PURCHASE, SALE AND
TERMINATION OF INTERESTS AGREEMENT
BY
AND
BETWEEN
BEKAERT CORPORATION ("SELLER"),
N.V. BEKAERT S.A. ("NVB"),
AND
ENERGY CONVERSION DEVICES, INC. ("BUYER")
DATED: MAY 14, 2003
TABLE OF CONTENTS
Section 1. PURCHASE AND SALE OF OWNERSHIP INTERESTS .........................1
1.1 PURCHASE AND SALE OF ▇▇▇▇ INTEREST 1
1.2 PURCHASE AND SALE OF USSC INTEREST 2
1.3 PURCHASE AND SALE OF MEXICO SHARE 2
1.4 ASSIGNMENT 2
1.5 PURCHASE PRICE 2
1.6 ESCROW ACCOUNT 2
Section 2. RELEASE OF LIABILITIES OF NVB; ASSUMPTION OF LIABILITY;
RETAINED LIABILITY ...............................................3
2.1 RELEASED LIABILITIES 3
2.2 WRITTEN RELEASES; LETTERS OF CREDIT 3
2.3 ASSUMPTION BY SELLER OF OBLIGATION TO CANON UNDER THE ECD NOTE 5
2.4 RETAINED LIABILITIES 6
Section 3. ASSIGNMENT OF INTEREST AND ASSUMPTION OF OBLIGATIONS
IN AGREEMENT .....................................................6
3.1 LIMITED LIABILITY COMPANY AGREEMENT 6
3.2 RELEASE OF SELLER 6
Section 4. TRANSACTION DOCUMENTS; AMENDMENTS AND TERMINATIONS; RELEASE ......6
4.1 DOCUMENTS 6
4.2 DRAW DOWN; DISCHARGE ECD/▇▇▇▇ NOTE 8
4.3 MUTUAL RELEASES 8
Section 5 REPRESENTATIONS AND WARRANTIES OF SELLER .........................9
5.1 ORGANIZATION; AUTHORIZATION 9
5.2 GOVERNMENTAL AUTHORITIES; CONSENTS 9
5.3 TITLE; BENEFICIAL OWNERSHIP OF USSC INTEREST 10
5.4 TITLE; BENEFICIAL OWNERSHIP OF ▇▇▇▇ INTEREST 10
5.5 ABSENCE OF LIENS ON USS DE MEXICO SHARE 10
5.6 SELLER/▇▇▇▇ NOTE 10
5.7 FINDERS FEES 10
5.8 LITIGATION 11
5.9 INVESTIGATION; DISCLOSURES. 11
Section 6 REPRESENTATIONS AND WARRANTIES OF BUYER .........................12
6.1 ORGANIZATION; AUTHORIZATION 12
6.2 GOVERNMENTAL AUTHORITIES; CONSENTS 13
6.3 INVESTMENT 13
6.4 FINDERS FEES 13
6.5 LITIGATION 13
6.6 ACCESS 14
6.7 DISCLOSURE 14
Section 7 ADDITIONAL COVENANTS ............................................14
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7.1 WAIVER OF RIGHT OF FIRST REFUSAL 14
7.2 CONSENT TO BUYER 15
7.3 ACCESS AND INVESTIGATION 15
7.4 PAYMENT OF THE SINVACO OBLIGATION; WARRANTY WORK; AND EQUIPMENT 15
7.5 PAYMENT OF THE BENG OBLIGATION 15
7.6 PAYMENT OF THE BCC OBLIGATION 15
7.7 CONSENTS OF THIRD PARTIES 15
7.8 RESIGNATIONS 15
7.9 NVB-USSC LICENSE AGREEMENT 16
7.10 NONCOMPETITION AGREEMENT 16
7.11 EMPLOYEES 16
7.12 ▇▇▇▇' CONSULTING AGREEMENT 17
7.13 PUBLIC ANNOUNCEMENTS 17
7.14 FURTHER ASSURANCES 17
7.15 EXPENSES 18
7.16 PERFORMANCE OF DEVELOPMENT WORK 18
7.17 CHANGE OF NAME 18
7.18 SATISFACTION OF CONDITIONS 19
7.19 TAX MATTERS 19
7.20 TRADE RECEIVABLES 21
7.21 GARANTIE D'ACHEVEMENT 21
7.22 INTENTIONALLY OMITTED 22
7.23 TRANSITION PERIOD 22
7.24 SEVERANCE 22
7.25 NONSOLICITATION 22
7.26 OPEN PURCHASE ORDERS; UNPAID INVOICES 22
Section 8 CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE ....................22
8.1 MUTUAL CONDITIONS TO OBLIGATIONS OF NVB, SELLER AND BUYER 22
8.2 CONDITIONS TO OBLIGATIONS OF BUYER 23
8.3 CONDITIONS TO OBLIGATIONS OF SELLER 23
Section 9 CLOSING .........................................................24
9.1 CLOSING 24
9.2 CLOSING OBLIGATIONS 24
Section 10 TERMINATION .....................................................27
10.1 EVENTS OF TERMINATION 27
10.2 EFFECT OF TERMINATION 27
Section 11 INDEMNIFICATION .................................................28
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES 28
11.2 INDEMNIFICATION BY BUYER 28
11.3 INDEMNIFICATION BY NVB AND SELLER 29
11.4 INDEMNIFICATION OF DIRECTORS AND OFFICERS 29
11.5 THIRD PARTY CLAIMS 30
Section 12 DEFINITIONS .....................................................31
12.1 DEFINITIONS 31
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Section 13 DISPUTE RESOLUTION ..............................................36
13.1 APPLICABILITY 36
13.2 PROCEDURE 37
13.3 SELECTION OF ARBITRATOR 37
13.4 CONDUCT OF ARBITRATION 37
Section 14 MISCELLANEOUS ...................................................38
14.1 NOTICES 38
14.2 BINDING EFFECT 39
14.3 HEADINGS 39
14.4 EXHIBITS AND SCHEDULES 39
14.5 COUNTERPARTS 39
14.6 NO WAIVER OF RIGHTS 39
14.7 PRONOUNS 39
14.8 TIME PERIODS 39
14.9 MODIFICATION OR AMENDMENT 40
14.10 ENTIRE AGREEMENT 40
14.11 NO ASSIGNMENT 40
14.12 SEVERABILITY 40
14.13 GOVERNING LAW 40
14.14 SURVIVAL 40
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PURCHASE, SALE AND TERMINATION OF INTERESTS AGREEMENT
-----------------------------------------------------
THIS PURCHASE, SALE AND TERMINATION OF INTERESTS AGREEMENT ("Agreement"),
dated as of this 14th day of May, 2003, is made between Bekaert Corporation
("Seller"), a Delaware corporation, with its offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, N.V. Bekaert S.A. ("NVB"), a Belgian corporation,
with its principal office at President ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
and Energy Conversion Devices, Inc. ("Buyer"), a Delaware corporation, with its
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Seller, NVB
and Buyer are sometimes referred to herein individually as a "Party" and
collectively as "Parties."
RECITALS:
--------
A. Seller and Buyer entered into a joint venture in April 2000, whereby
Seller purchased an interest in United Solar Systems Corp. ("USSC"), a Delaware
corporation, and USSC and Seller formed a Delaware limited liability company
known as Bekaert ECD Solar Systems LLC ("▇▇▇▇").
B. Buyer owns an 81% ownership interest and Seller owns a 19% ownership
interest in USSC.
C. Seller owns a 60% ownership interest and USSC owns a 40% ownership
interest in ▇▇▇▇.
▇. ▇▇▇▇ owns a 90% ownership interest and USSC owns a 10% ownership
interest in ▇▇▇▇ Europe; ▇▇▇▇ owns a 99.8% ownership interest in USS de Mexico,
and ▇▇▇ ▇▇▇▇▇▇▇ owns .1% and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ owns .1% of USS de Mexico; and
USSC owns a 60% ownership interest in Sky Solar.
E. Buyer desires to purchase the USSC Interest and the ▇▇▇▇ Interest from
Seller, and Seller desires to sell and transfer the USSC Interest and the ▇▇▇▇
Interest to Buyer, upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the promises and payments hereinafter
set forth, and for other good and valuable consideration, the mutual receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
1. PURCHASE AND SALE OF OWNERSHIP INTERESTS
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1.1. Purchase and Sale of ▇▇▇▇ Interest. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall sell, assign, transfer
and deliver to Buyer, and
Buyer shall purchase all of Seller's right, title and interest in
▇▇▇▇ representing a 60% Membership Interest in ▇▇▇▇ (the "▇▇▇▇
Interest") as of the Closing Date.
1.2. Purchase and Sale of USSC Interest. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall sell, transfer and
deliver to Buyer, and Buyer shall purchase all of Seller's right, title
and interest in USSC representing 19% of the issued and outstanding
shares of USSC (the "USSC Interest") as of the Closing Date. The ▇▇▇▇
Interest and the USSC Interest together hereinafter the "Interests."
1.3. Purchase and Sale of Mexico Share. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall, or shall cause, NVB's
representative to sell, transfer and deliver to Buyer, or its
designated party, and Buyer shall purchase all of such representative's
right, title and interest in USS de Mexico, representing 0.1% of the
issued and outstanding shares of USS de Mexico (the "USS de Mexico
Share") as of the Closing Date.
1.4. Assignment of Seller/▇▇▇▇ Note. At the Closing, Seller shall transfer
and assign to Buyer, without recourse, the Promissory Note dated
September 27, 2002, made by Seller in favor of ▇▇▇▇ in the principal
amount of Twelve Million Two Hundred Thousand US Dollars
(US $12,200,000) (the "Seller/▇▇▇▇ Note").
1.5. Purchase Price. The aggregate purchase price for the Interests, the
Seller/▇▇▇▇ Note and the USS de Mexico Share shall be as follows:
1.5.1. Buyer shall pay Seller the amount of Six Million US Dollars (US
$6,000,000), payable as follows:
1.5.1.1. At the Closing, Four Million US Dollars (US $4,000,000) in cash via
wire transfer to an account designated by Seller; and
1.5.1.2. At the Closing, Two Million US Dollars (US $2,000,000) deposited into
an escrow account pursuant to the Escrow Agreement (as described
below).
1.5.2. Buyer shall obtain the release of certain liabilities of NVB as more
fully set forth in Section 2.
1.6. Escrow Account. An escrow account shall be maintained for the funds set
forth in Section 1.5.1.2 with Citibank, N.A. ("Escrow Agent"). Buyer
and Seller shall enter into an escrow agreement with the Escrow Agent
(the "Escrow Agreement"). The Escrow Agreement will provide that,
subject to the occurrence of the Closing, the escrowed funds shall be
disbursed on December 22, 2003 to Seller. The costs and fees of the
Escrow Agent shall be borne equally between Seller and Buyer. Buyer
shall have the
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right to all interest earned on the escrowed funds during such period
from the Closing Date through December 22, 2003. The form of the
Escrow Agreement shall be as set forth in Exhibit 1.6 attached.
