇▇▇ Act, as amended, the
▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other federal and state statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other Laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade.
"U.S. BENEFIT PLAN" has the meaning set forth in Section 3.15.
"U.S. GAAP" means United States generally accepted accounting
principles.
"U.S. GAAP AUDITED FINANCIAL STATEMENTS" has the meaning set
forth in Section 5.14(c).
"U.S. PENSION PLAN" has the meaning set forth in Section 3.15.
"U.S. TRANSFERRED EMPLOYEES" means Transferred Employees who
are U.S. employees.
"U.S. TRANSFERRED SUBSIDIARY" has the meaning set forth in
Section 3.12(l).
"WARN" means the United States Worker Adjustment and
Retraining Notification Act.
Section 1.2 OTHER TERMS. Other terms may be defined elsewhere in the text
of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
Section 1.3 OTHER DEFINITIONAL PROVISIONS. Unless the express context
otherwise requires:
(a) the words "hereof", "herein", and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement;
(b) the terms defined in the singular have a comparable meaning when
used in the plural, and vice versa;
(c) the terms "Dollars" and "$" mean United States Dollars;
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(d) the terms "Euros" and "(euro)" mean European Economic and Currency
Union Euros;
(e) references herein to a specific Section, Subsection or Schedule
shall refer, respectively, to Sections, Subsections or Schedules of this
Agreement;
(f) unless otherwise specifically provided herein or otherwise apparent
from the context, references herein to "Seller and its Affiliates" or any
substantially similar phrase shall be deemed to be references to "Seller and its
Affiliates (including the Transferred Subsidiaries)" and references herein to
"Buyer and its Affiliates" or any substantially similar phrase shall be deemed
to be references to "Buyer and its Affiliates (other than the Transferred
Subsidiaries)";
(g) unless otherwise specifically provided herein, all currency
conversions to be performed hereunder or under any of the Ancillary Agreements
shall be calculated based on the official foreign exchange rates published on
the website of the European Central Bank
(▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇.▇▇.▇▇▇▇) as of the date of payment;
(h) wherever the word "include," "includes," or "including" is used in
this Agreement, it shall be deemed to be followed by the words "without
limitation;" and
(i) references herein to any gender include the other gender.
ARTICLE II
PURCHASE AND SALE OF THE SHARES, THE GMBH SHARES AND THE BUSINESS
Section 2.1 PURCHASE AND SALE OF THE SHARES, THE GMBH SHARES AND
TRANSFERRED ASSETS. On the terms and subject to the conditions set forth herein,
at the Closing, Seller shall, or shall cause one or more of its Affiliates to,
sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase
from Seller or any of its Affiliates, all of Seller's and each of its
Affiliates' right, title and interest, as of the Closing, in and to (i) the
Shares and the GmbH Shares, in each case free and clear of all Encumbrances, and
(ii) the assets, rights and properties of Seller and its Affiliates (other than
the Transferred Subsidiaries) Related to the Business, whether tangible or
intangible, real, personal or mixed, except for the Excluded Assets and Retained
Assets (such assets, rights and properties referred to in this clause (ii),
collectively, the "TRANSFERRED ASSETS"), free and clear of all Encumbrances,
other than Permitted Encumbrances, including such right, title and interest in
and to the following:
(a) Transferred Accounts Receivable;
(b) Transferred Contracts;
(c) Transferred Books and Records;
(d) Transferred Fixtures and Equipment;
(e) Transferred Intellectual Property Assets;
(f) Transferred Inventory;
(g) Transferred Intercompany Payables;
(h) all causes of action, lawsuits, judgments, claims and demands of
any nature available to or being pursued by Seller or any of its Affiliates
(other than the Transferred Subsidiaries) to the extent related to the
Transferred Assets, the Assumed Liabilities or the ownership, use, function or
value of any Transferred Asset, whether arising by way of counterclaim or
otherwise, except to the extent included in the Retained Assets or the Excluded
Assets;
(i) to the extent their transfer is permitted by Law, all Governmental
Authorizations and Non-Governmental Authorizations and all applications
therefor, in each case to the extent held by Seller or any of its Affiliates
(other than the Transferred Subsidiaries) and Related to the Business;
(j) all credits, prepaid expenses, deferred charges, advance payments,
security deposits, prepaid items and duties to the extent related to a
Transferred Asset;
(k) assets of the Retained Plans and the Seller DC Plans to the extent
Buyer is entitled thereto under Section 5.7(c); PROVIDED that such assets shall
be transferred to Buyer at the times and on the terms set forth in Section
5.7(c);
(l) all Tax assets (including duty and Tax refunds and prepayments) of
Seller or any of its Affiliates (other than the Transferred Subsidiaries) to the
extent Buyer is entitled thereto under Section 5.6;
(m) all proceeds of Seller's or any of its Affiliates' (other than the
Transferred Subsidiaries) third party insurance policies to the extent related
to any Assumed Liabilities or Liabilities of the Transferred Subsidiaries that
are not Retained Liabilities; and
(n) all guaranties, warranties, indemnities and similar rights in favor
of Seller or any of its Affiliates (other than the Transferred Subsidiaries) to
the extent related to any Transferred Asset.
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Section 2.2 RETAINED ASSETS AND EXCLUDED ASSETS. Notwithstanding
anything herein to the contrary, (i) as of the Closing, the Transferred
Subsidiaries shall convey, transfer, assign and deliver to Seller, and Seller
shall accept from the Transferred Subsidiaries, all of the Transferred
Subsidiaries' right, title and interest, as of the Closing, in and to the
Retained Assets, and (ii) from and after the Closing, Seller and its Affiliates
(other than the Transferred Subsidiaries) shall retain all of their existing
right, title and interest in and to, and there shall be excluded from the sale,
conveyance, assignment or transfer to Buyer hereunder, and the Transferred
Assets shall not include, the following assets, rights and properties (such
assets, rights and properties referred to in this clause (ii), collectively, the
"EXCLUDED ASSETS"):
(i) any asset or class of assets of Seller and its Affiliates
(other than the Transferred Subsidiaries) excluded from the defined
terms set forth in Section 2.1(a)-(n) by virtue of the limitations
expressed or implied therein;
(ii) all cash and cash equivalents (as determined in
accordance with Belgian GAAP applying the same principles, practices,
methodologies and policies used in the preparation of the Financial
Statements) of Seller and its Affiliates (other than the Transferred
Subsidiaries);
(iii) those assets of Seller and its Affiliates (other than
the Transferred Subsidiaries) set forth on Schedule 2.2;
(iv) those assets, including any right of Seller and its
Affiliates to be indemnified for Liabilities primarily related to any
current or former business, facility or assets of Seller or any of its
Affiliates, including the Films Business, that are not Related to the
Business;
(v) all Tax Returns of Seller or its Affiliates (other than
the Transferred Subsidiaries) and all books and records (including
working papers) related thereto;
(vi) all insurance policies of Seller or its Affiliates (other
than the Transferred Subsidiaries) and rights to proceeds thereunder
other than as provided in Section 2.1(m);
(xii) all rights in connection with and assets of the Benefit
Plans, other than (i) Benefit Plans maintained and sponsored solely by
the Transferred Subsidiaries and other Acquired Plans and (ii) assets
in respect of the Transferred Employees under the Asset Transfer Plans,
the Retained Plans or the Seller DC Plans to the extent Buyer is
entitled thereto under Section 5.7(c); and
(viii) All Tax assets (including duty and Tax refunds and
prepayments) of Seller or any of its Affiliates (other than the
Transferred Subsidiaries) to the extent Seller or its Affiliates (other
than the Transferred Subsidiaries) are entitled thereto under Section
5.6.
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Section 2.3 BUYER'S ASSUMPTION OF LIABILITIES. On the terms and subject to
the conditions set forth herein, at the Closing, Buyer shall assume from Seller
and its Affiliates (other than the Transferred Subsidiaries) and discharge or
perform when due all the Assumed Liabilities, and shall execute and deliver at
the Closing an instrument of assumption for such purpose substantially in the
form attached hereto as Exhibit D. Buyer shall not assume or have any liability
or other obligation in respect of any Liabilities other than (i) Assumed
Liabilities and (ii) Liabilities of Transferred Subsidiaries that are not
Retained Liabilities.
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Section 2.4 SELLER'S ASSUMPTION OF LIABILITIES; EXCLUDED LIABILITIES. On
the terms and subject to the conditions set forth herein, at the Closing, Seller
shall assume from the Transferred Subsidiaries and discharge and perform when
due all the Retained Liabilities, and shall execute and deliver at the Closing
an instrument of assumption for such purpose substantially in the form attached
hereto as Exhibit E. Seller and its Affiliates (other than the Transferred
Subsidiaries) shall retain and remain responsible in all respects for all
Excluded Liabilities, and Buyer shall have no liability or other obligation in
respect of the Excluded Liabilities.
Section 2.5 PURCHASE PRICE. (a) On the terms and subject to the conditions
set forth herein, in consideration of the sale of the Shares, the GmbH Shares
and the Transferred Assets, at the Closing, in addition to the assumption of the
Assumed Liabilities by Buyer, Buyer shall (i) deliver to Seller the Purchase
Price Shares and (ii) pay to Seller an amount in cash equal to
(euro)1,275,000,000 (the "CASH PURCHASE PRICE" and, as adjusted pursuant to this
Section 2.5 and pursuant to Section 2.6, together with the Purchase Price
Shares, the "PURCHASE PRICE").
(b) Not less than five (5) Business Days prior to the Closing Date,
Seller will prepare and deliver a certificate (the "PURCHASE PRICE CERTIFICATE")
of an authorized officer of Seller setting forth (i) Seller's calculation of the
Base DBO Variance Amount and (ii) Seller's best estimate, prepared in good
faith, of (A) the Final Closing Net Working Capital Value as of the Closing
Date, but using the same currency exchange rates as were used in the calculation
of Base Net Working Capital Value (the "ESTIMATED CLOSING NET WORKING CAPITAL
VALUE"), (B) the aggregate amount of Acceptable Cash held by the Transferred
Subsidiaries as of the Closing Date (the "ESTIMATED ACCEPTABLE CASH AMOUNT") and
(C) the aggregate amount of Acceptable Indebtedness of all of the Transferred
Subsidiaries as of the Closing Date (the "ESTIMATED ACCEPTABLE INDEBTEDNESS
AMOUNT"). From and after the delivery of the Purchase Price Certificate until
the Closing, Buyer will be permitted to review Seller's and its accountants' (to
the extent permitted by such accountants) working papers relating to the
preparation of the Purchase Price Certificate and shall be provided with
reasonable access to individuals involved in preparing or reviewing the Purchase
Price Certificate.
(c) As of the Closing, the Cash Purchase Price shall be adjusted by the
amount (the "CLOSING PURCHASE PRICE ADJUSTMENT AMOUNT") equal to: (i) (A) the
Estimated Closing Net Working Capital Value MINUS (B) the Base Net Working
Capital Value; MINUS (ii) the Base DBO Variance Amount; MINUS (iii) the
Estimated Acceptable Indebtedness Amount; PLUS (iv) the Estimated Acceptable
Cash Amount; MINUS (v) $500,000. If the Closing Purchase Price Adjustment Amount
is a positive number, then the Cash Purchase Price payable as of the Closing
shall be increased by the Closing Purchase Price Adjustment Amount. If the
Closing Purchase Price Adjustment Amount is a negative number, then the Cash
Purchase Price payable as of the Closing shall be decreased by the Closing
Purchase Price Adjustment Amount.
(d) After the Closing Date, the Purchase Price shall be adjusted by the
amount (the "POST-CLOSING PURCHASE PRICE ADJUSTMENT AMOUNT") equal to (i) (A)
the Final Closing Net Working Capital Value (as finally determined pursuant to
Section 2.6) MINUS (B) the Estimated Closing Net Working Capital Value, MINUS
(ii) (A) the Final DBO Variance Amount (as finally determined pursuant to
Section 2.6) MINUS (B) the Base DBO Variance Amount, MINUS (iii) (A) the Actual
Acceptable Indebtedness Amount (as finally determined pursuant to Section 2.6)
MINUS (B) the Estimated Acceptable Indebtedness Amount, PLUS (iv) (A) the Actual
Acceptable Cash Amount (as finally determined pursuant to Section 2.6) MINUS (B)
the Estimated Acceptable Cash Amount. If the Post-Closing Purchase Price
Adjustment Amount is a positive number, then the Cash Purchase Price shall be
increased by the Post-Closing Purchase Price Adjustment Amount and Buyer shall
promptly (and in any event within five Business Days) after the final
determination thereof pay to Seller the Post-Closing Purchase Price Adjustment
Amount, plus interest from the Closing Date to, but not including, the date of
payment at LIBOR calculated on a 365-day basis, in Euro by wire transfer of
immediately available funds to an account designated in writing by Seller. If
the Post-Closing Purchase Price Adjustment Amount is a negative number, then the
Cash Purchase Price shall be decreased by the Post-Closing Purchase Price
Adjustment Amount and Seller shall promptly (and in any event within five
Business Days) after the final determination thereof pay to Buyer the
Post-Closing Purchase Price Adjustment Amount, plus interest from the Closing
Date to, but not including, the date of payment at LIBOR calculated on a 365-day
basis, in Euro by wire transfer of immediately available funds to an account
designated in writing by Buyer.
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Section 2.6 DETERMINATION OF FINAL CLOSING NET WORKING CAPITAL VALUE
AND FINAL DBO VARIANCE AMOUNT. (a) As soon as practicable but in no event later
than the later of (i) ninety (90) days following the Closing and (ii) sixty (60)
days following the last transfer of assets of the Asset Transfer Plan in
accordance with Section 5.7(c) (or, if earlier, the date that is 120 days after
the Closing Date), Buyer shall prepare, or cause to be prepared, and deliver to
Seller (i) the Closing Date Net Working Capital Statement, which shall set forth
the Current Assets and the Current Liabilities of the Business as of the Closing
and Buyer's calculation of Final Closing Net Working Capital Value and which
shall be prepared in accordance with Belgian GAAP and in accordance with the
procedures set forth on Schedule 2.6(a) and (ii) Buyer's calculation of the
Final DBO Variance Amount and (iii) Buyer's calculation of (x) the aggregate
amount of Acceptable Cash of all of the Transferred Subsidiaries as of the
Closing Date (as such amount is finally determined pursuant to this Section 2.6,
the "ACTUAL ACCEPTABLE CASH AMOUNT") and (y) the aggregate amount of Acceptable
Indebtedness of all of the Transferred Subsidiaries as of the Closing Date (as
such amount is finally determined pursuant to this Section 2.6, the "ACTUAL
ACCEPTABLE INDEBTEDNESS AMOUNT"), in the case of each of clause (x) and (y)
which shall be prepared in accordance with Belgian GAAP applying the same
principles, practices, methodologies and policies used in the preparation of the
Financial Statements.
(b) Seller shall have sixty (60) days following the receipt of complete
and accurate data to review the Closing Date Net Working Capital Statement and
Buyer's calculations of the Final DBO Variance Amount, the Actual Acceptable
Cash Amount and the Actual Acceptable Indebtedness Amount after delivery thereof
by Buyer. In the event that Seller determines that the Closing Date Net Working
Capital Statement and/or Buyer's calculations of any of the Final DBO Variance
Amount, the Actual Acceptable Cash Amount and/or the Actual Acceptable
Indebtedness Amount has or have not been prepared on the basis set forth in
Section 2.6(a), Seller shall, on or before the last day of such 60-day period,
so inform Buyer in writing ("SELLER'S OBJECTION"), setting forth a specific
description of the basis of Seller's determination and the adjustments to the
Closing Date Net Working Capital Statement and/or Buyer's calculation of the
Final DBO Variance Amount, the Actual Acceptable Cash Amount and/or the Actual
Acceptable Indebtedness Amount, and the corresponding adjustments to the Final
Closing Net Working Capital Value, the Final DBO Variance Amount, the Actual
Acceptable Cash Amount and/or the Actual Acceptable Indebtedness Amount that
Seller believes should be made. If no Seller's Objection is received by Buyer on
or before the last day of such 60-day period, then the Final Closing Net Working
Capital Value set forth on the Closing Date Net Working Capital Statement
delivered by Buyer and the Final DBO Variance Amount, the Actual Acceptable Cash
Amount and the Actual Acceptable Indebtedness Amount set forth in Buyer's
calculations thereof shall be deemed final for all purposes under this
Agreement. Buyer shall have thirty (30) days from its receipt of Seller's
Objection to review and respond to Seller's Objection.
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(c) Buyer and Seller shall use their reasonable best efforts to resolve
any disagreements with respect to the proposed adjustments set forth in Seller's
Objection. If Buyer and Seller are unable to resolve such disagreements within
thirty (30) days following the completion of Buyer's review of Seller's
Objection, they shall refer any remaining disagreements (the "UNRESOLVED ITEMS")
to the CPA Firm which, acting as experts and not as arbitrators, shall
determine, on the basis set forth in and in accordance with Section 2.6(a), and
only with respect to the Unresolved Items, whether and to what extent, if any,
the Closing Date Net Working Capital Statement and the Final Closing Net Working
Capital Value and/or Buyer's calculations of the Final DBO Variance Amount, the
Actual Acceptable Cash Amount and/or the Actual Acceptable Indebtedness Amount
require adjustment. Seller and Buyer shall instruct the CPA Firm to deliver its
written determination to Seller and Buyer no later than thirty (30) days after
such disagreements are referred to the CPA Firm. The CPA Firm's determination
shall be conclusive and binding upon Seller and Buyer and their respective
Affiliates and for all purposes under this Agreement. The fees and disbursements
of the CPA Firm shall be borne by Seller and Buyer based on the following
formula: (i) Seller shall pay a portion of such fees and expenses equal to the
total of such fees and expenses multiplied by a fraction, the numerator of which
is the Euro amount of the Unresolved Items resolved in favor of Buyer and the
denominator of which is the total Euro amount of Unresolved Items; and (ii)
Buyer shall pay a portion of such fees and expenses equal to the total of such
fees and expenses multiplied by a fraction, the numerator of which is the Euro
amount of Unresolved Items resolved in favor of Seller and the denominator of
which is the total Euro amount of Unresolved Items. Buyer and Seller shall make
readily available to the CPA Firm all relevant books and records and any work
papers (including those of the parties' respective accountants, to the extent
permitted by such accountants) relating to the Closing Date Net Working Capital
Statement, to the calculations of the Final DBO Variance Amount, the Actual
Acceptable Cash Amount and the Actual Acceptable Indebtedness Amount and to
Seller's Objection and all other items reasonably requested by the CPA Firm in
connection with its review.
(d) Seller and its accountants shall have reasonable access to all
information used by Buyer in preparing, and employees of Buyer and its
Affiliates involved in the preparation of, the Closing Date Net Working Capital
Statement and Buyer's calculations of the Final DBO Variance Amount, the Actual
Acceptable Cash Amount and the Actual Acceptable Indebtedness Amount, including,
in each case, the work papers of Buyer's accountants, in each case during
regular business hours and upon reasonable advance notice. Each party shall have
reasonable access to all information used by the CPA Firm in reaching its
determination hereunder.
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Section 2.7 CLOSING. The Closing shall take place at the offices of
Cleary, Gottlieb, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇ ▇▇▇, ▇▇,▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
at 10:00 A.M., Brussels time, on the last Business Day of the month during which
the conditions set forth in Section 6.1 (other than those conditions that by
their nature are to be satisfied at the Closing but subject to the fulfillment
or waiver of those conditions) have been satisfied or waived, or at such other
time and place as the parties hereto may mutually agree. The date on which the
Closing occurs is the "CLOSING DATE."
Section 2.8 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver to
Seller the following: Section 4.16
(a) the Cash Purchase Price in immediately available funds by
wire transfer to an account or accounts which have been designated in
writing by Seller at least two Business Days prior to the Closing Date;
(b) a certificate or certificates representing the Purchase
Price Shares in definitive form, registered in the name of Seller,
bearing a legend or legends referencing restrictions under the
Securities Act on transfer of the Purchase Price Shares and any legends
required by the Stockholder's Agreement;
(c) subject to Section 2.10, such instruments of assignment
and other instruments or documents, in form and substance reasonably
acceptable to Seller, as may be necessary to effect the effective
assignment of any Transferred Assets;
(d) such instruments of assumption described in Section 2.3 as
may be necessary to effect Buyer's assumption of the Assumed
Liabilities;
(e) a duly executed counterpart of each of the Ancillary
Agreements and the Stockholder's Agreement;
(f) the certificate to be delivered pursuant to Section
6.3(c); and
(g) such other instruments of transfer, assumptions, filings
or documents, in form and substance reasonably satisfactory to Seller,
as may be reasonably required to give effect to this Agreement.
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Section 2.9 DELIVERIES BY SELLER. At the Closing, Seller shall deliver,
or cause to be delivered, to Buyer the following:
(a) The share register of the Company, together with a duly
completed and signed share transfer power authorizing Buyer to register
the transfer of ownership of the Shares to Buyer and certificates,
notarial assignment deeds, duly endorsed in the name of Buyer, or such
other instruments evidencing ownership under applicable Law of, the
GmbH Shares;
(b) bills of sale or other appropriate documents of transfer,
in form and substance reasonably acceptable to Buyer, transferring the
tangible personal property included in the Transferred Assets to Buyer;
(c) assignments, in form and substance reasonably acceptable
to Buyer and, if applicable, as required by any Government Entity with
which Seller's or any of its Affiliates' (other than the Transferred
Subsidiaries) rights to any Transferred Intellectual Property Assets
have been filed, assigning to Buyer the Transferred Intellectual
Property Assets;
(d) assignment and assumption agreements, in form and
substance reasonably acceptable to Buyer and Seller, assigning to Buyer
all rights of Seller and its Affiliates (other than the Transferred
Subsidiaries) in and to all of the Transferred Contracts, exclusive of
any Excluded Liabilities;
(e) such instruments of assignment and assumption (including,
as described in Section 2.4) and other instruments or documents, in
form and substance reasonably acceptable to Buyer, as may be necessary
to effect Seller's assumption of the Retained Liabilities and the
effective assignment of any Retained Assets;
(f) assignment and assumption agreements, in form and
substance reasonably acceptable to Buyer and Seller, assigning to Buyer
the proprietary/confidential information agreements and non-competition
agreements between any employee of Seller or any of its Affiliates
(other than a Transferred Subsidiary) that is not a Transferred
Employee, on the one hand, and Seller or any of its Affiliates (other
than the Transferred Subsidiaries), on the other hand, to the extent
Related to the Business;
(g) assignments and releases, in form and substance reasonably
acceptable to Buyer and Seller, assigning to Buyer or one or more
designees of Buyer all rights of Seller and its Affiliates (other than
the Transferred Subsidiaries) in and to all of the Transferred
Intercompany Payables and releasing Buyer and its Affiliates (including
the Transferred Subsidiaries) from any further obligation to Seller and
its Affiliates (other than the Transferred Subsidiaries) in respect of
the Transferred Intercompany Payables;
(h) written resignations, effective as of the Closing, of any
directors of the Transferred Subsidiaries employed by Seller or any of
its Affiliates (other than Transferred Subsidiaries) containing waivers
of any claims such directors may have against any of the Transferred
Subsidiaries to the extent such claims arise from their positions as
directors of any Transferred Subsidiary;
(i) all minute books, stock record books (or similar
registries) and corporate (or similar) records and seals of each of the
Transferred Subsidiaries;
(j) a duly executed counterpart of each of the Ancillary
Agreements and the Stockholder's Agreement;
(k) a receipt acknowledging payment of the Purchase Price by
Buyer in full satisfaction of Buyer's obligations under Section 2.8(a)
and (b) (but subject to any further obligations contained in this
Agreement);
(l) the general release and discharge in favor of the
Transferred Subsidiaries referred to in Section 9.12;
(m) the certificate to be delivered pursuant to Section
6.2(c); and
(n) such other instruments of transfer, assumptions, filings
or documents, in form and substance reasonably satisfactory to Buyer,
as may be reasonably required to give effect to this Agreement.
Section 2.10 NONASSIGNABILITY OF ASSETS. (a) Notwithstanding anything
to the contrary contained in this Agreement, to the extent that the sale,
assignment, sublease, transfer, conveyance or delivery or attempted sale,
sublease, assignment, transfer, conveyance or delivery to Buyer of any asset
that would be a Transferred Asset or any claim or right or any benefit arising
thereunder or resulting therefrom is prohibited by any applicable Law or would
require any governmental or third party authorizations, approvals, consents or
waivers, and such authorizations, approvals, consents or waivers shall not have
been obtained prior to the Closing, the Closing shall proceed without the sale,
assignment, sublease, transfer, conveyance or delivery of such asset, claim,
right or benefit unless such failure causes a failure of any of the
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conditions to Closing set forth in Article 6, in which event the Closing shall
proceed only if the failed condition is waived by the party or parties entitled
to the benefit thereof. In the event that such lack of authorization, approval,
consent or waiver does not cause a failure of any of the conditions to Closing
or the failed condition is waived and the Closing proceeds without the sale,
assignment, sublease, transfer, conveyance or delivery of any such asset, claim,
right or benefit, then (i) such asset, claim, right or benefit shall be regarded
as a Transferred Asset for purposes of the calculations required under Section
2.6 if such asset is a Current Asset and (ii) following the Closing, the parties
shall use their reasonable best efforts, and cooperate with each other, to
obtain promptly such authorizations, approvals, consents or waivers; PROVIDED,
HOWEVER, that none of Seller or Buyer or any of their respective Affiliates
shall be required to pay any consideration therefor other than filing,
recordation or similar fees, which shall be shared equally by Buyer and Seller.
Pending such authorization, approval, consent or waiver, the parties shall
cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to Buyer the benefits of use of such asset,
claim, right or benefit and to Seller or its Affiliates the benefits, including
any indemnities, that they would have obtained had the asset, claim, right or
benefit been conveyed to Buyer at the Closing. Once authorization, approval,
consent or waiver for the sale, assignment, sublease, transfer, conveyance or
delivery of any such asset, claim, right or benefit not sold, assigned,
subleased, transferred, conveyed or delivered at the Closing is obtained, Seller
shall or shall cause the relevant Affiliates to, assign, transfer, convey and
deliver such asset, claim, right or benefit to Buyer at no additional cost. To
the extent that any such asset, claim, right or benefit cannot be transferred or
the full benefits of use of any such asset, claim, right or benefit cannot be
provided to Buyer following the Closing pursuant to this Section 2.10, then
Buyer and Seller shall enter into such arrangements (including subleasing,
sublicensing or subcontracting) to provide to the parties hereto the economic
(taking into account Tax costs and benefits) and operational equivalent, to the
extent permitted, of obtaining such authorization, approval, consent or waiver
and the performance by Buyer of the obligations thereunder. Seller shall hold in
trust for and pay to Buyer promptly upon receipt thereof, all income, proceeds
and other monies received by Seller or any of its Affiliates in connection with
its use of any asset, claim, right or benefit (net of any Taxes and any other
costs imposed upon Seller or any of its Affiliates (other than the Transferred
Subsidiaries)) in connection with the arrangements under this Section 2.10.
Without limiting in any respect the foregoing, subject to applicable Law and the
provisions of the applicable Contracts, in the event that any consents or
waivers in respect of any restrictions on changes in control or assignment
contained in any Contract with respect to any partnership, joint venture or
similar Person in which a Transferred Subsidiary is a member or participant have
not been obtained prior to the Closing, Seller shall, and shall cause its
Affiliates to, with a view to putting Buyer or one of its Affiliates in the same
position as if it were directly a member or participant therein:
(i) provide to Buyer any and all economic benefits Seller or
any of its Affiliates may have as a member of or participant in any
such partnership, joint venture or similar Person (net of any Taxes and
any other costs imposed on Seller or any of its Affiliates as a result
of being a member of or participant in any such partnership, joint
venture or similar Person or by making any assignment pursuant to this
Section 2.10) as if Buyer were a member or participant thereof,
including any (i) distribution of cash flow, (ii) allocation of tax
losses, (iii) distribution of proceeds from any capital transactions
(including refinancings, proceeds in liquidation and sales or transfers
of assets), (iv) return of capital contributions, either in cash or in
tangible or intangible property, (v) taxable income or gain allowable
to the partners, and (vi) proceeds of sale, in such form as are
received, of any transfer of all or part of such partnership, joint
venture or similar interests;
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(ii) provide to Buyer a written accounting of each payment
made to Buyer pursuant to this Section 2.10, which accounting shall set
forth the amounts received by Seller and its Affiliates and the amounts
paid by Seller and its Affiliates pursuant to this Section 2.10;
(iii) at Buyer's request, in Buyer's sole discretion,
designate one or more representatives of Buyer to attend and
participate in, and vote at, any meetings of any boards of directors,
committees or other governance bodies of such partnerships, joint
ventures or similar Persons;
(iv) only take such actions or vote on, consent to or approve
of any actions pertaining to such partnership, joint venture or similar
Person as it or they shall be directed to take, elect, consent to or
approve by Buyer, in Buyer's sole discretion;
(v) negotiate, agree and/or enter into only such agreements,
contracts, leases and subleases, purchase orders, arrangements,
commitments and licenses in respect of such partnership, joint venture
or similar Person as Buyer shall direct Seller and its Affiliates to
negotiate, agree and/or enter into, in Buyer's sole discretion; and
(vi) exercise only such rights, and perform only such
obligations, with respect to such partnership, joint venture or similar
Person as Buyer shall request Seller and its Affiliates to exercise and
perform, in Buyer's sole discretion.
(b) Buyer shall indemnify and hold harmless Seller and its
Affiliates against all Liabilities under each such Contract to the
extent such Liabilities would have been incurred by Buyer if the
applicable waiver or consent had been obtained prior to the Closing and
Buyer had assumed such Contract.
Section 2.11 INTERCOMPANY RECEIVABLES AND INTERCOMPANY PAYABLES. Seller
shall take all actions necessary so that, effective as of the Closing, all
Intercompany Receivables and Intercompany Payables then existing shall be
settled or otherwise eliminated and any Taxes arising from any such settlement
or elimination shall be borne by Seller in accordance with Section 5.6; PROVIDED
that the foregoing shall not apply to the Intercompany Payables described as of
the Closing on Schedule 2.11 (the "TRANSFERRED INTERCOMPANY PAYABLES"). Not less
than five (5) Business Days prior to the Closing Date, Seller shall prepare and
deliver to Buyer an updated statement of the amount of each Transferred
Intercompany Payable. Subject to Buyer's consent which shall be provided within
two (2) Business Days after Seller delivers such updated statement, if at all,
such statement shall thereafter constitute Schedule 2.11.
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Section 2.12 ALLOCATION OF PURCHASE PRICE. As soon as practicable after
the final determination of the Closing Net Working Capital Value in accordance
with Section 2.6, Seller shall deliver to Buyer a statement (the "PROPOSED
ALLOCATION STATEMENT") allocating the Purchase Price (plus Assumed Liabilities,
to the extent properly taken into account under applicable Tax Laws), adjusted
as appropriate under applicable Tax Law to reflect any payments made under
Section 2.6, among the Transferred Assets, the GmbH Shares and the Shares in
accordance with applicable Tax Laws. If, within thirty (30) days after receipt
of the Proposed Allocation Statement, Buyer shall not have objected in writing
to such Proposed Allocation Statement, the Proposed Allocation shall become
binding on Buyer and Seller (the "ALLOCATION STATEMENT"). In the event that
Buyer objects in writing on a timely basis, the parties shall cooperate in good
faith to resolve any discrepancies and attempt to agree on an allocation
statement which shall become binding on Buyer and Seller. In the event that the
parties are unable in good faith to reach an agreement regarding the Allocation
Statement, each of the parties may prepare and file its Tax Returns and take any
position it sees fit. The parties agree that, except as otherwise required by
Law, Buyer and Seller shall, and shall cause their respective Affiliates to, act
in accordance with the allocations contained in the Allocation Statement, if
any, as it may be adjusted from time to time for all Tax purposes and that
neither of them will take, or permit their respective Affiliates to take, any
position inconsistent therewith in any Tax Returns or similar filings, any
refund claim, any litigation or otherwise. If an adjustment is made to the
Purchase Price pursuant to this Agreement after an Allocation Statement is
determined, the Allocation Statement shall be adjusted in accordance with
applicable Law and as mutually agreed by Buyer and Seller under principles
similar to those required to originally determine the Allocation Statement. The
parties agree to consult with one another with respect to any Tax audit,
controversy or litigation relating to the allocation made pursuant to this
Section 2.12.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the exceptions set forth in the disclosure schedules
delivered to Buyer on or prior to the date hereof (the "SELLER DISCLOSURE
SCHEDULES"), Seller represents and warrants to Buyer as of the date hereof and
as of the Closing as follows:
Section 3.1 ORGANIZATION AND QUALIFICATION. Seller is a SOCIETE ANONYME
duly formed, validly existing and in good standing under the laws of Belgium.
