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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
May 22, 1997
________________________________________
THERMO FIBERTEK INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-11406 52-1762325
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
81 Wyman Street
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
PAGE
Item 2. Acquisition or Disposition of Assets
------------------------------------
On May 22, 1997, Thermo Fibertek Inc. (the "Company") acquired the
stock preparation business (the "Business") of The Black Clawson Company
("Black Clawson") and its affiliates for approximately $108,000,000 in
cash. The purchase price is subject to a post-closing adjustment equal to
the amount by which the net tangible assets of the Business as of the
closing date are greater or less than, as the case may be, certain target
amounts set forth in the Asset Purchase Agreement dated as of May 22, 1997
between the Company, and certain of its affiliates, and Black Clawson, and
certain of its affiliates (the "Agreement").
The purchase price was based upon the Company's determination of the
fair value of the Business, and the terms of the Agreement were determined
by arms-length negotiation among the parties. To finance the acquisition,
the Company utilized approximately $8 million of available cash and
approximately $100 million of borrowings from Thermo Electron Corporation
("Thermo Electron"), the Company's majority stockholder. The indebtedness
to Thermo Electron bears interest at a rate equal to the 90-day Commercial
Paper Composite Rate plus 25 basis points, set at the beginning of each
quarter, and is due January 5, 1999.
The Company has no present intention to use the plant, equipment or
other physical property acquired for purposes materially different from the
purposes for which such assets were used prior to the acquisition.
However, the Company will review the Business and its assets, corporate
structure, capitalization, operations, properties, policies, management and
personnel. After completion of this review, the Company may develop
alternative plans or proposals, including mergers, transfers of a material
amount of assets or other transactions or changes relating to the Business.
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits
------------------------
(a) Financial Statements of Business Acquired. To be filed by
amendment no later than July 21, 1997.
(b) Pro Forma Combined Condensed Financial Information. To be
filed by amendment no later than July 21, 1997.
(c) Exhibits
2.1 Asset Purchase Agreement dated as of May 22, 1997 among
BC Acquisition Corp., Thermo Fibertek Inc., The Black
Clawson Company, Black Clawson Shortle Mfg. Co. Inc.,
Black Clawson International Ltd., Black Clawson Canada
Fibre Processing Ltd., Black Clawson Europe S.A. and Carl
C. Landegger. Pursuant to Item 601(b)(2) of regulation
S-K, schedules and exhibits to this Agreement have been
omitted. The Company hereby undertakes to furnish
supplementally a copy of such schedules and exhibits to
the Commission upon request.
PAGE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized, on this __st day of May, 1997.
THERMO BIOANALYSIS CORPORATION
By: /s/ Jonathan W. Painter
-----------------------
Jonathan W. Painter
Treasurer
AA971500022
ASSET PURCHASE AGREEMENT
By and Among
BC ACQUISITION CORP.,
THERMO FIBERTEK INC.,
THE BLACK CLAWSON COMPANY,
BLACK CLAWSON SHARTLE MFG. CO. INC.,
BLACK CLAWSON INTERNATIONAL, LTD.,
BLACK CLAWSON CANADA FIBRE PROCESSING LTD.,
BLACK CLAWSON EUROPE S.A.