2. RELEASE OF LIABILITIES OF NVB; ASSUMPTION OF LIABILITY; RETAINED
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LIABILITY
---------
2.1 Released Liabilities. As part of its obligations under this
Agreement Buyer shall obtain the full and complete release of the
appropriate third party of NVB of the following liabilities of NVB
(the "Released Liabilities"):
2.1.1 As soon as possible after the Closing Date but no later than
August 31, 2003, NVB's guarantee of Canon, Inc. ("Canon")
under the Guaranty Agreement executed by NVB in favor of Canon
dated April 11, 2000, whereby NVB guaranteed Canon with regard
to the Fujilease, and the other written agreements applicable
to NVB related thereto (the "Canon Guaranty"); and
2.1.2 On or prior to the Closing Date, NVB's guarantee given to ABN
AMRO Bank N.V. ("ABN AMRO") under the several guarantee
executed by NVB in favor of ABN AMRO dated December 21, 2001
(the "ABN AMRO Several Guarantee"), with regard to the
Facility Letter dated December 24, 2001 (the "ABN AMRO
Facility Letter") for the grant by ABN AMRO to ▇▇▇▇ of a
facility available for the issuance of standby letters of
credit relating to the LaSalle National Leasing Corp.'s Master
Lease Agreement with ▇▇▇▇ dated December 21, 2001 (the
"LaSalle Lease"), and under the joint and several guarantee
executed by NVB and Buyer in favor of ABN AMRO dated March 7,
2003 (the "ABN AMRO Joint and Several Guaranty") with regard
to the ABN AMRO Facility Letter (collectively, the "ABN AMRO
Guarantees"); and
2.1.3 As soon as possible after the Closing Date but no later than
August 31, 2003, NVB's guaranty to Liberty 2001 Corp.
(believed to be assigned to 3800 Lapeer LLC), as landlord (the
"Landlord") under the Guaranty executed by NVB and Buyer in
favor of Landlord dated February 12, 2001, as amended on
February 15, 2002, with regard to the property located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ (the "Landlord Guaranty").
2.2 Written Releases; Letters of Credit.
2.2.1 On the Closing Date, ▇▇▇▇ shall purchase the equipment leased from
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LaSalle National Leasing under the LaSalle Lease, thereby
causing the termination of the LaSalle Lease, and the
termination and release of all security held to secure the
LaSalle Lease including, without limitation, the ABN AMRO
letters of credit. On the Closing Date, Buyer shall deliver to
NVB and Seller written evidence from ABN AMRO of its agreement
to fully and completely release NVB from the ABN AMRO
Guarantees, and upon payment on the Closing Date by ▇▇▇▇ to
LaSalle, ABN AMRO's agreement to sign and deliver the release
of the ABN AMRO Guarantees, in the identical form of release
attached hereto to Exhibit 2.2.1.
2.2.2 Buyer acknowledges and agrees that it must obtain the full and
complete release of the Canon Guaranty and Landlord Guaranty,
such releases to be in the form of Exhibit 2.2.2 or as
otherwise acceptable to Seller in its sole discretion. Buyer
cannot obtain such releases of the Canon Guaranty and the
Landlord Guaranty prior to the Closing Date. NVB and Seller
are willing to Close the transactions contemplated hereunder,
but do not waive Buyer's obligation to obtain such releases of
the Canon Guaranty and the Landlord Guaranty. Buyer shall
obtain the releases of the Canon Guaranty and Landlord
Guaranty as soon as possible after the Closing Date and in no
event later than August 31, 2003. Buyer confirms its continued
obligation to promptly obtain such releases, and as security
for its obligations to obtain such releases shall obtain and
deliver to NVB irrevocable, standby letters of credit in favor
of NVB issued by Standard Federal Bank or some other reputable
financial institution acceptable to NVB, in the full amount
due under the Canon Guaranty and the Landlord Guaranty
(collectively, the "Letters of Credit"). On or before August
31, 2003, Buyer shall also deliver to NVB the termination of
the Global IP Agreement as to NVB. NVB shall retain all rights
under the Note Guaranty, Canon Guaranty and Landlord Guaranty
including rights of subrogation contained therein or arising
thereunder.
2.2.3 If Buyer does not deliver the releases of the Canon Guaranty
and Landlord Guaranty by August 31, 2003, in accordance with
Section 2.2.2 above, then at any time thereafter, NVB may in
its sole discretion and without notice to Buyer, draw on the
Letters of Credit and use such funds to pay the underlying
debt secured by the Canon Guaranty and the Landlord Guaranty
and any applicable costs and expenses. Buyer shall fully
cooperate with NVB in obtaining such releases with the
applicable third parties.
2.2.4 At such time as the release of the Canon Guaranty is obtained and
delivered to NVB, NVB shall assign to Buyer its rights under the
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Amended and Restated Reimbursement and Security Agreement dated
April 11, 2000, by and among Canon, USSC, ▇▇▇▇ and NVB, and its
rights under the Amended and Restated Second Agreement for
Guarantee Fee dated April 11, 2000, by and among Canon, USSC and
NVB. The assignments shall be effectuated by the Assignment and
Assumption of Agreements in the form of Exhibit 2.2.4 attached
hereto.
2.3 Assumption by Seller of Obligation to Canon under the ECD Note.
In fulfillment of Seller's payment obligations under the
Subscription Agreement and ▇▇▇▇'▇ payment obligation under the
ECD/▇▇▇▇ License Agreement, and in partial consideration for Buyer's
obligations hereunder (including, without limitation, the delivery
of the releases pursuant to Section 4.3 hereof), and among other
things to minimize the continued disruption of its business
operations relating to its investments in ▇▇▇▇ and USSC, and to
protect its business reputation and goodwill, at the Closing Seller
shall assume all of Buyer's payment obligations under that certain
Promissory Note made by Buyer dated April 11, 2000 in the original
principal amount of Twelve Million US Dollars (US $12,000,000)
payable to Canon (the "ECD Note"). Buyer (on behalf of itself and on
behalf of ▇▇▇▇ and USSC), Seller and NVB each acknowledges and
agrees that the performance by Seller of Buyer's payment obligations
under the ECD Note as contemplated by this Section, shall be deemed
payment in full satisfaction of the Subscription Agreement and the
ECD/▇▇▇▇ License Agreement pursuant to the terms thereof, and
neither Seller nor Buyer shall have any right to receive any
additional interest in ▇▇▇▇ as a result of such payment. Without
limiting the generality of the foregoing, the Parties acknowledge
that their original intent in entering into the Subscription
Agreement was not to provide unrestricted funds or working capital
to ▇▇▇▇, but solely as a vehicle to pay the ECD/▇▇▇▇ License
Agreement and ultimately to pay the ECD Note. Notwithstanding such
intent or the termination of the Subscription Agreement pursuant to
this Agreement, and except as otherwise specifically provided in
this Section 2.3, Seller acknowledges and agrees that Seller's
obligation to make payments under the ECD Note is unconditional.
Subject specifically to the full, final, irrevocable and
indefeasible termination and deemed satisfaction of the Subscription
Agreement, Seller shall pay all amounts owing under the ECD Note
when due, without demand upon or recourse to Buyer or ▇▇▇▇. In no
event shall Seller's obligation to make payments under the ECD Note
be conditioned upon the performance by Buyer or ▇▇▇▇ of any
obligations under the Subscription Agreement or the ECD/▇▇▇▇ License
Agreement; provided, however, that Seller's obligation to make
payments under the ECD Note is subject to the full, final,
irrevocable and indefeasible termination and deemed satisfaction of
the Subscription Agreement. In no event shall Seller be required to
pay under both the ECD Note/Note Guaranty to Canon and the
Subscription Agreement to ▇▇▇▇. The foregoing shall be effectuated by
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the Assumption Agreement in the form of Exhibit 2.3 attached hereto.
2.4 Retained Liabilities. NVB shall retain the liability under the
Guaranty Agreement executed by NVB in favor of Canon dated April 11,
2000, whereby NVB guaranteed the ECD Note (the "Note Guaranty"),
which shall be satisfied in full by the payment in full to Canon as
provided in Section 2.3. As more fully set forth in the Termination
and Release Agreement, except for the Note Guaranty or as expressly
provided in this Agreement or in the Transaction Documents, after
the Closing, neither NVB, Seller nor any of their Affiliates shall
retain or be obligated to satisfy or perform any guaranty,
liability, obligation or commitment with regard to Buyer, USSC, ▇▇▇▇
or any of their Affiliates, of whatever nature, whether known or
unknown, fixed or contingent.
3. ASSIGNMENT OF INTEREST AND ASSUMPTION OF OBLIGATIONS IN AGREEMENT
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3.1 Limited Liability Company Agreement. At the Closing, Seller shall
assign to Buyer all of its rights under the Limited Liability
Company Agreement of ▇▇▇▇ dated April 11, 2000, between Seller and
USSC, as amended on April 15, 2002 (the "LLC Agreement"), and Buyer
shall assume all of Seller's obligations thereunder, and USSC shall
consent to such assignment and assumption. The foregoing assignment
and assumption shall be effectuated by an Assignment and Assumption
Agreement with respect to the LLC Agreement in the form of Exhibit
3.1 attached hereto ("LLC Assignment").
3.2 Release of Seller. Seller shall be released at the Closing from all
of its obligations under the LLC Agreement, and such agreement shall
be assumed from Seller by Buyer. The foregoing shall be effectuated
by the LLC Assignment.
4. DOCUMENTS; AMENDMENTS AND TERMINATIONS; RELEASE
-----------------------------------------------
4.1 Documents. NVB and Seller have entered into the following agreements
relating to Buyer, ▇▇▇▇, USSC and/or their Affiliates, which shall
be terminated, amended or assigned at the Closing, unless otherwise
provided in Section 2.2.2, as follows:
4.1.1 Foundation Agreement between Seller, Buyer and USSC, which
shall be terminated as of the Closing Date pursuant to the
Termination and Release Agreement;
4.1.2 LLC Agreement between Seller and USSC, which shall be assigned
by Seller to Buyer as provided in Section 3.1;
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4.1.3 Close Corporation Agreement between Seller, USSC and Buyer,
which shall be terminated as of the Closing Date pursuant to
the Termination and Release Agreement;
4.1.4 NVB-USSC License Agreement between NVB and USSC, which shall
be terminated and amended as provided in Section 7.9;
4.1.5 Employee Lease Agreement between Seller and ▇▇▇▇, which shall
be amended in accordance with Section 7.11.1;
4.1.6 Subscription Agreement between ▇▇▇▇, USSC and Seller, which
shall be terminated and deemed satisfied as of the Closing
Date pursuant to the Termination and Release Agreement;
4.1.7 Unification Agreement between Seller and USSC, which shall be
terminated as of the Closing Date pursuant to the Termination
and Release Agreement;
4.1.8 Noncompetition Agreement between Buyer, Seller and NVB, which
shall be amended and restated as provided in Section 7.10;
4.1.9 Additional Interest Agreement between Buyer, Seller and USSC,
which shall be terminated as of the Closing Date pursuant to
the Termination and Release Agreement;
4.1.10 Guaranty Agreement by NVB in favor of Canon (relating to the
ECD Note), which shall be retained by Seller as provided in
Section 2.4;
4.1.11 Canon Guaranty, from which Buyer shall obtain the release of
NVB by Canon as provided in Sections 2.1.1 and 2.2;
4.1.12 ABN AMRO Guarantees, from which Buyer shall obtain the release
of NVB by ABN AMRO as provided in Sections 2.1.2 and 2.2;
4.1.13 Global IP Agreement between USSC, NVB, Buyer and Canon, which shall
be terminated as to NVB as provided in Section 2.2.2;
4.1.14 Landlord Guaranty, from which Buyer shall obtain the release of
NVB by Landlord as provided in Sections 2.1.3 and 2.2;
4.1.15 Contribution Agreement between NVB, Buyer, Seller and USSC, dated
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December 21, 2001, which shall be terminated as of the
Closing Date pursuant to the Termination and Release Agreement;
4.1.16 The Agreements identified on Schedule 4.1.16 to be terminated
shall be terminated as of the Closing Date pursuant to the
Termination and Release Agreement; and
4.1.17 Except as otherwise provided in this Agreement and the
Transaction Documents, all other agreements, oral or written,
to which NVB, Seller or any of their Affiliates are a party
with regard to Buyer, ▇▇▇▇, USSC and/or any of their
Affiliates, shall be terminated as of the Closing Date
pursuant to the Termination and Release Agreement.