Seller and each of the Seller Subsidiaries that own Transferred Assets has all
requisite corporate power and authority to own, lease and operate its assets,
and to carry on its portion of the Business as currently conducted and is duly
qualified to do business and, if applicable, is in good standing as a foreign
corporation in each jurisdiction where the ownership or operation of the
Transferred Assets or the conduct of the Business requires such qualification
except where the failure to be so qualified would not materially interfere with
the continued operation of the Business.
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Section 3.2 THE TRANSFERRED SUBSIDIARIES. (a) Schedule 3.2(a) sets
forth a complete and accurate list of each of the Transferred Subsidiaries,
together with its jurisdiction of organization, its authorized and outstanding
capital stock or other equity interests, the identity of each holder of its
outstanding capital stock or other equity interests and the number and class of
shares of capital stock or other equity interests held by each such holder.
Except as set forth on Schedule 3.2(a), each Transferred Subsidiary is duly
organized, validly existing, and, if applicable, in good standing under the laws
of its jurisdiction of organization and has all requisite corporate or similar
power and authority to own, lease and operate its assets and to carry on its
portion of the Business as currently conducted and is duly qualified to do
business and, if applicable, is in good standing as a foreign corporation or
other entity in each jurisdiction where the ownership or operation of its assets
or the conduct of its business requires such qualification except where the
failure to be so qualified would not materially interfere with the continued
operation of the Business.
(b) All of the outstanding stock and other equity interests of the
Transferred Subsidiaries have been duly authorized and validly issued, and are
fully paid and non-assessable. Seller has good and valid title to all of the
outstanding capital stock and other equity interests of the Company, and, except
for the GmbH Shares and except as set forth on Schedule 3.2(a), a Transferred
Subsidiary has good and valid title to all of the outstanding capital stock and
other equity interests of the Transferred Subsidiaries (other than the Company),
in each case free and clear of all Encumbrances. UCB GmbH has good and valid
title to the GmbH Shares. Except as set forth on Schedule 3.2(a), upon delivery
by Seller of the Shares and the GmbH Shares at the Closing, good and valid title
to all of the outstanding capital stock and other equity interests of the
Transferred Subsidiaries will pass to Buyer, directly or indirectly, free and
clear of all Encumbrances, other than those resulting from Buyer's ownership.
(c) Except as set forth on Schedule 3.2(c), there are no preemptive or
other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments of any character under which Seller or its
Affiliates are or may become obligated to issue or sell, or giving any Person a
right to subscribe for or acquire, or in any way dispose of, any shares of the
capital stock or other equity interests, or any securities or obligations
exercisable or exchangeable for or convertible into any shares of the capital
stock or other equity interests, of the Transferred Subsidiaries, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The outstanding capital stock and other equity interests of the
Transferred Subsidiaries are not subject to any voting trust agreement or other
contract, agreement or arrangement restricting or otherwise relating to the
voting, dividend rights or disposition of such capital stock or other equity
interests. There are no phantom stock or similar rights providing economic
benefits based, directly or indirectly, on the value or price of the capital
stock or other equity interests of the Transferred Subsidiaries.
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(d) Except as set forth on Schedule 3.2(d), no Transferred Subsidiary
owns, directly or indirectly, any capital stock or other equity interests of any
Person other than another Transferred Subsidiary or has any direct or indirect
equity or ownership interest in any business, or is a member of or participant
in any partnership, joint venture or similar Person. There are no outstanding
contractual obligations of the Transferred Subsidiaries to acquire any interest
in, provide funds to, or to make any investment (in the form of a loan, capital
contribution or otherwise) in, any other Person.
(e) Seller has furnished or made available to Buyer a complete and
correct copy of the Organizational Documents of each of the Transferred
Subsidiaries, in each case as currently in effect. Except as set forth on
Schedule 3.2(a), all such Organizational Documents are in full force and effect
and no other organizational documents are applicable to or binding upon the
Transferred Subsidiaries. Seller has made available to Buyer complete and
correct copies of the minutes of the meetings held since September 1, 2003, or
written consents effected since such date of, and such minutes or written
consents contain accurate records of all meetings and accurately reflect all
other actions taken by, the stockholders (or other equity holders) and the board
of directors (or similar body) and any committee thereof of each of the
Transferred Subsidiaries.
Section 3.3 CORPORATE AUTHORIZATION. Seller has full corporate power
and authority to execute and deliver this Agreement, the Stockholder's Agreement
and each of the Ancillary Agreements to which it is or will be a party, and
Seller had or will have full corporate power and authority to execute any
agreements, instruments and other documents relating to the Pre-Signing
Restructuring Transactions and the Post-Signing Restructuring Transactions, and
to perform its obligations hereunder and thereunder. The execution, delivery and
performance by Seller of this Agreement, the Stockholder's Agreement and each of
the Ancillary Agreements to which it is or will be a party has been duly and
validly authorized and no additional corporate or stockholder authorization or
consent is required in connection with the execution, delivery and performance
by Seller of this Agreement, the Stockholder's Agreement or any of such
Ancillary Agreements. The execution, delivery and performance by Seller of any
agreements, instruments and other documents relating to the Pre-Signing
Restructuring Transactions and the Post-Signing Restructuring Transactions to
which it is or will be a party was or will be duly and validly authorized and no
additional corporate or stockholder authorization or consent was or will be
required in connection with the execution, delivery and performance by Seller of
any agreements, instruments or other documents relating to the Pre-Signing
Restructuring Transactions and the Post-Signing Restructuring Transactions. Each
Affiliate of Seller has or prior to the Closing will have full corporate power
and authority to execute and deliver each Ancillary Agreement or other document
or agreement to be delivered at or prior to the Closing to which it is or will
be a party and to perform its obligations thereunder. Each Affiliate of Seller
had or will have full corporate power and authority to execute and deliver any
agreements, instruments or other documents relating to the Pre-Signing
Restructuring Transactions and the Post-Signing Restructuring Transactions to
which it is or will be a party and to perform its obligations thereunder. The
execution, delivery and performance by each Affiliate of Seller of each
Ancillary Agreement or other document or agreement to be delivered at or prior
to the Closing to which it is or will be a party has been or prior to the
Closing will have been duly and validly authorized, and no additional corporate
or stockholder authorization or consent is or will be required in connection
with the execution, delivery and performance by any Affiliate of Seller of the
Ancillary Agreements or other documents or agreements to be delivered at or
prior to the Closing to which such Affiliate is or will be a party or signatory.
The execution, delivery and performance by each Affiliate of Seller of each
agreement, instrument and other document relating to the Pre-Signing
Restructuring Transactions and the Post-Signing Restructuring Transactions to
which it is or will be a party was or will be duly and validly authorized, and
no additional corporate or stockholder authorization or consent was or will be
required in connection with the execution, delivery and performance by any
Affiliate of Seller of any agreements, instruments or other documents relating
to the Pre-Signing Restructuring Transactions and the Post-Signing Restructuring
Transactions to which such Affiliate is or will be a party or signatory.
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Section 3.4 CONSENTS AND APPROVALS. (a) Other than filings and/or
notices (i) under the HSR Act, the EC Merger Regulation and the Exchange Act,
(ii) in connection with the Other Antitrust Approvals, and (iii) under other
applicable merger control or similar Laws (the "OTHER ANTITRUST FILINGS"), and
except as described in Schedule 3.4(a), no consent, approval, waiver, clearance,
authorization, notice, filing or submission was or is required to be obtained by
Seller or any of its Affiliates from, or to be given by Seller or any of its
Affiliates to, or made by Seller or any of its Affiliates with, any Government
Entity or Self-Regulatory Organization, in connection with the execution,
delivery and performance by Seller or any of its Affiliates of this Agreement,
the Stockholder's Agreement and the Ancillary Agreements or any agreements,
instruments or other documents relating to the Pre-Signing Restructuring
Transactions and the Post-Signing Restructuring Transactions except where the
failure to obtain such consent, approval, waiver, clearance, authorization or
provide such notice, filing or submission would not materially interfere with
the continued operation of the Business.
(b) Except as described in Schedule 3.4(b), no consent, approval,
waiver, clearance, authorization, notice, filing or submission that is material
to the Business was or is required to be obtained by Seller or any of its
Affiliates from, or to be given by Seller or any of its Affiliates to, or made
by Seller or any of its Affiliates with, any Person which is not a Government
Entity or Self-Regulatory Organization in connection with the execution,
delivery and performance by Seller or any of its Affiliates of this Agreement,
the Stockholder's Agreement and the Ancillary Agreements or any agreements,
instruments and other document relating to the Pre-Signing Restructuring
Transactions and the Post-Signing Restructuring Transactions except where the
failure to obtain such consent, approval, waiver, clearance, authorization or
provide such notice, filing or submission would not materially interfere with
the continued operation of the Business.
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Section 3.5 NON-CONTRAVENTION. The execution, delivery and performance
by Seller and its Affiliates of this Agreement, the Stockholder's Agreement, the
Ancillary Agreements to which they are or will be a party and any agreements,
instruments and other document relating to the Pre-Signing Restructuring
Transactions and the Post-Signing Restructuring Transactions, and the
consummation of the transactions contemplated hereby and thereby, did not, do
not and will not (a) violate any provision of the Organizational Documents of
Seller or any of its Affiliates, (b) assuming the receipt of all consents,
approvals, waivers, clearances and authorizations and the making of the notices
and filings described in Schedule 3.4(b), conflict with, or result in the breach
of, or constitute a default under, or result in the termination, cancellation,
modification or acceleration (whether after the filing of notice or the lapse of
time or both) of any right or obligation of Seller or any of its Affiliates
under, or result in a loss of any benefit to which Seller or any of its
Affiliates is entitled under, any Contract, or result in the creation of any
Encumbrance upon any of the Transferred Assets or the assets of the Transferred
Subsidiaries, except where any of the foregoing would not materially interfere
with the continued operation of the Business or (c) assuming the receipt of all
consents, approvals, waivers, clearances and authorizations and the making of
notices, filings and submissions described in Section 3.4(a) or in Schedule
3.4(a) or required to be made or obtained prior to the Closing by Buyer or its
Affiliates, violate or result in a breach of or constitute a default under any
Law to which Seller or any of its Affiliates is subject, or under any
Governmental Authorization except where such violation, breach or default would
not materially interfere with the continued operation of the Business.
Section 3.6 BINDING EFFECT. This Agreement, assuming the due
authorization, execution and delivery by Buyer, constitutes a valid and legally
binding obligation of Seller, enforceable against Seller in accordance with its
terms, and, when executed by Seller or its Affiliates, the Stockholder's
Agreement and each of the Ancillary Agreements, assuming the due authorization,
execution and delivery by Buyer or its Affiliates, will constitute a valid and
legally binding obligation of Seller and each of its Affiliates party thereto,
in each case subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general applicability relating to
or affecting creditors' rights and subject to general equity principles (the
"BANKRUPTCY AND EQUITY EXCEPTION"). Each agreement, instrument and other
document relating to the Pre-Signing Restructuring Transactions and the
Post-Signing Restructuring Transactions constitutes or, when entered into, will
constitute a valid and legally binding obligation of Seller and each of its
Affiliates party thereto, subject to the Bankruptcy and Equity Exception.
Section 3.7 FINANCIAL STATEMENTS. (a) Set forth on Schedule 3.7(a) is a
copy of the unaudited combined balance sheet and statement of income for the
Business for the fiscal year ended 2003 (the "FINANCIAL STATEMENTS") and a copy
of the unaudited combined balance sheet and combined statement of income for the
Business for the six months ended June 30, 2004 (the "INTERIM FINANCIAL
STATEMENTS" and, together with the Financial Statements, the "HISTORICAL
FINANCIAL STATEMENTS"). Except as described in the notes thereto, (i) the
Historical Financial Statements have been prepared in accordance with Belgian
GAAP in accordance with Seller's policies and procedures set forth in the UCB
Accounting Policy Manual, consistently applied, and (ii) the consolidation of
the combined balance sheets contained in the Historical Financial Statements has
been performed in accordance with Schedule 2.6(a), and the Historical Financial
Statements fairly present, in all material respects, the combined financial
position and results of operations of the Business as of the dates thereof or
for the periods then ended, subject in the case of the Interim Financial
Statements to normal year-end adjustments that will not be material in amount or
effect and the absence of footnotes and similar presentation items therein.
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(b) The Most Recent Balance Sheet accurately reflects, as of the Most
Recent Balance Sheet Date, the aggregate amount of all outstanding rebates,
discounts or other allowances offered by the Business to its customers. Schedule
3.7(b) generally describes all policies relating to rebates, discounts or other
allowances offered by the Business to its customers.
(c) The Historical Financial Statements have been, and the Belgian GAAP
Audited Financial Statements will be, compiled from, and were and will be
prepared in accordance with, the books and records of Seller and its Affiliates.
The books and records of Seller and its Affiliates, to the extent Related to the
Business, are true, complete and correct in all material respects and have been
maintained in accordance with sound business practices.
(d) Seller has devised and maintained a system of internal accounting
controls sufficient to provide reasonable assurances regarding the reliability
of financial reporting and the preparation of annual financial statements for
external purposes in accordance with Belgian GAAP.
(e) With respect to each Transferred Intercompany Payable, there is or,
as of the Closing, will be a corresponding and equal Liability recorded in the
financial statements of the Transferred Subsidiary owing the applicable amount.
(f) As of the date hereof, the Business has no Liabilities to Solutia,
Inc. and Solutia, Inc.'s Affiliates organized under the Laws of the United
States that have not been paid as of the date hereof except as disclosed in
Schedule 3.7(f) and other than Liabilities arising in the Ordinary Course
post-petition under the Solutia Agreements.
(g) The combined statement of income included in the Financial
Statements accurately reflects, in all material respects, the amount of EBITDA
of the Business for the fiscal year ended 2003.
Section 3.8 ABSENCE OF LIABILITIES. Except as specifically reflected,
reserved against or otherwise disclosed in the Most Recent Balance Sheet or as
described in Schedule 3.8, neither the Business nor any Transferred Subsidiary
has any material Liabilities other than Liabilities incurred since the Most
Recent Balance Sheet Date in the Ordinary Course, IT BEING UNDERSTOOD that
nothing in this representation is intended to address any Liability in respect
of the subject matter addressed in Sections 3.12, 3.13 or 3.21.
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Section 3.9 ABSENCE OF CHANGES. Since the Most Recent Balance Sheet
Date, and other than in connection with the transactions contemplated hereby,
including the Pre-Signing Restructuring Transactions and the Post-Signing
Restructuring Transactions, Seller and its Affiliates have conducted the
Business only in the Ordinary Course, and (i) the Business has not experienced
any event or condition and, to the Knowledge of Seller, no event or condition is
threatened, that, individually or in the aggregate, has had or is reasonably
likely to have, a Business Material Adverse Effect and (ii) none of the actions
or events prohibited or circumscribed by Section 5.3 have been taken or have
occurred.
Section 3.10 LITIGATION AND CLAIMS. (a) There is no material civil,
criminal or administrative action, suit, demand, claim, hearing, proceeding or
investigation pending or, to the Knowledge of Seller, threatened, against or
relating to Seller or any of its Affiliates in connection with the Shares, the
GmbH Shares, the Transferred Assets, the Transferred Subsidiaries, the Business
or the transactions contemplated hereby, and, to the Knowledge of Seller, there
is no basis for the same.
(b) None of the Shares, the GmbH Shares, the Transferred Assets, the
Transferred Subsidiaries, the Business or the transactions contemplated hereby
is subject to any actual or, to the Knowledge of Seller, threatened order, writ,
judgment, award, injunction or decree of any Government Entity or
Self-Regulatory Organization of competent jurisdiction or any arbitrator or
arbitrators.
Section 3.11 COMPLIANCE WITH LAWS. Except as disclosed on Schedule
3.11, (a) since September 30, 1998, the Business has been and currently is being
conducted in compliance in all material respects with all applicable Laws
(excluding Environmental Laws, which are addressed in Section 3.13; Tax Laws,
which are addressed in Section 3.12; ERISA and other Laws regarding employee
benefit matters which are addressed in Section 3.15 and Labor Laws which are
addressed in Section 3.16), (b) none of Seller or any of its Affiliates has
received any written notice relating to the Business alleging any violation in
any material respect under any applicable Law, and (c) the Business and the
Transferred Subsidiaries have all Governmental Authorizations necessary for the
conduct of the Business in all material respects as currently conducted and the
operation of the Transferred Subsidiaries as currently operated; IT BEING
UNDERSTOOD that nothing in this representation is intended to address any
compliance issue that is specifically addressed by any other representation or
warranty set forth herein.
Section 3.12 TAXES. (a) All material Tax Returns that are required to
be filed on or before the Closing Date (including valid extensions of time with
respect to the filing thereon) by or with respect to the Transferred
Subsidiaries have been or will be timely filed on or before the Closing Date,
and all such Tax Returns are or will be true, correct and complete in all
material respects.
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(b) All material Taxes due with respect to the Transferred Subsidiaries
on or before the Closing Date have been or will be timely paid in full when due.
(c) All Taxes that are required to be collected or withheld on or
before the Closing Date by the Transferred Subsidiaries, Seller or any of its
Affiliates have been or will be duly collected or withheld on or before the
Closing Date and, to the extent payment is due on or before the Closing Date,
have been or will be timely remitted to the relevant taxing authority.
(d) The Liability for the payment of Taxes that are not yet due and
payable for which the Transferred Subsidiaries may be liable, for the periods
covered by the Most Recent Balance Sheet (i) do not exceed their respective
reserves for Taxes (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth on the Most
Recent Balance Sheet and (ii) will not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Transferred Subsidiaries in filing their Tax Returns.
(e) To the Knowledge of Seller, all deficiencies asserted or
assessments made as a result of examinations of Tax Returns referred to in
Section 3.12(a) for which deficiencies or assessments the statute of limitations
remains open have been paid in full or are being contested in good faith, as
described in Schedule 3.12 (e).
(f) Except as set forth in Schedule 3.12(f), none of Seller or any of
its Affiliates has received any written notice from any taxing authority of any
threatened Tax audit, examination, refund litigation or adjustment in
controversy, in each case with respect to the Transferred Subsidiaries.
(g) There are no Encumbrances on the Shares, the GmbH Shares or any of
the assets of the Transferred Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax.
(h) No waivers of statutes of limitation have been given by or
requested with respect to any Taxes of the Transferred Subsidiaries.
(i) To the Knowledge of Seller, there is no investigation or proceeding
pending or threatened, nor has a claim ever been made by a taxing authority in a
jurisdiction where Seller or its Affiliates do not file Tax Returns that a
Transferred Subsidiary is or may be subject to Tax by that jurisdiction.
(j) Except as set forth on Schedule 3.12(j), no Transferred Subsidiary
will be required, under applicable Tax Laws, to include any item of income in or
exclude any item of deduction from any Tax period ending after the Closing Date
as a result of (i) a change in accounting method for a Pre-Closing Period or
Straddle Period, (ii) a closing or similar agreement with any taxing authority
in respect of any Tax period of the Transferred Subsidiaries executed on or
before the Closing Date, (iii) intercompany transactions between the Transferred
Subsidiaries on the one hand and Seller or any of its Affiliates (other than the
Transferred Subsidiaries) on the other hand, or (iv) a prepaid amount received
on or before the Closing Date.
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(k) To the Knowledge of Seller, within the five-year period preceding
the Closing Date, no Transferred Subsidiary has been a party to a restructuring
transaction that would likely give rise to a Tax Liability (excluding the German
Real Estate Transfer Tax Act (GRUNDERWERBSTEUERGESETZ) and future limitations on
the use of a Tax net operating loss or Tax credits or similar Tax assets) for a
Post-Closing Period of a Transferred Subsidiary solely as a result of the
transactions described in Section 2.1 of this Agreement.
(l) Except as described in Schedule 3.12(l), to the Knowledge of
Seller, (i) no Transferred Subsidiary organized under the Laws of the United
States or any of its States (a "U.S. TRANSFERRED SUBSIDIARY") has made a
material tax election within the five-year period preceding the Closing Date
that Buyer cannot revoke, or can revoke only by incurring a penalty or a
Liability for Tax that it would not have incurred absent the revocation; (ii) no
Transferred Subsidiary has written down the book value of any of the shares in
any other Transferred Subsidiary to a lower fair market value with tax effect;
(iii) no Transferred Subsidiary organized under the laws of Belgium, Germany,
France, Spain, Austria or Italy has recorded an aggregate write-down of assets
(excluding depreciation) to a lower or zero fair market value in excess of
(euro)500,000 within the five year period preceding the Closing Date; (iv) none
of the shares in a Transferred Subsidiary organized under the laws of Germany
are tainted within the meaning of Section 8b, Paragraph 4 of the German
Corporate Tax Code (ss. 8b Abs. 4 KSTG); and (v) no interest in a partnership
organized under the laws of Germany and no transfer of assets owned by any
Transferred Subsidiary will incur a Tax Liability under Section 6, Paragraph 5
of the German Income Tax Act (EINKOMMENSTEUERGESETZ) or Section 5, Paragraph 3
and Section 6, Paragraphs 3 and 4 of the German Real Estate Transfer Tax Act
(GRUNDERWERBSTEUERGESETZ).
(m) Except as set forth in Schedule 3.12(m), to the Knowledge of
Seller, no closing agreements, private letter rulings, technical advice
memoranda or similar agreements or rulings have been requested, entered into or
issued by any taxing authority with respect to Seller or any of its Affiliates
with respect to any Transferred Subsidiary that are, or if issued would be,
binding upon any Transferred Subsidiary, Transferred Asset of the Business after
the Closing Date.
(n) Seller or an Affiliate of Seller, as the case may be, has retained
records of value added Taxes or similar Taxes paid in respect of any assets of
the Business or the Transferred Subsidiaries or in respect of any Transferred
Asset in accordance with Seller's past practice, which practice reasonably
implements the requirements of the applicable Tax Laws for obtaining any
available credit for value added Taxes or similar Taxes.
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(o) No German or Belgian Tax is required to be withheld by Buyer from
the Purchase Price as a result of the transfers contemplated by this Agreement.
(p) None of the Company, Surface Specialties Holding GmbH or the U.S.
Transferred Subsidiaries has been a United States real property holding
corporation within the meaning of Code ss.897(c)(2) during the applicable period
specified in Code ss.897(c)(1)(A)(ii).
(q) Except as set forth in Schedule 3.12(q), to the Knowledge of
Seller, no Transferred Subsidiary has agreed to any extension of time with
respect to a Tax assessment or deficiency.
(r) To the Knowledge of Seller, no U.S. Transferred Subsidiary has made
any payments, is obligated to make any payments, or is a party to any agreement
that under certain circumstances could obligate it to make any payments that
will not be deductible under Code ss.280G.
(s) To the Knowledge of Seller, all U.S. Transferred Subsidiaries have
disclosed on all United States federal income tax returns all positions taken
therein that could give rise to a substantial understatement of Tax within the
meaning of Code ss.6662.
(t) To the Knowledge of Seller, none of the assets of the U.S.
Transferred Subsidiaries (i) is "tax-exempt use property" within the meaning of
Section 168(h) of the Code, or (ii) directly or indirectly secures any debt the
interest on which is tax exempt under Section 103(a) of the Code.
(u) The reserve for deferred Taxes established to reflect timing
differences between book and Tax income as reflected in the Historical Financial
Statements has been prepared in accordance with Belgian GAAP and has been
adjusted through the Closing Date in a manner consistent with past practice and
Belgian GAAP.
(v) None of the U.S. Transferred Subsidiaries has an excess loss
account (as defined in Treasury Regulation 1.1502-19) with respect to the stock
of any Transferred Subsidiary.
(w) None of the U.S. Transferred Subsidiaries has been a "distributing
corporation" within the meaning of Section 355(c) of the Code with respect to a
transaction described in Section 355 of the Code within the five-year period
ending as of the date hereof.
(x) To the Knowledge of Seller, the Transferred Subsidiaries have filed
all reports and have created and maintained all records under Section 482 and
Section 6038A of the Code (or any similar provision of state, local, or
non-United States Law) with respect to transactions with related Persons. Seller
has created and maintained such records in accordance with Seller's past
practice, which practice reasonably implements the requirements of Sections 482
and 6038A of the Code and the similar provisions of state, local and non-United
States Law.
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Section 3.13 ENVIRONMENTAL MATTERS. Except as disclosed on Schedules
3.13(a) through 3.13(f):
(a) The Business and the Transferred Subsidiaries are, and for the
preceding five years have been, operating in substantial compliance with all
applicable Environmental Laws in effect as of the date of this Agreement;
(b) No Owned Real Property or Leased Real Property (including soils,
groundwater, surface water, buildings or other structures) has been the subject
of any written notice or claim to Seller or any of the Transferred Subsidiaries
from any Government Entity or third party on or prior to the Closing indicating
that such Owned Real Property or Leased Real Property is required to be
investigated, cleaned up or remediated under any Environmental Law in effect as
of the date of this Agreement and, in Seller's reasonable judgment based upon
current circumstances, no such notice or claim is expected;
(c) Neither the Business nor any of the Transferred Subsidiaries, nor
Seller in respect thereof, has received any written notice of any demand,
letter, claim or request for information from any Government Entity or third
party on or prior to the Closing indicating that it may be in noncompliance with
or subject to liability under any Environmental Law in effect as of the date of
this Agreement, and, in Seller's reasonable judgment based upon current
circumstances, no such notice or claim is expected;
(d) Neither the Business nor any of the Transferred Subsidiaries, nor
Seller in respect thereof, is subject to any outstanding order, decree, or
injunction issued by, or other agreement with, any Government Entity or has any
indemnity or other contractual obligation to any third party that is reasonably
expected to give rise to any significant liability to the Business or any of the
Transferred Subsidiaries under any Environmental Law in effect as of the date of
this Agreement;
(e) The Business and the Transferred Subsidiaries possess all permits,
licenses and authorizations required under applicable Environmental Law in
effect as of the date of this Agreement necessary for the conduct of their
business as presently conducted, and Seller and its Affiliates have not received
any written notice from any Government Entity or third party that any such
permit, license or authorization will be either challenged, terminated or
withdrawn or not renewed or reissued and, in Seller's reasonable judgment based
upon current circumstances, no such notice is expected; and
(f) Seller has provided Buyer with access to all material environmental
reports, studies, assessments, sampling data and closure estimates in its and
its Affiliates' possession relating to the Business or the Transferred
Subsidiaries and any of its or their current or former properties or operations,
which documents are listed on Schedule 3.13(f).
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Section 3.14 INTELLECTUAL PROPERTY AND IT ASSETS. (a) Schedule 3.14(a)
sets forth a true and complete list of:
(i) with respect to Owned Intellectual Property, (A) each
IP-Registered Trademark and material unregistered Trademark; (B) each
Patent; (C) each IP-Registered Copyright; and (D) each item of material
Computer Software, specifying for each, as applicable, its title or
subject matter, application or registration number, filing date, issue
date, owner and owner of record, where applicable;
(ii) each item of material Owned IT Hardware (identifying each
item's purpose and identifying whether the owner thereof is a
Transferred Subsidiary, on the one hand, or Seller or one of its
Affiliates (other than any Transferred Subsidiary), on the other hand);
(iii) each material Intellectual Property Contract
(identifying for each its title, the parties, its date and subject
matter), but excluding "shrinkwrap," "clickwrap" and other
non-negotiated licenses for off-the-shelf or otherwise generally
commercially available Computer Software;
(vi) to the extent not included in Schedule 3.14(a)(iii), each
Intellectual Property Contract (identifying for each its title, the
parties, its date and subject matter) pursuant to which Owned
Intellectual Property, or exclusively held Licensed-In Intellectual
Property, that are Patents, Trade Secrets or know-how has been licensed
or otherwise provided or made available to a third Person;
(v) To the extent not included in Schedule 3.14(a)(iii) or
(iv), each other Contract whose primary purpose is the licensing or
otherwise providing or making available of Owned Intellectual Property
or exclusively-held Licensed-In Intellectual Property to a third
Person; and
(vi) each material IT Hardware Contract (identifying for each
its title, the parties, its date and its subject matter).
(b) Unless otherwise stated therein, no item required to be listed on
Schedule 3.14(a)(i) has lapsed, expired or been abandoned or cancelled, or is
subject to any pending or, to the Knowledge of Seller, threatened, opposition,
nullity action, infringement action, cancellation, interference, public protest,
domain name dispute or other proceeding, and no such item requires within thirty
(30) days immediately following the date of this Agreement that any maintenance
fee be paid, or that an affidavit of use or renewal be filed, or that a patent
application be timely filed to avoid a rejection, or that any other formal legal
action required to maintain or preserve such item be taken. Except as set forth
on Schedule 3.14(b), the material Owned Intellectual Property is actively
subsisting in accordance with its description on Schedule 3.14(a) and, to the
Knowledge of Seller, is enforceable. Neither Seller nor its Affiliates have
taken affirmative steps to render such Intellectual Property unenforceable. No
Owned Intellectual Property or Licensed Computer Software is subject to any
outstanding order, judgment or decree adversely affecting the use thereof or
rights thereto. To the Knowledge of Seller, no facts or circumstances exist that
reasonably would be expected to cause any Owned Intellectual Property to be
declared invalid, nonsubsisting or unenforceable. To the Knowledge of Seller, no
Licensed-In Intellectual Property is subject to any outstanding order, judgment
or decree adversely affecting Seller's or its Affiliates' use thereof or rights
thereto.
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(c) Unless otherwise stated on Schedule 3.14(a), Seller and its
Affiliates exclusively own all Owned Intellectual Property and Owned IT
Hardware, free of all Encumbrances (except Permitted Encumbrances) and all such
Owned Intellectual Property and Owned IT Hardware is freely transferable to
Buyer via the mode of transfer contemplated by this Agreement free and clear of
all Encumbrances (except Permitted Encumbrances) and will be so transferred to
the extent not an Excluded Asset or Retained Asset PROVIDED that, for the
avoidance of doubt, no representation or warranty is made under this Section
3.14(c) with respect to the non-infringement or misappropriation of the
Intellectual Property Rights of any third Person, the sole representations and
warranties with respect to which are made in Section 3.14(d). Except as set
forth on Schedule 3.14(c), all material Intellectual Property Contracts and
material IT Hardware Contracts are freely transferable to Buyer via the mode of
transfer contemplated by this Agreement and will be so transferred to Buyer free
of all Encumbrances (except Permitted Encumbrances). To the Knowledge of Seller
with respect to the Licensed Computer Software only, Seller and its Affiliates
(other than the Transferred Subsidiaries), have all rights necessary to grant
the licenses granted to Buyer and the Transferred Subsidiaries under the
Licensed IP pursuant to Sections 5.8(a) and 5.8(b).
(d) The conduct of the Business as currently conducted and as conducted
during the three (3) year period immediately preceding the date of this
Agreement does not and did not infringe, misappropriate or otherwise violate the
Intellectual Property rights (but expressly excluding for these purposes such
rights in or to Patents and Trademarks) of any third Person, and to the
Knowledge of Seller, including after reasonable inquiry (it being understood
that reasonable inquiry for the purposes of this Section 3.14(d) shall only
require inquiry of those employees of Seller and its Affiliates who are
reasonably likely to have information about such infringement, misappropriation
or other violation, including any such employees previously employed by Solutia,
Inc. and its Affiliates), such conduct does not and did not infringe,
misappropriate or otherwise violate the Intellectual Property rights of any
third Person in or to any Patents or Trademarks. Since January 1, 2000, Seller
has not received written notice of or, to the Knowledge of Seller, threat of any
claim against Seller and/or any of its Affiliates or any indemnitee thereof
concerning the infringement, use or licensed right to use any Business
Intellectual Property or concerning the ownership, validity, registerability or
enforceability of any Owned Intellectual Property or exclusively held
Licensed-In Intellectual Property.