and
CARL C. LANDEGGER
May 22, 1997
PAGE
TABLE OF CONTENTS
ARTICLE IDEFINITIONS1
ARTICLE IITHE PURCHASE15
2.1 Purchase and Sale of the Acquired Assets 15
2.2 Assumption of Liabilities 15
2.3 Purchase Price 19
2.4 The Closings 20
2.5 Allocation of Purchase Price 22
2.6 Post-Closing Adjustments 22
2.7 Further Assurances 24
2.8 Escrow 25
2.9 Transaction Taxes 25
2.10 Restricted Assets 26
2.11 Sellers' Representative 27
ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF THE SELLERS29
3.1 Organization, Qualification and Corporate Power29
3.2 Subsidiaries 29
3.3 Authority 30
3.4 Noncontravention 30
3.5 Financial Statements 31
3.6 Absence of Certain Changes 31
3.7 Undisclosed Liabilities 31
3.8 Tax Matters 31
3.9 Ownership and Condition of Assets 32
3.10 Intellectual Property 33
3.11 Inventory. 35
3.12 Contracts 35
PAGE
3.13 Accounts Receivable; Contracts in Progress; Accounts
Payable 38
3.14 Powers of Attorney 38
3.15 Insurance Policies 38
3.16 Litigation 39
3.17 Product Warranty; Recall 39
3.18 Employees 39
3.19 Employee Benefits 41
3.20 Environmental Matters 44
3.21 Legal Compliance 45
3.22 Permits 45
3.23 Certain Business Relationships With Affiliates46
3.24 Brokers' Fees 46
3.25 Books and Records 46
3.26 Customers and Suppliers 46
3.27 Real Property Leases 47
3.28 Owned Real Property. 48
3.29 Indebtedness and Guaranties 49
3.30 Government Contracts 50
3.31 Disclosure 50
ARTICLE IVREPRESENTATIONS AND WARRANTIES OF THE BUYER51
4.1 Organization 51
4.2 Authority 51
4.3 Noncontravention. 51
4.4 Brokers' Fees 52
ARTICLE VPRE-CLOSING COVENANTS52
5.1 Best Efforts 52
5.2 Notices and Consents 52
5.3 HSR Act 52
PAGE
5.4 Operation of Business 53
5.5 Full Access 55
5.6 Notice of Breaches; Updates; Interim Financial
Statements 55
5.7 Exclusivity 56
5.8 Bulk Transfers Law 56
5.9 BC France. 56
ARTICLE VICONDITIONS TO CLOSING 57
6.1 Conditions to Obligations of the Buyer for the U.S.
Closing 57
6.2 Conditions to Obligations of the Sellers for the U.S.
Closing 60
6.3 Conditions to Obligations of the Buyer for the France
Closing 61
6.4 Conditions to Obligations of the Sellers for the France
Closing 63
ARTICLE VIIPOST-CLOSING COVENANTS 64
7.1 Proprietary Information 64
7.2 Solicitation and Hiring 65
7.3 Non-Competition; Referral of Customers 65
7.4 Sharing of Data 68
7.5 Enforcement of Insurance Claims 69
7.6 Cooperation in Litigation 69
7.7 Collection of Accounts Receivable and Contracts in
Progress 69
7.8 Employees 70
7.9 Employee Benefit Matters. 71
7.10 Tax Matters. 74
7.11 Employee Notices. 75
7.12 Use of Name. 75
7.13 Sellers' Obligations. 76
7.14 U.K. Value Added Tax. 76
PAGE
7.15 BC France. 77
7.16 BC International Inventory 80
7.17 Excluded Sales Contracts 80
7.18 Arrangements Regarding Certain Contracts80
ARTICLE VIIIINDEMNIFICATION 81
8.1 Indemnification by the Sellers 81
8.2 Indemnification by the Buyer 82
8.3 Claims for Indemnification 83
8.4 Defense by the Indemnifying Party 83
8.5 Payment of Indemnification Obligation84
8.6 Survival 84
8.7 Limitations 85
8.8 Parent Guarantee 85
ARTICLE IXTERMINATION 86
9.1 Termination of Agreement 86
9.2 Effect of Termination 86
9.3 Termination of France Closing 86
ARTICLE XMISCELLANEOUS 87
10.1 Press Releases and Announcements 87
10.2 No Third Party Beneficiaries 88
10.3 Entire Agreement 88