4.2 Draw Down; Discharge ECD/▇▇▇▇ Note.
4.2.1 Draw Down of Seller/▇▇▇▇ Note. At or prior to the Closing
Date, ▇▇▇▇ will fully draw down the remaining principal, if
any, of the Seller/▇▇▇▇ Note.
4.2.2 Intentionally Omitted.
4.2.3 Covenant of Buyer Regarding Discharge ECD/▇▇▇▇ Note. Buyer
hereby covenants with Seller that it will not, prior to or at
Closing, discharge or forgive any amounts under the Promissory
Note dated September 27, 2002, made by Buyer in favor of ▇▇▇▇
in the principal amount of Sixteen Million One Hundred
Thousand US Dollars (US $16,100,000) (the "ECD/▇▇▇▇ Note").
4.2.4 Intercreditor Agreement. At the Closing, Seller, Buyer, USSC
and ▇▇▇▇ shall terminate the Intercreditor Agreement dated
September 27, 2002, to which they are parties, as amended,
with regard to all obligations of such parties arising after
the Closing Date. The foregoing shall be effectuated by the
Termination and Release Agreement.
4.3 Mutual Releases. At the Closing, Buyer, ▇▇▇▇ and USSC, each on their
own behalf and on behalf of their Affiliates, on the one hand, and
NVB and Seller, each on their own behalf and on behalf of their
Affiliates, on the other hand, shall completely release each other
and their respective shareholders, directors, officers, employees,
consultants, agents and representatives, from any and all Claims,
known or unknown, in any way relating to or arising out of the
▇▇▇▇/USSC relationship, except as provided in the Termination and
Release Agreement. To effectuate the foregoing, at the Closing,
Buyer, ▇▇▇▇, USSC,
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NVB and Seller shall enter into a Termination and Release
Agreement in the form attached as Exhibit 4.3 hereto.
5. REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Buyer that the following statements
contained in this Section 5 are true, complete and correct:
5.1 Organization; Authorization. Seller is a corporation validly
existing and in good standing under the laws of the State of
Delaware. NVB is a corporation validly existing and in good standing
under the laws of Belgium. Each of Seller and NVB has all requisite
corporate power and authority to execute, deliver and perform this
Agreement and each Transaction Document to be executed and delivered
by or on behalf of it in connection herewith. The execution and
delivery of this Agreement and each Transaction Document to be
executed by Seller and NVB hereunder have been duly and validly
authorized and approved by Seller's and NVB's board of directors,
and no other corporate proceedings on the part of Seller or NVB are
necessary to authorize the execution and delivery by Seller or NVB,
as the case may be, of this Agreement and the Transaction Documents.
This Agreement and each Transaction Document executed and delivered
by Seller or NVB, as the case may be, pursuant to this Agreement
(assuming the valid execution and delivery thereof by the parties
thereto) constitutes, or when executed and delivered will
constitute, legal, valid and binding obligations of Seller or NVB,
as the case may be, enforceable in accordance with their terms.
5.2 Governmental Authorities; Consents. Except as set forth on Schedule
5.2, neither Seller nor NVB is required to submit any notice, report
or other filing with any Governmental Authority in connection with
Seller's execution, delivery or performance of this Agreement or any
Transaction Document to be executed and delivered by Seller or NVB
in connection herewith and the consummation of the transaction
contemplated hereby, and such execution, delivery and performance:
(a) will not violate any Law by which Seller or NVB is bound, or any
agreement to which Seller or NVB is a party, (b) will not violate
any provision of the Certificate of Incorporation or the By-Laws of
Seller, or the Articles of Association or By-Laws of NVB, and (c)
will not result in a breach or violation of, or constitute a default
under, or give rise to a right of any party to accelerate, modify or
terminate, any contract, agreement, instrument or indenture to which
Seller or NVB is a party. Except as set forth on Schedule 5.2, no
consent, approval or authorization of any Governmental Authority or
any other Person is required to be obtained by Seller or NVB in
connection with Seller or NVB's execution, delivery and performance
of this Agreement or any Transaction
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Document to be executed and delivered by Seller or NVB in
connection herewith.
5.3 Title; Beneficial Ownership of USSC Interest. Seller owns
beneficially and of record the USSC Interest free and clear of any
Liens arising by or through Seller. Without limiting the foregoing,
except as provided in this Agreement, neither Seller nor its
Affiliates has transferred or otherwise disposed of or agreed to
transfer or otherwise dispose of, either directly or indirectly, the
USSC Interest or any portion thereof. Upon consummation of the
transactions contemplated hereby, Buyer will acquire good, valid,
legal and marketable title to the USSC Interest free and clear of
any Liens arising by or through Seller. The USSC Interest
constitutes all of the ownership interests of Seller and its
Affiliates in USSC. The USSC Interest represents 19% of the issued
and outstanding shares of USSC.
5.4 Title; Beneficial Ownership of ▇▇▇▇ Interest. Seller owns
beneficially and of record the ▇▇▇▇ Interest free and clear of any
Liens arising by or through Seller. Without limiting the foregoing,
except as provided in this Agreement, neither Seller nor its
Affiliates has transferred or otherwise disposed of or agreed to
transfer or otherwise dispose of, either directly or indirectly, the
▇▇▇▇ Interest or any portion thereof. Upon consummation of the
transactions contemplated hereby, Buyer will acquire good, valid,
legal and marketable title to the ▇▇▇▇ Interest free and clear of
any Liens arising by or through Seller. The ▇▇▇▇ Interest
constitutes all of the ownership interests of Seller and its
Affiliates in ▇▇▇▇. The ▇▇▇▇ Interest represents a 60% Membership
Interest in ▇▇▇▇.
5.5 Absence of Liens on USS de Mexico Share. Neither Seller, NVB nor its
representatives, have taken any direct action to place a Lien on the
USS de Mexico Share. Without limiting the foregoing, except as
provided in this Agreement, neither Seller, NVB nor their respective
representatives has directly transferred or otherwise disposed of or
agreed to transfer or dispose of the USS de Mexico Share. The USS de
Mexico Share constitutes all of the ownership interests of Seller,
NVB or their respective representatives in USS de Mexico.
5.6 Seller/▇▇▇▇ Note. Seller has not pledged the Seller/▇▇▇▇ Note to
any third party.
5.7 Finders Fees. Except for ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., there is no
investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Seller who
might be entitled to any fee or commission from Seller upon
consummation of the transactions contemplated by this Agreement.
Seller and/or NVB shall pay all fees and expenses owed to ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
10
5.8 Litigation. There are no judicial or administrative actions,
proceedings or investigations pending or, to the knowledge of
Seller, threatened against Seller or its Affiliates which question
the validity of this Agreement, the Transaction Documents or any
action taken or to be taken by Seller or its Affiliates in
connection herewith, or that, individually or in the aggregate,
would prevent, enjoin or delay the performance by the Seller or its
Affiliates, as applicable, of this Agreement or any other
Transaction Document. None of the Seller or its Affiliates is
subject to any judgment that could reasonably be expected to
prevent, enjoin or delay materially the performance by the Seller or
its Affiliates, as applicable, of this Agreement or any other
Transaction Document.
5.9 Investigation; Disclosures.
5.9.1 Buyer hereby acknowledges and agrees that neither Seller nor
NVB has made or hereby makes, and each such Party specifically
negates and disclaims, any representation, warranty, promise,
covenant, agreement, and guaranty of any kind and character
whatsoever, whether express or implied, oral or written, past,
present or future, of, as to, concerning, or with respect to
the nature, quality, and condition (financial or otherwise) of
USSC, ▇▇▇▇, and their Affiliates, including without limitation
as to the Know-How Cross-License Agreement, the Patent
Cross-License Agreement and the Global IP Agreement, except as
(and solely to the extent) specifically set forth in this
Section 5. Buyer hereby acknowledges and agrees that in each
case it (i) has made its own inquiry and investigation into,
and, based thereon, has formed an independent judgment
concerning USSC, ▇▇▇▇ and their Affiliates; (ii) has been
furnished with or given adequate access to such information
concerning USSC, ▇▇▇▇, and their Affiliates, as it has
requested; and (iii) shall not assert any claim against NVB,
Seller or any of their Affiliates and any of their respective
shareholders, members, managers, directors, officers,
consultants, employees, agents, stockholders, or
representatives or hold NVB, Seller or any such Affiliate
liable for any inaccuracy, misstatement, or omission with
respect to information furnished by NVB, Seller or any such
Affiliate concerning USSC, ▇▇▇▇, and their Affiliates, except
the representations and warranties of Seller contained in this
Section.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT RELATING TO
USSC, ▇▇▇▇ AND THEIR AFFILIATES, SELLER AND NVB HEREBY
DISCLAIM ANY AND ALL REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS, AND GUARANTEES OF ANY KIND AND
11
CHARACTER WHATSOEVER REGARDING THE MARKETABILITY AND
PROFITABILITY OF, AND THE QUALITY OF TITLE TO, THE ASSETS OF
USSC, ▇▇▇▇ AND THEIR AFFILIATES. BUYER FURTHER ACKNOWLEDGES
AND AGREES THAT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AND
EXCEPT AS (AND SOLELY TO THE EXTENT) EXPRESSLY SET FORTH IN
THIS SECTION 5 TO THE CONTRARY, THE SALE, CONVEYANCE,
ASSIGNMENT, AND TRANSFER OF THE ▇▇▇▇ INTEREST, THE USSC
INTEREST AND THE USS DE MEXICO SHARE, AND THE UNDERLYING
ASSETS, OF USSC AND ▇▇▇▇, AND THEIR AFFILIATES, ARE MADE ON AN
"AS IS, WHERE IS, WITH ALL FAULTS" CONDITION AND BASIS. In
furtherance of the foregoing, Buyer hereby waives and
releases, to the fullest extent permitted by applicable Law,
any and all other rights, claims and causes of action
(including rights of contributions, if any) known or unknown,
foreseen or unforeseen, which exist or may arise in the
future, that it may have against NVB, Seller and/or their
Affiliates arising under or based upon any Law, judicial
decision or the common law (including any such Law or judicial
decision relating to environmental matters or arising under or
based upon any securities law, common law or otherwise) in
respect of the subject matter of this Agreement and the
Transaction Documents, provided, however, that in no event
shall this Section be construed to be a release of NVB, Seller
and/or their Affiliates for any express covenants or
obligations made or incurred by NVB and Seller in this
Agreement or in any of the Transaction Documents or for fraud
of NVB, Seller and/or their Affiliates.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller that the following statements
contained in this Section 6 are true, complete and correct:
6.1 Organization; Authorization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite corporate power and authority to
execute, deliver and perform this Agreement and each Transaction
Document to be executed and delivered by or on behalf of Buyer in
connection herewith. The execution and delivery of this Agreement
and each Transaction Document to be executed by Buyer hereunder have
been duly and validly authorized and approved by Buyer's board of
directors, and no other corporate proceedings on the part of Buyer
are necessary to authorize the execution and delivery by Buyer of
this Agreement and the Transaction Documents. This Agreement and
each Transaction Document
12
executed and delivered by Buyer pursuant to this Agreement
(assuming the valid execution and delivery thereof by the
other parties thereto) constitutes, or when executed and
delivered will constitute, legal, valid and binding obligations
of Buyer, enforceable in accordance with their terms.