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(e) Except as set forth on Schedule 3.14(e), to the Knowledge of
Seller, no third Person is infringing, misappropriating or otherwise violating
any of Seller's and/or any of its Affiliates' rights in the Owned Intellectual
Property or exclusively held Licensed-In Intellectual Property. There are no
claims currently asserted or threatened by Seller and/or any of its Affiliates,
that (i) a third Person infringes, misappropriates or otherwise violates, or for
the three (3) year period immediately preceding the date of this Agreement has
infringed, misappropriated or otherwise violated, Seller's and/or any of its
Affiliates' rights in Owned Intellectual Property or exclusively held
Licensed-In Intellectual Property; or (ii) a third Person's owned or claimed
Intellectual Property interferes with or dilutes Seller's and/or any of its
Affiliates' rights in Owned Intellectual Property or exclusively held
Licensed-In Intellectual Property.
(f) No party to any material Intellectual Property Contract or IT
Hardware Contract has given Seller or its Affiliates written notice of its
intention to cancel, terminate, change the scope of rights under, or fail to
renew such Intellectual Property Contract or IT Hardware Contract.
(g) Seller and its Affiliates have taken reasonable steps in accordance
with normal industry practice to maintain the confidentiality of (i) their
respective Trade Secrets and (ii) information received from third Persons which
Seller or its Affiliates are obligated to treat as confidential, in each case to
the extent Related to the Business. Seller and its Affiliates have taken
reasonable steps in accordance with normal industry practice to obtain ownership
of all material works of authorship, inventions and other Intellectual Property
made by its employees, consultants and contractors not already owned by Seller
or its Affiliates by operation of Law. Without limiting the foregoing sentence,
Seller and its Affiliates have taken reasonable measures in agreements with
employees and contractors who contribute to the development of Intellectual
Property on behalf of Seller and its Affiliates to ensure that the ownership of
such Intellectual Property vests in, or is assigned to, Seller or its
Affiliates.
(h) Except as set forth on Schedule 3.14(h), Seller and its Affiliates
are not obligated to make and have not within the past three (3) years made
payments by way of royalties, advances, profit sharing, commissions or fees to
any Person in amounts totaling (euro)300,000 or more per year in respect of any
individual Intellectual Property Contract currently in effect.
(i) Except as set forth on Schedule 3.14(i), the Owned Intellectual
Property, the rights under the Intellectual Property Contracts including the
Licensed-In Intellectual Property, the rights under the IT Hardware Contracts
and the Licensed IP constitute all Intellectual Property necessary to conduct
the Business as conducted at any time between January 1, 2004 and the Closing
and, immediately after the Closing, necessary for Buyer to continue to operate
and conduct the Business as conducted at any time between January 1, 2004 and
the Closing. The Licensed Computer Software is not primarily related to the
Business.
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(j) The IT Assets used in the Business operate and perform in all
material respects in accordance with their documentation and functional
specifications and otherwise as required by Seller and its Affiliates in
connection with the Business, and have not materially malfunctioned or
materially failed within the past two (2) years. As set forth in Schedule
3.14(j), Seller maintains, and causes the Transferred Subsidiaries to maintain,
systems and procedures designed to protect the Seller's and Transferred
Subsidiaries' computer systems against damage by "malicious code" (as defined in
Schedule 3.14(j)), including by detecting and preventing the intrusion of
malicious code. To the Knowledge of Seller, no Computer Software comprising
Owned Intellectual Property is subject to the terms of any "open source,"
"copyleft," or other similar licenses in a manner that would require the source
code of the Computer Software to be licensed or publicly distributed. Seller and
its Affiliates have implemented reasonable backup and disaster recovery
technology for the Business consistent with industry practices.
(k) Except as set forth on Schedule 3.14(k), in connection with the
Films Separation, neither Seller nor its Affiliates have licensed, provided or
otherwise made available to any Person (other than a Transferred Subsidiary) any
Business Intellectual Property in any fields of use encompassed within the
Business, or competitive with or reasonably expected to be competitive with the
Business. Except as set forth on Schedule 3.14(k), since January 1, 2004,
neither Seller nor any of its Affiliates have licensed, provided or otherwise
made available to any of its Affiliates (other than a Transferred Subsidiary)
any business Intellectual Property in any fields of use encompassed within the
Business, or competitive with or reasonably expected to be competitive with the
Business. The agreements entered into between Seller and/or its Affiliates and
Hamsard 2724 Limited or its Affiliates in connection with the Films Separation
are not used in or held for use in the Seller Amino Resins Business.
Section 3.15 EMPLOYEE BENEFITS. (a) Except as set forth on Schedule
3.15(a), all current employees of Seller and its Affiliates who have devoted
more than fifty percent of their working hours to the Business since January 1,
2004 (together with the individuals listed on Schedule 3.15(a), the "BUSINESS
DESIGNATED EMPLOYEES") are employed by a Transferred Subsidiary, and (ii) no
current employees of Seller and its Affiliates who have devoted less than fifty
percent of their working hours to the Business since January 1, 2004 are
employed by a Transferred Subsidiary.
(b) As of or prior to the Closing, Seller shall cause (i) the
employment of those employees of the Transferred Subsidiaries who devote their
working hours to the Films Business to be transferred to Seller or an Affiliate
of Seller that is not a Transferred Subsidiary and (ii) the accrued benefits and
rights of such employees and of former employees of the Films Business who are
not Transferred Employees and Liabilities related to such accrued benefits and
rights to be transferred to a Benefit Plan of Seller or an Affiliate of Seller
that is not a Transferred Subsidiary and Seller shall be responsible for the
costs, if any, related to such transfers.
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(c) The Financial Statements and the Most Recent Balance Sheet reflect
accrual of all unpaid bonuses and vacation days in respect of all Business
Designated Employees, other than the integration bonuses referred to in Section
5.7(e).
(d) Schedule 3.15(d)(i) sets forth a complete list of all written
Non-U.S. Benefit Plans and Schedule 3.15(d)(ii) sets forth a complete list of
all written U.S. Benefit Plans; PROVIDED that in each case Seller will not be
obligated to list (i) any Benefit Plan that is immaterial in relationship to the
total compensation and benefits paid or provided to the group of employees
covered under each such Benefit Plan or (ii) individual employment agreements
that do not require payment of base compensation in excess of (euro)150,000.
(e) Seller has provided or made available to Buyer true and complete
copies of all material written Non-U.S. Benefit Plans and any related trust
agreements or other funding documents and a summary of the material terms of any
material unwritten Benefit Plan.
(f) NON-U.S. BENEFIT PLANS.
(i) All benefit and compensation plans, contracts, policies,
agreements or arrangements (other than U.S. Benefit Plans and plans,
contracts, policies, agreements or arrangements operated by any
Government Entity) (A) maintained by a Transferred Subsidiary or Seller
or any of its Affiliates (other than a Transferred Subsidiary) for the
benefit of Business Designated Employees or current or former employees
or directors of a Transferred Subsidiary, (B) in respect of which any
Transferred Subsidiary or, in relation to the Business Designated
Employees, Seller or any of its other Affiliates has contributed, or
(C) in respect of which any Transferred Subsidiary has any material
liability (whether actual or contingent), including, but not limited to
plans providing benefits on retirement, early retirement, death,
termination of employment (whether voluntary or not), or during periods
of sickness or disablement, or any deferred or incentive compensation,
welfare, healthcare, medical, stock or stock-related award plans,
including, without limitation, individual pension commitments,
"jubilee" pension benefits and retirement and termination indemnity
arrangements (such plans, contracts, agreements, policies and
arrangements hereinafter being referred to as "NON-U.S. BENEFIT PLANS")
have been administered in accordance with their terms and are in
compliance with applicable Laws and contracts, except for any failures
to so administer or be in compliance that, individually and in the
aggregate, are not reasonably likely to have a Business Material
Adverse Effect. To the Knowledge of Seller, no proposal has been
announced to establish any new Non-U.S. Benefit Plan that would result
in a material increase in the liability of the Transferred Subsidiaries
for employment or other benefit obligations. All required filings for
all Non-U.S. Benefit Plans have been made on time and with the
appropriate Government Entity, except for any failures to timely file
that, individually and in the aggregate, are not reasonably likely to
have a Business Material Adverse Effect. As of the date hereof, there
is no pending or, to the Knowledge of Seller, threatened material
litigation relating to Non-U.S. Benefit Plans.
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(ii) The Transferred Subsidiaries and, with respect to the
Business Designated Employees, Seller and its other Affiliates (i) are
in compliance with all applicable Laws respecting employment,
employment practices, terms and conditions of employment, occupational
health, safety, wages and hours, (ii) have withheld all amounts
required by applicable Laws, collective bargaining agreements or the
Non-U.S. Benefit Plans to be withheld from the wages, salaries or other
payments to the Business Designated Employees and former employees of
the Transferred Subsidiaries, (iii) in respect of the Business
Designated Employees or former employees of the Transferred
Subsidiaries, are not liable for any arrears, wages, Taxes or any
penalty for failure to comply with the foregoing, and (iv) are not
liable for any payment to any trust or other fund or to any Government
Entity with respect to unemployment compensation benefits, workers
compensation, social security or other benefits for Business Designated
Employees or former employees of the Transferred Subsidiaries for any
amounts other than payments not yet due, in each case under any
applicable provisions of Non-U.S. Benefit Plans and any applicable
Laws, except, in any such case, for any failures to comply, failures to
withhold or liabilities that, individually and in the aggregate, are
not reasonably likely to have a Business Material Adverse Effect.
(iii) All material contributions that the Transferred
Subsidiaries (or in relation to the Business Designated Employees,
Seller or any other Affiliate of Seller) are required to make to any
Non-U.S. Benefit Plan have been fully and timely paid when due.
(g) U.S. BENEFIT PLANS.
(i) True and complete copies of all benefit and compensation plans,
contracts, policies, agreements or arrangements (A) maintained by a
Transferred Subsidiary for the benefit of Business Designated Employees or
current or former employees or directors of a Transferred Subsidiary, (B)
in respect of which any Transferred Subsidiary or, in relation to the
Business Designated Employees, Seller or any of its other Affiliates has
contributed, or (C) in respect of which any Transferred Subsidiary has any
material liability (whether actual or contingent), in each case maintained
in the United States primarily for the benefit of employees working inside
the United States, including, but not limited to, "employee benefit plans"
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and deferred compensation,
stock option, stock purchase, stock appreciation rights, stock based,
incentive and bonus plans (the "U.S. BENEFIT PLANS"), have been provided or
made available to Buyer, to the extent any such U.S. Benefit Plan is in
writing, and any related trust instruments, insurance contracts and, with
respect to any employee stock ownership plan, loan agreements forming a
part of any U.S. Benefit Plan, and all amendments thereto have been
provided or made available to Buyer. Each U.S. Benefit Plan that has
received a favorable opinion or determination letter from the Internal
Revenue Service National Office, including any master or prototype plan,
has been separately identified on Schedule 3.15(e).
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(ii) All U.S. Benefit Plans, other than "multiemployer plans" within
the meaning of Section 3(37) of ERISA (each, a "MULTIEMPLOYER PLAN"), are
in compliance with ERISA, the Code and other applicable Laws, except for
any failures to comply that, individually and in the aggregate, are not
reasonably likely to have a Business Material Adverse Effect. Each U.S.
Benefit Plan which is subject to ERISA (the "ERISA PLANS") that is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA
(a "U.S. PENSION PLAN") and that is intended to be qualified under Section
401(a) of the Code, has received a favorable determination letter from the
Internal Revenue Service covering all Tax Law changes prior to the Economic
Growth and Tax Relief Reconciliation Act of 2001 or has applied to the
Internal Revenue Service for such favorable determination letter within the
applicable remedial amendment period under Section 401(b) of the Code, and
Seller has no Knowledge of any circumstances likely to result in the loss
of the qualification of such ERISA Plan under Section 401(a) of the Code.
Neither Seller nor any of its Affiliates has engaged in a transaction with
respect to any ERISA Plan that, assuming the taxable period of such
transaction expired as of the date hereof, is reasonably likely to subject
any Transferred Subsidiary to a Tax or penalty imposed by either Section
4975 of the Code or Section 502(i) of ERISA in an amount which is
reasonably likely to have a Business Material Adverse Effect.
(iii) No liability under Subtitle C or D of Title IV of ERISA has been
or is expected to be incurred by Seller or any of its Affiliates with
respect to any ongoing, frozen or terminated "single-employer plan", within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which
is considered one employer with Seller and its Affiliates under Section
4001 of ERISA or Section 414 of the Code (an "ERISA AFFILIATE"), other than
any such liability that, individually and in the aggregate, has not and
would not reasonably be expected to result in the incurrence of any
material liability by any Transferred Subsidiary or, following the Closing,
Buyer or any of its Affiliates. Seller and its Affiliates have not incurred
and do not reasonably expect to incur any material withdrawal liability
with respect to a Multiemployer Plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate).
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(iv) All material contributions required to be made by the Transferred
Subsidiaries and, with respect to the Business Designated Employees, Seller
and its other Affiliates under each U.S. Benefit Plan, as of the date
hereof, have been timely made. Neither any U.S. Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding
funding waiver.
(h) Except as may be provided under the terms of the Benefit Plans,
required under the Laws of a Government Entity that is not a U.S. entity or
contemplated by this Agreement, the execution of this Agreement and the
consummation of the transactions contemplated hereby will not alone or together
with a related event (i) entitle any of the Business Designated Employees to
severance pay or any increase in severance pay upon any termination of
employment after the date hereof, (ii) other than as expressly provided in this
Agreement, accelerate the time of payment or vesting, or require any payment or
funding (through a grantor trust or otherwise) of material compensation or
benefits under, or increase by a material amount the amount payable under, any
of the Benefit Plans in respect of any Transferred Employee, or (iii) result in
payments under any of the U.S. Benefit Plans which would not be deductible under
Section 162(m) of the Code.
Section 3.16 LABOR. (a) Except as set forth in Schedule 3.16(a), neither
Seller nor any of its Affiliates is a party to or bound by any company specific
labor agreements, union contracts and collective bargaining agreements in
respect of the Business Designated Employees.
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(b) The Transferred Subsidiaries and, with respect to the Business
Designated Employees, Seller and its other Affiliates are in compliance with all
labor Laws applicable to the Business and the Business Designated Employees, and
are not engaged in any unfair labor practices or similar prohibited practices
with respect to Business Designated Employees, except for any failures to comply
or engagement in such practices that, individually or in the aggregate, are not
reasonably likely to have a Business Material Adverse Effect.
(c) There is no pending or, to the Knowledge of Seller, threatened, strike,
walkout or other work stoppage or any union organizing effort by any of the
Business Designated Employees.
(d) There is no material unfair labor practice charge or complaint against
the Business or any of the Transferred Subsidiaries pending or, to the Knowledge
of Seller, threatened, before any Government Entity.
(e) Neither the Transferred Subsidiaries nor, with respect to the Business,
Seller or any of its Affiliates (other than the Transferred Subsidiaries) has
taken any action which could be construed as a "plant closing" or "mass layoff,"
as those terms are defined in WARN.
(f) As of the date hereof, Seller and its Affiliates have complied in all
material respects with all applicable obligations under the labor Laws of any
jurisdiction and any collective bargaining agreements applicable to the Business
Designated Employees to inform and consult with the shop committees, workers'
councils or other employee bodies of Seller and its Affiliates in connection
with the transactions contemplated hereby, the Films Separation, the Pre-Signing
Restructuring Transactions, the Post-Signing Restructuring Transactions.
Section 3.17 CONTRACTS. (a) Seller has made available to Buyer copies of
all written Material Contracts (as defined below) and accurate written
descriptions of all material terms of all oral Material Contracts. Schedules
3.17(a)(i) through (xiii) set forth a complete and accurate list of the
following:
(i) all Contracts which contain non-competition or exclusivity
covenants or which otherwise restrict the Transferred Subsidiaries or their
Affiliates in the conduct of the Business or any other business in any line
of business or geographic area;
(ii) all Contracts which require annual payments to a Business
Designated Employee of base compensation in excess of (euro)150,000;
(iii) all Contracts with a duration of one year or more to the extent
such Contracts are not the subject of any other clause of this Section
3.17(a);
(iv) all capitalized leases;
(v) all Contracts requiring the payment by the counterparties thereto
for goods or services whether or not the goods or services are actually
provided or the provision of goods or services by Seller or any of its
Affiliates at a price less than Seller's or its Affiliates' cost of
producing such goods or providing such services;
(vi) all Contracts providing for any loan or advance to, or investment
in, any Person;
(vii) all Contracts that would require Buyer or any of its Affiliates
or any of their respective successors or assigns to provide for
indemnification or contribution with respect to any matter;
(viii) all Contracts containing preferential rights to purchase all or
any portion of the Business which rights have not, or by the Closing will
not have been, terminated or expired;
(ix) all Contracts relating to swaps, futures, derivative or similar
transactions;
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(x) all joint venture, partnership or similar Contracts;
(xi) all Contracts for the acquisition or disposition of any business
or businesses which acquisition or disposition has not been completed as of
the date hereof;
(xii) all Contracts pursuant to which a Government Entity is providing
Tax abatements or other similar economic incentives; and
(xiii) all Contracts to which any Government Entity is a party.
The Contracts described in sections (i)-(xii) hereof are collectively, the
"MATERIAL CONTRACTS").
(b) Each Material Contract and each Contract required to be listed on
Schedule 3.14(a)(iii), (iv), (v) or (vi) is a valid and binding agreement of
Seller or one or more of its Affiliates, as the case may be, and is in full
force and effect and, to the Knowledge of Seller, is enforceable against each
party thereto in accordance with the express terms thereof. There does not exist
under any Material Contract or any Contract required to be listed on Schedule
3.14(a)(iii), (iv), (v) or (vi) any violation, breach or event of default, or
alleged violation, breach or event of default, or event or condition that, after
notice or lapse of time or both, would constitute a violation, breach or event
of default thereunder on the part of Seller or any of its Affiliates or, to the
Knowledge of Seller, any other party thereto, except as described in Schedule
3.17(b).
Section 3.18 SUFFICIENCY OF ASSETS. The Transferred Assets and the assets
of the Transferred Subsidiaries (other than the Retained Assets), when taken
together with any assets or services to be provided by Seller or its Affiliates
(other than the Transferred Subsidiaries) pursuant to the Ancillary Agreements
and the Excluded Assets (other than those contemplated by Sections 2.2(i) and
2.2(iv)), constitute all the assets, properties and rights of Seller and its
Affiliates other than the Intellectual Property necessary to conduct the
Business as conducted at any time between January 1, 2004 and the Closing
(except for assets, properties and rights of Seller or its Affiliates that have
been transferred to a third party in the Ordinary Course or that have become
obsolete or unusable in the Ordinary Course) and, immediately after the Closing,
necessary for Buyer to continue to operate and conduct the Business as conducted
at any time between January 1, 2004 and the Closing. No assets that are Related
to the Business have been transferred or are contemplated to be transferred to a
third party in connection with the Films Separation. The Transferred
Subsidiaries are and at all times have been engaged solely in the Business
(except insofar as having been engaged in the businesses described in clause
(iii) of the definition of Retained Liabilities) and do not currently engage in
any other business or activity (other than in respect of the Retained Assets and
Retained Liabilities). No part of the Business is currently operated by Seller
through any entity other than Seller, the Transferred Subsidiaries and the
Seller Subsidiaries described in Schedule 3.18 in respect of the Transferred
Assets held by such Seller Subsidiaries as of the date hereof that are listed
for each such Seller Subsidiary on Schedule 3.18. For the avoidance of doubt, no
representation or warranty is made under this Section 3.18 with respect to
sufficiency of any Intellectual Property, the sole representation and warranties
with respect to which are made in Section 3.14(i).
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Section 3.19 TITLE TO PROPERTY. Seller and its Affiliates (other than the
Transferred Subsidiaries) have, and at the Closing Seller and its Affiliates
(other than the Transferred Subsidiaries) will, transfer to Buyer or its
Affiliates good title to the personal tangible property they own or lease that
is included in the Transferred Assets, free and clear of all Encumbrances,
except Permitted Encumbrances. The Transferred Subsidiaries have good title to
the personal tangible property they own or lease, free and clear of all
Encumbrances, except Permitted Encumbrances, and good and marketable title to
the real property listed on Schedule 3.19(a), all of which is owned by the
Transferred Subsidiaries (the "OWNED REAL PROPERTY"). The Transferred
Subsidiaries have valid and binding leasehold interests in the real property
listed on Schedule 3.19(b) (the "LEASED REAL PROPERTY"). The Transferred
Subsidiaries do not own any real property other than the Owned Real Property
and, except for the Leased Real Property, no Person other than the Transferred
Subsidiaries owns any real property used by the Transferred Subsidiaries. None
of the Owned Real Property or Leased Real Property is subject to any
Encumbrances or any right or option of any other Person to purchase, lease,
sublease or license an interest in such property, other than Permitted
Encumbrances, and no Person (other than the Transferred Subsidiaries) has any
right to use, occupy or lease any of the Owned Real Property or the Leased Real
Property. None of the Transferred Subsidiaries is obligated to mortgage any of
the Owned Real Property or to acquire fee ownership of any real property subject
to a mortgage.
Section 3.20 REAL PROPERTY. (a) Seller has made available to Buyer complete
and accurate copies of each lease and sublease of the Leased Real Property (as
such leases and subleases may be amended or modified from time to time, the
"REAL PROPERTY LEASES"). Schedule 3.20(a) is a complete and accurate list of the
Real Property Leases. Each of the Real Property Leases is a valid and binding
agreement of a Transferred Subsidiary and is in full force and effect and, to
the Knowledge of Seller, enforceable against each party thereto in accordance
with the express terms thereof. There does not exist under any Real Property
Leases any violation, breach or event of default, or alleged violation, breach
or event of default, or event or condition that, after notice or lapse of time
or both, would constitute a violation, breach or event of default thereunder on
the part of a Transferred Subsidiary or, to the Knowledge of Seller, any other
party thereto.
(b) Except as disclosed on Schedule 3.20(b), each facility (including all
buildings, structures, and improvements) owned by a Transferred Subsidiary
(other than any Retained Asset): (i) is in all material respects in reasonable
operating condition and repair and is structurally sound and free of material
defects, with no material alterations or repairs required thereto under
applicable Law or insurance company requirements; and (ii) is suitable in all
material respects for its current use, operation and occupancy.
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(c) The ownership, occupancy, use and operation of the Owned Real Property
and, to the Knowledge of Seller, the Leased Real Property has complied and
complies in all material respects with all Laws and Governmental Authorizations,
and does not violate in any material respect any instrument of record or
agreement affecting such property.
(d) There are no pending, or, to the Knowledge of Seller, threatened,
appropriation, condemnation, eminent domain or like proceedings relating to the
Owned Real Property or, to the Knowledge of Seller, the Leased Real Property.
(e) None of the Owned Real Property or the Leased Real Property has
suffered any material damage by fire or other casualty which has not heretofore
been repaired and restored in all material respects.
Section 3.21 WARRANTIES AND PRODUCT LIABILITY. Except as described in
Schedule 3.21 and except as specifically reflected, reserved against or
otherwise disclosed in the Historical Financial Statements or incurred since the
date of the Historical Financial Statements in the Ordinary Course and as would
not be material to the Business (a) there is no notice, demand, claim, action,
suit, inquiry, hearing, proceeding, notice of violation or investigation from,
by or before any Government Entity relating to any product, including the
packaging and advertising related thereto, designed, formulated, manufactured,
processed, sold or placed in the stream of commerce by the Business or any
Transferred Subsidiaries or any services provided by the Business or any
Transferred Subsidiaries (a "PRODUCT"), or claim or lawsuit involving a Product
which is pending or, to the Knowledge of Seller, threatened, by any Person, and
(b) there has not been, nor is there under consideration by the Business or any
Transferred Subsidiaries, any Product recall or post-sale warning of a material
nature conducted by or on behalf of the Business or any Transferred Subsidiaries
concerning any Product. There have not been and there are no material design,
formulation, manufacturing or labeling defects, flaws or deficiencies in such
Products.
Section 3.22 INSURANCE. (a) Schedule 3.22(a)(i) lists all material
insurance policies to which the Transferred Subsidiaries are parties
(collectively, together with any renewals thereof, the "TRANSFERRED INSURANCE
POLICIES"). Schedule 3.22(a)(ii) lists all material policies to which Seller and
its Affiliates (other than the Transferred Subsidiaries) are parties, which
policies cover the properties, assets, employees, directors and operations of
the Business (collectively, together with any renewals thereof, the "SELLER
INSURANCE POLICIES"). Seller has provided to Buyer summaries of all Transferred
Insurance Policies and Seller Insurance Policies. The execution, delivery and
performance by Seller and its Affiliates of this Agreement, the Stockholder's
Agreement, the Ancillary Agreements to which they are a party and other
documents relating to the Films Separation, the Pre-Signing Restructuring
Transactions and the Post-Signing Restructuring Transactions will not result in
the termination, cancellation or modification of the Transferred Insurance
Policies.
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(b) Schedule 3.22(b) lists information on significant worker health and
safety claims related to accidents in the workplace, to the extent Related to
the Business, since January 1, 2001.
(c) Except as disclosed on Schedule 3.22(b) there are no outstanding unpaid
claims related to the Business or the Transferred Subsidiaries under any of the
Insurance Policies in excess of (euro)100,000 per claim. None of Seller or its
Affiliates has received notice of cancellation, termination or non-renewal of
any Insurance Policy, and none of the Transferred Subsidiaries has been denied
insurance coverage.
Section 3.23 NO PAYMENTS OR BENEFITS TO GOVERNMENT OFFICIALS. In connection
with the Business, the Transferred Subsidiaries or the transactions contemplated
hereby, neither Seller nor any of its Affiliates nor, to the Knowledge of
Seller, any director, officer, employee or agent thereof, has made, directly or
indirectly, any illegal contribution to a political party or candidate, any
improper foreign payment (as defined in the U.S. Foreign Corrupt Practices Act),
or any commitment to make any such contribution or payment.
Section 3.24 CUSTOMERS AND SUPPLIERS. Set forth in Schedule 3.24 is a true and
correct list of (i) the ten (10) largest customers (by revenues) of the
Business, and (ii) the ten (10) largest suppliers (by purchases) of the
Business, in each case, during the year ended December 31, 2003. No customer or
supplier that is not listed on Schedule 3.24 accounted for in excess of 5% of
the revenues or purchases of the Business during the year ended December 31,
2003. To the Knowledge of Seller, as of the date hereof, no customer or supplier
listed in Schedule 3.24 has canceled or otherwise terminated, or threatened in
writing to terminate, its relationship with the Business, or decreased or
limited in any material respect, or threatened in writing to decrease or limit
in any material respect, its purchases from or sales to the Business.
Section 3.25 TOXICOLOGICAL INFORMATION. Seller has delivered or made
available to Buyer all of the following to the extent Related to the Business:
(a) true and complete copies of material safety data sheets for Products
set forth on Schedule 3.25(a) currently produced and identified to Buyer as "key
products"; and
(b) true copies of all summaries of significant epidemiological studies
sent to the United States Environmental Protection Agency or toxicological
studies that are in the possession of Seller for which reporting is required by
government standards relating to (i) any Product other than a Product set forth
on Schedule 3.25(a) produced since January 1, 2001 or (ii) any of the Products
listed on Schedule 3.25(a).
Section 3.26 EINECS AND TSCA. Except as set forth on Schedule 3.26 and
except as is not reasonably likely to have any Business Material Adverse Effect,
currently and for the preceding five years, all Products that are required to be
registered on the EU EINECs lists or reported to the U.S. Environmental
Protection Agency for listing in the TSCA Inventory have been so registered or
reported. Except as set forth on Schedule 3.26 and Seller and its Affiliates
have complied in all material respects with EINECS and Section 8(c) of the TSCA
with respect to the Products and, to the Knowledge of Seller, the suppliers of
the Business have complied with EINECS and TSCA with respect to raw materials
used in the Business. Except as set forth on Schedule 3.26 and except as set
forth in Schedule 3.26, no report of substantial risk under Section 8(e) of TSCA
has been made by Seller or any of its Affiliates and no effects have been
recorded under Section 8(c) of TSCA with respect to any Products. To the
Knowledge of Seller, no report of substantial risk under Section 8(e) of TSCA
has been made by any other person or entity with respect to any Products.
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Section 3.27 RETURN OF PRODUCTS. Subject to recourses which are generally
available to purchasers at Law and policies described in Schedule 3.27, no
customer of the Business has any right to return any merchandise for credit or
refund pursuant to any agreement, understanding or practice that the Business
will accept returned products. Without limiting the foregoing, the Business does
not have any products or other materials Related to the Business in the
possession of its customers on consignment or on a similar basis except as set
forth on Schedule 3.27.
Section 3.28 RESTRUCTURING TRANSACTIONS. Set forth on Schedule 3.28 is a
true and complete description of all material actions taken, in each relevant
country, by Seller and its Affiliates with respect to the Business or the
Transferred Subsidiaries from and after January 1, 2004 and prior to the date
hereof for the purpose of authorizing, agreeing to or undertaking the
consolidation, restructuring, or reorganization of the Business and the
Transferred Subsidiaries, including any of the following: (a) the splitting,
combining, subdividing, reclassifying or redeeming, or purchasing or otherwise
acquiring, of any outstanding securities of the Transferred Subsidiaries, (b)
the amendment of any of the Organizational Documents of the Transferred
Subsidiaries, (c) the issuance, sale, pledging, transferring, disposing of or
encumbering any shares of the Transferred Subsidiaries' capital stock or
securities convertible into or exchangeable for any such shares, or any rights,
warrants, options, calls or commitments to acquire or dispose of any such shares
or other securities, (d) the permitting of any Transferred Subsidiary to acquire
(by merger, consolidation, acquisition of stock or assets or otherwise), any
other Person or any equity interest therein, (e) the transfer of any assets to
Transferred Subsidiary from Seller or any of its Affiliates (other than the
Transferred Subsidiaries), or from any Transferred Subsidiary to Seller or any
of its Affiliates (other than the Transferred Subsidiaries), (f) the assumption
of any Liability by any Transferred Subsidiary from Seller or any of its
Affiliates (other than the Transferred Subsidiaries), (g) the amendment of any
Benefit Plan, or (h) the assumption of or entering into of any collective labor
or bargaining agreement relating to the Business (collectively, the "PRE-SIGNING
RESTRUCTURING TRANSACTIONS").
Section 3.29 ACQUISITION OF PURCHASE PRICE SHARES FOR INVESTMENT. Seller
has sufficient knowledge and experience in financial and business matters such
that it is capable of evaluating the merits and risks of its acquisition of the
Purchase Price Shares, and has been provided access to such information, if any,
concerning Buyer as it has considered necessary for purposes of making its
evaluation. Seller is acquiring the Purchase Price Shares for investment and not
with a view toward any distribution thereof, or with any present intention of
distributing the Purchase Price Shares other than as provided in the
Stockholder's Agreement. Seller agrees that the Purchase Price Shares may not be
sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed
of without registration under the Securities Act, except pursuant to an
exemption from such registration available under the Securities Act, and in any
event only as contemplated by the Stockholder's Agreement.
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Section 3.30 OWNERSHIP OF SECURITIES. As of the date hereof, neither Seller
nor any of its Affiliates Beneficially Owns or has entered into any hedging or
derivative transactions, including short sales and forward contracts, with
respect to any securities of Buyer.
Section 3.31 FINDERS' FEES. Except for Bear, ▇▇▇▇▇▇▇ International Limited,
whose fees will be paid by Seller, there is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Seller or any of its Affiliates who might be entitled to any fee or
commission from Seller or any of its Affiliates in connection with the
transactions contemplated hereby.
Section 3.32 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article III, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF Buyer
Subject to the exceptions set forth in the disclosure schedules
delivered to Seller on or prior to the date hereof (the "BUYER DISCLOSURE
SCHEDULES"), and except as disclosed in the Buyer Reports filed prior to the
date hereof, Buyer represents and warrants to Seller as of the date hereof and
as of the Closing as follows:
Section 4.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite corporate power and authority to own, lease and operate its
assets, and to carry on its business as currently conducted, and is qualified to
do business and, if applicable, is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its assets or conduct of
its business requires such qualification except where the failure to be so
qualified would not materially interfere with the continued operation of the
Buyer's business.