10.4 Succession and Assignment. 88
10.5 Counterparts 89
10.6 Headings 89
10.7 Notices 89
10.8 Governing Law; Time of the Essence 90
10.9 Amendments and Waivers 90
PAGE
10.10 Severability 90
10.11 Expenses 90
10.12 Specific Performance 90
10.13 Construction 91
10.14 Incorporation of Exhibits and Schedules91
PAGE
Exhibit A - December 31, 1996 Balance Sheet
Exhibit B - December 31, 1996 Income Statement
Exhibit C - Form of Bill of Sale
Exhibit D - Form of Instrument of Assumption of Liabilities
Exhibit E - Form of Patent Assignment
Exhibit F - Form of Trademark Assignment
Exhibit G - Form of Escrow Agreement
Exhibit H - Form of BC France Escrow Agreement
Exhibit I - Form of France Bill of Sale
Exhibit J - U.K. Pension Exhibit
Exhibit K - Form of Opinion of U.S. Counsel to the Sellers
Exhibit L-1 - Form of U.K. Supply Agreement
Exhibit L-2 - Form of U.K. Mutual Personnel and Services
Agreement
Exhibit M - Form of U.S. Lease and Services Agreement
Exhibit N - Form of BC Asia Sublease Agreement
Exhibit O - Form of Opinion of Special Counsel to the Buyer
Exhibit P - Form of Trademark License Agreement
Exhibit Q - Form of Opinion of French Counsel to the Sellers
Schedule 1.2(e) - Assigned Contracts
Schedule 1.33 - Non-U.S. Designated Employees
Schedule 1.44(k) - Ohio Office Equipment
Schedule 1.44(n) - Excluded Contracts
Schedule 1.82 - Sellers' Obligations
Schedule 2.2(b)(xvi) - Assumed Foreign Currency Contracts
Schedule 2.6 - Sellers' Accounting Principles
Schedule 7.15(f) - Severance Costs
Disclosure Schedule
PAGE
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of the 22nd
day of May, 1997, by and among BC Acquisition Corp., a Delaware
corporation (the "Buyer"), Thermo Fibertek Inc., a Delaware
corporation (the "Parent"), The Black Clawson Company, an Ohio
corporation ("Black Clawson"), Black Clawson Shartle Mfg. Co.
Inc., a Delaware corporation ("BC Shartle"), Black Clawson
International, Ltd., a company limited by shares under the
Companies Act of 1985 of the United Kingdom ("BC International"),
Black Clawson Canada Fibre Processing Ltd., a Canadian Federal
corporation ("BC Canada"), Black Clawson Europe S.A., a
corporation organized under the laws of France ("BC France"), and
Carl C. Landegger (the "Principal").
Preliminary Statement
Subject to the terms and conditions of this Agreement, the
Buyer desires to purchase, and the Sellers desire to sell, all of
the business and assets of the Sellers used in connection with
the Business (as defined below), for the consideration set forth
below and the assumption by the Buyer of certain of the Sellers'
liabilities set forth below relating to the Business.
NOW, THEREFORE, in consideration of the representations,
warranties and covenants herein contained, the Parties, the
Parent and the Principal agree as follows.
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall
have the meanings ascribed to them below.
"Accounts Receivable" means all trade and other accounts
receivable and notes and loans receivable relating to or
generated by the Business, other than accounts receivable or
notes or loans receivable from employees of the Sellers
evidencing loans to such employees (other than (a) travel
advances in the Ordinary Course of Business and (b) the
approximately $70,000 loan from Black Clawson to Andrew Gan).