6.2 Governmental Authorities; Consents. Except as set forth on Schedule
6.2, Buyer is not required to submit any notice, report or other
filing with any Governmental Authority in connection with Buyer's
execution, delivery or performance of this Agreement or any
Transaction Document to be executed and delivered by Buyer in
connection herewith and the consummation of the transaction
contemplated hereby, and such execution, delivery and performance:
(a) will not violate any Law by which Buyer is bound, or any
agreement to which Buyer is a party, (b) will not violate any
provision of the Certificate of Incorporation or the By-Laws of
Buyer, and (c) will not result in a breach or violation of, or
constitute a default under, or give rise to a right of any party to
accelerate, modify or terminate, any contract, agreement, instrument
or indenture to which Buyer is a party. Except as set forth on
Schedule 6.2, no consent, approval or authorization of any
Governmental Authority or any other Person is required to be
obtained by Buyer in connection with Buyer's execution, delivery and
performance of this Agreement or any Transaction Document to be
executed and delivered by Buyer in connection herewith.
6.3 Investment. Buyer (a) understands that the Interests have not been,
and will not be, registered under the Securities Act, or under any
state securities laws, and are being offered and sold in reliance
upon federal and state exemptions for transactions not involving any
public offering; (b) is acquiring the Interests solely for its own
account for investment purposes, not as a nominee or agent, and not
with a view to the distribution thereof; (c) is able to bear the
economic risk and lack of liquidity inherent in holding the
Interests; (d) is an Accredited Investor as defined in Rule 501 of
Regulation D of the Securities Act; and (e) is experienced in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Interests and is capable
of bearing the economic risk of such investment.
6.4 Finders Fees. Except for IAS Equities, Inc., there is no investment
banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Buyer or its Affiliates who
might be entitled to any fee or commission from Buyer or its
Affiliates upon consummation of the transactions contemplated by
this Agreement. Buyer shall pay all fees and expenses owed to IAS
Equities, Inc.
6.5 Litigation. There are no judicial or administrative actions,
proceedings or
13
investigations pending or, to the knowledge of Buyer, threatened,
against Buyer or its Affiliates, which question the validity of
this Agreement, the Transaction Documents or any action taken or
to be taken by Buyer or its Affiliates in connection herewith,
or that, individually or in the aggregate, would prevent,
enjoin or delay the performance by the Buyer or its Affiliates, as
applicable, of this Agreement or any other Transaction Document.
None of the Buyer or its Affiliates is subject to any judgment that
could reasonably be expected to prevent, enjoin or delay materially
the performance by the Buyer or its Affiliates, as applicable, of
this Agreement or any other Transaction Document.
6.6 Access. Buyer confirms that it currently owns 81% of USSC and USSC
owns 40% of ▇▇▇▇. Buyer acknowledges and agrees that it has full
access to ▇▇▇▇, USSC and their Affiliates, and has the ability to
ask questions to the officers and management employees of USSC, ▇▇▇▇
and their Affiliates, and to acquire such additional information
about USSC, ▇▇▇▇ and their Affiliates', business and financial
condition as Buyer has requested.
6.7 Disclosure. Buyer does not have knowledge of any material fact (not
known by the Seller's nominees on the ▇▇▇▇ Management Committee or
on the USSC Board of Directors or by NVB's chief executive officer
(collectively, the "Seller Knowledge Persons")) concerning:
(i) a third-party purchase of equity in USSC, ▇▇▇▇, USS de Mexico or
▇▇▇▇ Europe (collectively, the "Unisolar Entities") or the sale,
merger or license of all or a significant portion of their
respective businesses, where, as to any of the foregoing, the
proceeds would be payable, directly or indirectly, to ECD or its
Affiliates (excluding from such definition of "Affiliate" for
purposes of this Section, the Unisolar Entities); or
(ii) the future assets, business, prospects, financial condition or
results of operations of the Unisolar Entities,
that, in either case under (i) or (ii), would cause Seller not to
consummate the transactions contemplated hereunder. For purposes of
this Section, "known" or "knowledge" shall be defined, as to Buyer,
as the actual knowledge of any director or officer of Buyer or, as
to Seller, as the actual knowledge of the Seller Knowledge Persons.
7. ADDITIONAL COVENANTS
--------------------
7.1 Waiver of Right of First Refusal. At the Closing, Buyer shall cause
USSC to waive all of its rights of first refusal to the sale of the
▇▇▇▇ Interest under Article
14
VIII of the LLC Agreement, and Buyer shall cause ▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to waive all of their rights of first refusal
to the sale of the USS de Mexico Shares.
7.2 Consent to Buyer. At the Closing, Buyer shall cause USSC to consent
to the admission of Buyer as a member of ▇▇▇▇. Buyer and USSC shall
execute and deliver the consent to admission ("Consent"), in the
form of Exhibit 7.2 attached hereto.
7.3 Access and Investigation. Buyer hereby acknowledges and confirms
that it and its representatives have full and free access to USSC,
▇▇▇▇, and their Affiliates' properties, contracts, financials, books
and records and other documents and data.
7.4 Payment of the Sinvaco Obligation; Warranty Work; and Equipment.
On or prior to the Closing Date, Buyer shall pay in full, and
shall cause ▇▇▇▇ and USSC, and their Affiliates, to pay in full the
outstanding obligations of Buyer, ▇▇▇▇ and USSC, and their
Affiliates, as applicable, to Bekaert VDS NV (formerly known as,
Sinvaco) for the purchase of consumables (the "Sinvaco Obligation").
Bekaert VDS NV shall retain its obligation to provide warranty work
in relation to the Sinvaco Obligation and in relation to the back
reflector and ITO equipment from Sinvaco. As of the Closing Date,
the outstanding obligation of Buyer to pay Bekaert VDS NV for the
Sinvaco equipment will be released in the amount of Four Hundred Six
Thousand Five Hundred Sixty-one and 20/100 US Dollars (US
$406,561.20), and Bekaert VDS NV will be released from a chargeback
from Buyer in the amount of One Hundred Thousand US Dollars (US
$100,000).
7.5 Payment of the BENG Obligation. On or prior to the Closing Date,
Buyer shall cause Bekaert ECD Solar Systems Europe NV ("▇▇▇▇
Europe") to pay in full the outstanding obligation of ▇▇▇▇ Europe to
Bekaert Engineering, an unincorporated division of NVB, (the "BENG
Obligation").
7.6 Payment of the BCC Obligation. On or prior to the Closing Date,
Buyer shall cause ▇▇▇▇ Europe to pay in full the outstanding
obligation of ▇▇▇▇ Europe to Bekaert Coordinatiecentrum NV ("BCC")
(the "BCC Obligation").
7.7 Consents of Third Parties. On or prior to the Closing Date, each
Party shall use reasonable commercial efforts to obtain any third
party consents required for such Party to consummate the
transactions contemplated hereunder in accordance with the terms
hereof; provided, that Buyer shall be obligated to obtain the
releases under Section 2.
7.8 Resignations. At the Closing, Seller shall deliver the resignations
of Seller's
15
representatives serving on the Management Committee and/or Board
of Directors of ▇▇▇▇, USSC, ▇▇▇▇ Europe and USS de Mexico
effective as of the Closing Date.
7.9 NVB-USSC License Agreement. NVB and USSC entered into the NVB-United
Solar Systems Corp. License Agreement dated April 11, 2000 (the
"NVB-USSC License Agreement"). The NVB-USSC License Agreement shall
be amended to provide that the licenses granted by NVB thereunder
shall become non-exclusive from and after the Closing Date, and all
other terms and conditions of such agreement shall remain in full
force and effect. To effectuate the foregoing, the form of the
Amendment Regarding Termination to NVB-United Solar License
Agreement is attached as Exhibit 7.9 hereto, and shall be executed
at the Closing.
7.10 Noncompetition Agreement. Buyer, on the one hand, and NVB and
Seller, on the other, entered into a certain Noncompetition
Agreement dated April 11, 2000 (the "Noncompetition Agreement").
Buyer, NVB and Seller agree that notwithstanding any provisions to
the contrary contained in the Transaction Agreements, at and after
the Closing NVB and its Affiliates shall retain (subject to USSC's
right to use as provided in the NVB-USSC License Agreement, as
amended), the worldwide, exclusive, royalty-free and fully paid-up
right, including the right to sublicense, to make, use and sell
sputter hardware and consumables used therein for making
photovoltaic products other than triple-junction products, and all
other terms and conditions of the Noncompetition Agreement shall
remain the same. The Noncompetition Agreement shall be amended at
the Closing to reflect the foregoing, and the Amended and Restated
Noncompetition Agreement shall be in the form of Exhibit 7.10
attached hereto.
7.11 Employees.
7.11.1 At or prior to the Closing Date, Buyer shall cause ▇▇▇▇ to pay
in full the consideration for the leased employees under the
Employee Lease Agreement due and owing prior to the Closing Date.
At the Closing, the Employee Lease Agreement ("Employee Lease
Agreement") between Seller and ▇▇▇▇ dated April 11, 2000, shall
be amended to terminate effective on a mutually agreed upon date,
but in no event later than August 31, 2003 (the "Amendment to
Employee Lease Agreement"), in the form of Exhibit attached hereto.
From and after the Closing, Buyer shall cause ▇▇▇▇ to pay all amounts
due to Seller, for the services of the leased employees rendered
between the Closing Date and August 31, 2003 (the "Transition Period").
Such employees leased during the Transition Period will be listed on an
attachment to the Transition Period Agreement.