Section 4.2 CORPORATE AUTHORIZATION. Buyer has full corporate or similar
power and authority to execute and deliver this Agreement, the Stockholder's
Agreement and each of the Ancillary Agreements to which it is or will be a
party, and to perform its obligations hereunder and thereunder. The execution,
delivery and performance by Buyer of this Agreement and each of the Ancillary
Agreements to which it is or will be a party has been duly and validly
authorized and no additional corporate or stockholder authorization or consent
is required in connection with the execution, delivery and performance by Buyer
of this Agreement or such Ancillary Agreement. Each Affiliate of Buyer has or
prior to the Closing will have full corporate power and authority to execute and
deliver each Ancillary Agreement or other document or agreement to be delivered
at or prior to the Closing to which it is or will be a party and to perform its
obligations thereunder. The execution, delivery and performance by each
Affiliate of Buyer of each Ancillary Agreement or other document or agreement to
be delivered at or prior to the Closing to which it is or will be a party has
been or prior to the Closing will have been duly and validly authorized, and no
additional corporate or stockholder authorization or consent is or will be
required in connection with the execution, delivery and performance by any
Affiliate of Buyer of the Ancillary Agreements or other documents or agreements
to be delivered at or prior to the Closing to which such Affiliate is or will be
a party or signatory.
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Section 4.3 CAPITAL STRUCTURE OF BUYER. (a) The authorized capital stock of
Buyer consists of 150,000,000 shares of common stock, par value $.01 per share
("BUYER COMMON STOCK"), of which 39,624,027 shares were outstanding as of the
close of business on September 24, 2004, and 4,000 shares of Series C Cumulative
Preferred Stock, par value $0.01 per share, of which no shares were outstanding
as of the close of business as of the date hereof. All of the outstanding shares
of Buyer Common Stock have been duly authorized and validly issued, and are
fully paid and nonassessable. Except as described in Schedule 4.3, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments of any character under which Buyer is or may become
obligated to issue or sell any shares of the capital stock or other equity
interests, or any securities or obligations exercisable or exchangeable for or
convertible into any shares of the capital stock or other equity interests, of
Buyer, and no securities or obligations evidencing such rights are authorized,
issued or outstanding. To the Knowledge of Buyer, the outstanding stock and
other equity interests of Buyer are not subject to any voting trust arrangement
or other contract, agreement or arrangement restricting or otherwise relating to
the voting, dividend rights or disposition of such stock or other equity
interests except as described in Schedule 4.3. There are no phantom stock or
similar rights providing economic benefits based, directly or indirectly, on the
value or price of the stock or other equity interests of Buyer.
(b) Prior to the Closing, Buyer will have taken all necessary action to
permit it to issue or otherwise deliver the Purchase Price Shares to be
delivered in connection with the transactions contemplated hereby. All Purchase
Price Shares to be delivered to Seller at the Closing will be validly issued,
fully paid and nonassessable, and no Person will have any preemptive right of
subscription or purchase in respect thereof.
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Section 4.4 CONSENTS AND APPROVALS. (a) Other than filings, notices and/or
approvals (i) under the HSR Act, the EC Merger Regulation and the Exchange Act,
(ii) in connection with the Other Antitrust Approvals and Other Antitrust
Filings and (iii) required to be made with the NYSE, and except as described in
Schedule 4.4(a), no consent, approval, waiver, clearance, authorization, notice,
filing or submission is required to be obtained by Buyer or any of its
Affiliates from, or to be given by Buyer or any of its Affiliates to, or made by
Buyer or any of its Affiliates with, any Government Entity or Self-Regulatory
Organization, in connection with the execution, delivery and performance by
Buyer or any of its Affiliates of this Agreement, the Stockholder's Agreement
and the Ancillary Agreements except where the failure to obtain such consent,
approval, waiver, clearance, authorization or provide such notice, filing or
submission would not materially interfere with the continued operation of
Buyer's business or its ability to consummate the transactions contemplated by
this Agreement.
(b) Except as described in Schedule 4.4(b), no consent, approval, waiver,
clearance, authorization, notice, filing or submission that is material to
Buyer's business was or is required to be obtained by Buyer or any of its
Affiliates from, or to be given by Buyer or any of its Affiliates to, or made by
Buyer or any of its Affiliates with, any Person which is not a Government Entity
or Self-Regulatory Organization in connection with the execution, delivery and
performance by Buyer or any of its Affiliates of this Agreement, the
Stockholder's Agreement and the Ancillary Agreements except where the failure to
obtain such consent, approval, waiver, clearance, authorization or provide such
notice, filing or submission would not materially interfere with the continued
operation of Buyer's business or its ability to consummate the transactions
contemplated by this Agreement.
Section 4.5 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer and the Buyer Subsidiaries of this Agreement, the Stockholder's Agreement
and the Ancillary Agreements to which they are or will be a party, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not (a) violate any provision of the Organizational Documents of Buyer or
any of the Buyer Subsidiaries, (b) assuming the receipt of all consents,
approvals, waivers, clearances, authorizations and the making of the notices and
filings described under Schedules 4.4(a) and 4.4(b), conflict with, or result in
the breach of, or constitute a default under, or result in the termination,
cancellation, modification or acceleration (whether after the filing of notice
or the lapse of time or both) of any right obligation of Buyer or any of its
Affiliates under, or result in a loss of any benefit to which Buyer or any of
its Affiliates entitled to under any material contract, except where any of the
foregoing would not materially interfere with the continued operation of Buyer's
business or its ability to consummate the transactions contemplated by this
Agreement or (c) assuming the receipt of all consents, approvals, waivers,
clearances and authorizations and the making of notices, filings and submissions
described in Section 4.4 or on Schedule 4.4(a) or 4.4(b) or required to be made
or obtained by Seller and its Affiliates, violate or result in a breach of or
constitute a default under any Law to which Buyer or any of the Buyer
Subsidiaries is subject, or under any Governmental Authorization except where
such violation, breach or default would not materially interfere with the
continued operation of Buyer's business or its ability to consummate the
transactions contemplated by this Agreement.
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Section 4.6 BINDING EFFECT. This Agreement, assuming due authorization,
execution and delivery by Seller, constitutes a valid and legally binding
obligation of Buyer enforceable against Buyer in accordance with its terms, and,
when executed by Buyer or its Affiliates, each of the Stockholder's Agreement
and Ancillary Agreements, assuming the due authorization, execution and delivery
by Seller or its Affiliates, will constitute a valid and legally binding
obligation of Buyer and each of its Affiliates party thereto, in each case
subject to the Bankruptcy and Equity Exception.
Section 4.7 BUYER REPORTS; FINANCIAL STATEMENTS. Since January 1, 2003,
Buyer has timely filed with the SEC all registration statements, reports, proxy
statements or information statements required to be filed by Buyer, including
(a) Buyer's Annual Report on Form 10-K for the year ended December 31, 2002 and
2003 and (b) Buyer's Quarterly Reports on Form 10-Q for the periods ended March
31, 2003, June 30, 2003, September 30, 2003, March 31, 2004 and June 30, 2004,
which are publicly available on the SEC's ▇▇▇▇▇ system (collectively, including
any such reports filed subsequent to the date hereof, the "BUYER REPORTS"). As
of their respective dates (or if amended, as of the date of such amendment or,
if superseded by a subsequent Buyer Report filed prior to the date hereof, as of
the date of such subsequent Buyer Report), the Buyer Reports did not, and any
Buyer Reports filed with the SEC subsequent to the date hereof will not, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances in which they were made, not misleading. Each of
the consolidated balance sheets included in or incorporated by reference into
the Buyer Reports (including the related notes and schedules) fairly presents,
or will fairly present, in all material respects, the consolidated financial
position of Buyer and the Buyer Subsidiaries as of its date and each of the
consolidated statements of income and of changes in financial position included
in or incorporated by reference into the Buyer Reports (including any related
notes and schedules) fairly presents, or will fairly present, in all material
respects, the results of operations, retained earnings and changes in financial
position, as the case may be, of Buyer and the Buyer Subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to
notes and normal year-end audit adjustments that will not be material in amount
or effect), in each case in accordance with U.S. GAAP consistently applied
during the periods involved, except as may be noted therein.
Section 4.8 ABSENCE OF LIABILITIES. Except as set forth in Schedule 4.8,
Buyer does not have any material Liabilities other than Liabilities reflected,
reserved against or otherwise disclosed in the Buyer Reports and Liabilities
incurred since the Buyer Audit Date in the Ordinary Course.
Section 4.9 ABSENCE OF CHANGES. Since the Buyer Audit Date, other than in
connection with the transactions contemplated hereby, Buyer and the Buyer
Subsidiaries have conducted their respective businesses only in the Ordinary
Course, and Buyer has not experienced any event or condition, and, to the
Knowledge of Buyer, no event or condition is threatened, that has had or is
reasonably likely to have, a Buyer Material Adverse Effect.
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Section 4.10 LITIGATION AND CLAIMS. There is no material civil, criminal or
administrative action, suit, demand, claim, hearing, proceeding or investigation
pending, or, to the Knowledge of Buyer, threatened, against or relating to Buyer
or any of the Buyer Subsidiaries.
Section 4.11 ANTI-TAKEOVER STATUTE. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation
(including Section 203 of the Delaware General Corporation Law) is applicable to
the Purchase Price Shares or the transactions contemplated by this Agreement,
the Stockholder's Agreement and the Ancillary Agreements.
Section 4.12 REQUIRED FINANCING. Buyer has financing commitments (as
renewed, amended or replaced from time to time, the "FINANCING COMMITMENTS") in
place which, if funded in accordance with their terms, either alone or with cash
presently on hand, will provide sufficient funds to consummate the transactions
contemplated hereby, including, without limitation, to (i) pay the Cash Purchase
Price pursuant to Section 2.5 (including any adjustment thereto in accordance
with this Agreement) and (ii) pay any fees and expenses in connection with the
transactions contemplated hereby or the financing thereof. Buyer has delivered
to Seller copies of the Financing Commitments.
Section 4.13 FINDERS' FEES. Except for ▇▇▇▇▇▇▇, Sachs & Co., whose fees
will be paid by Buyer, there is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
Buyer or any of its Affiliates who might be entitled to any fee or commission
from Buyer in connection with the transactions contemplated hereby.
Section 4.14 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article IV, neither Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer.
ARTICLE V
COVENANTS
Section 5.1 ACCESS AND INFORMATION. (a) From the date hereof until the
Closing, subject to, and to the extent permitted by, any applicable Laws,
policies, practices, procedures or direction of any Government Entity, Seller
shall, and shall cause each of the Seller Subsidiaries to, (i) afford Buyer and
its representatives (including representatives of entities providing or
arranging financing for Buyer) access, during regular business hours and upon
reasonable advance notice, to the Business Designated Employees, other employees
of Seller and its Affiliates who perform functions on behalf of or provide
services to the Business, the Business Intellectual Property, and the assets,
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books, properties, systems and records related to the Business, the Pre-Signing
Restructuring Transactions or the Post-Signing Restructuring Transactions, (ii)
furnish, or cause to be furnished, to Buyer any financial and operating data and
other information that is available with respect to the Business as Buyer from
time to time may reasonably request, including in connection with the
preparation of any audited financial statements or pro forma financial
statements that Buyer may be required pursuant to applicable Law to file with or
furnish to any Government Entity, in connection with any financing and in
connection with the review, documentation and testing by Buyer of the internal
control over financial reporting of the Business and the Transferred
Subsidiaries for the purpose of preparing for the compliance by Buyer after the
Closing with the reporting and attestation requirements of the Exchange Act,
(iii) instruct the employees of the Transferred Subsidiaries and other employees
of Seller and its Affiliates who perform functions on behalf of or provide
services to the Business, and Seller's and its Affiliates' counsel, financial
advisors and other representatives and agents, to cooperate with Buyer in its
investigation of the Business, including using reasonable best efforts to cause
their accountants to give Buyer access to their work papers (on such customary
terms and conditions as such accountants may require). No investigation pursuant
to this Section 5.1(a) shall alter any representation or warranty given
hereunder by Seller. All requests for information and access made pursuant to
this Section 5.1(a) shall be directed only to such Person or Persons as may be
designated by Seller, and shall not be granted to the extent deemed inconsistent
with any Law, policy, practice, procedure or direction of any Government Entity.
No request for information or access made pursuant to this Section 5.1 shall be
granted to the extent that it would interfere unreasonably with Seller's
business. All information received pursuant to this Section 5.1(a) shall be
governed by the terms of Section 5.2.
(b) Following the Closing, upon the request of any other party hereto,
Seller and Buyer shall, to the extent permitted by Law, policies, practices,
procedures and directions of all relevant Government Entities and
confidentiality obligations existing as of the Closing, grant to such other
party and its representatives during regular business hours and subject to
reasonable rules and regulations of the granting party, the right, at the
expense of the non-granting party, to inspect and copy the books, records and
other documents in the granting party's possession pertaining to the operation
of the Business prior to the Closing (including books of account, records,
files, invoices, correspondence and memoranda, customer and supplier lists,
data, specifications, insurance policies, operating history information and
inventory records). In no event shall either party have access to the
consolidated Tax Returns of the other party.
(c) Buyer agrees to, and to cause its Affiliates (including the Transferred
Subsidiaries) to, (i) retain all Books and Records in existence on the Closing
Date for not less than five years following the Closing and thereafter shall
retain such Books and Records in accordance with applicable Law and Buyer's
record retention policies and procedures then-applicable to books and records of
Buyer and its Affiliates, and (ii) subject to applicable Law, make personnel of
Buyer and its Affiliates (including the Transferred Subsidiaries) available to
Seller to the extent in each case that such access is reasonably related to any
Retained Assets, Retained Liabilities, Excluded Assets or Excluded Liabilities
or otherwise necessary for Seller to comply with the terms of this Agreement,
the Stockholder's Agreement, any Ancillary Agreement or any applicable Law.
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(d) Seller shall provide to Buyer, at least twenty Business Days prior to
the Closing Date, a list that sets forth the name of each bank in which any
Transferred Subsidiary has an account or safe deposit box, vault, lock-box or
other arrangement, the account number and description of each account at each
bank and the names of all Persons authorized to draw thereon or to have access
thereto; and the names of all Persons, if any, holding Tax or other powers of
attorney from any Transferred Subsidiary or relating to the Business.
Section 5.2 CONFIDENTIALITY. (a) As of the date hereof, the Confidentiality
Agreement is hereby terminated, and is void and shall have no further effect,
and neither party thereto shall have any Liability to the other party thereto or
its Affiliates, directors, officers or employees, except that nothing in this
Section 5.2(a) shall relieve any party from Liability for any willful or
intentional breach of the Confidentiality Agreement prior to the date hereof.
(b) From and after the date hereof, Seller shall, and shall cause its
Affiliates (including, until the Closing, the Transferred Subsidiaries) and its
and their employees, counsel, financial advisors and other representatives to,
treat as confidential and safeguard, and (subject to Section 5.2(g)) not to use
except as expressly agreed in writing by Buyer or its Affiliates, any and all
information, knowledge and data included in the Transferred Assets or owned or
held by any of the Transferred Subsidiaries, in each case by using the standard
of care necessary to prevent the unauthorized use, dissemination or disclosure
of such information, knowledge and data, PROVIDED that from and after the date
hereof until the Closing, this provision shall not restrict Seller and its
Affiliates' use or disclosure thereof in the Ordinary Course.
(c) From and after the date hereof until the Closing, Buyer shall, and
shall cause its Affiliates and its and their employees, counsel, financial
advisors and other representatives to, treat as confidential and safeguard any
and all information, knowledge and data of Seller and its Affiliates that
becomes known to Buyer or its Affiliates as a result of the transactions
contemplated hereby except as otherwise agreed to by Seller in writing, in each
case by using the standard of care necessary to prevent the unauthorized use,
dissemination or disclosure of such information, knowledge and data.
(d) From and after the Closing, Buyer shall, and shall cause its Affiliates
and its and their employees, counsel, financial advisors and other
representatives to, treat as confidential and safeguard any and all information,
knowledge or data included in (i) the Seller Leased Property, and (ii) any
information relating to the businesses of Seller and its Affiliates other than
the Business that becomes known to Buyer or its Affiliates as a result of the
transactions contemplated hereby except as otherwise agreed to by Seller in
writing; PROVIDED, HOWEVER, that nothing in this Section 5.2(d) shall prevent
the disclosure of any such information, knowledge or data to any directors,
officers or employees of Buyer or any of its Affiliates to whom such disclosure
is necessary or desirable in the conduct of the Business if such Persons are
informed by Buyer of the confidential nature of such information and are
directed by Buyer to comply with the provisions of this Section 5.2(d).
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(e) Buyer and Seller acknowledge that the confidentiality obligations set
forth in this Agreement shall not extend to information, knowledge and data that
is publicly available or becomes publicly available other than through an act or
omission of the party owing a duty of confidentiality, or becomes available on a
non-confidential basis from a source other than the party owing a duty of
confidentiality so long as such source is not known by such party to be bound by
a confidentiality agreement with or other obligations of secrecy to the other
party. In the event either Buyer or Seller or their respective Affiliates or
employees, counsel, financial advisors or other representatives (i) is requested
or required to disclose information, knowledge or data that is subject to a duty
of confidentiality hereunder in connection with any judicial or administrative
proceedings or (ii) receives an opinion of outside counsel that disclosure of
information, knowledge or data that is subject to a duty of confidentiality
hereunder is necessary to avoid violating applicable Law, then Buyer or Seller,
as applicable, shall provide the other party with prompt notice of such
requirement in advance of any such disclosure, and shall cooperate with such
other party to the extent it may seek to limit such disclosure. In such case, in
the absence of a protective order or the receipt of a waiver from the
non-disclosing party after a request in writing therefor is made by the
disclosing party, the disclosing party may disclose such information, knowledge
or data without liability hereunder, but such disclosing party shall disclose
only such information as is required to be disclosed and shall use its
reasonable best efforts to obtain a confidentiality order or undertaking with
respect to such information.
(f) In the event of a breach of the obligations hereunder by Buyer or
Seller, the non-breaching party, in addition to all other available remedies,
will be entitled to injunctive relief to enforce the provisions of this Section
5.2 in the manner provided in Section 9.8 herein.
(g) Nothing in this Agreement shall be construed to restrict either Buyer
or Seller or their respective Affiliates from using any skills or experience of
a general nature (as distinguished from the tangible embodiment of such skills
or experience) that are retained in the unaided memory of any such Person's
current or former employees or consultants who have had access or exposure to
information belonging to the other party.
Section 5.3 SELLER'S CONDUCT OF BUSINESS. During the period from the date
hereof to the Closing, except as set forth on Schedule 5.3 or as otherwise
contemplated by this Agreement, including in respect of the Post-Signing
Restructuring Transactions and the Films Separation, or as Buyer otherwise
agrees in advance, Seller shall conduct, and shall cause its Affiliates to
conduct, the Business in the Ordinary Course and use its commercially reasonable
efforts to preserve intact the Business and its relationships with its
customers, suppliers, creditors and employees. Without limiting the foregoing,
during the period from the date hereof to the Closing, except as otherwise
contemplated by this Agreement, including in respect of the Post-Signing
Restructuring Transactions and the Film Separation, or as Buyer otherwise agrees
in advance, Seller shall not, and shall cause its Affiliates not to, directly or
indirectly, take, authorize or enter into any agreement or commitment to take
any of the following actions to the extent such actions relate to the Business
or the Transferred Subsidiaries:
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(a) split, combine, subdivide, reclassify or redeem, or purchase or
otherwise acquire, any outstanding securities of the Transferred Subsidiaries;
(b) amend any of the Organizational Documents of the Transferred
Subsidiaries;
(c) issue, sell, pledge, transfer, dispose of or encumber any shares of the
Transferred Subsidiaries' capital stock or securities convertible into or
exchangeable for any such shares, or any rights, warrants, options, calls or
commitments to acquire or dispose of any such shares or other securities;
(d) permit any Transferred Subsidiary to adopt a plan of complete or
partial liquidation or authorize or undertake a dissolution, consolidation,
restructuring, recapitalization or other reorganization;
(e) make or rescind any material election relating to Taxes of any
Transferred Subsidiary or Transferred Asset, or file any material amended income
Tax Return of, or claim for refund for, any Transferred Subsidiary, in each
case, if such election or amendment would have the effect of increasing the Tax
Liability of any Transferred Subsidiary for any period ending after the Closing
Date or make any material change in any material method of Tax accounting of any
Transferred Subsidiary or in respect of any Transferred Assets or Assumed
Liabilities; PROVIDED, HOWEVER, Seller shall have the sole right to negotiate
and settle any Tax audits or proceedings described in Schedule 5.3(e);
(f) make any material change in any method of accounting, keeping of books
of account or accounting practices unless required by Belgian GAAP,
International Accounting Standards (if after December 31, 2004), U.S. GAAP or
applicable Law and other than such changes that Seller and its Affiliates may
make in connection with modifying their respective methods of accounting,
keeping of books of account or accounting practices or methods of Tax accounting
to comply with the International Accounting Standards;
(g) permit any Transferred Subsidiaries to acquire (by merger,
consolidation, acquisition of stock or assets or otherwise) any corporation,
partnership or other business organization or division thereof or any equity
interest therein;
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(h) except in the Ordinary Course, incur, create or assume any Encumbrance
on any of the Transferred Assets or the assets of the Transferred Subsidiaries
(other than the Retained Assets), other than a Permitted Encumbrance;
(i) except in the Ordinary Course, sell, lease, license, transfer or
dispose of any of the Transferred Assets or assets of a Transferred Subsidiary
(other than the Retained Assets);
(j) except in the Ordinary Course, terminate or materially extend or
materially modify any Material Contract or enter into any Contract that would
thereafter constitute a Material Contract;
(k) extend or modify in any way adverse to any of the Transferred
Subsidiaries any Contract relating to the Films Separation, including, without
limitation, the Films Disposition Agreement;
(l) except in the Ordinary Course, enter into any Contract requiring
payment in an amount in excess of (euro)1,000,000 in any six-month period
following the Closing;
(m) except in the Ordinary Course, dispose of or permit to lapse any rights
of Seller or its Affiliates in, to or for the use of any Intellectual Property
Related to the Business, or disclose to any Person not an employee of a
Transferred Subsidiary any Trade Secret Related to the Business not a matter of
public knowledge, except pursuant to judicial or administrative process or with
respect to any such Intellectual Property that is a Retained Asset or any
Excluded Asset;
(n) except in the Ordinary Course or as required by applicable Law or
collective labor or bargaining agreements, increase the compensation or
aggregate benefits of any of the Business Designated Employees, except pursuant
to the terms of the Benefit Plans or Contracts with such employees in effect as
of the date hereof;
(o) except in the Ordinary Course or as required by applicable Law, amend
in any respect any of the Benefit Plans;
(p) except as required by applicable Law, enter into any new or modify any
existing employment, change of control, severance or similar agreements with
respect to any of the Business Designated Employees, other than in connection
with the hiring in the Ordinary Course of any employee at the grade of C6 or
below in the Hay system and other than in connection with the hiring in the
Ordinary Course of any employee at the grade of C7 and above (but not including
directors) to fill a vacancy in existence on the date of this Agreement or to
replace an employee at such a grade whose employment is terminated after the
date of this Agreement; PROVIDED that in each case, such new or modified
agreements are commensurate with the position to which the employees are being
appointed and the terms thereof are consistent with the Ordinary Course, except
that in no event shall any such agreement contain terms providing for any
payment or acceleration of vesting upon or after the Closing as a result of the
consummation of the transactions contemplated by this Agreement or any of the
Ancillary Agreements, whether such payment or acceleration of vesting occurs
solely as a result of the Closing or as a result of the occurrence of the
Closing followed by termination of such employee without cause or for good
reason;
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(q) except in the Ordinary Course or as required by applicable Law, assume
or enter into any labor or collective bargaining agreement relating to the
Business;
(r) make any material loans, advances or capital contributions to, or
investments in, any other Person;
(s) settle any claims, actions, arbitrations, disputes or other proceedings
that would result in Seller or any of its Affiliates to the extent Related to
the Business or in any of the Transferred Subsidiaries or Buyer being enjoined
in any respect;
(t) except in the Ordinary Course, accelerate the delivery or sale of
Products, or offer discounts on sales of Products or premiums on purchases of
raw materials;
(u) cancel or compromise any material debt or claim or waive any rights of
material value to the Business without the Business receiving a realizable
benefit of similar or greater value, or voluntarily suffer any extraordinary
loss;
(v) fail to maintain insurance in such amounts and against such risks and
Losses as are currently maintained in respect of the Business;
(w) fail to maintain in the Ordinary Course any escrow account or customer,
tenant or other deposit account in connection with which the Business will have
any Liability after the Closing;
(x) fail to make capital expenditures with respect to the Business that are
substantially consistent in amount and manner with the Ordinary Course;
(y) authorize, take, enter into or agree to take or enter into any action
or transaction of the type described in Section 3.28 other than the Post-Signing
Restructuring Actions; and
(z) knowingly do any other act which would cause any representation or
warranty of Seller in this Agreement to be or become untrue in any material
respect or knowingly omit to take any action necessary to prevent any such
representation or warranty from being untrue in any material respect at such
time.
Notwithstanding anything to the contrary set forth in this Section 5.3,
Seller may, at any time prior to the Closing, (a) effect, or cause its
Affiliates to effect, the Post-Signing Restructuring Transactions and the Films
Separation, and to take any steps reasonably necessary therefor or incident
thereto, (b) take, or cause its Affiliates to take, any action relating to the
Excluded Assets, the Retained Assets, the Excluded Liabilities or the Retained
Liabilities and (c) take the steps necessary to achieve the levels of Acceptable
Cash, Acceptable Indebtedness and Intercompany Payables as set out in Schedule
1.1(a), Schedule 1.1(b) and Schedule 2.11 respectively. For purposes of this
Section 5.3, if Seller requests Buyer's approval of any proposed action, such
approval will be deemed granted unless, within five (5) Business Days of Buyer's
receipt of Seller's request, Buyer shall have expressly denied Seller's request.
If Buyer designates in writing a person or persons to receive such requests, all
requests for Buyer's approval made pursuant to this Section 5.3 shall be
directed only to such person or persons.
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Section 5.4 BUYER'S CONDUCT OF BUSINESS. During the period from the date
hereof to the Closing, except as otherwise contemplated by this Agreement or in
connection with the transactions contemplated hereby, or as Seller otherwise
agrees in writing in advance, Buyer shall conduct, and shall cause its
Affiliates to conduct, its businesses in the Ordinary Course. Without limiting
the foregoing, during the period from the date hereof to the Closing, except as
otherwise contemplated by this Agreement or in connection with the transactions
contemplated hereby, or as Seller otherwise agrees in writing in advance, Buyer
shall not, directly or indirectly, take, authorize or enter into any agreement
or commitment to take any of the following actions:
(a) declare, set aside or pay any dividend or distribution on any shares of
capital stock of Buyer other than quarterly dividends not exceeding $0.10 per
share on the Buyer Common Stock, with usual declaration, record and payment
dates in accordance with past practice;
(b) amend any of the Organizational Documents of Buyer in a manner that
would prevent, delay or materially impair the consummation of the transactions
contemplated hereby;
(c) adopt a plan of complete or partial liquidation or authorize or
undertake a dissolution, consolidation, restructuring, recapitalization or other
reorganization;
(d) acquire (by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization or
division thereof or any equity interest therein if such acquisition could be
reasonably likely to prevent, delay or materially impair the consummation of the
transactions contemplated hereby; and
(e) knowingly do any other act which would cause any representation or
warranty of Buyer in this Agreement to be or become untrue in any material
respect or knowingly omit to take any action necessary to prevent any such
representation or warranty from being untrue in any material respect at such
time.
Section 5.5 CONSENTS AND CONDITIONS.
(a) GENERAL. Seller and Buyer shall cooperate and use their respective
reasonable best efforts, subject to the terms and conditions of this Section
5.5, to fulfill as promptly as practicable the conditions precedent to each
party's obligations hereunder, including securing as promptly as possible all
consents, approvals, waivers, clearances and authorizations required in
connection with the purchase of the Shares and the GmbH Shares and the purchase
and assumption of the assets and Liabilities of the Business contemplated
hereby. Except to the extent otherwise provided for in Schedule 5.5(c), Seller
and Buyer shall each use their respective reasonable best efforts to obtain any
consent or waiver of right of first refusal or right of first offer or similar
waiver that would be triggered in connection with the consummation of the
transactions contemplated hereby or the divestiture of the Seller Amino Resins
Business pursuant to Section 5.5(c) under any Contract. Except to the extent
otherwise provided for in Schedule 5.5(a), nothing contained in this Agreement
shall require either Buyer or Seller to pay any consideration to any Person from
whom any such consents, approvals, waivers, clearances or authorizations are
requested, PROVIDED that Buyer shall pay all filing, recordation or similar fees
in connection with obtaining any consent or waiver pursuant to this Section
5.5(a).
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(b) ANTITRUST APPROVALS. Without limiting the generality of subsection (a),
Buyer and Seller shall promptly make all filings, notifications and submissions
required by U.S. Antitrust Laws, the EC Merger Regulation, the Laws of the EC
Member States concerned in the case of application of Article 9(3) or Article
9(5) of the EC Merger Regulation, and the Laws governing the Other Antitrust
Approvals and the Other Antitrust Filings and promptly file any additional
information requested as soon as practicable after receipt of a request therefor
from an applicable Government Entity or at such other time as the parties hereto
may mutually agree. Each party shall bear and pay the legal fees and filing fees
applicable to its filings, notifications and/or submissions. For the avoidance
of doubt, Buyer shall pay the notification fees payable under the HSR Act.
(c) AGREED ACTIONS.
(i) Buyer agrees to commit to "hold separate" and to divest the Seller
Amino Resins Business under terms and conditions, including supporting and
other ancillary arrangements, negotiated with and agreed to by the European
Commission (or, as the case may be, a competent Government Entity in an EU
Member State) and the United States reviewing authority. Buyer agrees to
offer, negotiate and agree to such commitment to divest the Seller Amino
Resins Business expeditiously and in a timely fashion with a view to
obtaining approval or non-opposition from the European Commission (or, as
the case may be, a competent Government Entity in an EU Member State)
pursuant to Article 6(1)(b) of the EC Merger Regulation (or, as the case
may be, pursuant to the equivalent thereof in any EU Member State) and with
a view to obtaining the expiration or termination of the waiting period
applicable to the consummation of the transactions contemplated hereby
under the HSR Act.
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(ii) Seller agrees to use its reasonable best efforts to separate,
prior to the Closing Date, the Seller Amino Resins Business from the
remainder of the Business, in such manner as appropriate under the
divestiture conditions negotiated with and agreed to by the European
Commission (or, as the case may be, a competent Government Entity in a EU
Member State) and the United States reviewing authority; PROVIDED that
Seller need not, pursuant to this sentence, implement such separation (or
preliminary steps in respect thereof) until immediately prior to the
Closing. From and after the date hereof until the Closing, Seller shall,
and shall cause each of its Affiliates to, timely comply with all
applicable labor or employment Laws and any collective bargaining
agreements applicable to the Business Designated Employees to inform and/or
consult with the relevant local and European works councils, in each case
in connection with the separation of and divestiture of the Seller Amino
Resins Business. To the extent permissible under Law and the policies,
practices, procedures and directions of each relevant Government Entity,
Seller shall inform Buyer of all actions that it proposes to take pursuant
to the foregoing sentences and shall take all such actions in consultation
with Buyer.
(iii) Notwithstanding anything to the contrary set forth herein,
nothing set forth in this Agreement shall be construed (A) to require Buyer
to agree to, or to offer or negotiate to, commit to (x) "hold separate" or
to divest the assets and properties of the Business located at Suzano,
Brazil and at La Lagosta, Spain (the "BRAZILIAN AND SPANISH PLANTS") in
their entirety or (y) not produce products that compete with the Seller
Amino Resins Business in any jurisdictions (except as provided in this
Section 5.5(c)(iii)), or (B) to require Seller to use its reasonable best
efforts to prepare to separate the Brazilian and Spanish Plants in their
entirety from the remainder of the Business; provided, however, that if
requested by the European Commission (or, as the case may be, a competent
Government Entity in an EU Member State) or the United States reviewing
authority, Buyer shall commit to (x) "hold separate" and to divest
particular assets located or utilized at the Brazilian and Spanish Plants
to the extent those assets relate to the Seller Amino Resins Business;
and/or (y) enter into ancillary agreements pursuant to which Buyer would
(i) produce products relating to the Seller Amino Resins Business using the
Brazilian and Spanish Plants for purchase on an arms-length basis by any
Person that purchases the Seller Amino Resins Business from Buyer and its
Affiliates (including the Transferred Subsidiaries), and/or (ii) agree not
to produce any products of the type produced by the Seller Amino Resins
Business or amino resins products of the type presently produced by Buyer
and its Affiliates, as of the date hereof, using the reactors currently
used to produce such products at the Brazilian and Spanish Plants.