"Acquired Assets" means all right, title and interest in and to
all of the assets, properties and rights, whether real, personal,
tangible or intangible, of every kind, nature and description, of
the Sellers existing as of the U.S. Closing or, in the case of BC
France, the France Closing and relating to or used in connection
with the Business, including without limitation:
(a) all Accounts Receivable and all unbilled amounts
for Contracts in Progress (excluding Accounts Receivable and
Contracts in Progress of BC France);
PAGE
(b) all inventories of raw materials, work in process,
finished goods, supplies, packaging materials, spare parts and
similar items (excluding any such items owned by BC France);
(c) all machinery, equipment, tools and tooling,
furniture, fixtures, leasehold improvements and motor vehicles
(excluding any such items owned by BC International (other than
assets listed on Section 3.9(c) of the Disclosure Schedule) or by
BC France);
(d) all Intellectual Property and all associated
goodwill, including without limitation all rights to (i) the name
"Black Clawson," subject to the license arrangement in favor of
Black Clawson referenced in Section 6.2(f), and (ii) the mass
balance software owned by BC International;
(e) all rights under contracts, agreements or
instruments (including without limitation any agreements or
instruments securing any amounts owed to any of the Sellers in
connection with the Business, any leases or subleases for real
property, any equipment leases and any licenses or sublicenses
issued to or by any of the Sellers relating to Intellectual
Property), including without limitation those contracts and
licenses set forth on Schedule 1.2(e) attached hereto, but
excluding (i) any Contracts in Progress of BC France, (ii) any
notes or other instruments evidencing loans made by any of the
Sellers to any of their employees (other than (A) travel advances
in the Ordinary Course of Business and (B) the approximately
$70,000 loan from Black Clawson to Andrew Gan), (iii) any
Employee Benefit Plans, (iv) any sales representative or similar
agreements providing for the sale and/or distribution of both
products relating to the Business and products relating to any
other business conducted by any of the Sellers (the "Excluded
Sales Contracts"), and (v) any employment agreements with
employees who do not constitute Continuing Employees (subject to
Section 1.2(j)) (collectively, the "Assigned Contracts");
(f) to the extent assignable, all claims, security
deposits, prepayments, refunds, causes of action, choses in
action, rights of recovery, rights of setoff and rights of
recoupment and all rights under warranties;
(g) to the extent assignable, all Permits issued by or
obtained from any Governmental Entity;
(h) all books, records, accounts, ledgers, files,
documents, correspondence, lists (customer or otherwise),
drawings or specifications, product and sales literature,
employment records of Continuing Employees (but excluding records
concerning Employee Benefit Plans), manufacturing, technical and
procedural manuals, advertising and promotional materials,
studies, reports and other printed or written materials, other
than the Sellers' corporate minute books;
(i) all real property, leaseholds and subleaseholds in
real property, and easements, rights-of-way and other
PAGE
appurtenants thereto, other than any real property, leaseholds
and subleaseholds of BC France and BC International;
(j) all rights to enforce any confidentiality,
invention assignment and/or noncompetition agreements between any
Seller and its employees to the extent that such agreements
relate to the Business;
(k) all outstanding capital stock and other forms of
equity interest and rights to acquire equity in (i) Jin Ya Taiwan
and (ii) SOREP, in each case owned by any Seller;
(l) all assets, properties and rights comprising the
Sellers' offices in Beijing and Guangzhou, China (irrespective of
whether such assets, properties or rights relate to or are used
in connection with the Business); and
(m) all claims and defenses to the extent relating to
any of the foregoing or to the Assumed Liabilities.
Notwithstanding the foregoing, under no circumstances
shall the Acquired Assets include any Excluded Assets.
"Affiliate" shall have the meaning set forth in Rule 12b-2 under
the Exchange Act.
"Agreement" shall mean this Asset Purchase Agreement, together
with the exhibits and schedules (including the Disclosure
Schedule) hereto, as such agreement, exhibits and schedules may
be amended from time to time in accordance with the terms hereof.
"Ancillary Agreements" means the agreements and instruments
attached as exhibits to this Agreement or contemplated to be
entered into in connection herewith.
"Assigned Contracts" shall have the meaning set forth in Section
1.2(e) of this Agreement.
"Assumed Liabilities" means the following liabilities of the
Sellers and no other liabilities:
(a) the liabilities of the Sellers (other than
liabilities for Taxes for "Pre-Closing Periods" (determined in
accordance with Section 7.10 hereof), liabilities pursuant to any
Employee Benefit Plan and liabilities of BC France) incurred in
connection with the Business as set forth on the face of (and not
solely in any notes to) the December 31, 1996 Balance Sheet, to
the extent they have not been paid or discharged prior to the
U.S. Closing;
(b) all liabilities of the Sellers (other than
liabilities for Taxes for "Pre-Closing Periods" (determined in
accordance with Section 7.10 hereof), liabilities pursuant to any
Employee Benefit Plan and liabilities of BC France) incurred in
connection with the Business which have arisen after December 31,
1996 in the Ordinary Course of Business and which are of the same
type as those set forth on the face of (and not solely in any
PAGE
notes to) the December 31, 1996 Balance Sheet, to the extent such
liabilities have not been paid or discharged prior to the U.S.