16
7.11.2 At or prior to the Closing Date, Buyer shall cause ▇▇▇▇ Europe
to pay in full the consideration for NVB's or its Affiliates', as
the case may be, employees working for ▇▇▇▇ Europe due and owing
prior to the Closing Date. From and after the Closing, Buyer
shall cause ▇▇▇▇ Europe to pay all amounts due to NVB and its
Affiliates, as the case may be, for the services of NVB or its
Affiliates' employees used by ▇▇▇▇ Europe during the Transition
Period. The terms of such use shall be set forth in the
Transition Period Agreement.
7.12 ▇▇▇▇' Consulting Agreement. At or prior to the Closing Date, Buyer
shall cause ▇▇▇▇ to pay in full ▇▇▇▇▇▇▇ ▇▇▇▇' living expense
allowance for his consulting services. As of the Closing, the
services of ▇▇▇▇▇▇▇ ▇▇▇▇ at ▇▇▇▇ and the Consulting Agreement
between ▇▇▇▇ and ▇▇▇▇ shall be amended effective the Closing Date to
provide that ▇▇▇▇ resigns as President of ▇▇▇▇ and will continue to
be available to ▇▇▇▇ only for a maximum of three (3) days per month
through August 31, 2003, and thereafter the Consulting Agreement
will terminate in full (the "Amendment to Consulting Agreement").
▇▇▇▇ shall notify ▇▇▇▇ prior to the first day of the month as to the
number of days it would like ▇▇▇▇' services during that month. Buyer
will cause ▇▇▇▇ to pay all travel, lodging and out-of-pocket
expenses of ▇▇▇▇ for services rendered between the Closing Date and
August 31, 2003. To effectuate the foregoing, the form of the
Amendment to Consulting Agreement attached as Exhibit 7.12 hereto
shall be executed at the Closing.
7.13 Public Announcements. Prior to December 31, 2003, any public
announcement, press release or similar publicity with respect to
this Agreement or the transactions contemplated hereby will be
issued, if at all, at such time and in such manner as the Parties
mutually agree. Prior to December 31, 2003, except with the prior
consent of the Parties, no Party nor any of their representatives
shall disclose to any Person any information about the transactions
contemplated under this Agreement or the Transaction Documents,
including the status of such discussions or negotiations, the
execution of any documents (including this Agreement) or any of the
terms of the transactions contemplated under this Agreement or the
Transaction Documents or this Agreement, except as may be required
under applicable Law; provided, that the Parties shall use
reasonable commercial efforts to consult with the other in advance
of any disclosure required by Law. Notwithstanding the foregoing,
Buyer shall be permitted to discuss the contemplated transaction
with third party financing sources on a need to know basis, provided
such third party agrees to be bound by the confidentiality
obligations set forth in this Section.
7.14 Further Assurances. The Parties shall cooperate reasonably with each
other Party
17
and with their respective representatives in connection with any
steps required to be taken as part of their respective obligations
under this Agreement and the Transaction Documents, and shall
(a) furnish upon request to each other such further information;
(b) execute and deliver to each other such other documents; and
(c) do such other acts and things, all as the other Parties may
reasonably request for the purpose of carrying out the intent of
this Agreement and the Transaction Documents, and the transactions
contemplated thereunder.
7.15 Expenses. Except as otherwise provided in this Agreement, each Party
shall bear its respective fees and expenses incurred in connection
with the preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated herein, including all
fees and expenses of its representatives.
7.16 Performance of Development Work. From and after the Closing Date,
subject to agreement of USSC and NVB, NVB may perform development
work for USSC and/or its Affiliates at terms and conditions to be
agreed upon by NVB and USSC; provided that such terms and conditions
will be based upon an arms' length transaction between unrelated
parties. Notwithstanding the foregoing, neither USSC nor NVB are
obligated to enter into a relationship with the other concerning
development work after the Closing.
7.17 Change of Name.
7.17.1 As soon as practical after the Closing Date but in no event
later than thirty (30) days thereafter, Buyer shall cause
▇▇▇▇, USSC and any of their Affiliates to amend their
governing documents, as the case may be, and take all other
actions necessary to change its name, trade name, trademark or
any other designation or ▇▇▇▇ to not include the name
"Bekaert" or any derivative thereof;
7.17.2 As soon as practical after the Closing Date but in no event
later than forty-five (45) days thereafter, Buyer shall cause
▇▇▇▇, USSC and any of their Affiliates to refrain from using
the name "Bekaert" or any derivative thereof in their
respective marketing materials including, without limitation,
all sales and marketing literature, brochures, pamphlets, and
similar matters; and
7.17.3 As soon as practical after the Closing Date but in no event
later than August 31, 2003, except as otherwise provided in
this Section, Buyer shall cause ▇▇▇▇, USSC and any of their
Affiliates to refrain from and cease using the name "Bekaert"
or any derivative thereof.
18
7.18 Satisfaction of Conditions. Without limiting the generality or
effect of any provision of Section 8, prior to the Closing Date,
each Party will use reasonable commercial efforts with due diligence
and in good faith to satisfy promptly all conditions required hereby
to be satisfied by it in order to consummate the transactions
contemplated hereby.
7.19 Tax Matters.
7.19.1 The Parties acknowledge that the ▇▇▇▇ Federal income Tax
partnership between Seller and USSC shall terminate effective
as of the Closing Date, and that a final Federal partnership
return will be required to be filed for such terminated Tax
partnership for the period January 1, 2003 through the Closing
Date (the "Final Federal Return").
7.19.2 Seller shall prepare or cause to be prepared, and USSC and/or
Buyer shall timely file or cause to be timely filed by the due
date or extension thereof, all Tax returns (including the
Final Federal Return) that are required to be filed for or with
respect to ▇▇▇▇ for all taxable periods ending on or prior to the
Closing Date which are filed after the Closing Date. Seller will
allow Buyer and USSC an opportunity to review and comment upon
any such Tax returns. Notwithstanding any other provision hereof,
Seller shall have the final and exclusive authority to determine
all reporting positions with respect to each such Tax return,
provided that such determination shall be made in good faith
and in accordance with the provisions of Section 7.19.4. Buyer
shall pay and/or reimburse Seller fifty percent (50%)of the
costs and fees incurred by Seller in connection with the
preparation of any such Tax returns.
7.19.3 Buyer and/or USSC shall prepare or cause to be prepared and file
or cause to be filed any Tax returns for or with respect to ▇▇▇▇
that are required to be filed for any taxable period which
begins on or before the Closing Date and ends after the Closing
Date ("Straddle Period"). Buyer will allow Seller an opportunity
to review and comment upon any such Straddle Period Tax return.
Notwithstanding any other provision hereof, Buyer shall have
the final and exclusive authority to determine all reporting
positions with respect to each such Straddle Period Tax return,
provided that such determination shall be made in good faith and
in accordance with the provisions of Section 7.19.4. ▇▇▇▇, USSC
and/or Buyer shall be responsible for paying any Tax due upon
the filing of any such Tax return.
7.19.4 Each Tax return shall be prepared in accordance with
reasonable Tax accounting methods, practices and principles
selected by the party
19
responsible for preparing such Tax return, provided that such
practice does not have a material adverse effect on the Tax
position of any other party. Any position taken on such Tax
return shall have at least a more likely than not possibility
of being sustained on its merits if challenged by the applicable
government or taxing authority.
7.19.5 The Parties shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors and
other representatives reasonably to cooperate, in preparing and
filing all Tax returns, including providing powers of attorney,
maintaining and making available to each other all records
necessary in connection with Taxes and in resolving all disputes
and audits with respect to all taxable periods relating to Taxes.
Such cooperation shall include the retention and (upon the other
Party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation
of any material provided hereunder. The Parties agree to retain
(and Buyer shall cause USSC and ▇▇▇▇ to retain) all books and
records with respect to Tax matters pertinent to ▇▇▇▇ relating to
any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent
notified by a Party, any extensions thereof) of the respective
taxable periods.
7.19.6 If an audit, investigation or similar proceeding with respect to
Tax matters shall be commenced, or a claim shall be made, by any
taxing authority, the Party receiving notice of such audit,
investigation, similar proceeding or claim shall promptly notify
the other Party in writing of such audit, investigation, similar
proceeding or claim (a "Tax Proceeding"); provided, however, that
failure to give such notice shall not affect the obligations of
a Party hereunder unless such failure materially prejudices such
Party.
7.19.6.1 With respect to any Tax Proceeding relating to any Tax return of ▇▇▇▇
for any taxable period which ends on or before the Closing Date,
Seller shall have the right to control all proceedings taken in
connection with such Tax Proceeding (including selection of counsel)
and to settle such Tax Proceeding in any manner in which it
chooses. Buyer and USSC shall be entitled to participate in
all proceedings with respect to any such Tax Proceeding (at its
expense) and to employ counsel of its choice for such purpose. Buyer
shall pay and/or reimburse Seller fifty percent (50%) of the costs
and fees incurred by Seller in connection with any such Tax Proceeding.
20
7.19.6.2 With respect to any Tax Proceeding relating to any Straddle Period
Tax return of ▇▇▇▇, Buyer and/or USSC shall have the right to
control all proceedings taken in connection with such Tax Proceeding
(including selection of counsel) and to settle such Tax Proceeding
in any manner in which it chooses. Seller shall be entitled to
participate in all proceedings with respect to any such Tax
Proceeding (at its expense) and to employ counsel of its choice for
such purpose. Any additional Tax due with respect to a Tax
Proceeding involving a Straddle Period return shall be paid by
▇▇▇▇, Buyer and/or USSC. Seller shall pay and/or reimburse Buyer
fifty percent (50%) of the costs and fees incurred by Buyer in
connection with any such Tax Proceeding.
7.19.6.3 Each Party shall provide the other Party or Parties with copies
of all material documents with respect to the aforementioned
Tax Proceedings.
7.19.6.4 The Parties shall cooperate with each other in contesting any Tax
Proceeding, which cooperation shall include the retention and
(upon a Party's request) the provision of records and information
which are reasonably relevant to such Tax Proceeding, and making
employees available on a mutually convenient basis to provide
additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax
Proceeding and, in the case of USSC and Buyer, causing ▇▇▇▇ to
so cooperate.
7.19.7 Each of the Parties agrees that it shall not (on a Tax return,
under audit or otherwise) take a position which is contrary
to, or inconsistent with, the manner in which the income/loss
of ▇▇▇▇ and/or USSC has been reported or allocated (between
▇▇▇▇ and USSC or between Seller and USSC) for Tax purposes.
7.20 Trade Receivables. At or prior to the Closing Date, Buyer shall, and
Buyer shall cause ▇▇▇▇, USSC and any of their Affiliates to, pay all
trade receivables owed to NVB and any of its Affiliates for amounts
outstanding prior to the Closing Date.
7.21 Garantie D'Achevement. BCC shall maintain the Garantie D'Achevement
with KBC Bank dated December 3, 2002, for the benefit of Copal Belle
Boutique SA on behalf of ▇▇▇▇ Europe. Buyer and ▇▇▇▇ Europe, jointly
and severally, shall
21
indemnify BCC against any draws on the Garantie D'Achevement.
This Garantie will only remain in place until July 15, 2003, and
no extensions will be provided.