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(iv) All expenses, costs and Liabilities incurred by Buyer to the
extent resulting from the divestiture by Buyer of the Seller Amino Resins
Business, or in connection with any other remedy, shall be solely borne by
Buyer, without any recourse to Seller, and Buyer shall reimburse and
indemnify Seller for all reasonable expenses, costs and Liabilities
incurred by Seller in fulfillment of its obligation to use its reasonable
best efforts to separate the Seller Amino Resins Business pursuant to
Section 5.5(c)(ii); PROVIDED that the parties' allocation of responsibility
for any Liabilities of Seller and its Affiliates existing prior to such
divesture shall not be affected by this sentence; provided, further, that
Buyer shall not be liable for Seller's costs and expenses to the extent
such costs and expenses result from any Taxes that Seller would have
incurred in connection with the transactions contemplated hereby without
regard to Seller's actions pursuant to Section 5.5(c).
(v) From and after the date hereof until the Closing, Seller and its
Affiliates shall not, without Buyer's consent, make individual or related
series of capital expenditures with respect to the Seller Amino Resins
Business in excess of (euro)500,000.
(d) OTHER ACTIONS. Except as set forth in subsection (c), nothing in this
Section 5.5 shall require or be construed to require Buyer to, or to agree to,
with respect to any of Buyer, the Buyer Subsidiaries or the Transferred
Subsidiaries, in whole or in part, (A) sell, divest, dispose of or hold separate
any other assets or businesses or license any rights, or otherwise take or
commit to take, or refrain or commit to refrain from taking, any action that
could reasonably limit its freedom of action with respect to, or its ability to
retain, one or more businesses, product lines, intellectual property rights or
assets, or its ability to operate any business or exercise any intellectual
property right; or (B) litigate or defend against any administrative or judicial
action or proceeding (including any proceeding seeking a temporary restraining
order or preliminary or permanent injunction or any decision prohibiting the
sale of the Transferred Subsidiaries or the Transferred Assets pursuant to this
Agreement) challenging any of the transactions contemplated hereby, by the
Ancillary Agreements or by the Stockholder's Agreement as violative of any U.S.
Antitrust Law, the EC Merger Regulation or any other Law, except, in the case of
each of clauses (A) and (B), for filing, recordation or similar fees and for
such other actions such as are, individually and in the aggregate, immaterial
relative to the Business, Buyer and its Affiliates (taken as a whole) and the
synergies or other benefits expected to be received by Buyer from the
transactions contemplated hereby (each action listed in clause (A) or clause
(B), a "BUYER ADVERSE CONDITION"). If, at any time, Buyer determines that it is
not prepared to accept an action requested by a Government Antitrust Entity that
is additional to that required by Section 5.5(c) above, Buyer shall promptly
notify Seller in writing of that determination. Such notice will state whether,
in the good faith judgment of Buyer, such action constitutes a Buyer Adverse
Condition.
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(e) COOPERATION. To the extent permissible under Law and the policies,
practices, procedures and directions of each relevant Government Entity, (i)
Seller and Buyer shall cooperate with each other and shall furnish to the other
party all information necessary or desirable in connection with making any
filing, notification or submission under the HSR Act, the EC Merger Regulation,
the Laws of the EC Member States concerned in the case of application of Article
9(3) or Article 9(5) of the EC Merger Regulation and the Laws governing the
Other Antitrust Approvals, and in connection with responding to, complying with,
resolving or terminating any investigation or other inquiry by any Government
Entity under any competition or merger control Laws with respect to the
transactions contemplated hereby, (ii) each of the parties shall promptly inform
the other party of any communication with, and any proposed understanding,
undertaking or agreement with, any Government Entity regarding any such filings,
notifications or submissions or any such transaction, (iii) Seller and Buyer
shall give each other reasonable notice of and the opportunity to participate in
any meeting or telephone conversation with any Government Entity in respect of
any such filing, notification or submission, investigation or other inquiry, and
(iv) the parties will timely consult and cooperate with one another in
connection with any analyses, appearances, presentations, memoranda, briefs,
documents, arguments, opinions, proposals or other submissions made or provided
by or on behalf of any party in connection with all meetings, actions and
proceedings under or relating to the HSR Act, the EC Merger Regulation or other
competition or merger control Laws (including, with respect to making a
particular filing, notification or submission, by providing copies of all such
documents (not including any confidential information not reasonably required by
the non-filing party for the purpose of reviewing such documents or submissions)
to the non-filing party and their advisors prior to filing or submission and, if
requested, giving due consideration to all reasonable additions, deletions or
changes suggested in connection therewith).
(f) IMPLEMENTATION OF DIVESTITURE.
(i) Without prejudice to Seller's obligations under Section 5.1 and
subject to applicable Law, from and after the date hereof until the
Closing, Seller shall, and shall cause its Affiliates to, cooperate with
and, subject to execution of an appropriate confidentiality agreement,
provide such information and assistance to Buyer as Buyer shall reasonably
request in connection with any divestiture of the Seller Amino Resins
Business, including granting Buyer, any potential purchaser of the Seller
Amino Resins Business and any trustee or other agent authorized or directed
by any Government Antitrust Entity such access, during regular business
hours and upon reasonable advance notice, to the Business Designated
Employees and other employees of Seller and its Affiliates who perform
functions on behalf of or provide services to the Seller Amino Resins
Business, the Business Intellectual Property that is primarily related to
the Seller Amino Resins Business, and the assets, books, properties,
systems and records related to the Seller Amino Resins Business, as shall
be requested by Buyer in order to enable or facilitate Buyer's compliance
with (A) its obligations under Section 5.5(c), (B) its obligations under
the covenants, agreements and undertakings between Buyer and the relevant
Government Antitrust Entities with respect to the holding separate,
operation and divestiture of the Seller Amino Resins Business, and (C) its
obligations under or resulting from the trustee mandate that Buyer will
enter into pursuant to such covenants, agreements and undertakings between
Buyer and the European Commission and any comparable agreement between
Buyer and any other Government Entity. The provision of information under
this subsection shall be subject to customary confidentiality restrictions
and shall be limited to persons who require such information for the
purposes of complying with this Section 5.5.
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(ii) Without limiting in any respect Section 5.5(f)(i), and subject to
applicable Law, Seller shall, and shall cause its Affiliates to, (A)
provide to Buyer such cooperation and information as may be reasonably be
requested by Buyer to prepare materials to offer such assets to third
parties and to discuss such potential dispositions with third parties, (B)
within twenty (20) Business Days after the date hereof, prepare and provide
to Buyer an unaudited pro forma balance sheet as of December 31, 2003 and
September 30, 2004 for the Seller Amino Resins Business and unaudited
statements of income for the fiscal year ended December 31, 2003 and the
nine months ended September 30, 2004, each of which shall be prepared in
accordance with Belgian GAAP applying the same principles, practices,
methodologies and policies used in the preparation of the Financial
Statements, (C) within twenty (20) Business Days after the date hereof,
compile and otherwise prepare a data room containing all Contracts, books
and records and other documents that are, or contain information, material
to the Seller Amino Resins Business, and (D) upon Buyer's reasonable
request, cause the Business Designated Employees and other employees of
Seller and its Affiliates to prepare management presentations regarding the
Seller Amino Resins Business and present such management presentations to
prospective purchasers thereof at reasonable times and upon reasonable
notice; PROVIDED that (x) Buyer shall engage, at its own expense, an
investment bank to assist Seller to complete its obligations under this
Section 5.5(f)(ii) and (y) neither Seller nor any of its Affiliates shall
be required to make any representations with respect to the Seller Amino
Resins Business to any prospective purchaser. The provision of information
under this subsection shall be subject to customary confidentiality
restrictions and shall be limited to persons who require such information
for the purposes of complying with this Section 5.5.
Section 5.6 TAX MATTERS.
(a) RESTRUCTURING TRANSACTION TAXES AND TRANSFER TAXES. Any Tax Returns
that must be filed in respect of any transfer, sales, value added, filing,
recordation or similar Taxes or fees imposed in connection with the Films
Separation, the Pre-Signing Restructuring Transactions or the Post-Signing
Restructuring Transactions (collectively, the "RESTRUCTURING TRANSACTION TAXES")
shall be prepared by Seller. Seller shall be liable for all Restructuring
Transaction Taxes. Any Tax Returns that must be filed in respect of any
transfer, sales, value added, filing, recordation or similar Taxes or fees
imposed in connection the purchase or sale of the Shares, the GmbH Shares, the
Business or the Transferred Assets pursuant to this Agreement (collectively,
"TRANSFER TAXES") shall be prepared by the party that customarily has primary
responsibility for filing such Tax Returns pursuant to the applicable Tax Laws.
Such Tax Returns shall be filed on a basis that is consistent with the
Allocation Statement pursuant to Section 2.12 of this Agreement, if such an
Allocation Statement has been agreed upon. Any Tax Returns filed in respect of
Transfer Taxes by Seller pursuant to this Section 5.6(a) shall be made available
to Buyer at least ten (10) Business Days before such Tax Returns are due to be
filed. Buyer shall be liable for all Transfer Taxes and shall indemnify, defend
and hold Seller and its Affiliates harmless against any and all such Transfer
Taxes. Buyer shall pay to Seller any amount of Transfer Taxes payable in respect
of Tax Returns filed by Seller pursuant to this Section 5.6(a) at least five (5)
Business Days before such Transfer Tax becomes due and payable. Each of Buyer
and Seller agrees to use its best efforts to obtain any certificate or other
document, if requested by the other party, from any Government Entity or any
other Person as may be necessary to mitigate, reduce or eliminate any Transfer
Tax that could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).
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(b) SELLER LIABILITY FOR TAXES. Except as set forth in Section 5.6(a),
Seller shall be liable for and indemnify, defend and hold Buyer harmless from
and against, any and all Taxes (including, without limitation, any obligation to
contribute to the payment of a Tax determined on a consolidated, combined fiscal
unity or similar foreign basis, or unitary basis with respect to a group of
corporations that includes or included any Transferred Subsidiary and Taxes
resulting from a Transferred Subsidiary ceasing to be a member of Seller's group
of Affiliates) (i) of Seller or any of its Affiliates (other than the
Transferred Subsidiaries) for any taxable year except as provided in Section
5.6(c), or (ii) of the Transferred Subsidiaries, in respect of the Transferred
Assets or for which any Transferred Subsidiary may otherwise be liable, for any
taxable year or period that ends on or before the Closing Date (each, a
"PRE-CLOSING PERIOD") and, with respect to any taxable year or period beginning
before and ending after the Closing Date (each, a "STRADDLE PERIOD"), the
portion of such taxable year ending on and including the Closing Date, PROVIDED,
HOWEVER, that Seller shall not be liable for (i) any value added Taxes
attributable to any Transferred Subsidiary that are properly reflected as
accrued in the statutory accounts of the Transferred Subsidiary, (ii) any
employment Taxes imposed in respect of any Transferred Employee not due and
payable on or before the Closing Date and attributable to, and to be withheld
from, employee compensation payments to be made after the Closing Date, (iii)
any Taxes that result, in whole or in part, from an action taken solely by or at
the direction of the Buyer on or after the Closing, which actions for the
avoidance of doubt exclude the transactions between Buyer and Seller that are
described in Section 2.1, (iv) any Taxes that result, in whole or in part, from
an election under Section 338 of the Code (or any corresponding or similar
elections under state, local or foreign Tax law), and that Buyer shall be liable
for and indemnify, defend and hold Seller harmless from and against any and all
such Taxes. Except as set forth in Section 5.6(f), Seller shall be entitled to
any refund of Taxes of any of the Transferred Subsidiaries or in respect of any
of the Transferred Assets received for such periods. Buyer shall promptly pay to
Seller the amount of any refund made available to which Seller is entitled under
this Section 5.6.
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(c) BUYER LIABILITY FOR TAXES. Except as set forth in Sections 5.6(a) and
(b), Buyer shall be liable for and indemnify, defend and hold Seller harmless
from and against any and all Taxes of the Transferred Subsidiaries or in respect
of the Transferred Assets for any taxable year or period that begins after the
Closing Date (each, a "POST-CLOSING PERIOD") and, with respect to any Straddle
Period, the portion of such Straddle Period beginning after the Closing Date,
and any and all Taxes allocated to Buyer under the proviso of Section 5.6(b).
Buyer shall be entitled to any refund of Taxes of the Transferred Subsidiaries
or in respect of Transferred Assets received for such periods or in respect of
Taxes allocated to Buyer under the provision of Section 5.6(b). Seller shall
promptly pay to Buyer the amount of any refund made available to Seller to which
Buyer is entitled under this Section 5.6.
(d) ALLOCATION OF TAXES FOR SHORT TAXABLE YEAR. For purposes of Section
5.6(b) and (c), whenever it is necessary to determine the liability for Taxes of
a Transferred Subsidiary or in respect of a Transferred Asset for a Straddle
Period, the determination of the Taxes of the Transferred Subsidiary or in
respect of the Transferred Asset for the portion of the year or period ending
on, and the portion of the year or period beginning after, the Closing Date
shall be determined by, in the case of Taxes that are based upon or related to
income or receipts, assuming that the Transferred Subsidiary had, and the
allocation of Taxes in respect of the Transferred Asset is made with respect to,
a taxable year or period which ended at the close of the Closing Date, and in
the case of any Taxes other than Taxes based upon or related to income or
receipts, be deemed to be the amount of such Tax for the entire Taxable period
multiplied by a fraction the numerator of which is the number of days in the
Taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, except that (i) exemptions,
allowances or deductions that are calculated on an annual or other periodic
basis, such as the deduction for depreciation, shall be apportioned on a time
basis, and (ii) Tax items addressed in Sections 5.6(b) and (c) shall be
allocated consistently under this Section 5.6(d).
(e) ADJUSTMENT TO PURCHASE PRICE. To the extent permitted by applicable
Law, any payment by Buyer or Seller under this Section 5.6 shall be treated by
Buyer and Seller as an adjustment to the Purchase Price and allocated according
to Section 2.12.
(f) REFUNDS FROM CARRYBACKS. To the extent permissible under applicable Tax
Law, Buyer or Seller, as the case may be, shall make the appropriate elections
to waive any option to carryback to a Pre-Closing Period any losses, credits or
similar items realized in a Post-Closing Period by a Transferred Subsidiary or
with respect to a Transferred Asset ("POST-CLOSING TAX ATTRIBUTES"). If Seller
becomes entitled to a refund, reduction or credit of Taxes for any Pre-Closing
Period and such amounts are attributable to the carryback of any Post-Closing
Tax Attributes, then Seller shall within ten (10) Business Days of receipt of
payment, pay to Buyer the amount of such refund, reduction or credit received
together with any interest actually collected thereon, PROVIDED, HOWEVER, Seller
shall only be liable for the payment of amounts under this Section 5.6(f) to the
extent in the reasonable judgment of Seller's tax director that Seller has
realized a net Tax savings as a result of the carryback of Post-Closing Tax
Attributes. In the event a refund is paid to Buyer pursuant to this Section
5.6(f) and a Tax authority subsequently claims that all or a portion of the
refund was not payable, Buyer shall repay the refund together with interest
within ten (10) Business Days of Seller's written demand. For the sake of
clarity and avoidance of doubt, to the extent permissible under applicable Tax
Law, Seller shall be permitted to carryback any losses, credits or similar items
realized by a Transferred Subsidiary or with respect to a Transferred Asset in a
Pre-Closing Period.
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(g) TAX RETURNS. Except as set forth in Section 5.6(a), Seller shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
with respect to the Transferred Subsidiaries or any Transferred Asset for all
Pre-Closing Periods and all Straddle Periods (if any) ending on or prior to
December 31, 2004. Buyer shall prepare or cause to be prepared and file or cause
to be filed all Tax Returns with respect to the Transferred Subsidiaries or any
Transferred Asset for all Post-Closing Periods and all Straddle Periods (if any)
ending after December 31, 2004, it being understood that Buyer shall (i) file,
or shall cause to filed, any amended Tax Return and claims for refunds or
credits reasonably requested by Seller, and (ii) elect, or cause the appropriate
Affiliate of Buyer to elect, to carry back any item of loss, deduction or credit
(which arises with respect to a Pre-Closing Period) to the extent permitted by
applicable Tax Law. The party that is not responsible for preparing a Tax Return
with respect to a Straddle Period shall be entitled to review and comment on
such Tax Return before it is filed, and the party preparing such Tax Return
shall use reasonable efforts to accommodate requests to review such Tax Return.
Any Taxes payable from any amount allocated pursuant to Sections 5.6(b) or
5.6(c) to a party that is not responsible for the filing of the Tax Return to
which such amount relates shall be paid to the party preparing such Tax Return
no later than ten (10) Business Days prior to the filing of the underlying Tax
Return.
(h) CONTEST PROVISIONS. Buyer shall promptly notify Seller in writing upon
receipt by Buyer or any of its Affiliates (including the Transferred
Subsidiaries) of notice of any pending or threatened Tax audits or assessments
which may affect the Tax Liabilities for which Seller would be required to
indemnify Buyer pursuant to Section 5.6(a) or (b), PROVIDED that any failure to
comply with this provision shall not affect Buyer's right to indemnification
hereunder to the extent such failure does not prejudice Seller's ability to
defend such audit or assessment or increases the amount of such Taxes. Seller
shall have the sole right to represent the relevant Transferred Subsidiary's
interests in any Tax audit or administrative or court proceeding relating to
Pre-Closing Periods, and to employ counsel of its choice at its expense, except
that Buyer shall have the sole right to represent the Transferred Subsidiaries
in any Tax audit or administrative or court proceeding relating to issues that
might give rise to an indemnification obligation of Buyer with respect to any
Pre-Closing Periods pursuant to Section 5.6(b). Seller shall be entitled to
settle either administratively or after the commencement of litigation without
the consent of Buyer any claim for Taxes related to Tax audits or proceedings
described in Schedule 5.6(h). Notwithstanding the foregoing, Seller shall not be
entitled to settle, either administratively or after the commencement of
litigation, any claim for Taxes represented by Seller that is not described in
Schedule 5.6(h) and that may materially affect the liability for Taxes of Buyer
or any Transferred Subsidiary for any period ending after the Closing Date to
any extent (including, but not limited to, the imposition of income Tax
deficiencies, the reduction of asset basis or cost adjustments, the lengthening
of any amortization or depreciation periods, the denial of amortization or
depreciation deductions, or the reduction of loss or credit carryforwards,
except for such reductions of loss or credit carryforward realized in a
Pre-Closing Period) without the prior written consent of Buyer, which consent
shall not be unreasonably withheld. Such consent shall not be necessary to the
extent that Seller has agreed in writing to indemnify Buyer against the effects
of any such settlement. Seller shall be entitled to participate at its expense
in the defense of any claim for Taxes for a year or period ending after the
Closing Date which may be the subject of indemnification by Seller pursuant to
Section 5.6(b) and, with the written consent of Buyer, and at its sole expense,
may assume the entire defense of such Tax claim. Neither Buyer nor any
Transferred Subsidiary may agree to settle any Tax claim for the portion of the
year or period ending on the Closing Date which may be the subject of
indemnification by Seller under Section 5.6(b) without the prior written consent
of Seller, which consent shall not be unreasonably withheld.
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(i) TERMINATION OF TAX ALLOCATION AGREEMENTS. Any Tax allocation or sharing
agreement or arrangement, whether or not written, that has been entered into by
Seller or any Affiliate of Seller (other than the Transferred Subsidiaries) on
the one hand and any Transferred Subsidiary on the other shall be extinguished
and terminated as to each affected Transferred Subsidiary as of the Closing
Date, and any rights or obligations existing under any such agreement or
arrangement to be no longer enforceable and no payments that are owed by or to a
Transferred Subsidiary pursuant thereto shall be made thereunder.
(j) ASSISTANCE AND COOPERATION. After the Closing Date, each of Seller and
Buyer shall, (i) assist (and cause their respective Affiliates to assist) the
other party in preparing any Tax Returns or reports which such other party is
responsible for preparing and filing in accordance with this Section 5.6; (ii)
cooperate in preparing for any audits of, or disputes with taxing authorities
regarding, any Tax Returns of Seller, its Affiliates or any Transferred
Subsidiary or regarding any Taxes in respect of the Transferred Assets; (iii)
make available to the other and to any taxing authority as reasonably requested
all information, records, and documents relating to Taxes of Seller, its
Affiliates or any Transferred Subsidiary or in respect of any Transferred Asset;
(iv) provide timely notice to the other in writing of any pending or threatened
Tax audits or assessments of Seller, its Affiliates or any Transferred
Subsidiary or in respect of any Transferred Asset for taxable periods for which
the other may have a liability under this Section 5.6; and (v) furnish the other
with copies of all correspondence received from any taxing authority in
connection with any Tax audit or information request with respect to any such
taxable period. Such cooperation shall include making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder that are reasonably relevant to any such Tax
Returns, audit, litigation or other proceeding. Seller will provide to Buyer
upon request all necessary information in order to permit Buyer to apply the
provisions of Section 41(f)(3)(A) of the Code.
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(k) FORMS W-2. The parties hereby adopt, if applicable, for purposes of
this Agreement and the transactions contemplated hereby, the standard procedure
provided in Section 4 of Revenue Procedure 2004-53, I.R.B. 2004-34 in respect of
the U.S. Transferred Employees.
(l) WITHHOLDING CERTIFICATES. At the Closing, Seller shall deliver to Buyer
any certificates or documentation required under applicable Tax Laws, in a form
reasonably satisfactory to Buyer, required to be furnished to obtain any
reduction of, or exemption from, withholding Taxes in respect of the
transactions contemplated under this Agreement that are available to Seller and
Buyer under applicable Tax Laws.
(m) SURVIVAL OF OBLIGATIONS. The obligations of the parties set forth in
this Section 5.6 shall be unconditional and absolute and shall remain in effect
without limitation as to time.
Section 5.7 EMPLOYEE MATTERS. (a) Each of the employees who remains on the
employment rolls of a Transferred Subsidiary as of the Closing, whether or not
actively at work as of the Closing Date, and each of the Business Designated
Employees whose employment is transferred to a Transferred Subsidiary, Buyer
or/and Affiliate of Buyer on or prior to the Closing shall be a "TRANSFERRED
EMPLOYEE".
(b) GENERAL TERMS AND CONDITIONS OF EMPLOYMENT. It is acknowledged and
agreed that all Business Designated Employees who prior to the Closing are
employees of the Transferred Subsidiaries shall remain employees of the
Transferred Subsidiaries immediately following the Closing, and that the Closing
of the transactions contemplated by this Agreement shall not change that status.
Nothing in this subsection (b) or in subsection (c) below shall be construed to
prevent the termination of any individual employee following the Closing Date.
(c) EMPLOYEE COMPENSATION AND BENEFIT PLANS.
(i) For the two year period immediately following the Closing Date,
Buyer shall, or shall cause the Buyer Subsidiaries (including the
Transferred Subsidiaries) to, provide to Transferred Employees (in respect
of their service after closing) base compensation, terms and conditions of
employment, and any incentive compensation opportunities and welfare and
retirement benefits that, in the aggregate, are of a substantially
comparable value to those that apply to them or for which they are eligible
immediately before the Closing. The Transferred Employees will be eligible
to participate in the benefit and compensation plans, contracts, policies
and arrangements of Buyer or the applicable Buyer Subsidiaries (including
the benefit and compensation plans, contracts, policies and arrangements of
the Transferred Subsidiaries maintained at or after the Closing) (the
"BUYER BENEFIT PLANS") effective immediately upon the Closing.
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(ii) From and after the Closing, Buyer shall, or shall cause the Buyer
Subsidiaries (including the Transferred Subsidiaries) to, cause each Buyer
Benefit Plan in which Transferred Employees are or will become eligible to
participate to credit for purposes of eligibility to participate or receive
any level of benefits and vesting thereunder (but not for purposes of
benefit accrual) the service of such employees with Seller or its
Affiliates (including the Transferred Subsidiaries) prior to the Closing as
if such service were with Buyer or its Affiliates, to the same extent as
such service was credited for such purpose by Seller or its Affiliates
prior to the Closing, PROVIDED that no such service credit will be required
to the extent it would result in a duplication of benefits; PROVIDED
FURTHER, that Transferred Employees covered under the Retained Plans shall,
in addition to the foregoing, receive credit for service for purposes of
benefit accrual under each Buyer Benefit Plan that receives assets
transferred from a Retained Plan, either through an asset transfer or
through the purchase price adjustment in accordance with Article II of this
Agreement. Subject to compliance with Section 5.7(b) and (c), nothing
herein shall limit the ability of Buyer or the Buyer Subsidiaries
(including the Transferred Subsidiaries) to amend or terminate any of their
respective Buyer Benefit Plans in accordance with their terms and
applicable Law at any time. Seller and its Affiliates (other than the
Transferred Subsidiaries) shall retain all Liabilities in respect of
severance or other termination costs or indemnities for any employee of
Seller or its Affiliates (other than the Transferred Subsidiaries);
PROVIDED, HOWEVER, that Buyer and its Affiliates shall be responsible for
all Liabilities in respect of severance for any Business Designated
Employees who do not become Transferred Employees, up to a maximum
aggregate cost of (euro)200,000.
(iii) If any Transferred Employee becomes eligible to participate in a
Buyer Benefit Plan that provides medical, dental, vision or other health
benefits or disability or life insurance benefits, Buyer shall use its
commercially reasonable efforts to cause each such Buyer Benefit Plan to
(A) waive any preexisting condition limitations to the extent such
conditions would have been covered under an analogous Benefit Plan that was
applicable to such Transferred Employee (or his or her eligible dependents)
immediately prior to the Closing Date or, if later, the commencement of
such Transferred Employee's participation in such Buyer Benefit Plan, (B)
waive any waiting period limitation or evidence of insurability requirement
which would otherwise be applicable to such Transferred Employee (or his or
her eligible dependents) on or after the Closing Date to the extent such
Transferred Employee (or his or her eligible dependents) had satisfied any
similar limitation or requirement under an analogous Benefit Plan that was
applicable to such Transferred Employee immediately prior to the Closing
Date or, if later, the commencement of such Transferred Employee's
participation in such Buyer Benefit Plan, and (C) recognize under such
Buyer Benefit Plan any co-payments, deductible payments, premium amounts
and similar payments or expenses incurred by the Transferred Employees
under any analogous Benefit Plan that was applicable to such Transferred
Employee (or his or her eligible dependents) in the plan year that includes
the Closing Date or, if later, the commencement of such Transferred
Employee's participation in such Buyer Benefit Plan.
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(iv) Within the later of (i) 90 days following the Closing Date and
(ii) 15 days from the final determination of the amount of the assets to be
transferred pursuant to this Section 5.7(c)(iv), the Seller shall use its
commercially reasonable efforts to transfer, and to cause any of its
Affiliates or any third party holding relevant assets to transfer, the
amount under each of the Asset Transfer Plans that may be transferred in
respect of the Transferred Employees who are participants in each such
Asset Transfer Plan immediately prior to the Closing to a Buyer Benefit
Plan that is defined benefit plan maintained in accordance with all
applicable laws of relevant jurisdiction and rules and regulations of
applicable Government Entities and that are intended to qualify for any
special tax treatment under the applicable Tax Laws of such jurisdiction
for which the corresponding Asset Transfer Plan is intended to qualify. The
amount of assets to be transferred in respect of the Transferred Employees
participating in each Asset Transfer Plan shall be determined in accordance
with applicable Law, the rules of the relevant plan and the principles set
forth in Schedule 1.1(d). Buyer shall provide evidence to Seller of the
tax, legal and regulatory qualification of the Buyer Benefit Plans
receiving the transfer of assets hereunder reasonably satisfactory to
Seller prior to the transfer of any such assets. Seller and Buyer agree to
cooperate in good faith to implement the foregoing.
(v) Within 90 days following the Closing Date, the Seller shall use
its commercially reasonable efforts to transfer, and to cause any of its
Affiliates or any third party holding relevant assets to transfer, assets
under each of the Seller DC Plans that are held in respect of the
Transferred Employees participating in each such Seller DC Plan immediately
prior to the Closing to Buyer Benefit Plans that are defined contribution
plans in accordance with all applicable Laws of the relevant jurisdictions
and rules and regulations of applicable Government Entities and that are
intended to qualify for any special tax treatment under the applicable Tax
Laws of such jurisdiction for which the corresponding Seller DC Plan is
intended to qualify. The amount of assets to be transferred in respect of
the Transferred Employees participating in each such Seller DC Plan shall
equal the sum of the account balances of the applicable Transferred
Employees under such plan, determined as of the last valuation date for the
relevant plan immediately prior to the actual date of the transfer of
assets and otherwise in accordance with applicable Law and the rules of the
relevant Seller DC Plan (and, for the avoidance of doubt, the full balance
of each such Transferred Employee shall be vested regardless of service).
The transferred amount shall include interest at LIBOR on each account
balance, credited based on the time elapsed between the date of the
relevant valuation and the date of the transfer. Buyer shall provide
evidence to Seller of the tax, legal and regulatory qualification of the
relevant Buyer Defined Contribution Plans reasonably satisfactory to Seller
prior to the transfer of any such assets. Seller and Buyer agree to
cooperate in good faith to implement the foregoing.
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(vi) As soon as reasonably practicable after the Closing, in light of
the formalities for transferring assets under defined benefit plans
organized in the U.K., if any Transferred Employee who participates in the
U.K. Retained Plan (a "U.K. EMPLOYEE PARTICIPANT") so elects, Seller shall
use its commercially reasonable efforts to arrange a transfer of the assets
and liabilities held in respect of such U.K. Employee Participant under the
U.K. Retained Plan to a Buyer Benefit Plan that is a defined benefit plan
maintained by Buyer in accordance with the applicable laws of the U.K. and
any rules and regulations of any applicable U.K. Government Entity and that
is intended to qualify for any special tax treatment under the applicable
Tax Laws of the U.K. for which the U.K. Retained Plan is intended to
qualify. The amount of assets to be transferred in respect of those U.K.
Employee Participants who so elect shall be determined in accordance with
applicable Law and the rules of the U.K. Retained Plan. Buyer shall provide
evidence to Seller of the tax, legal and regulatory qualification of the
relevant Buyer Benefit Plan reasonably satisfactory to Seller prior to the
transfer of any such assets. Seller and Buyer agree to cooperate in good
faith to implement the foregoing.
(vii) As soon as reasonably practicable following the Closing Date or
at such later date as may be required under applicable Law, Seller shall
cause to be distributed to each Transferred Employee who was a participant
in the TQPP Japan plan immediately prior to the Closing Date (the "JAPANESE
TRANSFERRED EMPLOYEES") an amount equal to each such Japanese Participant's
accrued benefit under such plan as of the Closing Date payable upon an
involuntary termination of employment, as determined in accordance with the
rules of such plan.
(viii) Seller shall fully vest the Transferred Employees in their
account balances under the UCB 401(k) Retirement Plan (the "SELLER'S 401(K)
PLAN"). Buyer shall use commercially reasonable efforts to permit each such
Transferred Employees who receives an eligible rollover distribution (as
defined in Section 402(c)(4) of the Code) from Seller's 401(k) Plan, if
any, to roll such eligible rollover distribution into an account under
Buyer's Employees Savings and Profit Sharing Plan. The Transferred
Employees who are U.S. employees shall, as of the Closing Date, become
eligible to participate in Buyer's Employees Savings and Profit Sharing
Plan in accordance with its terms and the service recognition provisions of
Section 5.7(c)(ii) of this Agreement.
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(ix) As of the Closing Date, the U.S. Transferred Employees shall
cease to accrue further benefits under the applicable U.S. Pension Plans
that are "defined benefit plans" within the meaning of Section 414 of the
Code maintained by Seller or a Seller Affiliate for such U.S. Transferred
Employees. Seller shall fully vest as of the Closing Date all U.S.
Transferred Employees in their benefits accrued as of the Closing Date
under such plans. No pension liabilities or assets shall be transferred to
Buyer or any of Buyer's Subsidiaries (including the Transferred
Subsidiaries) with respect to any such plan benefiting any U.S. Transferred
Employee.