7.22 Intentionally Omitted.
7.23 Transition Period. The Parties will enter into a Transition Period
Agreement ("Transition Period Agreement"), in the form of Exhibit
7.23 attached hereto, which shall govern the provision of and
payments for the use of facilities, services and personnel from the
Closing Date for a period to be mutually agreed to by the applicable
parties but in no event later than August 31, 2003, as provided
therein.
7.24 Severance. Buyer shall pay one-half (1/2) of the total severance
cost of any employee of NVB, Seller or any of their Affiliates who
was performing services for ▇▇▇▇, USSC or any of their Affiliates,
for the portion of such severance attributable to service to ▇▇▇▇,
USSC or any of their Affiliates, and is or was terminated by NVB,
Seller or any of their Affiliates as a result of this transaction.
The remaining one-half (1/2) of such severance shall be paid by NVB
(or NVB shall cause its applicable Affiliate to pay such one-half
(1/2)).
7.25 Nonsolicitation. For a period of one (1) year after the Closing
Date, neither ECD, ▇▇▇▇, USSC nor any of their Affiliates shall,
directly or indirectly, hire, solicit to hire, or retain any
employee or independent contractor of NVB, Seller or any of their
Affiliates, without the prior written consent of NVB or Seller.
7.26 Open Purchase Orders; Unpaid Invoices. From and after the Closing
Date, except as otherwise provided in this Agreement, Seller, NVB or
the appropriate Affiliate shall fill all open purchase orders from
▇▇▇▇, ▇▇▇▇ Europe, USSC, ECD, and their Affiliates entered into
prior to the Closing Date. From and after the Closing Date, except
as otherwise provided in this Agreement, ▇▇▇▇, ▇▇▇▇ Europe, USSC,
ECD and their Affiliates shall pay all unpaid invoices from Seller,
NVB and their Affiliates, as the case may be.
8. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE
--------------------------------------------
8.1 Mutual Conditions to Obligations of NVB, Seller and Buyer. In
addition to the other conditions set forth in this Section 8, the
obligations of each of NVB, Seller and Buyer to take the other
actions required to be taken by that Party, as the case may be, at
the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be
waived by the affected Party, in whole or in part):
8.1.1 Buyer shall have assumed all of Seller's obligations under the
LLC
22
Agreement, and Seller's right under the foregoing agreement
shall be terminated for periods after the Closing Date.
8.1.2 Each material consent required from third parties identified
on Exhibit 8.1.2 shall have been obtained and shall be in full
force and effect.
8.1.3 Each Party, as applicable, shall have received each other
document and obligation required to be delivered or performed
by the other Parties under the terms of this Agreement as set
forth in Section 9.2.
8.1.4 The Termination Agreement of the MOU shall have been executed
by IAS Equities, Inc.
8.2 Conditions to Obligations of Buyer. In addition to the other
conditions set forth in Section 8.1, the obligations of Buyer to
take the other actions required to be taken by it at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Buyer, in
whole or in part):
8.2.1 The representations and warranties of Seller contained herein
were true and correct as of the date of this Agreement and
continue to be true and correct as of the Closing Date with
the same force and effect as though made at such time.
8.2.2 All of the covenants and obligations that Seller and NVB are
required to perform, or to comply with, in favor of Buyer,
pursuant to this Agreement at or prior to the Closing shall
have been duly performed and complied with.
8.3 Conditions to Obligations of Seller. In addition to the other
conditions set forth in Section 8.1, the obligations of Seller to
take the other actions required to be taken by it at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Seller, in
whole or in part):
8.3.1 The representations and warranties of Buyer contained herein
were true and correct as of the date of this Agreement and
continue to be true and correct as of the Closing Date with
the same force and effect as though made at such time.
8.3.2 All of the covenants and obligations that Buyer is required to
perform, or to comply with, in favor of Seller or NVB,
pursuant to this Agreement at
23
or prior to the Closing shall have been duly performed and
complied with.
8.3.3 The termination or amendment of NVB, Seller and their
Affiliates' obligations under the Transaction Agreements in
accordance with this Agreement, in a form acceptable to the
applicable parties.
8.3.4 The complete release by the applicable third parties of NVB
and/or Seller of their obligations under the Released
Liabilities including, without limitation, ABN AMRO, Canon and
Landlord.
8.3.5 The granting of the Technology Rights.
8.3.6 The payment in full of the Sinvaco Obligation.
8.3.7 The payment in full of the BENG Obligation.
8.3.8 The payment in full of the BCC Obligation.
9. CLOSING
-------
9.1 Closing. If the conditions to the parties' obligations enumerated in
Section 8 are satisfied, consummation of the transactions
contemplated hereby (the "Closing") shall take place on May 14,
2003, at 12:00 pm, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, A Legal
Professional Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ or by the exchange of documents by courier and facsimile,
or on such other date as the Parties may agree (the "Closing Date").
The transfers and deliveries described in this Section 9 shall be
mutually interdependent and regarded as occurring simultaneously;
and no such transfer or delivery shall become effective until all
such other transfers and deliveries have also been consummated.
9.2 Closing Obligations. In addition to any other documents to be
delivered under other provisions of this Agreement, at the Closing:
9.2.1 Buyer Deliveries. Buyer shall deliver to NVB and Seller, as the
case may be, the following:
9.2.1.1 Payment of Four Million US Dollars (US $4,000,000) in cash
to Seller as set forth in Section 1.5;
9.2.1.2 Deposit of Two Million US Dollars (US $2,000,000) with
the Escrow Agent;
24
9.2.1.3 The Escrow Agreement, duly executed by Buyer;
9.2.1.4 Written release of NVB by ABN AMRO as set forth in Section 2.2.1;
9.2.1.5 The Letters of Credit as set forth in Section 2.2.2.
9.2.1.6 The LLC Assignment, duly executed by Buyer;
9.2.1.7 Buyer shall cause USSC to execute and deliver the Amendment
Regarding Termination to NVB-USSC License Agreement;
9.2.1.8 Buyer shall cause ▇▇▇▇ to execute and deliver the Amendment
to Employee Lease Agreement;
9.2.1.9 Buyer shall cause ▇▇▇▇ to execute and deliver the Amendment
to Consulting Agreement;
9.2.1.10 The Amended and Restated Noncompetition Agreement, duly
executed by Buyer;
9.2.1.11 The Termination and Release Agreement, duly executed by
Buyer, and Buyer shall cause ▇▇▇▇ and USSC to execute
and deliver the same;
9.2.1.12 Resolutions of the Board of Directors of USSC and the
Management Committee of ▇▇▇▇, authorizing the consents,
execution, delivery and performance of the Transaction
Documents to which they are parties or signators,
executed by the Buyer appointed Representatives of ▇▇▇▇
and Buyer appointed Directors of USSC;
9.2.1.13 A certificate executed by Buyer as to the accuracy of
its representations and warranties as of the date of
this Agreement and as of the Closing Date, and as to its
compliance with and performance of its covenants and
obligations to be performed or complied with at or
before the Closing; and
9.2.1.14 Termination Agreement of the MOU, duly executed by Buyer.
9.2.2 NVB and Seller Deliveries. NVB and Seller shall deliver to Buyer,
as the
25
case may be, the following:
9.2.2.1 The stock certificates of Seller representing the USSC
Interest to Buyer, each duly endorsed in blank or
accompanied by stock powers duly executed in blank, in
proper form for transfer;
9.2.2.2 The assignment of the ▇▇▇▇ Interest to Buyer, in proper form
for transfer;
9.2.2.3 The stock certificates of Seller and NVB's
representatives, as applicable, representing the USS de
Mexico Share to Buyer, or its designated party, each
duly endorsed in blank or accompanied by stock powers
duly executed in blank, in proper form for transfer;
9.2.2.4 The Escrow Agreement, duly executed by Seller;
9.2.2.5 The LLC Assignment, duly executed by Seller;
9.2.2.6 The Amendment Regarding Termination to NVB-USSC License Agreement,
duly executed by NVB;
9.2.2.7 The Amended and Restated Noncompetition Agreement, duly executed
by NVB and Seller;
9.2.2.8 The Termination and Release Agreement, duly executed by NVB
and Seller;
9.2.2.9 The Amendment to Employee Lease Agreement, duly executed by Seller;
9.2.2.10 Resolutions of the Management Committee of ▇▇▇▇,
authorizing the consents, execution, delivery and
performance of the Transaction Documents to which it is
a party or signator, executed by the Seller appointed
Representatives of ▇▇▇▇ and the Seller appointed
Director of USSC;
9.2.2.11 A certificate executed by Seller as to the accuracy of
Seller's representations and warranties as of the date
of this Agreement and as of the Closing Date, and NVB
and Seller as to their compliance with and performance
of their covenants and obligations to be performed or
complied with at or before the Closing;
26
9.2.2.12 Termination Agreement of the MOU, duly executed by NVB
and Seller; and
9.2.2.13 Assignment of the Seller/▇▇▇▇ Note, duly executed by Seller.
10. TERMINATION
-----------
10.1 Events of Termination.
This Agreement may be terminated prior to Closing pursuant to
the following:
10.1.1 Termination by Buyer. This Agreement may be terminated by Buyer's
written notice to the other Parties if (i) a material breach of
any provision of this Agreement has been committed by NVB or
Seller, and such breach has not been waived by Buyer; or
(ii) if any condition set forth in Sections 8.1 or 8.2 has not
been satisfied as of Closing or if satisfaction of such a
condition by Closing is or becomes impossible (other than through
the failure of Buyer to comply with its obligations under this
Agreement), and Buyer has not waived such condition before
Closing; or (iii) the Closing has not occurred on or before
June 30, 2003, or such later date as the Parties may agree
upon, unless Buyer is in material breach of this Agreement;
10.1.2 Termination by NVB or Seller. This Agreement may be terminated
by NVB or Seller's written notice to the other Parties if (i) a
material breach of any provision of this Agreement has been
committed by Buyer, and such breach has not been waived by NVB
or Seller; or (ii) if any condition set forth in Sections 8.1 or
8.3 has not been satisfied as of Closing or if satisfaction of
such a condition by Closing is or becomes impossible (other than
through the failure of NVB or Seller to comply with its
obligations under this Agreement), and NVB or Seller has not
waived such condition before Closing; or (iii) the Closing
has not occurred on or before June 30, 2003, or such later date
as the Parties may agree upon, unless NVB or Seller is in material
breach of this Agreement; or
10.1.3 Mutual Termination. This Agreement may be terminated by the mutual
written consent of the Parties.
10.2 Effect of Termination. Each Party's right of termination under
Section 10.1 is in addition to any other rights it may have under
this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 10.1, all obligations of the
27
Parties under this Agreement (but not the obligations under Section
7.13) will terminate, except that the obligations of the Parties in
this Section 10.2 and Sections 13 and 14 will survive; provided,
however, that, if this Agreement is terminated because of a breach
of this Agreement by the nonterminating Party or because one or more
of the conditions to the terminating Party's obligations under this
Agreement is not satisfied as a result of the Party's failure to
comply with its obligations under this Agreement, the terminating
Party's right to pursue all legal remedies will survive such
termination unimpaired.