(x) From and after the Closing, Buyer shall, or shall cause the
applicable Buyer Subsidiaries, including the Transferred Subsidiaries, to,
assume and satisfy all Liabilities for claims incurred but not reported
prior to the Closing Date by any Transferred Employee (or his or her
beneficiary or eligible dependent) for medical, dental, vision, other
health, life or disability benefits or expense reimbursement under any
Benefit Plan, to the extent such Liabilities are reflected on the Closing
Date Net Working Capital Statement other than Liability for any such
benefit or expense reimbursement that is fully insured by a third party
insurer under insurance policies of Seller or one of its Affiliates (other
than a Transferred Subsidiary). For purposes of this Section 5.7(c)(x), a
claim shall be deemed incurred when the applicable medical service is
provided to a Transferred Employee (or eligible dependent), drug or other
medical device is purchased or used by a Transferred Employee (or eligible
dependent), confinement of a Transferred Employee (or eligible dependent)
commences, absence from employment due to disability of a Transferred
Employee commences or the date of death of a Transferred Employee, as the
case may be.
(d) Seller shall be responsible for providing or discharging any and all
notifications, benefits and Liabilities to Business Designated Employees and
Government Entities required by WARN or by any other applicable Law relating to
plant closings mass lay-offs, within the meaning of WARN, that are required to
be provided based on actions of Seller or one of its Affiliates before the
Closing are required to be provided by Seller or one of its Affiliates before
the Closing as a result of the transactions contemplated hereby, and Buyer shall
be responsible for any and all such matters and Liabilities following the
Closing. Seller shall cooperate in assisting Buyer in distributing any notices
that Buyer may desire to provide prior to the Closing in connection with actions
by Buyer after the Closing that would result in a notice requirement under such
Laws, subject to Seller's prior review and reasonable comments thereto.
(e) Seller shall, or shall cause an Affiliate of Seller to, pay to those
Transferred Employees who are eligible to earn an integration bonus under the
terms of Seller's integration bonus arrangement a pro rata portion of the amount
of any such bonus earned by such Transferred Employee under such arrangement for
the portion of the 2004 calendar year preceding the Closing Date, as determined
by Seller, in its discretion, but only to the extent such bonus amount exceeds
the amount reflected in respect thereof on the Closing Date Net Working Capital
Statement. Promptly following the final determination of the Final Net Working
Capital Amount in accordance with Section 2.6 hereof or, if later, on February
28, 2005, Seller shall pay to eligible Transferred Employees the portion of such
integration bonus payable by Seller under this paragraph (e) and Buyer shall
cause the applicable Transferred Subsidiaries to pay the remaining portion of
such integration bonus to such Transferred Employees and any related vacation
accrual amounts.
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(f) Seller and Buyer each shall, and shall each cause its respective
Affiliates to, timely comply with all applicable labor or employment Laws of the
applicable jurisdictions and any collective bargaining agreements applicable to
the Business Designated Employees to inform and/or consult with the relevant
local and European works councils, in each case in connection with the
transactions contemplated hereby. Seller and Buyer shall reasonably cooperate
with each other with respect to the provision of information required or
desirable to be provided to any works council in respect of the transactions
contemplated hereby.
Section 5.8 INTELLECTUAL PROPERTY MATTERS.
(a) LICENSED TRADEMARKS.
(i) Buyer and its Affiliates shall immediately cease all use of the
Licensed Trademarks as of the Closing; PROVIDED, HOWEVER, that, effective
as of the Closing and for a period of 180 days thereafter, Seller hereby
grants to the Transferred Subsidiaries a limited, transitional,
non-exclusive, royalty-free, non-sublicensable, non-transferable,
non-assignable (subject to Section 5.8(h)) right to use those trademarks
identified on Schedule 5.8(a) (each, a "LICENSED TRADEMARK") in the
territory where such Licensed Trademark was so used by the Seller and its
Affiliates in the conduct of the Business, in each case solely for the
limited purpose of winding down the use of each Licensed Trademark in such
territory solely in connection with business activities and products and
services in existence prior to the Closing, and in the manner used in the
Business as of the Closing ("TRANSITIONAL USE"). For the avoidance of
doubt, Transitional Use consists primarily of use of a Licensed Trademark
on existing signage and existing inventory of the Business, including
stationery, displays, product packaging, phone numbers, fax numbers,
promotional materials or other similar materials in the manner and to the
extent used in the Business in the one-year period prior to the Closing
Date. Notwithstanding the foregoing, Buyer covenants to take the necessary
action to change, as promptly as reasonably practicable after the Closing
Date, the legal name of each Transferred Subsidiary so that the name UCB is
no longer employed.
(ii) The Transferred Subsidiaries shall maintain quality control
standards that are substantially equivalent to or stricter than those
standards used by Seller and its Affiliates immediately prior to the
Closing Date with respect to the Licensed Trademarks, which quality control
standards shall be provided by Seller to the Transferred Subsidiaries prior
to the Closing. Seller shall have the right to monitor and inspect any
products or services provided by the Transferred Subsidiaries under the
Licensed Trademarks if such right is used at reasonable times and upon
reasonable advance written notice for the purpose of enabling Seller to
ensure the Transferred Subsidiaries' compliance with this Section 5.8,
PROVIDED that such inspection shall not unreasonably burden or
inconvenience the Transferred Subsidiaries.
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(iii) Without the prior written consent of Seller, Buyer shall not,
and shall cause its Affiliates not to, knowingly, for a period of five (5)
years from and after the Closing Date, apply for, or contest, the
registration or renewal of registration of any Licensed Trademark or of any
Trademark that is identical or confusingly similar to any Licensed
Trademark, and Buyer shall not, and shall cause its Affiliates not to,
knowingly, for a period of five (5) years from and after the Closing Date,
take any action reasonably likely to impair the validity of any Licensed
Trademark or the goodwill therein. Buyer and its Affiliates shall not
combine any Licensed Trademark with any other marks or words to form a new
▇▇▇▇ or alter the design of any Licensed Trademark. Without the prior
written consent of Buyer, Seller shall not, and shall cause its Affiliates
not to, knowingly, for a period of five (5) years from and after the
Closing Date, apply for, or contest, the registration or renewal of
registration of any Trademark that is Owned Intellectual Property or of any
Trademark that is identical or confusingly similar to any Trademark that is
Owned Intellectual Property, and Seller shall not, and shall cause its
Affiliates not to, knowingly, for a period of five (5) years from and after
the Closing Date take any action reasonably likely to impair the validity
of any Trademark that is included in the Owned Intellectual Property or the
goodwill therein. Seller and its Affiliates shall not combine any Trademark
that is Owned Intellectual Property with any other marks or words to form a
new ▇▇▇▇ or alter the design of any Trademark that is Owned Intellectual
Property.
(iv) Buyer acknowledges that the Licensed Trademarks and all goodwill
associated therewith are, and shall remain, the sole property of Seller and
no rights are conferred upon Buyer or its Affiliates or the Transferred
Subsidiaries with respect to the Licensed Trademarks except as specifically
set forth herein. All uses of the Licensed Trademarks, and all goodwill
arising therefrom, shall inure to the exclusive benefit of Seller and its
Affiliates (other than the Transferred Subsidiaries). Seller and its
Affiliates (other than the Transferred Subsidiaries) reserve all rights in
the Licensed Trademarks not expressly granted in this Agreement. This
Agreement shall not preclude (i) Buyer or its Affiliates from using the
Licensed Trademarks as required by Law or in other manners permitted by the
doctrine of Trademark fair use, but for logos only in non-promotional
contexts or (ii) Seller or its Affiliates from using the Trademarks that
are Owned Intellectual Property as required by Law, or in other manners
permitted by the doctrine of Trademark fair use, but for logos only in
non-promotional contexts.
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(b) Effective as of the Closing, Seller, on behalf of itself and its
Affiliates (other than the Transferred Subsidiaries), hereby grants to Buyer and
its Affiliates a non-exclusive, irrevocable, perpetual, royalty-free license,
which license may be transferred, divided or sublicensed consistent with the
terms of Section 5.8(h) to use, reproduce, modify and create derivative works
of, for any purpose, including to conduct the Business as it may now or
hereafter exist, all (or any portion(s) of) Computer Software owned by Seller
and its Affiliates (other than the Transferred Subsidiaries), in object code and
source code form, that are used in the Business prior to the Closing, but which
are not Transferred Assets (the "LICENSED COMPUTER SOFTWARE"). Seller shall
deliver to Buyer on or before the Closing Date all reasonably available
documentation relating to the Licensed Computer Software and on the Closing Date
shall deliver or make available in source code form the Licensed Computer
Software (either in tangible form or via access to a server, which server shall
be delivered to Buyer or its designee as mutually agreed in writing by the
parties) sufficient to enable Buyer to enjoy the full benefit of the licensed
rights hereby granted as enjoyed prior to the date hereof.
(i) Other than pursuant to the Ancillary Agreements, Seller and its
Affiliates have no obligation to provide Buyer or its Affiliates with any
improvements to the Licensed Computer Software or to provide Buyer or its
Affiliates with any updates, maintenance or support with respect thereto.
Buyer and its Affiliates have no obligation to provide Seller or its
Affiliates with any improvements to the Licensed Computer Software that
Buyer or its Affiliates may develop, PROVIDED, that Buyer hereby grants
Seller and its Affiliates a non-exclusive, irrevocable, perpetual,
royalty-free license, which license may be transferred, divided or
sublicensed consistent with the terms of Section 5.8(h) under any Patents
that Buyer or any of its Affiliates may receive or obtain which are derived
from and based on such improvements.
(ii) Buyer acknowledges and agrees that Seller and its Affiliates are
the sole and exclusive owners of the Licensed IP. Seller hereby
acknowledges that, other than the licenses expressly granted herein, this
Agreement transfers no right, title or interest to Buyer or its Affiliates
in the Licensed IP. Seller and its Affiliates (other than the Transferred
Subsidiaries) expressly reserve all rights in the Licensed IP not expressly
granted in this Agreement.
(iii) Nothing contained in this Agreement shall be construed as
conferring on (A) Seller or any of its Affiliates an obligation to file,
secure, protect, maintain and/or enforce any of its rights in the Licensed
Trademarks or the Licensed Computer Software (the Licensed Trademarks and
the Licensed Computer Software, collectively, the "LICENSED IP"), and
Seller and its Affiliates (other than the Transferred Subsidiaries) may
bring or decline to bring actions to enforce their rights in the Licensed
IP in their sole discretion or (B) Buyer any right to bring any action on
behalf of Seller and its Affiliates or otherwise, based on or related to
the Licensed IP. Nothing contained in this Agreement shall limit Seller or
any of its Affiliates' (other than the Transferred Subsidiaries') ability
to use the Licensed IP in any manner it chooses, except as contemplated
under the terms of this Agreement or any Ancillary Agreements.
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(iv) EXCEPT AS OTHERWISE PROVIDED IN ARTICLE III AND WITHOUT LIMITING
ARTICLE VII: THE LICENSED IP IS PROVIDED HEREUNDER "AS IS", "WITH ALL
FAULTS" AND WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND, AND WITHOUT
LIMITING THE FOREGOING, SELLER AND ITS AFFILIATES EXPRESSLY DISCLAIM ALL
REPRESENTATIONS AND WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, INCLUDING
ANY REPRESENTATION OR WARRANTY OF TITLE, MERCHANTABILITY, FITNESS OR
SUITABILITY FOR ANY PARTICULAR PURPOSE (EVEN IF ON NOTICE OF SUCH PURPOSE),
NON-INFRINGEMENT, AND CUSTOM OR USAGE IN THE TRADE, AND WITHOUT LIMITING
THE FOREGOING, NO REPRESENTATION OR WARRANTY IS GIVEN THAT THE LICENSED IP
OR ANY PORTION THEREOF WILL CONFORM TO ANY DESCRIPTION THEREOF OR BE FREE
OF DEFECTS OR IS, OR WILL OPERATE WITHOUT ERRORS. EXCEPT AS OTHERWISE
PROVIDED IN ARTICLE III AND WITHOUT LIMITING ARTICLE VII, WITH RESPECT TO
THE LICENSED TRADEMARKS ONLY, EACH OF BUYER AND ITS AFFILIATES WAIVES ANY
CLAIMS IT MIGHT HAVE AGAINST ANY OF SELLER OR ITS AFFILIATES WHICH ARISE
OUT OF OR RELATE TO BUYER'S OR ANY OF ITS AFFILIATES' EXERCISE OF THE
RIGHTS UNDER THE LICENSED TRADEMARKS GRANTED TO IT BY THIS SECTION 5.8.
(v) Buyer shall defend, indemnify and hold harmless Seller and its
Affiliates (other than the Transferred Subsidiaries) and their respective
employees, directors, officers, consultants and agents from and against all
Losses arising out of, or relating to, any claim by any third party arising
out of, or relating to Buyer's use of the Licensed Trademarks in any manner
not authorized by this Agreement and different from how used by Seller and
its Affiliates in the Business in the 12 months immediately prior to the
Closing Date. Notwithstanding the foregoing, Buyer will not have any
indemnification obligation to Seller or its Affiliates under this Section
5.8 or otherwise, with respect to any Loss to the extent such Loss arises
out of the gross negligence or willful misconduct of Seller or its
Affiliates (other than the Transferred Subsidiaries with respect to actions
taken by them after the Closing Date).
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(c) Effective as of the Closing, Buyer, on behalf of itself and its
Affiliates, hereby grants to Seller and its Affiliates a non-exclusive,
irrevocable, perpetual, royalty-free license, which license may be transferred,
divided or sublicensed consistent with the terms of Section 5.8(h), to use,
reproduce, modify and create derivative works of, for any purpose, including to
conduct the businesses of Seller as they may now or hereafter exist, all (or any
portion(s) of) Computer Software (in object code and source code form) that are
Transferred Assets used by Seller or any of its Affiliates (other than the
Transferred Subsidiaries) prior to the Closing (the "LICENSED-BACK COMPUTER
SOFTWARE"). Seller may retain on the Closing Date tangible copies of all
Licensed-Back Computer Software. If the Films Business shall have been
transferred back to Seller or any of its Affiliates (other than the Transferred
Subsidiaries) rather than to a third party purchaser as part of the Films
Separation, the license provided in this subsection shall extend to the Films
Business. Seller and its Affiliates have no obligation to provide Buyer or its
Affiliates with any improvements to the Licensed-Back Computer Software that
Seller or its Affiliates may develop, PROVIDED, that Seller hereby grants Buyer
and its Affiliates a non-exclusive, irrevocable, perpetual, royalty-free
license, which license may be transferred, divided or sublicensed consistent
with the terms of Section 5.8(h) under any Patents that Seller or any of its
Affiliates may receive or obtain which are derived from and based on such
improvements. Nothing contained in this Agreement shall be construed as
conferring on (A) Buyer or any of its Affiliates an obligation to file, secure,
protect, maintain and/or enforce any of its rights in the Licensed-Back Computer
Software, and Buyer and its Affiliates may bring or decline to bring actions to
enforce their rights in the Licensed-Back Computer Software in their sole
discretion or (B) Seller or its Affiliates any right to bring any action on
behalf of Buyer and its Affiliates or otherwise, based on or related to the
Licensed-Back Computer Software.
(d) Except as may be consented to in writing by Buyer, after the date of
this Agreement and before the Closing:
(i) Seller and its Affiliates shall make such payments and take such
other actions as are reasonably necessary to maintain IP-Registered Owned
Intellectual Property, including the payment of any registration,
maintenance or renewal fees or the filing of any responses to office
actions by the patent, copyright, trademark or other authorities in any
jurisdiction, documents, applications or certificates for the purposes of
obtaining, maintaining, perfecting or preserving or renewing such
IP-Registered Owned Intellectual Property; and
(ii) Seller and its Affiliates shall provide information to Buyer upon
Buyer's reasonable written request about the status of any pending
applications for IP-Registered Owned Intellectual Property (including
reissues, renewals and the like) and, subject to compliance with any Law
relating to competition, restrictive trade practices, unfair competition,
antitrust, monopolies, fair trading or restraint of trade or other legal
requirements, Seller and Buyer shall consult and cooperate in good faith
regarding the prosecution of pending applications for IP-Registered Owned
Intellectual Property and Seller shall allow Buyer to provide reasonable
instruction and direction as to the prosecution of such applications.
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(e) Subject to Sections 5.8(f) and 5.8(g), from and after the Closing,
Buyer shall have responsibility for the prosecution and maintenance of all Owned
Intellectual Property and shall pay all fees relating to the aforesaid.
(f) With a view to enabling Buyer to prosecute, file and maintain,
including coordinating payments to patent, trademark, copyright or other
authorities in any jurisdiction ("PATENT AND TRADEMARK OFFICES"), all Owned
Intellectual Property on and after the Closing in a manner consistent with the
manner in which Seller and its Affiliates performed such prosecution, filing,
maintenance prior to the Closing, Seller shall, prior to the Closing, use its
reasonable best efforts to cause one or more of the Transferred Employees to
acquire such skills as are reasonably required to enable such Transferred
Employee to carry out administrative functions related to the prosecution,
filing, (including preparing foreign filing papers) maintaining and coordination
of payments to Patent and Trademark Offices with respect to all Owned
Intellectual Property other than Trademarks. For the avoidance of doubt, such
Transferred Employee shall not be required to be trained to perform any
functions with respect to the prosecution, filing, and maintenance of Owned
Intellectual Property that have been performed by and outsourced to Intellectual
Property counsel, Patent agents or Trademark agents that are not within the
employment of Seller and its Affiliates. Seller shall also cause all Books and
Records relating to the Owned Intellectual Property in the possession of Seller
or its Affiliates (excluding the Transferred Subsidiaries) to be in the physical
possession of the Transferred Subsidiaries on the Closing Date, as necessary to
continue prosecution, filing and maintenance of the Owned Intellectual Property
after the Closing as conducted prior to the Closing. Seller shall, and shall
cause its Affiliates to, include in the Business Designated Employees all of
those individuals who in the twelve months prior to Closing primarily conducted
prosecution and maintenance for Patents which are Owned Intellectual Property.
With respect to Trademarks that are Owned Intellectual Property, from and after
the Closing, pursuant to the Transition Services Agreement, Seller shall, and
shall cause its Affiliates (other than the Transferred Subsidiaries) to provide
or cause their respective employees to provide such assistance and information
as may be reasonably requested by Buyer for the prosecution, maintenance and
renewal of such Trademarks.
(g) With respect to (i) Transferred Intellectual Property Assets and (ii)
Intellectual Property Contracts that are Transferred Contracts, Seller and its
Affiliates (other than the Transferred Subsidiaries) shall complete the
assignment of record ownership of such assets to Buyer or its designee and the
transfer to Buyer or its designee, at Seller's expense, of files relating
thereto promptly after the Closing but in any event within 60 days after the
Closing Date. Prior to any transfer to Buyer or its designee of physical files,
Seller and its Affiliates shall retain responsibility for prosecution, filing
and maintenance of such Owned Intellectual Property, including responding to all
matters and paying all fees due within sixty (60) days of transfer and shall pay
all fees relating to the foregoing obligation, which fees shall be reimbursed by
Buyer, as and to the extent incurred by Seller or its Affiliates after the
Closing. Buyer shall make available to Seller Transferred Employees as necessary
to assist Seller in connection with Seller's obligations pursuant to this
Section 5.8(g).
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(h) Buyer and each of the Transferred Subsidiaries may assign or otherwise
transfer the licenses granted in the Licensed Computer Software pursuant to
Section 5.8 (or a portion thereof) and in the Patents pursuant to Section
5.8(b)(i) to a successor to (i) all or a portion of its assets, or (ii) all or a
portion of the assets of the Business. Buyer may assign, sublicense or otherwise
transfer the licenses granted in the Licensed IP pursuant to Section 5.8 (or a
portion thereof) to a successor to all or substantially all of the assets of the
Seller Amino Resins Business. As and to the extent required by Law, Buyer may
assign, sublicense or otherwise transfer the licenses granted in the Licensed
Trademarks. Seller and its Affiliates may assign or otherwise transfer the
licenses granted in the Licensed-Back Computer Software pursuant to Section 5.8
(or a portion thereof) and in the Patents pursuant to Section 5.8 to a successor
to (i) all or a portion of its assets or (ii) all or a portion of the assets of
the business to which the Licensed-Back Computer Software relates.
(i) From and after the date hereof until the Closing, neither Seller nor
its Affiliates shall, in connection with the Films Separation, license, provide
or otherwise make available to any third Person any Owned Intellectual Property
or exclusively-held Licensed-In Intellectual Property in any fields of use
encompassed within the Business, or competitive with or reasonably expected to
be competitive with the Business.
(j) Buyer shall use its reasonable efforts to obtain substitute licenses
for the Computer Software set forth on Schedule 2.2 as of the Closing and, in
any event, shall obtain such substitute licenses within six (6) months after the
Closing Date. Seller shall reasonably cooperate with Buyer with respect to the
foregoing; PROVIDED that, for the avoidance of doubt, such reasonable
cooperation shall not include the payment of fees or other consideration to any
Person.
(k) Seller and its Affiliates shall at Seller's sole cost and expense make
commercially reasonable efforts to submit to the appropriate Patent and
Trademark Offices for recordation as promptly as reasonably practicable all
documents reasonably necessary to evidence true and complete chain of title
ownership immediately prior to the Closing of Seller or its Affiliates, as the
case may be, of each item of IP-Registered Intellectual Property required to be
listed on Schedule 3.14(a)(i) from such items' inception (collectively, the "IP
RECORDATIONS") solely to the extent that, with respect to each item of
IP-Registered Intellectual Property, it is commercially reasonable for such
recordation to be made (when considering the relative value, utility or
significance of the Intellectual Property item that is the subject of such
recordation). On and after the Closing, to the extent that Buyer and its
Affiliates desire that additional IP Recordations be made, which recordations
are commercially reasonable (when considering the relative value, utility or
significance of the Intellectual Property item that is the subject of such
recordation), Buyer shall notify Seller as to each such additional IP
Recordation and shall specify to Seller the estimated aggregate costs and
expenses of such additional IP Recordation(s). Within thirty (30) days of
receiving such notice, Seller shall (i) approve the estimate, in which case
Seller promptly shall reimburse Buyer upon receipt of an invoice for its actual
costs and expenses for such recordations (but excluding Buyer's internal costs);
provided that they do not materially exceed the estimate previously approved by
Seller or (ii) agree to make such recordations (either itself or with the
assistance of a third Person designee of Seller's choice and at Seller's option)
at Seller's sole cost and expense, in which case Seller promptly shall do so. On
and after the Closing, Seller shall have no obligation to reimburse Buyer for
any costs and expenses with respect to any IP Recordations that are not
commercially reasonable to be made (when considering the relative value, utility
or significance of the Intellectual Property item that is the subject of such
recordation). Seller and its Affiliates promptly shall deliver to Buyer true and
complete copies of all documentation filed with and received from the applicable
Patent and Trademark Offices concerning all IP Recordations filed by Seller or
its Affiliates or their third Person designees.
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Section 5.9 ANCILLARY AGREEMENTS AND STOCKHOLDER'S AGREEMENT. At the
Closing, Seller shall, and shall cause each of its Affiliates party to an
Ancillary Agreement to, execute and deliver each Ancillary Agreement to which it
is a party, and Buyer shall, and shall cause each of its Affiliates party to an
Ancillary Agreement to, execute and deliver each of the Ancillary Agreements to
which it is a party. At the Closing, each of Buyer and Seller shall execute and
deliver the Stockholder's Agreement.
Section 5.10 ASSIGNMENT OF RETAINED ASSETS AND ASSUMPTION OF RETAINED
LIABILITIES. Prior to the Closing, Seller shall use its reasonable best efforts
to cause the Retained Assets to be distributed or otherwise transferred by the
applicable Transferred Subsidiary to another Person (other than any other
Transferred Subsidiary), and to cause a Person (other than any Transferred
Subsidiary) to assume the Retained Liabilities from the applicable Transferred
Subsidiary; PROVIDED that there shall not be the imposition of any Liability on
Buyer or any of its Affiliates (including the Transferred Subsidiaries) for any
violation of applicable Law in connection therewith. Seller shall make available
to Buyer in a timely manner for review all agreements, instruments and other
documentation relating to the transfer prior to the Closing by any Transferred
Subsidiary of any assets intended to be Retained Assets to Seller or any of its
Affiliates, or the assumption by Seller or any of its Affiliates (other than the
Transferred Subsidiaries) of any Liabilities intended to be Retained Liabilities
from any of the Transferred Subsidiaries, and Seller shall consider in good
faith Buyer's comments thereon. To the extent that the distribution or transfer
of the Retained Assets or the assumption of the Retained Liabilities, or
attempted distribution, transfer or assumption, as provided for in this Section
5.10 is prohibited by any applicable Law or would require any governmental or
third party authorizations, approvals, consents or waivers, and such
authorizations, approvals, consents or waivers shall not have been obtained at
or prior to the Closing, then the provisions of Section 2.10 shall apply MUTATIS
MUTANDIS. Without limiting the foregoing, in the event that a Transferred
Subsidiary is unable to assign any rights to seek indemnity against third
parties in respect of any Retained Assets or Retained Liabilities, or that any
such assignment is held to be invalid or unenforceable, Buyer shall, or shall
cause the relevant Transferred Subsidiary to, reasonably cooperate with Seller
and take such steps as Seller may reasonably request and at Seller's expense in
pursuing the claims for indemnity.
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Section 5.11 INSURANCE PROCEEDS. (a) From and after the Closing, Seller
shall, or shall cause its Affiliates to, assign, to the extent assignable, to
Buyer any proceeds of Seller's or any of its Affiliates' (other than the
Transferred Subsidiaries) third party insurance policies to the extent related
to any Assumed Liabilities or Liabilities of the Transferred Subsidiaries (other
than any Excluded Liabilities or any Retained Liabilities). Seller agrees to use
its reasonable efforts to obtain any necessary consents or approvals of any
insurance company or other third party relating to any such assignment. If such
proceeds are not assignable, Seller agrees to pay any such proceeds received by
it or any of its Affiliates to Buyer promptly upon the receipt thereof.
(b) From and after the Closing, Buyer shall, or shall cause its Affiliates
to, assign, to the extent assignable, to Seller any proceeds of the third party
Transferred Insurance Policies to the extent related to any Retained Liabilities
or Excluded Liabilities. Buyer agrees to use its reasonable efforts to obtain
any necessary consents or approvals of any insurance company or other third
party relating to any such assignment. If such proceeds are not assignable,
Buyer agrees to pay any such proceeds received by it or any of its Affiliates to
Seller promptly upon the receipt thereof.
Section 5.12 RESTRUCTURING TRANSACTIONS. (a) Seller shall cause the actions
and transactions described on Schedule 5.12 (the "POST-SIGNING RESTRUCTURING
TRANSACTIONS") to be implemented as set forth on Schedule 5.12. Seller shall
make available to Buyer in a timely manner for review all drafts of agreements,
instruments and other documents relating to the Post-Signing Restructuring
Transactions, and Seller shall not, and shall cause its Affiliates not to,
execute any such agreements, instruments or other documentation, or take any
actions or consummate any transactions contemplated thereby, without Buyer's
prior written consent, which consent shall not be unreasonably withheld or
delayed.
(b) Seller shall, and shall cause its Affiliates to, use reasonable best
efforts to complete the Films Separation prior to the Closing Date.
Section 5.13 SUPPLEMENTAL LISTING APPLICATION. Buyer shall use its best
efforts to cause the Purchase Price Shares to be issued in the transactions
contemplated hereby to be approved for listing on the NYSE, to the extent not
already so approved, subject to official notice of issuance, prior to the
Closing Date.
Section 5.14 ADDITIONAL FINANCIAL STATEMENTS. (a) Seller shall, not later
than the tenth Business Day of each calendar month from and after the date
hereof until the Closing Date, provide Buyer an unaudited statement showing (i)
the sales by legal entity for the Business, and any consolidated results (to the
extent available) for the preceding calendar month, and comparing such sales to
the comparable figure for the same month of the prior year, and (ii) the
operating results, after financial charges, by legal entity for the Business,
and any consolidated results (to the extent available) for the preceding month,
in each case prepared in accordance with Belgian GAAP for periods through
December 31, 2004 and prepared in accordance with International Accounting
Standards for periods beginning thereafter. Seller shall, not later than the
fifteenth Business Day after the end of any calendar quarter from and after the
date hereof until the Closing Date, provide Buyer an unaudited statement of
income of the Business for the preceding calendar quarter, in each case prepared
in accordance with Belgian GAAP for periods through December 31, 2004 and
prepared in accordance with International Accounting Standards for periods
beginning thereafter.
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(b) Seller shall, prior to the Closing Date, deliver to Buyer (i) audited
combined balance sheets of the Business as of December 31, 2001, 2002 and 2003,
(ii) audited combined statements of income of the Business for the 2002 and 2003
fiscal years and (iii) to the extent required by the SEC, an unaudited combined
interim balance sheet for the Business for the six (6) months ended June 30,
2003 (collectively, the "BELGIAN GAAP AUDITED FINANCIAL STATEMENTS"). Seller
shall, prior to the Closing Date, deliver to Buyer an unaudited combined interim
balance sheet for the Business as of June 30, 2004 and an unaudited interim
statement of income for the period ended June 30, 2004. The financial statements
described in this Section 5.14(b) shall be prepared in accordance with Belgian
GAAP in accordance with Seller's policies and procedures set forth in the UCB
Accounting Policy Manual, consistently applied, and the consolidation thereof
shall be performed in accordance with Schedule 2.6(a). Seller shall cause a firm
of independent certified public accountants that is registered with the U.S.
Public Company Accounting Oversight Board to audit the Belgian GAAP Audited
Financial Statements. All costs and expenses incurred by Seller and its
Affiliates in connection with the preparation of and audit of the Belgian GAAP
Audited Financial Statements shall be borne by Seller and its Affiliates.
(c) Buyer shall, prior to the Closing Date, prepare, or cause to be
prepared, (i) audited combined balance sheets of the Business as of December 31,
2001, 2002 and 2003, (ii) audited combined statements of income of the Business
for the 2002 and 2003 fiscal years and (iii) to the extent required by the SEC,
an unaudited combined interim balance sheet for the Business for the six (6)
months ended June 30, 2003 (collectively, the "U.S. GAAP AUDITED FINANCIAL
STATEMENTS" and, together with the Belgian GAAP Audited Financial Statements,
the "AUDITED FINANCIAL STATEMENTS"). Buyer shall, prior to the Closing Date,
prepare, or caused to be prepared, an unaudited combined interim balance sheet
for the Business as of June 30, 2004 and an unaudited interim statement of
income for the period then ended. The financial statements described in this
Section 5.14(c) shall be prepared in accordance with U.S. GAAP consistently
applied. Buyer shall cause a firm of independent certified public accountants
that is registered with the U.S. Public Company Accounting Oversight Board to
audit the U.S. GAAP Audited Financial Statements. Without limiting the
generality of Section 5.1, Seller shall, and shall cause its Affiliates to,
cooperate with Buyer with respect to the preparation of the foregoing and
provide to Buyer and to the firm of independent certified public accountants
engaged by Buyer for purposes of auditing the U.S. GAAP Audited Financial
Statements such data as is reasonably necessary for the preparation and audit of
the financial statements described in this Section 5.14(c), and shall execute
and cause their respective officers, directors and employees to execute such
customary representation letters as such firm of independent certified public
accountants may reasonably request with respect to the data and information
underlying such financial statements, the conformity of such financial
statements to U.S. GAAP and the procedures used in the preparation of such
financial statements. Buyer shall, promptly upon receiving a written request
from Seller, reimburse Seller for all of Seller's and its Affiliates' reasonable
costs and expenses incurred in connection with the preparation of and audit of
the U.S. GAAP Audited Financial Statements.
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Section 5.15 UPDATING OF INFORMATION. Each party hereto shall, as soon as
reasonably practicable after it obtains Knowledge thereof prior to the Closing,
deliver to the other parties hereto any information concerning a change or any
event occurring subsequent to the date hereof and prior to the Closing that
causes any representation and warranty of such party contained herein to become
incorrect or incomplete in any material respect, it being understood and agreed
that the delivery of such information shall not in any manner constitute a
waiver by any other party of any of the conditions precedent to the Closing
hereunder and that in determining whether there is a breach of any
representation and warranty for purposes of any indemnification to be provided
pursuant to Article VII, such representation and warranty shall not be qualified
by any information provided pursuant to this Section 5.15. Without limiting the
foregoing, if, at any time after the date hereof, Buyer receives notice from its
lenders that the Financing Commitments will not be funded or Buyer determines
that it will not obtain alternative financing necessary to consummate the
transactions contemplated by this Agreement, Buyer shall promptly notify Seller
in writing of that notice and/or determination and, if applicable, advise Seller
of any reason given by such lenders for such action.