11. INDEMNIFICATION
---------------
11.1 Survival of Representations and Warranties. The representations and
warranties of Seller in Section 5 and Buyer in Section 6 shall
survive the Closing and continue to be binding thereafter
indefinitely.
11.2 Indemnification by Buyer.
11.2.1 Buyer shall defend, indemnify and hold harmless NVB and
Seller, and their Affiliates and their respective directors,
officers, partners, employees, consultants, agents and
representatives (the "Bekaert Indemnified Parties"), from and
against all Claims in any way arising out of or relating to:
11.2.1.1 Any inaccuracy in or breach of any representation or warranty
by Buyer in this Agreement; and
11.2.1.2 Any breach or nonperformance of any covenant or
obligation made or incurred by Buyer, ▇▇▇▇ or USSC
herein or in any other Transaction Document delivered by
or on behalf of Buyer, ▇▇▇▇ or USSC in connection
herewith.
11.2.2 Subject to the Closing, Buyer shall defend, indemnify and hold
harmless the Bekaert Indemnified Parties, from and against all
third party Claims in any way arising out of or relating to
the business of ▇▇▇▇, USSC or their respective Affiliates
(whether arising before or after the Closing Date), including,
without limitation, claims of trade creditors or employees,
except for express covenants or obligations made or incurred
by NVB and Seller in this Agreement or in any Transaction
Documents.
11.2.3 Subject to the Closing, Buyer shall indemnify and reimburse
the Bekaert Indemnified Parties for all Claims (including
without limitation their personnel at their fully burdened
rates) incurred by the Bekaert
28
Indemnified Parties in settling and obtaining the release of
the Canon Guaranty or the Landlord Guaranty and settlement of the
underlying claims, to the extent not satisfied in full by the
proceeds of the Letters of Credit.
11.3 Indemnification by NVB and Seller.
11.3.1 NVB and Seller shall defend, indemnify and hold harmless
Buyer, and its Affiliates and its respective directors,
officers, partners, employees, agents and representatives (the
"Buyer Indemnified Parties"), from and against all Claims in
any way arising out of or relating to:
11.3.1.1 Any inaccuracy in or breach of any representation or warranty by
Seller in this Agreement; and
11.3.1.2 Any breach or nonperformance of any covenant or
obligation made or incurred by NVB and Seller herein or
in any other Transaction Document delivered by or on
behalf of NVB and Seller in connection herewith.
11.4 Indemnification of Directors and Officers.
11.4.1 To the fullest extent permitted by law, Buyer agrees that from
and after the Closing Date and for a period of six (6) years
thereafter, it shall not permit any of ▇▇▇▇, USSC or any of their
Affiliates, as the case may be, to amend, modify or terminate
their respective By-Laws or governing documents or their
liability insurance that covers directors and officers
(so long as it is available on commercially reasonable terms) so
as to adversely effect in any way the indemnification or
insurance rights of Seller and NVB's employees, consultants,
agents and representatives who served on the Board of Directors
and/or the Management Committee of ▇▇▇▇, USSC or any of their
Affiliates, as well as any Seller and/or NVB employee, consultant,
agent or representative who served as an officer of ▇▇▇▇, USSC
and/or any of their Affiliates (each, individually, a "Director/
Officer Indemnitee") for such service.
11.4.2 The protections set forth in Section 11.4.1 shall be in
addition to any other rights to which a Director/Officer
Indemnitee may be entitled under any agreement, as a matter of
law or otherwise as to action in the Director/Officer
Indemnitee's capacity as a director or officer of ▇▇▇▇, USSC
or their Affiliates, as the case may be, and shall inure to
the benefit of the respective heirs, successors, assigns,
administrators and legal
29
representatives of the Director/Officer Indemnitee.
11.4.3 This Section 11.4 is intended to be for the benefit of, and
shall be enforceable by, each of the Director/Officer
Indemnitees and their respective heirs, successors, assigns,
administrators and legal representatives.
11.5 Third Party Claims. If any legal proceedings shall be instituted or
any claim is asserted by any third party in respect of which the
Bekaert Indemnified Parties or the Buyer Indemnified Parties, as the
case may be, may be entitled to indemnity hereunder, the party
asserting such right to indemnity shall give the Party from whom
indemnity is sought written notice thereof. A delay in giving notice
shall only relieve the Party from whom indemnity is sought to the
extent such Party suffers actual prejudice because of the delay. The
Party from whom indemnity is sought shall have the right, at its
option and expense, to participate in the defense of such a
proceeding or claim, but not to control the defense, negotiation or
settlement thereof, which control shall at all times rest with the
Party asserting such right to indemnity, unless the proceeding or
claim involves only money damages, not an injunction or other
equitable relief, and unless the Party from whom indemnity is
sought:
(a) irrevocably acknowledges in writing complete responsibility
for and agrees to indemnify the Party asserting such right
to indemnity, and
(b) furnishes satisfactory evidence of its financial ability to
indemnify the Party asserting such right to indemnity,
in which case the Party from whom indemnity is sought may assume
such control through counsel of its choice and at its expense, but
the Party asserting such right to indemnity shall continue to have
the right to be represented, at its own expense, by counsel of its
choice in connection with the defense of such a proceeding or claim.
If the Party from whom indemnity is sought does not assume control
of the defense of such a proceeding or claim, the entire defense of
the proceeding or claim by the Party asserting such right to
indemnity, any settlement made by the Party asserting such right to
indemnity, and any judgment entered in the proceeding or claim shall
be deemed to have been consented to by, and shall be binding on, the
Party from whom indemnity is sought as fully as though it alone had
assumed the defense thereof and a judgment had been entered in the
proceeding or claim in the amount of such settlement or judgment,
except that the right of the Party from whom indemnity is sought to
contest the right of the other to indemnification under this
Agreement with respect to the proceeding or claim shall not be
extinguished. If the Party from whom indemnity is sought does
30
assume control of the defense of such a proceeding or claim, it
will not, without the prior written consent of the Party asserting
such right to indemnity, settle the proceeding or claim or consent
to entry of any judgment relating thereto which does not include as
an unconditional term thereof the giving by the claimant to the Party
asserting such right to indemnity a release from all Liability in
respect of the proceeding or claim. The Parties hereto agree to
cooperate fully with each other in connection with the defense,
negotiation or settlement of any such proceeding or claim.
12. DEFINITIONS
-----------
12.1 Definitions. When used in this Agreement, the following terms in all
of their tenses and cases shall have the meanings assigned to them
below or elsewhere in this Agreement as indicated below:
"AAA" shall have the meaning set forth in Section 13.3.
"ABN AMRO" shall mean ABN AMRO Bank N.V., a Belgian corporation.
"ABN AMRO Facility Letter" shall have the meaning set forth in
Section 2.1.2.
"ABN AMRO Guarantees" shall have the meaning set forth in Section
2.1.2.
"ABN AMRO Joint and Several Guaranty" shall have the meaning set
forth in Section 2.1.2.
"ABN AMRO Several Guarantee" shall have the meaning set forth in
Section 2.1.2.
"Affiliate" of any Person shall mean any individual, partnership,
corporation, trust or other entity or association, directly or
indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with such Person. The term
"control," as used in the immediately preceding sentence, means,
with respect to a corporation or limited liability company the right
to exercise, directly or indirectly, more than fifty percent (50%)
of the voting rights attributable to the controlled corporation or
limited liability company, and, with respect to any individual,
partnership, trust, other entity or association, the possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.
However, such individual, partnership, corporation, trust or other
entity or association shall be deemed to be an Affiliate only as
long as such control exists.
31
"Agreement" shall mean this Purchase, Sale and Termination of
Interests Agreement.
"Amended and Restated Noncompetition Agreement" shall have the
meaning set forth in Section 7.10.
"Amendment to Consulting Agreement" shall have the meaning set forth
in Section 7.12.
"Amendment to Employee Lease Agreement" shall have the meaning set
forth in Section 7.11.1.
"Amendment Regarding Termination to NVB-United Solar License
Agreement" shall have the meaning set forth in Section 7.9.
"Arbitration Notice" shall have the meaning set forth in Section
13.2.
"Arbitrator" shall have the meaning set forth in Section 13.3.
"BCC" shall mean Bekaert Coordinatiecentrum NV, a Belgian
corporation.
"BCC Obligation" shall have the meaning set forth in Section 7.6.
"Bekaert Indemnified Parties" shall have the meaning set forth in
Section 11.2.1.
"BENG Obligation" shall have the meaning set forth in Section 7.5.
"▇▇▇▇" shall mean Bekaert ECD Solar Systems LLC, a Delaware limited
liability company.
"▇▇▇▇ Europe" shall mean Bekaert ECD Solar Systems Europe NV, a
Belgian corporation.
"▇▇▇▇ Interest" shall have the meaning set forth in Section 1.1.
"Business Day" shall mean Monday through Friday, except for a legal
or bank holiday.
"Buyer" shall mean Energy Conversion Devices, Inc., a Delaware
corporation.
"Buyer Indemnified Parties" shall have the meaning set forth in
Section 11.3.1.
32
"Canon" shall mean Canon Inc., a Japanese corporation.
"Canon Guaranty" shall have the meaning set forth in Section 2.1.1.
"Claims" shall mean any claim, Liability, Tax, loss, damage
(including any diminution in value), cost, fee, penalty and expense
(including attorneys' fees).
"Close Corporation Agreement" shall mean the Close Corporation
Shareholder Agreement between Buyer, Seller and USSC dated April 11,
2000.
"Closing Date" or "Closing" shall have the meaning set forth in
Section 9.1.
"Consent" shall have the meaning set forth in Section 7.2.
"Director/Officer Indemnitee" shall have the meaning set forth in
Section 11.4.1.
"Disagreement" shall have the meaning set forth in Section 13.1.
"ECD/▇▇▇▇ License Agreement" shall mean the ECD/Bekaert-ECD Solar
Systems LLC License Agreement between Buyer and ▇▇▇▇ dated April 11,
2000.
"ECD/▇▇▇▇ Note" shall have the meaning set forth in Section 4.2.3.
"ECD Note" shall have the meaning set forth in Section 2.3.
"Employee Lease Agreement" shall have the meaning set forth in
Section 7.11.1.
"Escrow Agent" shall have the meaning set forth in Section 1.6.
"Escrow Agreement" shall have the meaning set forth in Section 1.6.
"Final Federal Return" shall have the meaning set forth in Section
7.19.1.
"Foundation Agreement" shall mean the Foundation Agreement between
USSC, Buyer and Seller dated March 17, 2000.
"Fujilease" shall mean the Lease and Security Agreement between USSC
and Fujilease Corporation dated November 21, 1997.
"Global IP Agreement" shall mean the Global IP Agreement between
NVB, Buyer and Canon, dated April 11, 2000.
33
"Governmental Authority" means any foreign, federal, state, regional
or local authority, agency, body, court or instrumentality,
regulatory or otherwise, which, in whole or in part, was formed by
or operates under the auspices of any foreign, federal, state,
regional or local government.
"Interests" shall mean the ▇▇▇▇ Interest and the USSC Interest.
"Know-How Cross License Agreement" shall mean the Know-How Cross
License Agreement between Canon, Buyer and USSC dated July 6, 1990,
as amended April 11, 2000.