Section 5.16 CERTAIN GUARANTEES AND INDEBTEDNESS. (a) Seller shall use its
reasonable best efforts to cause itself or one or more of its Affiliates (other
than the Transferred Subsidiaries) to be substituted in all respects for the
Transferred Subsidiaries and for the Transferred Subsidiaries to be otherwise
removed or released, effective as of the Closing, in respect of all obligations
of the Transferred Subsidiaries under each of the guarantees, indemnities,
surety bonds, letters of credit and letters of comfort obtained by the
Transferred Subsidiaries for the benefit of Seller or its Affiliates (other than
the Transferred Subsidiaries) (collectively, the "TRANSFERRED SUBSIDIARY
GUARANTEES"), including the guarantees described in Schedule 5.16(a), which sets
forth all such guarantees that are material, and for all obligations of the
Transferred Subsidiaries in respect thereof to be terminated, with, in each
case, such substitution, removal, release and termination to be in form and
substance reasonably satisfactory to Buyer. In the event that Seller has been
unable to effect any such substitution, removal, release or termination with
respect to any Transferred Subsidiary Guarantee effective as of the Closing,
Seller agrees that after the Closing it shall use its reasonable best efforts to
effect such substitution, removal and release and termination as soon as
reasonably practicable, including, without limitation, by providing substitute
cash collateral. Seller agrees to indemnify and hold Buyer and its Affiliates
(including the Transferred Subsidiaries) harmless from and against and in
respect of any and all Losses incurred by Buyer and its Affiliates (including
the Transferred Subsidiaries) after the Closing under or pursuant to any
Transferred Subsidiary Guarantee.
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(b) Buyer shall use its reasonable best efforts to cause Seller and its
Affiliates (other than the Transferred Subsidiaries) to be removed or released,
effective as of the Closing or, if not possible, as soon thereafter as
reasonably practicable, in respect of all obligations of Seller and such
Affiliates under each of the guarantees, indemnities, surety bonds, letters of
credit and letters of comfort obtained by Seller and such Affiliates for the
benefit of the Transferred Subsidiaries that are described in Schedule 5.16(b),
and, to the extent commercially reasonable to achieve such removal or release,
to agree to substitute itself in the place of Seller and its Affiliates. Buyer
agrees to indemnify and hold Seller and its Affiliates harmless from and against
any Losses incurred by Seller and its Affiliates after the Closing under or
pursuant to any such guarantee.
(c) Seller shall defease or repay or otherwise settle or cause itself or
one or more of its Affiliates (other than the Transferred Subsidiaries) to be
substituted in all respects for the Transferred Subsidiaries and for the
Transferred Subsidiaries to be otherwise removed or released, effective as of
the Closing, in respect of all Indebtedness of the Transferred Subsidiaries,
other than the Transferred Intercompany Payables and the Actual Acceptable
Indebtedness Amount, and for all obligations of the Transferred Subsidiaries in
respect thereof to be terminated, with, in each case, such substitution, release
and termination to be in form and substance reasonably satisfactory to Buyer.
Not less than five (5) Business Days prior to the Closing Date, Seller shall
prepare and deliver to Buyer an updated statement of the amount of the
Acceptable Indebtedness of each Transferred Subsidiary. If Buyer consents to
such updated statement, then such statement shall replace for all purposes the
version of Schedule 1.1(b) delivered as of the date hereof. If Buyer does not
consent to such updated statement, then Schedule 1.1(b), as delivered as of the
date hereof, shall remain in effect for all purposes.
Section 5.17 DISPOSITION OF RETAINED SURFACE SPECIALTIES TRADEMARK FILINGS.
As concerns those trademark filings containing the "Surface Specialties"
designation listed on Schedule 5.18(a) (collectively, the "Retained Surface
Specialties Trademark Filings"), at any time on or after the date hereof, Seller
and its Affiliates shall permit Buyer and its Affiliates to file and prosecute
one or more new applications for trademark registration for the "Surface
Specialties" designations and logos (or similar designations or logos, with or
without other elements), but excluding the "UCB" name and logo and other
trademarks owned by Seller and its Affiliates (other than the Transferred
Subsidiaries) and not transferred to Buyer pursuant to this Agreement. At
Buyer's sole cost and expense as and to the extent beyond the 180 period after
Closing, but at Seller's sole cost and expense prior thereto, Seller and its
Affiliates will use commercially reasonable efforts to not cause or permit the
Retained Surface Specialties Trademark Filings to cancel, abandon or otherwise
lapse unless (i) Buyer directs Seller and its Affiliates to do so in writing, in
which case Seller and its Affiliates promptly will do so as directed by Buyer,
or (ii) Buyer provides its prior written consent, which consent shall not be
withheld unreasonably. At Buyer's sole cost and expense as and to the extent
beyond the 180 period after Closing, but at Seller's sole cost and expense prior
thereto, Seller and its Affiliates shall deliver to Buyer true and complete
copies of all documentation filed with and received from the applicable Patent
and Trademark Offices evidencing same. At Buyer's sole cost and expense as and
to the extent beyond the 180 period after Closing, but at Seller's sole cost and
expense prior thereto, Seller and its Affiliates shall assist Buyer and its
Affiliates as reasonably requested with preparing, filing, prosecuting and
defending oppositions of such new applications (including providing any consents
to registration requested by the Patent and Trademark Offices), and shall not
use its rights in any Retained Surface Specialties Trademark Filings or the
trademark rights represented thereby as a basis for opposing, canceling or
otherwise challenging such applications or their resulting registrations or the
trademark rights represented thereby. Seller and its Affiliates acknowledge that
after the Closing, the "Surface Specialties" name and ▇▇▇▇ (but not any UCB name
or logo used in connection therewith) shall be transferred to Buyer and its
Affiliates and Seller and its Affiliates shall have no ownership or use rights
thereto. Neither Buyer nor its Affiliates shall be responsible for any internal
costs of Seller and its Affiliates or other costs and expenses attributable to
work done with respect to the Retained Surface Specialties Trademark Filings by
employees of Seller or its Affiliates.
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Section 5.18 INTERGROUP AGREEMENTS. Subject to applicable Law, prior to the
Closing, Seller shall, and shall cause its Affiliates to, amend each of the
agreements listed on Schedule 5.17 (the "SURVIVING INTERGROUP AGREEMENTS") to
cause each such Surviving Intergroup Agreement to:
(a) except as otherwise required to be amended pursuant to this Section
5.17, contain volume and other material terms and conditions (other than price)
that are no less favorable to the Transferred Subsidiaries than the volume and
other material non-financial terms and conditions (other than price) applicable
to the provision and purchase of substantially similar goods and services by the
parties thereto as of the Most Recent Balance Sheet Date pursuant to (i) if such
Surviving Intergroup Agreement was effective as of the Most Recent Balance Sheet
Date, such Surviving Intergroup Agreement, or (ii) if such Surviving Intergroup
Agreement was not effective as of the Most Recent Balance Sheet Date, any
agreement, contract, lease, sublease, purchase order, arrangement, commitment
and/or license that was superseded or modified by such Surviving Intergroup
Agreement, if any;
(b) subject to reasonable adjustments to take account of inflation, with
respect to Surviving Intergroup Agreements pursuant to which any Transferred
Subsidiary will be required to make any payment after the Closing in respect of
goods and services provided to such Transferred Subsidiary by Seller or any of
its Affiliates (other than the Transferred Subsidiaries), contain price terms
that are based on Seller's or its applicable Affiliate's actual cost for
providing such goods and services, calculated on a consistent basis with
Seller's historical cost allocation methodology (as reflected in the Historical
Financial Statements) for the provision of such goods and services, which price
terms shall not have a profit or overhead component, other than those overhead
components reasonably related to, and required to be incurred by, Seller and/or
any of its Affiliates in connection with the performance by Seller and/or its
applicable Affiliates under such Surviving Intergroup Agreement;
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(c) terminate automatically as of the Closing with respect to any goods
and/or services to be provided by Seller or its Affiliates (other than the
Transferred Subsidiaries) to a Transferred Subsidiary pursuant to such Surviving
Intergroup Agreement to the extent Seller or one or more of its Affiliates
(other than the Transferred Subsidiaries) will otherwise be required to provide
such goods and/or services to such Transferred Subsidiary pursuant to this
Agreement or any Ancillary Agreement, PROVIDED that such Surviving Intergroup
Agreement shall survive the Closing with respect to all other goods and/or
services provided thereunder;
(d) be terminable at any time by Buyer, in its sole discretion, by giving
ninety (90) days' prior written notice of termination to Seller or an Affiliate
of Seller party thereto; PROVIDED, that (i) twelve (12) months' prior written
notice of termination shall be required to be given by Buyer in respect of the
Leases between Surface Specialties, Inc. and UCB, Inc., dated July 1, 2003, for
the properties located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in each
case in Smyrna, Georgia, United States, and (ii) six (6) months' prior written
notice of termination shall be required to be given by Buyer in respect of
Central Management Assistance Agreement, dated as of January 1, 2002, between
UCB Bioproducts Inc. and UCB Chemicals Corporation;
(e) provide that the leases between Surface Specialties, Inc. and UCB,
Inc., dated July 1, 2003, for the properties located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in each case in Smyrna, Georgia, United States, have
evergreen terms that may not be terminated after the Closing by Seller or any of
its Affiliates on less than three (3) years' prior written notice of termination
given by Seller to Buyer and to delete in such leases any requirement that any
Transferred Subsidiary restore to a pristine condition any facility or structure
leased under a Surviving Intergroup Agreement;
(f) contain restrictions on disclosures of confidential information of
either party that are substantially similar to those contained in Section 5.2;
(g) incorporate by reference Sections 9.1, 9.2, 9.6, 9.9, 9.10 and 9.11
hereof, MUTATIS MUTANDIS, and delete any existing provisions of such Surviving
Intergroup Agreement that conflict with any of such Sections; and
(h) provided that no indemnification or other remedy shall be available
thereunder to the extent that the scope, terms and conditions of such
indemnification or remedy are materially inconsistent with the scope, terms and
conditions of any indemnification or remedy that would be reasonably likely to
be available to similarly-situated but unrelated parties in an arm's length
agreement with respect to the same or similar subject matter.
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Section 5.19 STANDSTILL. From and after the date hereof until the Closing,
without the prior consent of Buyer, Seller shall not, and shall cause each of
its Affiliates not to, directly or indirectly, alone or in concert with any
other Person:
(a) acquire, offer to acquire or agree to acquire Beneficial Ownership of
any securities issued by Buyer other than the Purchase Price Shares;
(b) sell, offer to sell or agree to sell any securities issued by Buyer,
including by means of hedging, short sales, forward contracts or other
derivative transactions;
(c) deposit any securities issued by Buyer into a voting trust or subject
any such securities to any proxy, arrangement or agreement with respect to the
voting of such securities or other agreement having a similar effect; or
(d) form, join or in any way participate in a group (as contemplated by
Exchange Act Rule 13d-5(b) or any successor statute or regulation) with respect
to any securities issued by Buyer.
Section 5.20 FURTHER ASSURANCES. (a) From time to time after the Closing,
each party hereto shall, and shall cause its Affiliates to, promptly execute,
acknowledge and deliver any other assurances or documents or instruments of
transfer reasonably requested by the other party hereto and necessary for the
requesting party to satisfy its obligations hereunder or to obtain the benefits
of the transactions contemplated hereby. Without limiting the generality of the
foregoing, to the extent that Buyer or Seller discover following Closing that
(i) any asset that was intended to be transferred pursuant to this Agreement was
not transferred at Closing, Seller shall or shall cause its Affiliates promptly
to assign and transfer to Buyer all right, title and interest in such asset or
(ii) any asset that was intended to be a Retained Asset or an Excluded Asset
pursuant to this Agreement was not transferred prior to the Closing, Buyer
shall, or shall cause its Affiliates to, promptly assign and transfer to Seller
all right, title and interest in such Retained Asset or Excluded Asset. In the
event that, following the Closing, there are actions that are required to be
taken by one or more of the Transferred Subsidiaries or by Seller or any of its
Affiliates in connection with the assumption of any Retained Liability by Seller
or any of its Affiliates, such Transferred Subsidiaries Seller or Affiliate of
Seller will take such action or actions, at the reasonable direction and expense
of Seller.
(b) From and after the date hereof until the Closing, Buyer and Seller
shall consult and cooperate with each other to develop reasonably specific
descriptions of (i) the service levels at which services will be provided to the
Business under the IT/IS Services Agreement after the Closing and (ii) the
procedures pursuant to which Buyer may make requests from time to time for
services to be provided to the Business under the IT/IS Services Agreement after
the Closing and pursuant to which Buyer and Seller will cooperate to develop, in
good faith, a schedule, including deadlines, for Seller to provide such
services. Buyer and Seller shall cause such descriptions and procedures to be
included in Schedule A of the IT/IS Services Agreement as of the Closing. Such
descriptions shall not expand the obligations of Buyer or Seller pursuant to the
IT/IS Agreement and shall not increase the level of service compared to the
level of service provided to the Business in the one-year period prior to the
Closing;
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(c) From and after the date hereof until the Closing, Buyer and Seller
shall consult and cooperate with each other to develop Schedule A to the
Transition Services Agreement, as contemplated by the Transition Services
Agreement. Without limiting the generality of the foregoing, unless the parties
mutually agree otherwise, such Schedule A shall provide that the services shall
be provided for a term of six (6) months, that any service shall be terminable
by Buyer upon thirty (30) days advance written notice to Seller and that Buyer's
fee for each such service shall be equal to Seller and its Affiliates' actual
cost for such service, based upon Seller's historical cost allocation
methodology (as reflected in the Historical Financial Statements) for such
service. No such fee for any service shall have a profit component or an
overhead component, other than those overhead components reasonably related to,
and required to be incurred by Seller and/or its Affiliates in connection with,
the performance by Seller and/or its Affiliates of such service and not
otherwise attributable to Seller or its Affiliates.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 CONDITIONS TO THE OBLIGATIONS OF BUYER AND SELLER. The
obligations of Buyer and Seller to effect the Closing are subject to the
satisfaction or waiver prior to the Closing of the following conditions:
(a) HSR, EC MERGER REGULATION AND OTHER LAWS. (i) The waiting period
applicable to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated, (ii) the European Commission
shall have adopted a decision pursuant to the EC Merger Regulation declaring the
transactions contemplated hereby compatible with the common market (or such
compatibility shall have been deemed to exist under Article 10(6) of the EC
Merger Regulation), or, in the event that the European Commission adopts a
decision pursuant to Article 9(3) of the EC Merger Regulation referring the
review of all or part of the transactions contemplated hereby to a Government
Entity of a Member State (or is deemed pursuant to Article 9(5) of the EC Merger
Regulation to have done so), such Government Entity (or any other Government
Entity in the Member State concerned) shall have granted approval of the
transactions or part thereof that were so referred, (iii) the Other Antitrust
Approvals shall have been granted, and (iv) each material consent, clearance,
notice, report and other filing required to be made with or obtained from any
Government Entity or Self-Regulatory Organization in connection with the
transactions contemplated hereby at or prior to the Closing shall have been made
or obtained.
(b) NO PROHIBITION. No Government Entity of competent jurisdiction shall
have (i) enacted, issued, promulgated, enforced, or entered any Law (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated hereby
(collectively, an "ORDER"), (ii) instituted and not withdrawn any proceeding
seeking any such Order, or (iii) threatened to institute a proceeding that the
parties reasonably determine is likely to result in such an Order.
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(c) FILMS SEPARATION. The Films Separation shall have been consummated.
Section 6.2 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of
Buyer to effect the Closing are subject to the satisfaction or waiver prior to
the Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of (i) the representations and
warranties of Seller contained in this Agreement (other than the representations
and warranties contained in Sections 3.1, 3.2, 3.3, 3.6, and 3.9(i)) shall be
true and correct as of the date hereof and as of the Closing as if made on and
as of the Closing Date (except for such representations and warranties that are
made as of a specific date, which shall speak only as of such date), except for
any failures of such representations and warranties to be true and correct that
are not, individually or in the aggregate, reasonably likely to have a Business
Material Adverse Effect, (ii) each of the representations and warranties of
Seller contained in Sections 3.1, 3.2, 3.3 and 3.6 shall be true and correct in
all material respects as of the date hereof and as of the Closing as if made on
and as of the Closing Date (except for such representations and warranties that
are made as of a specific date, which shall speak only as of such date) and
(iii) the representations and warranties of Seller contained in Section 3.9(i)
shall be true and correct as of the date hereof and as of the Closing as if made
on and as of the Closing Date.
(b) COVENANTS. Each of the covenants and agreements of Seller to be
performed on or prior to the Closing shall have been duly performed in all
material respects.
(c) CERTIFICATE. Buyer shall have received a certificate, signed by a duly
authorized executive officer of Seller and dated the Closing Date, to the effect
that the conditions set forth in Sections 6.2(a) and 6.2(b) have been satisfied.
(d) ANCILLARY AGREEMENTS AND STOCKHOLDER'S AGREEMENT. Seller shall have
executed and delivered the Stockholder's Agreement. Seller and its Affiliates
shall have executed and delivered the Ancillary Agreements to which they are a
party.
(e) NO BUYER ADVERSE CONDITION. No Government Entity of competent
jurisdiction shall have instituted any civil, criminal or administrative action,
suit, claim, hearing, investigation or other proceeding that, individually or in
the aggregate, is reasonably likely to, in the good faith judgment of Buyer,
result in a Buyer Adverse Condition. None of the approvals, consents,
clearances, notices, reports and other filings made or obtained as contemplated
by Section 6.1(a) shall provide for, contain or require a Buyer Adverse
Condition.
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(f) THIRD-PARTY CONSENTS AND APPROVALS. The consents and approvals of third
parties set forth on Schedule 6.2(f) shall have been obtained.
(g) NO BUSINESS MATERIAL ADVERSE EFFECT. Since the date hereof, the
Business shall not have experienced any event or condition that, individually or
in the aggregate, has had or is reasonably likely to have, a Business Material
Adverse Effect.
(h) FINANCING. The lenders party to the Financing Commitments shall have
provided to Buyer the financing contemplated to be provided thereunder or Buyer
shall otherwise have obtained alternative financing necessary to consummate the
transactions contemplated hereby.
(i) AUDITED FINANCIAL STATEMENTS. The Audited Financial Statements shall
have been prepared and delivered, together with one or more audit reports
(including an unqualified audit opinion) of one or more firms of independent
certified public accountants which shall be registered with the U.S. Public
Company Accounting Oversight Board.
Section 6.3 CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations of
Seller to effect the Closing are subject to the satisfaction or waiver prior to
the Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of (i) the representations and
warranties of Buyer contained in this Agreement (other than the representations
and warranties contained in Sections 4.1, 4.2, 4.3(b), 4.6 and 4.9) shall be
true and correct as of the date hereof and as of the Closing as if made on and
as of the Closing Date (except for such representations and warranties that are
made as of a specific date, which shall speak only as of such date), except for
any failures of such representations and warranties to be true and correct that
are not, individually or in the aggregate, reasonably likely to have a Buyer
Material Adverse Effect, (ii) each of the representations and warranties of
Buyer contained Sections 4.1, 4.2, 4.3(b) and 4.6 shall be true and correct in
all material respects as of the date hereof and as of the Closing as if made on
and as of the Closing Date (except for such representations and warranties that
are made as of a specific date, which shall speak only as of such date) and
(iii) the representations and warranties of Buyer contained in Section 4.9 shall
be true and correct as of the date hereof and as of the Closing Date as if made
on and as of the Closing Date.
(b) COVENANTS. Each of the covenants and agreements of Buyer to be
performed on or prior to the Closing shall have been duly performed in all
material respects.
(c) CERTIFICATE. Seller shall have received a certificate, signed by a duly
authorized executive officer of Buyer and dated the Closing Date, to the effect
that the conditions set forth in Sections 6.3(a) and 6.3(b) have been satisfied.
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(d) ANCILLARY AGREEMENTS AND STOCKHOLDER'S AGREEMENT. Buyer shall have
executed and delivered the Stockholder's Agreement. Buyer and each of its
Affiliates party to an Ancillary Agreement shall have executed and delivered the
Ancillary Agreements to which they are a party.
(e) NO BUYER MATERIAL ADVERSE EFFECT. Since the date hereof, Buyer and its
Affiliates, taken as a whole, shall not have experienced any event or condition
that, individually or in the aggregate, has had or is reasonably likely to have,
a Buyer Material Adverse Effect.
(f) NYSE LISTING. All newly issued Purchase Price Shares deliverable to
Seller at the Closing shall have been authorized for listing on the NYSE,
subject to official notice of issuance.
ARTICLE VII
SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 SURVIVAL. The representations and warranties contained in this
Agreement shall survive the Closing for the period set forth in this Section
7.1. All representations and warranties contained in this Agreement and all
claims with respect thereto shall terminate upon the eighteen (18) month
anniversary of the Closing Date, except that (a) the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.6, 4.1, 4.2, and 4.6 shall
survive indefinitely, (b) the representations and warranties contained in
Section 3.12 shall survive until the expiration of the applicable statute of
limitations, (c) the representations and warranties contained in Section 3.13
shall survive until the seventh anniversary of the Closing Date, (d) the
representations and warranties contained in Sections 3.14 and 3.15 shall survive
until the thirty (30) month anniversary of the Closing Date, and (e) the
representations and warranties contained in Sections 4.3, 4.4, 4.5, 4.7, 4.8,
4.9, 4.10, 4.11, 4.12, 4.13 and 4.14 shall not survive the Closing; IT BEING
UNDERSTOOD THAT in the event notice of any claim for indemnification under
Section 7.2(a) or Section 7.4 hereof, other than a notice of any claim with
respect to a breach of the representations and warranties contained in Section
3.13, has been given (within the meaning of Section 9.1) within the applicable
survival period, the representations and warranties that are the subject of such
indemnification claim shall survive with respect to such claim until such time
as such claim is finally resolved.
Section 7.2 INDEMNIFICATION BY SELLER. (a) Subject to Section 7.6, Seller
hereby agrees that from and after the Closing it shall indemnify, defend and
hold harmless Buyer, its Affiliates (including the Transferred Subsidiaries),
and their respective directors, officers, attorneys, accountants, agents,
representatives and employees and their heirs, successors and permitted assigns,
each in their capacity as such (the "BUYER INDEMNIFIED PARTIES") from, against
and in respect of any damages, losses, charges, Liabilities, diminutions in
value, claims, demands, actions, suits, proceedings, payments, judgments,
settlements, assessments, deficiencies, Taxes, interest, penalties, costs,
expenses (including removal costs, remediation costs, closure costs, fines,
penalties and expenses of investigations and ongoing monitoring, reasonable
attorneys' fees and reasonable out of pocket disbursements) (collectively,
"LOSSES") imposed on, sustained, incurred or suffered by, or asserted against,
any of the Buyer Indemnified Parties, in respect of claims, demands or suits (by
any Person) directly or indirectly relating to or arising out of (i) any actual
or alleged (by a third party) breach of any representation or warranty made by
Seller contained in this Agreement (other than the representations and
warranties contained in Section 3.13 for which separate and excusive provision
is made in Section 7.3) for the period such representation or warranty survives,
PROVIDED that for purposes of this Section 7.2(a) any qualifications as to
materiality or Business Material Adverse Effect or other similar materiality
qualifications (including any reference to any material interference with the
continued operation of the Business) included in such representation or warranty
shall be disregarded for purposes of determining whether such representation or
warranty was breached; PROVIDED, HOWEVER, that no Buyer Indemnified Party shall
be entitled to indemnification hereunder if, on the date of this Agreement,
Buyer had Knowledge of the facts that give rise to claimed breach of any
representation or warranty with respect to which such Buyer Indemnified Party is
seeking indemnification hereunder; (ii) any breach of any covenant or agreement
of Seller contained in this Agreement; (iii) any of the Retained Liabilities or
Excluded Liabilities; or (iv) any Liabilities alleged by a third party to exist
that would, if finally determined to exist, be Retained Liabilities or Excluded
Liabilities.
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(b) Seller shall not be liable to the Buyer Indemnified Parties for any
Losses with respect to the matters contained in Section 7.2(a)(i) (other than
any breach of any representation or warranty made by Seller contained in Section
3.1, 3.2, 3.3, or 3.6, the Losses with respect to which shall not be subject to
the limitations set forth in this Section 7.2(b), or any breach of the
representations and warranties made by Seller contained in Section 3.7(g), the
Losses with respect to which shall be subject only to the limitations set forth
in Section 7.2(c)), unless the Losses therefrom exceed an aggregate amount equal
to (euro)15,000,000 (the "DEDUCTIBLE"), in which case Seller shall be liable
only for any such Losses in excess of the Deductible, up to an aggregate amount
of Losses with respect to all such matters for which Seller shall be liable
equal to (euro)300,000,000 (the "CAP"). Seller shall not be liable for and, for
purposes of calculating Buyer's satisfaction of the Deductible and Buyer's
utilization of the Cap, Losses with respect to a breach of any representation or
warranty made by Seller shall not include, any individual Loss with respect to
such matters totaling less than (euro)100,000; PROVIDED that for purposes of the
foregoing, any series of related Losses shall be considered an individual Loss.
(c) Seller shall not be liable to the Buyer Indemnified Parties to the
extent of any Losses imposed on, sustained, incurred or suffered by, or asserted
against, any of the Buyer Indemnified Parties, in respect of claims, demands or
suits (by any Person) directly or indirectly relating to or arising out of any
actual or alleged (by a third party) breach of any representation or warranty
made by Seller contained in Section 3.7(g) that exceed (euro)350,000,000. The
aggregate amount of any such Losses shall be included for purposes of (i)
calculating Buyer's utilization of the Environmental Cap and (ii) to the extent
of the amount of any such Losses for which the Buyer Indemnified Parties are
otherwise entitled to indemnification hereunder that exceeds the Environmental
Cap, calculating Buyer's utilization of the Cap.
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(d) Notwithstanding anything else in this Article VII, Seller shall not be
liable to the Buyer Indemnified Parties under Section 7.2(a)(i) or Section 7.3
for Losses that exceed (euro)450,000,000 in the aggregate.
Section 7.3 INDEMNIFICATION BY SELLER FOR ENVIRONMENTAL DAMAGES. (a)
Subject to Section 7.6, Seller hereby agrees that from and after the Closing it
shall indemnify, defend and hold harmless the Buyer Indemnified Parties from,
against and in respect of any Environmental Damages imposed on, sustained,
incurred or suffered by, or asserted against, any of the Buyer Indemnified
Parties, (i) in respect of claims, demands or suits (by any Person) directly or
indirectly relating to or arising out of any actual or alleged (by a third
party) breach of any representation or warranty made by Seller contained in
Section 3.13 of this Agreement for the period such representation or warranty
survives; and (ii) in respect of claims for Environmental Damages presented
during the Environmental Indemnity Claim Period; PROVIDED, HOWEVER, that any
Buyer Indemnified Party indemnification shall be reduced to the extent any
Environmental Damages are caused by Buyer's failure to take commercially
reasonable measures to mitigate any Environmental Damages for which it seeks
indemnification hereunder; and PROVIDED FURTHER that the Buyer Indemnified
Parties shall not be entitled to indemnification hereunder (i) with respect to
any Environmental Damages that arise out of or relate to Known Conditions, or
(ii) if on the date of this Agreement, Buyer had Knowledge of facts that would
reasonably likely breach any representation or warranty for which such Buyer
Indemnified Party is seeking indemnification hereunder.
(b) Seller shall not be liable to the Buyer Indemnified Parties for any
Environmental Damages with respect to the matters contained in Section 7.3(a),
unless the Environmental Damages exceed an aggregate amount equal to
(euro)5,000,000 (the "ENVIRONMENTAL DEDUCTIBLE"), in which case Seller shall be
liable only for the portion of any such Environmental Damages for which the
Buyer Indemnified Parties are otherwise entitled to indemnification hereunder in
excess of the Environmental Deductible in accordance with Seller's Environmental
Damages Percentage Allocation applicable to each such claim for Environmental
Damages determined under Section 7.3(c) below for any such Environmental Damages
in excess of the Environmental Deductible, up to an aggregate amount of
Environmental Damages with respect to all such matters for which Seller shall be
liable equal to (euro)150,000,000 (the "ENVIRONMENTAL CAP"). Seller shall not be
liable for and, for purposes of calculating Buyer's satisfaction of the
Environmental Deductible and Buyer's utilization of the Environmental Cap,
indemnifiable Environmental Damages shall not include, any individual
Environmental Damage totaling less than (euro)100,000; PROVIDED that for
purposes of the foregoing, any series of related Environmental Damages shalL be
considered an individual Environmental Damage.
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(c) For purposes of this Agreement, Seller shall be liable to the Buyer
Indemnified Parties only for the percentage portion of any otherwise
indemnifiable Environmental Damages equal to Seller's percentage allocation as
set out below determined by the year in which a notice of the claim is presented
in accordance with the procedures in Section 7.5 (the "SELLER'S ENVIRONMENTAL
DAMAGES PERCENTAGE ALLOCATION") and Buyer shall be liable to the Seller
Indemnified Parties only for the percentage portion of any otherwise
indemnifiable Environmental Damages equal to Buyer's percentage allocation as
set out below determined by the year in which a notice of the claim is presented
in accordance with the procedures in Section 7.5 (the "BUYER'S ENVIRONMENTAL
DAMAGES PERCENTAGE Allocation"):
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YEAR FOLLOWING CLOSING SELLER'S PERCENTAGE BUYER'S PERCENTAGE
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1 90 10
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2 90 10
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3 80 20
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4 70 30
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5 60 40
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6 50 50
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7 40 60
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Post-Survival (8 and thereafter) Zero 100
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(d) Prior to the exhaustion of the Environmental Deductible, Buyer will
provide a summary of the claims and costs taken into account by Buyer in its
assessment of the matters that should be counted against the Environmental
Deductible, together with sufficient information to substantiate Buyer's
position that such claims and costs would otherwise qualify as indemnifiable
Environmental Damages under this Section 7.3. Buyer and Seller shall make good
faith efforts to reach agreement with respect to the claims and costs asserted
against the Environmental Deductible, so that both parties can assess and seek
agreement on when the Environmental Deductible has been exhausted. In the event
that Buyer has a claim for Environmental Damages following the exhaustion of the
Environmental Deductible, Buyer will provide written notice to Seller of the
claim, providing as much detail as to cost, scope and the basis thereof as is
then available, within 30 days of receiving information that gives rise to the
claim; provided, however, that the failure to timely give notice of the claim
shall affect the rights of Seller hereunder only to the extent that such failure
has a prejudicial effect on the defenses or other rights available to Seller
with respect to the claim. Buyer shall continue to supplement this initial
written notice by providing further detail on the cost, scope and basis for the
claim to Seller as it becomes available, in order to enhance the ability of
Seller and Buyer to assess whether the claim presents indemnifiable
Environmental Damages under this Section 7.3. Upon receipt of such notice,
Seller shall indicate in writing, within 30 days, whether it accepts tender of
the claim, or whether it disputes the claim. If Seller does not dispute the
claim or upon dispute of the claim, is found to be responsible for the
Environmental Damages, and if such claim is presented to Seller by the Buyer
Indemnified Parties prior to the fifth anniversary of the Closing Date (the
"SELLER MANAGEMENT PERIOD"), Seller shall have the option, but not the
obligation, to assume the management of any investigation, remediation activity
or any other activity that is the subject of the claim for Environmental
Damages. If Seller disputes the tender of the claim, Buyer shall assume
management of the remediation activity. In the event that the Seller disputes
the claim for Environmental Damages, it shall set out in detail in writing the
reasons for the dispute and also describe in reasonable detail the basis for its
refusal to accept the tender of the claim. Buyer and Seller shall consult and
cooperate with respect to the protection of any confidential or privileged
information shared in connection with these activities. Any internal costs
incurred by any party with respect to any of these activities or procedures set
forth in this Section 7.3 shall not qualify as Environmental Damages for
purposes of this Agreement. The parties will endeavor to resolve any dispute of
a claim for Environmental Damages amicably within 90 days of the date upon which
Buyer makes the claim.