"Landlord" shall have the meaning set forth in Section 2.1.3.
"Landlord Guaranty" shall have the meaning set forth in Section
2.1.3.
"LaSalle Lease" shall have the meaning set forth in Section 2.1.2.
"Law" shall mean any national, regional or local law, statute,
regulation, decree, ordinance, rule or order, whether existing
previously or as of the date hereof.
"Letters of Credit" shall have the meaning set forth in Section
2.2.2.
"Liability" or "Liabilities" means responsibilities, obligations,
duties, commitments, claims, and liabilities of any and every kind,
whether known or unknown, accrued, absolute, contingent or
otherwise.
"Lien" means any lien, charge, covenant, condition, easement,
adverse claim, demand, encumbrance, limitation, security interest,
option, mortgage, charge, pledge, or any other title defect or
restriction of any kind.
"LLC Agreement" shall have the meaning set forth in Section 3.1.
"LLC Assignment" shall have the meaning set forth in Section 3.1.
"Membership Interest" shall mean a "Limited Liability Company
Interest," as defined in Section 18-1701 of the Delaware Limited
Liability Company Act, 6 Del. C.ss.18-101 et seq., as amended.
"MOU" shall mean the Memorandum of Understanding between IAS
Equities, Inc., Seller, Buyer and NVB dated April 11, 2003.
"Noncompetition Agreement" shall have the meaning set forth in
Section 7.10.
34
"Note Guaranty" shall have the meaning set forth in Section 2.4.
"NVB" shall mean N.V. Bekaert S.A., a Belgian corporation.
"NVB-USSC License Agreement" shall have the meaning set forth in
Section 7.9.
"Patent Cross License Agreement" shall mean the Patent Cross License
Agreement between Canon and USSC dated May 29, 1997, as amended
April 11, 2000.
"Party" and "Parties" shall mean Seller, NVB and Buyer individually,
or collectively.
"Person" means any individual, corporation, partnership, association
or any other entity or organization.
"Released Liabilities" shall have the meaning set forth in Section
2.1.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall mean Bekaert Corporation, a Delaware corporation.
"Seller/▇▇▇▇ Note" shall have the meaning set forth in Section 1.4.
"Seller Knowledge Persons" shall have the meaning set forth in
Section 6.7.
"Sinvaco Obligation" shall have the meaning set forth in Section
7.4.
"Straddle Period" shall have the meaning set forth in Section
7.19.3.
"Subscription Agreement" shall mean the Bekaert ECD Solar Systems
LLC Subscription Agreement between Seller, ▇▇▇▇ and USSC dated April
11, 2000.
"Tax" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs,
duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind
whatsoever imposed by any Governmental Authority, including any
interest, penalty or addition thereto.
35
"Tax Proceeding" shall have the meaning set forth in Section 7.19.6.
"Technology Rights" shall mean the rights granted under Sections 7.9
and 7.10 to NVB and its Affiliates.
"Termination Agreement of the MOU" shall mean the Termination
Agreement of IAS Equities, Inc. dated of even date herewith.
"Termination and Release Agreement" shall have the meaning set forth
in Section 4.3.
"Transaction Agreements" shall have the meaning set forth in Section
5 of the Foundation Agreement and the Foundation Agreement.
"Transaction Documents" shall mean all agreements, instruments and
documents to be executed and delivered in connection with this
Agreement.
"Transition Period" shall have the meaning set forth in Section
7.11.1.
"Transition Period Agreement" shall have the meaning set forth in
Section 7.23.
"Unification Agreement" shall mean the Unification Agreement between
Seller and USSC dated April 11, 2000, as amended and restated by the
Amended and Restated Unification Agreement dated December 21, 2001.
"Unisolar Entities" shall have the meaning set forth in Section 6.7.
"USS de Mexico" shall mean United Solar Systems de Mexico, S.A. de
C.V., a Mexican corporation, with its principal office at ▇▇. ▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇ Industrial Pacifico, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇.
"USS de Mexico Share" shall have the meaning set forth in Section
1.3.
"USSC" shall mean United Solar Systems Corp., a Delaware corporation.
"USSC Interest" shall have the meaning set forth in Section 1.2.
13. DISPUTE RESOLUTION
------------------
13.1 Applicability. This Section 13 shall apply to any dispute or
disagreement arising under or related to this Agreement or the
transactions contemplated hereunder (whether arising in contract,
tort or otherwise, and whether arising at Law or in
36
equity). Any dispute to which this Section 13 applies is referred
to herein as a "Disagreement." The Parties shall resolve any
Disagreement in accordance with this Section 13.
13.2 Procedure. If a Disagreement arises, a Party shall submit such
Disagreement to binding arbitration under this Section 13 by
notifying the other Parties (an "Arbitration Notice").
13.3 Selection of Arbitrator. Any arbitration conducted under this
Section 13 shall be heard by a sole arbitrator (the "Arbitrator")
selected in accordance with this Section 13.3. The Parties shall
attempt in good faith to agree upon a mutually-acceptable
Arbitrator. If they are unable to do so within ten (10) days
following delivery of the Arbitration Notice, any Party may request
the American Arbitration Association (or, if such Association has
ceased to exist, the principal successor thereto) (the "AAA") to
designate the Arbitrator.
13.4 Conduct of Arbitration. The Arbitrator shall expeditiously (and, if
possible, within ten (10) days after the Arbitrator's selection)
hear and decide all matters concerning the Disagreement. Any
arbitration hearing shall be held in New York, New York, USA. The
arbitration shall be conducted in accordance with the then current
Commercial Arbitration Rules of the AAA (excluding rules governing
the payment of arbitration, administrative or other fees or expenses
to the Arbitrator or the AAA), to the extent that such Rules do not
conflict with the terms of this Agreement. Each Party shall submit
its position on the Disagreement to the Arbitrator. The Arbitrator
shall select from among the final positions submitted by the Parties
and shall not have authority to construct an independent compromise
position. The Arbitrator shall have the power to grant injunctive
relief and enforce specific performance. If it deems necessary, the
Arbitrator may propose to the Parties that one or more other experts
be retained to assist it in resolving the Disagreement. The decision
of the Arbitrator (which shall be rendered in writing) shall be
final, nonappealable and binding upon the Parties and may be
enforced in any court of competent jurisdiction. The Arbitrator and
any court enforcing the award of the Arbitrator shall not have the
right or authority to award punitive or exemplary damages to any
Party. The responsibility for paying the costs and expenses of the
arbitration, including compensation to the Arbitrator and any
experts retained by the Arbitrator, shall be allocated among the
Parties in a manner determined by the Arbitrator to be fair and
reasonable under the circumstances. Each party shall be responsible
for the fees and expenses of its respective counsel, consultants and
witnesses, unless the Arbitrator determines that compelling reasons
exist for allocating all or a portion of such costs and expenses to
another Party.
37
14. MISCELLANEOUS
-------------
14.1 Notices. All notices given under this Agreement or the Transaction
Documents shall be in writing and shall be addressed to the Parties
at their respective addresses set forth below:
(a) If to Seller, to:
Bekaert Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attn: CFO
With a copy to:
N.V. Bekaert S.A.
President ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attn: Legal Department
(b) If to NVB, to:
N.V. Bekaert S.A.
President ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attn: Legal Department
(c) If to Buyer, to:
Energy Conversion Devices, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attn: President
With a copy to:
Energy Conversion Devices, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attn: Legal Department
A Party may change its address for purposes of this Agreement by
giving the other Parties written notice thereof. Notices sent by
registered or certified mail, postage prepaid, return receipt
requested, shall be deemed to have been given two Business Days
after being mailed, and notices sent by overnight courier shall be
deemed to have been given when received, and otherwise notices shall
be deemed to have been given when received.
14.2 Binding Effect. Except as may be otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns.
14.3 Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
14.4 Exhibits and Schedules. The Exhibits and Schedules referred to in
this Agreement shall be deemed to be a part of this Agreement.
14.5 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same document.
14.6 No Waiver of Rights. The rights and remedies of the Parties to this
Agreement are cumulative and not alternative. None of the conditions
or provisions of this Agreement shall be held to have been waived by
any act or knowledge on the part of a Party, except by an instrument
in writing signed by an authorized representative of such Party.
Neither the failure nor delay by a Party in the exercise of any
power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right
preclude other or further exercise thereof or of any other right or
power. No waiver by a Party of any breach hereof shall be deemed a
waiver of any preceding, continuing or succeeding breach of the same
or any other term hereof.
14.7 Pronouns. The use of a particular pronoun herein shall not be
restrictive as to gender or number but shall be interpreted in all
cases as the context may require.
14.8 Time Periods. Any action required hereunder to be taken within a
certain number of days shall be taken within that number of calendar
days, unless otherwise provided in this Agreement; provided,
however, that if the last day for taking such
39
action falls on a weekend or a holiday, the period during which
such action may be taken shall be automatically extended to the
next Business Day.
14.9 Modification or Amendment. No supplement, modification or amendment
of this Agreement shall be binding unless made in a written
instrument which is signed by all of the Parties and which
specifically refers to this Agreement.
14.10 Entire Agreement. This Agreement and the Transaction Documents
(including all exhibits and schedules) and the agreements and
documents referred to in this Agreement and the Transaction
Documents or delivered hereunder are the exclusive statement of the
agreement among the Parties concerning the subject matter hereof.
All negotiations among the Parties, including the MOU, are merged
into this Agreement and the Transaction Documents and the agreements
and documents referred to in this Agreement and the Transaction
Documents, and there are no representations, warranties, covenants,
understandings, or agreements, oral or otherwise, in relation
thereto among the Parties other than those incorporated herein and
to be delivered hereunder.
14.11 No Assignment. Neither this Agreement nor any interest herein may be
assigned, or any obligation delegated, by a Party hereto without the
prior written consent of the other Parties except as expressly
provided in this Agreement.
14.12 Severability. If any one or more of the provisions contained in this
Agreement or in any document executed in connection herewith (other
than provisions constituting a material consideration to a Party's
entering into this Agreement or such other document) shall be
invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired, provided, however, that in such case the
Parties shall use their reasonable commercial efforts to achieve the
purpose of the invalid provision.
14.13 Governing Law. This Agreement and all actions contemplated hereby
shall be governed by and construed and enforced in accordance with
the internal laws of the State of Delaware without reference to the
principles of conflict of laws.
14.14 Survival. The provisions of this Agreement shall survive the Closing
unless otherwise limited by time as set forth herein.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
40
INTENDING TO BE LEGALLY BOUND, the parties hereto have caused this Agreement to
be duly executed as of the date and year first above written.
BEKAERT CORPORATION
By: /S/▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /S/▇▇▇▇▇ ▇. Best
______________________________
Name: ▇▇▇▇▇ ▇. Best
Title: Chief Financial and
Administrative Officer
N.V. BEKAERT S.A.
By: /S/▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /S/▇▇▇▇▇ ▇. Best
______________________________
Name: ▇▇▇▇▇ ▇. Best
Title: Chief Financial and
Administrative Officer
ENERGY CONVERSION DEVICES, INC.
By: /S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