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(e) In the event that Seller elects to assume the management of any
activities that are the subject of a claim for Environmental Damages that was
presented during the Seller Management Period, then Seller's management of such
activities shall be conducted in accordance with the procedures set out in
Section 7.3(h) below. In the event that Seller does not elect to assume the
management of any activities that are the subject of a claim for Environmental
Damages that was presented during the Seller Management Period, then Buyer shall
assume the management of any such activities and shall manage such activities in
accordance with the procedures set out in Section 7.3(h) below. At any time
after submission of an initial notice of claim during the Seller Management
Period, during the time period prior to Seller's decision regarding either
acceptance or management of the claim, Buyer shall manage the activities that
are the subject of the claim in accordance with the procedures set out in
Section 7.3(h) below. In addition, Buyer shall have the obligation to assume the
management of any activities that are the subject of a claim for Environmental
Damages, where such claim is presented by Buyer Indemnified Parties during years
6 or 7 after Closing (the "BUYER MANAGEMENT PERIOD"), and shall manage such
activities in accordance with the procedures set out in Section 7.3(h) below.
(f) The Buyer Indemnified Parties agree to provide reasonable access to
Seller and its representatives, agents and contractors to any of the Owned Real
Properties or the Leased Real Properties, facilities, structures or equipment in
order to enable Seller and its representatives, agents and contractors to (i)
undertake and manage any activities or conditions that are the subject of a
claim for Environmental Damages for which Seller has assumed the management
obligation pursuant to Section 7.3(d) above, or (ii) inspect, audit or assess
any activities or conditions that are the subject of a claim for Environmental
Damages for which Buyer has assumed the management obligation pursuant to
Section 7.3(f) above. In addition, the parties agree to cooperate in good faith
with each other with respect to the implementation and completion of all such
activities and to execute such documents, notices, consents and recordations as
may be necessary to enable the implementation and completion of such activities
in accordance with the terms of this Agreement.
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(g) Whichever party assumes the management of any activities or conditions
that are the subject of a claim for Environmental Damages, pursuant to Section
7.3(f) above, the management of any investigation, remediation activity or other
activity that is the subject of a claim for indemnification for Environmental
Damages shall, for purposes of this subsection (h) be referred to as the
"MANAGING PARTY" and the party that has not assumed that management
responsibility shall be referred to as the "NON-MANAGING PARTY." With respect to
all such activities for which indemnification is sought, both the Managing Party
and the Non-Managing Party shall comply with each of the procedures set out in
this section. The Managing Party shall consult with the Non-Managing Party in
advance of developing, selecting, proposing and implementing any investigations
or remedial measures or other actions or alternatives, preparing and issuing any
documents, attending any meetings or hearings or taking any step or action in
relation to the relevant activities, to the extent that such documents,
meetings, consultations, actions and activities would reasonably be expected to
impact the development, assessment, cost, scope, choice and timing of the
Remediation Activity or of any other activities for which indemnification is
sought or the operation of the Owned or Leased Properties (hereinafter referred
to as "SIGNIFICANT REMEDIATION OR COMPLIANCE ACTIVITY"). The Managing Party
shall provide the Non-Managing Party with reasonable notice of and a reasonable
opportunity to attend any consultations with consultants or third parties,
meetings or hearings or the carrying out of any Significant Remediation or
Compliance Activity (including the opportunity to take split samples). The
Managing Party shall provide the Non-Managing Party with any and all documents
or information relating to any Significant Remediation or Compliance Activity
and, at the Non-Managing Party's request, any document concerning any
indemnified matter or any information related to any activities or costs needed
to evaluate a claim for Environmental Damages. The Managing Party and
Non-Managing Party shall consult and cooperate with respect to the protection of
any confidential or privileged information shared in connection with these
activities. The Non-Managing Party shall have the right to review in advance and
comment on the scope of such investigation or remedial work or any other work
for which it may share costs under this Section 7.3. The Managing Party shall
consider in good faith and implement all reasonable comments on, and
modifications to, such investigation or remedial work or any other work proposed
by the Non-Managing Party. The Managing Party shall provide the Non-Managing
Party with a reasonable opportunity to audit costs. The Managing Party shall
provide the Non-Managing Party in advance with all information documenting any
proposed remedial, investigative or compliance activities to be undertaken. Any
Remediation Activity shall employ the most cost-effective,
commercially-reasonable measures that are either (a) reasonably required to
comply with Environmental Laws or pursuant to the request or the demand of any
Government Entity; (b) undertaken in a good faith belief that they are
reasonably necessary to prevent a pending or threatened enforcement action or
investigation by any Government Entity or an imminent and substantial threat to
human health or the environment, including employee safety. Any Remediation
Activity shall be conducted in a manner that minimizes interference with the
operation of the business. Such measures may include, where appropriate, natural
attenuation, long-term monitoring, deed restrictions, institutional controls and
caps. Any Significant Remediation or Compliance Activity to be undertaken by the
Managing Party shall be subject to the prior approval of the Non-Managing Party,
with such approval not to be unreasonably withheld. In the event that the
Non-Managing Party determines to refuse to grant such approval, the Non-Managing
Party shall set out in detail in writing the reasons for the non-approval and
also describe in reasonable detail the alternative course of action proposed to
be taken and its justification. The Managing Party shall provide the
Non-Managing Party with copies of all correspondence and reports prepared in
connection with any remedial, investigative or compliance activities. The
Managing Party and the Non-Managing Party shall consult and cooperate with
respect to the protection of any confidential or privileged information shared
in connection with these activities. Any internal costs incurred by any party
with respect to any of these activities or procedures shall not qualify as
Environmental Damages for purposes of this Agreement.
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(h) Notwithstanding the foregoing provisions of this Section 7.3, Seller
shall have no indemnification obligation with respect to any Environmental
Damages to the extent that such Environmental Damages would not have arisen but
for any intrusive investigation or disclosure to a third party by any Buyer
Indemnified Party, unless (i) such intrusive investigation or disclosure was
reasonably required by Environmental Law or any other applicable Law; (ii) the
discovery of the relevant condition was inadvertent, and the purpose of such
investigation was not to identify the condition for purposes of developing a
claim for indemnification under this Agreement; (iii) the investigation or
disclosure was reasonably necessary to respond to a request or demand by any
Government Entity; (iv) the investigation or disclosure was undertaken in a good
faith belief that such measures were reasonably necessary to prevent a
threatened enforcement action or investigation by any Government Entity or an
imminent and substantial threat to human health or the environment, including
employee safety; or (v) the condition was inadvertently discovered or disclosed
in connection with any repair, maintenance, operations or construction activity
not undertaken in a manner to allow a claim for indemnification to be developed
under this Agreement at or adjacent to any facility.
(i) Notwithstanding the foregoing provisions of this Section 7.3, Seller
shall have no indemnification obligation with respect to any Environmental
Damages to the extent that such Environmental Damages would not have arisen but
for (i) any change in use after Closing, to a use other than chemical or
industrial manufacturing, which change subjects the property or operations to
more stringent cleanup requirements than would apply absent such change, or (ii)
any permanent cessation of manufacturing operations or other closure at a site
other than the San ▇▇▇▇▇▇▇▇, Spain site after the Closing, and only to the
extent that such Environmental Damages were incurred as a result of a written
notice or claim to Buyer from a Government Entity or third party indicating that
such site is required to be investigated, cleaned up or remediated under any
Environmental Law.
(j) Subject to the other limitations set out in this Section 7.3, any
Pre-Closing Environmental Condition that does not does not require any
Remediation Activity as of the Closing but following the Closing requires any
Remediation Activity due to a change in a Hazardous Substances regulatory
classification or a change in a regulatory classification of a substance as a
Hazardous Substance or a change in a remedial standard relating to any
Environmental Law after the Closing during the Environmental Indemnity Period
shall nevertheless be covered by the indemnity provisions and procedures set out
in this Section 7.3.
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(k) The indemnification provisions contained in this Section 7.3 shall
constitute the sole and exclusive recourse and remedy of the Buyer Indemnified
Parties for any Environmental Damages, for any breach of any representation or
warranty under Section 3.13, or for any other Losses of any sort whatsoever
arising under or related to any Environmental Law or to the presence or release
of any Hazardous Substances at the Owned Real Property, the Leased Real Property
or any other real property.
Section 7.4 INDEMNIFICATION BY BUYER. Buyer hereby agrees that from and
after the Closing it shall indemnify, defend and hold harmless Seller, its
Affiliates, and their respective directors, officers, attorneys, accountants,
agents, representatives and employees and their heirs, successors and permitted
assigns, each in their capacity as such (the "SELLER INDEMNIFIED PARTIES" and,
collectively with the Buyer Indemnified Parties, the "INDEMNIFIED PARTIES")
from, against and in respect of any Losses imposed on, sustained, incurred or
suffered by, or asserted against, any of Seller Indemnified Parties, whether in
respect of third party claims, claims between the parties hereto, or otherwise,
directly or indirectly relating to, arising out of or resulting from, (i) any
breach of any representation or warranty made by Buyer contained in this
Agreement for the period such representation or warranty survives, PROVIDED that
for purposes of this Section 7.4 any qualifications as to materiality or Buyer
Material Adverse Effect included in such representation or warranty shall be
disregarded for purposes of determining whether such representation or warranty
was breached; PROVIDED, HOWEVER, that no Seller Indemnified Party shall be
entitled to indemnification hereunder if, on the date of this Agreement, Seller
had Knowledge of the claimed breach of any representation or warranty with
respect to which such Seller Indemnified Party is seeking indemnification
hereunder; (ii) any breach of a covenant or agreement of Buyer contained in this
Agreement; or (iii) any of the Assumed Liabilities and any Liabilities of the
Transferred Subsidiaries that are not Retained Liabilities.
Section 7.5 THIRD PARTY CLAIM INDEMNIFICATION PROCEDURES. (a) In the event
that any written claim or demand for which an indemnifying party (an
"INDEMNIFYING PARTY") may have liability to any Indemnified Party hereunder,
other than those relating to Taxes (which are the subject of Section 5.6), or
Environmental Damages (which are the subject of Section 7.3), is asserted
against or sought to be collected from any Indemnified Party by a third party (a
"THIRD PARTY CLAIM"), such Indemnified Party shall promptly, but in no event
more than ten Business Days following such Indemnified Party's receipt of a
Third Party Claim, notify the Indemnifying Party in writing of such Third Party
Claim, the amount or the estimated amount of damages sought thereunder to the
extent then ascertainable (which estimate shall not be conclusive of the final
amount of such Third Party Claim), any other remedy sought thereunder, any
relevant time constraints relating thereto and, to the extent practicable, any
other material details pertaining thereto (a "CLAIM NOTICE"); PROVIDED, HOWEVER,
that the failure timely to give a Claim Notice shall affect the rights of an
Indemnified Party hereunder only to the extent that such failure has a
prejudicial effect on the defenses or other rights available to the Indemnifying
Party with respect to such Third Party Claim. The Indemnifying Party shall have
30 days (or such lesser number of days set forth in the Claim Notice as may be
required by court proceeding in the event of a litigated matter) after receipt
of the Claim Notice (the "NOTICE PERIOD") to notify the Indemnified Party that
it desires to defend the Indemnified Party against such Third Party Claim.
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(b) In the event that the Indemnifying Party notifies the Indemnified Party
within the Notice Period that it desires to defend the Indemnified Party against
a Third Party Claim, the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings and shall have the sole power to
direct and control such defense, with counsel reasonably satisfactory to the
Indemnified Party, at its expense. Once the Indemnifying Party has duly assumed
the defense of a Third Party Claim, the Indemnified Party shall have the right,
but not the obligation, to participate in any such defense and to employ
separate counsel of its choosing. The Indemnified Party shall participate in any
such defense at its expense unless (i) the Indemnifying Party and the
Indemnified Party are both named parties to the proceedings and the Indemnified
Party shall have reasonably concluded that representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them, or (ii) the Indemnified Party assumes the defense of a
Third Party Claim after the Indemnifying Party has failed to diligently pursue a
Third Party Claim it has assumed, as provided in the first sentence of Section
7.5(c). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party, settle, compromise or offer to settle or compromise any
Third Party Claim on a basis that would result in (i) the imposition of a order,
writ, injunction or decree that would restrict the future activity or conduct of
the Indemnified Party or any of its Affiliates, (ii) a finding or admission of a
violation of Law or violation of the rights of any Person by the Indemnified
Party or any of its Affiliates, (iii) a finding or admission that would have an
adverse effect on other claims made or threatened against the Indemnified Party
or any of its Affiliates, or (iv) any monetary Liability of the Indemnified
Party that will not be promptly paid or reimbursed by the Indemnifying Party.
(c) If the Indemnifying Party (i) elects not to defend the Indemnified
Party against a Third Party Claim, whether by not giving the Indemnified Party
timely notice of its desire to so defend or otherwise, (ii) is not entitled to
defend the Third Party Claim as a result of the Indemnified Party's election to
defend the Third Party Claim as provided in Section 7.5(b), or (iii) after
assuming the defense of a Third Party Claim, fails to take reasonable steps
necessary to defend diligently such Third Party Claim within ten Business Days
after receiving written notice from the Indemnified Party to the effect that the
Indemnifying Party has so failed, the Indemnified Party shall have the right but
not the obligation to assume its own defense; IT BEING UNDERSTOOD THAT the
Indemnified Party's right to indemnification for a Third Party Claim shall not
be adversely affected by assuming the defense of such Third Party Claim. The
Indemnified Party shall not settle a Third Party Claim without the consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
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(d) The Indemnified Party and the Indemnifying Party shall cooperate in
order to ensure the proper and adequate defense of a Third Party Claim,
including, to the extent permitted by Law, by providing access to each other's
relevant business records and other documents, and employees in accordance with
Section 5.1; IT BEING UNDERSTOOD THAT the costs and expenses of the Indemnified
Party relating thereto shall be Losses. The Indemnified Party and the
Indemnifying Party shall use reasonable best efforts to avoid production of
confidential or competitively sensitive information (consistent with applicable
Law), and to cause all communications among employees, counsel and others
representing any party to a Third Party Claim to be made so as to preserve any
applicable attorney-client or work-product privileges.
Section 7.6 CALCULATION OF DAMAGES. The parties hereto acknowledge that
Losses and Environmental Damages shall not include consequential, special,
incidental, indirect, punitive or exemplary damages, including lost profits,
unless, and then only to the extent, such damages (a) arise out of or result
from the willful or intentional breach of this Agreement by the Indemnifying
Party or any common law fraud by the Indemnifying Party or (b) are actually paid
by the Indemnified Party to a third party in respect of a Third Party Claim.
Section 7.7 ADJUSTMENTS TO LOSSES.
(a) TAXES. In calculating the amount of any Loss or Environmental Damage,
there shall be deducted an amount equal to any net Tax benefit actually realized
as a result of such Loss by the party or its Affiliates claiming such Loss or
Environmental Damage, and there shall be added an amount equal to any Tax
imposed on the receipt of any indemnity payment with respect thereto. The net
Tax benefit determined under this Section 7.7(a) shall be limited to the Tax
benefits actually realized in the year the Loss is incurred by the Indemnified
Party and in the two (2) subsequent years, and the amount of the net Tax benefit
shall be determined by using a Tax rate of 37%.
(b) INSURANCE PROCEEDS. In calculating the amount of any Loss or
Environmental Damage, there shall be deducted any insurance proceeds actually
received by the Indemnified Party from an unaffiliated insurance carrier
offsetting the amount of such Loss or Environmental Damage, net of any expenses
(including increases in current and future insurance premiums) incurred by the
Indemnified Party in obtaining such insurance proceeds; PROVIDED that Buyer
shall not be required to seek any insurance proceeds in connection with any Loss
or Environmental Damage. If an Indemnified Party recovers an amount from an
insurance carrier in respect of a Loss or Environmental Damage that is the
subject of indemnification hereunder after all or a portion of such Loss or
Environmental Damage has been paid by an Indemnifying Party pursuant to this
Article VII, the Indemnified Party shall promptly remit to the Indemnifying
Party the excess (if any) of (i) the amount paid by the Indemnifying Party in
respect of such Loss or Environmental Damage, plus the amount received from the
insurance carrier in respect thereof (net of any expenses incurred by the
Indemnified Party in obtaining such amount), less (ii) the full amount of such
Loss or Environmental Damage.
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(c) REIMBURSEMENT. In calculating the amount of any Loss or Environmental
Damage, there shall be deducted any reimbursement actually received by the
Indemnified Party from any third party offsetting the amount of such Loss or
Environmental Damage, net of any expenses incurred by the Indemnified Party in
obtaining such reimbursement; PROVIDED that Buyer shall not be required to seek
any reimbursement from any third party in connection with any Loss or
Environmental Damage. If an Indemnified Party recovers an amount from a third
party in respect of a Loss or Environmental Damage that is the subject of
indemnification hereunder after all or a portion of such Loss or Environmental
Damage has been paid by an Indemnifying Party pursuant to this Article VII, the
Indemnified Party shall promptly remit to the Indemnifying Party the excess (if
any) of (i) the amount paid by the Indemnifying Party in respect of such Loss or
Environmental Damage, plus the amount received from the third party in respect
thereof (net of any expenses incurred by the Indemnified Party in obtaining such
amount), less (ii) the full amount of such Loss or Environmental Damage.
Section 7.8 PAYMENTS. The Indemnifying Party shall pay all amounts payable
pursuant to this Article VII, by wire transfer of immediately available funds,
promptly following receipt from an Indemnified Party of a ▇▇▇▇, together with
all accompanying reasonably detailed back-up documentation, for a Loss or
Environmental Damage that is the subject of indemnification hereunder, unless
the Indemnifying Party in good faith disputes the Loss or Environmental Damage,
in which event it shall so promptly notify the Indemnified Party. In any event,
the Indemnifying Party shall pay to the Indemnified Party, by wire transfer of
immediately available funds, the amount of any Loss or Environmental Damage for
which it is liable hereunder no later than three days following any final
determination of such Loss or Environmental Damage and the Indemnifying Party's
liability therefor. A "final determination" shall exist when (a) the parties to
the dispute have reached an agreement in writing or (b) an arbitration or like
panel constituted in accordance with Section 9.8 shall have rendered a final
non-appealable determination with respect to disputes the parties have agreed to
submit thereto. Notwithstanding anything to the contrary in this Article VII, if
it is finally determined that an Indemnified Party is not entitled to
indemnification in connection with any claim made pursuant to this Article VII,
such Indemnified Party shall reimburse the Indemnifying Party promptly for any
amounts previously paid to such Indemnified Party by the Indemnifying Party in
connection with such claim pursuant to this Article VII.
Section 7.9 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. All payments made
by an Indemnifying Party to an Indemnified Party in respect of any claim
pursuant to Section 7.2 or 7.4 hereof shall be treated as adjustments to the
Purchase Price for Tax purposes.
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Section 7.10 REMEDIES. The rights and remedies of Seller and Buyer under
this Article VII are exclusive and in lieu of any and all other rights and
remedies which Seller and Buyer may have after the Closing under this Agreement
or otherwise against each other with respect to the transactions contemplated
hereby for monetary relief with respect to (a) any breach of any representation
or warranty or any failure to perform any covenant or agreement set forth in
this Agreement, other than those which are intentional or willful and other than
in respect of any common law fraud, and (b) the Assumed Liabilities, the
Retained Liabilities, the Excluded Liabilities or any other Liabilities of the
Transferred Subsidiaries, and Buyer and Seller each expressly waives, any and
all other rights or causes of action it or its Affiliates may have against the
other party or its Affiliates now or in the future under any Law with respect to
the subject matter hereof.
Section 7.11 TAX MATTERS. Notwithstanding anything to the contrary under
this Article VII, indemnification for any Taxes or matter regarding Taxes shall
be governed solely under Section 5.6.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing:
Section 16.2
(a) by written agreement of Buyer and Seller;
(b) by either Buyer or Seller, by giving written notice of such termination
to the other party, if the Closing shall not have occurred on or prior to the
date which is six (6) months after the date hereof so long as the terminating
party is not in material breach of its obligations under this Agreement;
PROVIDED that neither party may terminate this Agreement prior to the date which
is nine (9) months after the date hereof if any Government Antitrust Entity in
the United States, the EU or any other jurisdiction in which Other Antitrust
Approvals are required has not completed its review of the transactions
contemplated hereby by such date;
(c) by Buyer, by giving five (5) days written notice of such termination to
Seller, so long as Buyer is not in material breach of its obligations under this
Agreement, if there shall have occurred any breach of a representation or
warranty of Seller which shall have resulted in the condition set forth in
Section 6.2(a) becoming incapable of satisfaction;
(d) by Seller, by giving five (5) days written notice of such termination
to Buyer, so long as Seller is not in material breach of its obligations under
this Agreement, if there shall have occurred any breach of a representation or
warranty of Buyer which shall have resulted in the condition set forth in
Section 6.3(a) becoming incapable of satisfaction;
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(e) by either Buyer or Seller, by giving written notice of such termination
to the other party, if Buyer and/or Seller shall have received an Order from any
Government Antitrust Entity in the United States or the EU, which Order shall be
or have become final and non-appealable, preventing or prohibiting the
consummation of the transactions contemplated hereby;
(f) by Seller or Buyer, by giving written notice of such termination to the
other party, if Buyer shall have given Seller notice in accordance with Section
5.15 that Buyer has determined (i) that it will not, as of the Closing, be able
to obtain the financing contemplated by the Financing Commitments and (ii) that
Buyer will not obtain alternative financing necessary to consummate the
transactions contemplated hereby as of the Closing, rendering the condition in
Section 6.2(h) incapable of satisfaction; and
(g) by Seller at any time if Buyer shall have entered into a definitive
written agreement with respect to, or otherwise consummated, a Change of Control
Transaction.
Section 8.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement in accordance with Section 8.1, this Agreement shall thereafter become
void and have no effect, and no party hereto shall have any liability to the
other party hereto or their respective Affiliates, or their respective
directors, officers or employees, except for the obligations of the parties
hereto contained in this Section 8.2 and in Sections 5.2, 8.3, 9.1, 9.5, 9.6 and
9.8 (and any related definitional provisions set forth in Article I), and except
that nothing in this Section 8.2 shall relieve any party from liability for any
willful or intentional breach of this Agreement.
Section 8.3 TERMINATION FEE. (a) Buyer shall pay Seller a termination fee
(the "TERMINATION FEE") in the amount of (euro)45,000,000 in the event that this
Agreement is terminated:
(i) by Buyer or Seller pursuant to Section 8.1(f) unless, at the time
of such termination, either (A) the condition contained in Section 6.2(g)
shall not have been satisfied or (B) the notice given in accordance with
Section 5.15 indicates that the reason for the failure to obtain financing
is the occurrence of a Buyer Material Adverse Effect, without giving effect
to clause (D) of the definition thereof, resulting from the occurrence of a
Force Majeure Event;
(ii) by Buyer or Seller pursuant to Section 8.1(b) if at the time of
such termination the condition contained in Section 6.2(h) shall not have
been satisfied and all other conditions in Section 6.1 and Section 6.2
shall have been satisfied or waived (other than those conditions that by
their nature are to be satisfied at the Closing) unless the reason for the
failure of Section 6.2(h) to be satisfied is the occurrence of a Buyer
Material Adverse Effect resulting, without giving effect to clause (D) of
the definition thereof, from the occurrence of a Force Majeure Event;
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(iii) by Seller pursuant to Section 8.1(g).
Buyer shall pay the Termination Fee within five Business Days of any
termination described in clauses (i) through (iv) above in immediately available
funds by wire transfer to an account designated by Seller.
(b) If Buyer fails to pay the Termination Fee within the time period
specified in subsection (a), Buyer shall pay such Termination Fee together with
interest on the Termination Fee from the date payment was due under subsection
(a) to, but not including, the date of actual payment at LIBOR calculated on a
365-day basis. If, in order to obtain such payment, Seller commences an action
that results in judgment against Buyer (or its successor), Buyer (or its
successor) shall pay Seller the costs and expenses (including reasonable
attorneys' and expert witness fees) incurred in connection with such action,
together with interest on the amounts owed (including the Termination Fee) from
the date payment was due under subsection (a) to, but not including, the date of
actual payment at LIBOR calculated on a 365-day basis.
ARTICLE IX
MISCELLANEOUS
Section 9.1 NOTICES. All notices and communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or delivered by registered or
certified mail, return receipt requested, or if sent by telecopier or email,
PROVIDED that the telecopy or email is promptly confirmed by telephone
confirmation thereof, to the Person at the address set forth below, or such
other address as may be designated in writing hereafter, in the same manner, by
such Person:
To Buyer:
Cytec Industries, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Secretary
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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To Seller:
UCB ▇▇
▇▇▇▇▇ de la ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇▇
Telecopy: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇-▇▇▇▇▇.▇▇▇
Attn: Group General Counsel
With a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇ ▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Telephone: + ▇▇ ▇ ▇▇▇ ▇▇▇▇
Telecopy: + 32 2 231 1661
Email: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Section 9.2 AMENDMENT; WAIVER. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer and Seller, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law except as
otherwise specifically provided in Article VII hereof.
Section 9.3 NO ASSIGNMENT OR BENEFIT TO THIRD PARTIES. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, legal representatives and permitted assigns. No party to
this Agreement may assign any of its rights or delegate any of its obligations
under this Agreement, by operation of Law or otherwise, without the prior
written consent of the other party hereto, except that notwithstanding anything
to the contrary set forth in this Agreement, Buyer may assign any and all of its
rights, in whole or in part, under this Agreement or any Ancillary Agreement to
(a) one or more of Buyer's wholly owned subsidiaries or (b) to any other Person
in connection with such Person's purchase of all or any part of the Business
from Buyer or any of its Affiliates, including any such purchase in connection
with Buyer's satisfaction of its obligations under Section 5.5, provided that,
in each case, no such assignment shall relieve Buyer of any of its obligations
hereunder. Buyer and its Affiliates (including the Transferred Subsidiaries) may
assign or sublicense, in whole or in part, any license Seller or any of its
Affiliates (other than the Transferred Subsidiaries) grants to Buyer or any of
its Affiliates (including the Transferred Subsidiaries) pursuant to this
Agreement or any Ancillary Agreement to any Person in connection with such
Person's purchase of all or any part of the Business from Buyer or any of its
Affiliates, including any such purchase in connection with Buyer's satisfaction
of its obligations under Section 5.5, provided that no such assignment or
sublicense shall relieve Buyer of any of its obligations hereunder. Nothing in
this Agreement, express or implied, is intended to confer upon any Person other
than Buyer, Seller, the Indemnified Parties and their respective successors,
legal representatives and permitted assigns, any rights or remedies under or by
reason of this Agreement.
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Section 9.4 ENTIRE AGREEMENT. This Agreement (including all Schedules and
Exhibits hereto), the Stockholder's Agreement, the joint defense agreement,
dated as of July 28, 2004, between Buyer and Seller and their respective outside
counsel, and the Ancillary Agreements contain the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters. In the event of any conflict between this Agreement and any
agreement, instrument or other document relating to the Pre-Signing
Restructuring Transactions or the Post-Signing Restructuring Transactions, this
Agreement shall prevail.
Section 9.5 PUBLIC DISCLOSURE. Notwithstanding anything to the contrary
contained herein, except as may be required to comply with the requirements of
any applicable Law and the rules and regulations of any stock exchange upon
which the securities of one of the parties is listed, or in relation to any
filing or submission with respect to any civil, criminal, legislative or
administrative action, suit, demand, claim, hearing, proceeding or
investigation, from and after the date hereof, no press release or similar
public announcement or communication shall be made or caused to be made relating
to this Agreement, the Ancillary Agreements or the Stockholder's Agreement
unless specifically approved in advance by both parties hereto. In the event
that Buyer has issued a press release or made a similar public announcement or
communication in reliance upon the exception in the preceding sentence, Seller
shall be permitted to make a similar press release or public announcement. Prior
to the Closing, Buyer may announce the execution of any agreement, contract,
arrangement or commitment, whether oral or written, with respect to the
disposition of any of the assets of the Transferred Subsidiaries and/or any
Transferred Assets pursuant to any Law or any policy, practice, procedure or
direction of any Government Entity and any information reasonably related
thereto subject to the consent of Seller (such consent not to be unreasonably
withheld).
Section 9.6 EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
costs and expenses.
Section 9.7 BULK SALES. Seller and Buyer agree to waive compliance with
Article 6 of the Uniform Commercial Code as adopted in each of the jurisdictions
in which any of the Transferred Assets are located to the extent that such
Article is applicable to the transactions contemplated hereby.
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Section 9.8 GOVERNING LAW; ARBITRATION. (a) THE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(b) In the event of any dispute, controversy or claim arising out of or in
connection with this Agreement or any of the Ancillary Agreements (each, a
"DISPUTE"), the parties shall use their reasonable efforts to resolve such
Dispute within a period of ninety (90) calendar days, commencing from either
party's receipt of a notice from the other party indicating the existence of a
Dispute (a "NOTICE"). In the event any such Dispute is not so resolved within
ninety (90) calendar days after receipt of a Notice, either Buyer or Seller may
refer such Dispute to be resolved by final and binding arbitration under the
Rules of Arbitration (the "RULES") of the International Chamber of Commerce (the
"ICC"). The Rules are deemed to be incorporated by reference into this clause.
The party desiring to commence an arbitration shall provide a written request
(an "ARBITRATION REQUEST") to the other party (the "RESPONDENT") and to the ICC
in accordance with the Rules. The number of arbitrators shall be three (3) (such
arbitrators, collectively, the "ARBITRAL TRIBUNAL"). Each of Seller and Buyer
shall nominate one arbitrator and send written notice of that nomination to the
other party within such time period. In the event that either party fails to
nominate its arbitrator or send written notice of that nomination to the other
party within such time period, the ICC shall instead nominate that arbitrator
within thirty (30) calendar days after receipt of a written notice from either
party indicating the other party's failure to comply with the foregoing
provision. Within thirty (30) calendar days after their confirmation, the first
two arbitrators shall nominate the third arbitrator, who shall serve as the
Chairperson of the Arbitral Tribunal. If the first two arbitrators fail to
nominate the third arbitrator within such time period, the third arbitrator
shall be nominated by the ICC and shall serve as the Chairperson of the Arbitral
Tribunal.
(c) The seat, or legal place, of arbitration shall be London, England. The
language to be used in all arbitral proceedings shall be English. All
arbitrators shall be fluent in the English language and their award shall be
rendered in English. The English language shall be used in all documents,
briefs, evidence, and any other writings submitted to the Arbitral Tribunal.
Each party may make reasonable requests for relevant documents from the other
party prior to any evidentiary hearing in the arbitration. Any Dispute shall be
resolved in accordance with the substantive laws of the State of New York
without regard to principles of conflicts of law. The Arbitral Tribunal shall
have no authority to make any ruling, finding or award that does not conform to
the terms and conditions of the relevant agreement(s). Any such award shall be
made in Euro.
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Section 9.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
Section 9.10 HEADINGS. The heading references herein and the table of
contents hereof are for convenience purposes only, and shall not be deemed to
limit or affect any of the provisions hereof.
Section 9.11 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.12 RELEASE OF OBLIGATIONS. (a) At the Closing, Seller shall, on
behalf of itself and its Affiliates, execute and deliver to Buyer, for the
benefit of the Transferred Subsidiaries, a general release and discharge, in
form and substance reasonably satisfactory to Buyer, releasing and discharging
the Transferred Subsidiaries from any and all Liabilities to Seller or any of
its Affiliates (other than the Transferred Subsidiaries), except to the extent
such Liabilities are expressly contemplated to be retained by the Transferred
Subsidiaries pursuant to this Agreement, including Liabilities that arise in the
Ordinary Course that are expressly contemplated to be retained by the
Transferred Subsidiaries pursuant to this Agreement and including Liabilities
under the agreements described on Schedule 5.17, as such agreements have been
amended as of the date hereof, or any of the Ancillary Agreements or except to
the extent such Liabilities are contemplated to be retained by or have been
assumed by any of the Transferred Subsidiaries pursuant to any agreement,
instrument or other document relating to the Pre-Signing Restructuring
Transactions or the Post-Signing Restructuring Transactions if, and only if,
such retention or assumption is consistent with the terms of this Agreement.
(b) Except for contracts set forth in Schedule 5.17, all Contracts between
Seller or any of its Affiliates (other than the Transferred Subsidiaries) on the
one hand, and any Transferred Subsidiary, on the other hand, shall be terminated
immediately before the Closing without any penalty or obligation.
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
UCB SA
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Group Controller
CYTEC INDUSTRIES, INC.
By: \s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President