Closing; provided that this clause (b) shall not encompass any
such liabilities or obligations which relate to any breach of
contract, breach of warranty (except as set forth in
paragraph (d) below), tort, infringement or violation of Law or
Regulation or which arose out of any charge, complaint, action,
suit, proceeding, hearing, investigation, claim or demand;
(c) all obligations of the Sellers arising after the
U.S. Closing or, with respect to Assigned Contracts of BC France,
the France Closing, under the Assigned Contracts, other than
obligations arising from a breach of an Assigned Contract by any
of the Sellers prior to the applicable Closing Date;
(d) all liabilities of the Sellers for product
warranty claims for products manufactured or sold in connection
with the Business prior to the U.S. Closing or, with respect to
products manufactured or sold by BC France, the France Closing,
in each case to the extent they do not relate to the matters
which are the subject of indemnification by the Sellers pursuant
to Section 8.1(e) of this Agreement;
(e) all liabilities of the Sellers for product
liability claims arising out of occurrences after the U.S.
Closing or, with respect to products sold or manufactured by BC
France, the France Closing, including damages to persons or
property, relating to products sold or manufactured in connection
with the Business prior to the applicable Closing, other than
liabilities that are the subject of indemnification by the
Sellers pursuant to Section 8.1(e) of this Agreement;
(f) all liabilities of the Sellers for accrued
vacation and personal time for Continuing Employees to the extent
of the accrual therefor set forth on the Closing Statement; and
(g) fifty percent (50%) of any Transfer Taxes (other
than any VAT) and 100% of any VAT.
Notwithstanding the foregoing, under no circumstances
shall the Assumed Liabilities include any Retained Liabilities
listed in clauses (i) through (xxiii) of Section 2.2(b) of this
Agreement.
"BC Asia" means Black Clawson Asia (Pte.) Ltd., a private limited
company organized under the laws of Singapore.
"BC Canada" means Black Clawson Canada Fibre Processing Ltd., a
Canadian Federal corporation.
"BC France" means Black Clawson Europe S.A., a corporation
organized under the laws of France and registered with the
Registry of Commerce and Companies of Bordeaux under number
RCS-B-465-203-008.
PAGE
"BC France Bankruptcy Proceeding" means the redressement
judiciaire proceeding relating to the assets and indebtedness of
BC France currently pending in the French Bankruptcy Court.
"BC France Creditors" means the creditors of BC France with
claims in the BC France Bankruptcy Proceeding, and shall include,
without limitation, the holders of Obligations Remboursables en
Actions.
"BC France Escrow Agreement" shall have the meaning set forth in
Section 2.4(b)(xi) of this Agreement.
"BC France Escrow Fund" shall have the meaning set forth in
Section 2.8(b) of this Agreement.
"BC France Payments" shall have the meaning set forth in Section
5.9(b) of this Agreement.
"BC France Receiver" means the Commissaire a l' Execution du
Plan, who is maitre Jean-Denis Silvestri, 54 rue St. Remi, 33000,
Bordeaux, France.
"BC International" means Black Clawson International, Ltd., a
company limited by shares under the Companies Act of 1985 of the
United Kingdom.
"BC Shartle" means Black Clawson Shartle Mfg. Co. Inc., a
Delaware corporation.
"Black Clawson" means The Black Clawson Company, an Ohio
corporation.
"Black Clawson Group" means the Sellers, but only with respect to
any matter relating to or affecting the Business or the operation
or conduct thereof, or otherwise affecting the transactions
contemplated by this Agreement.
"Business" means the design, development, sale, marketing and
manufacture of stock preparation machinery and equipment used in
the manufacture of pulp and paper as conducted by the Sellers.
"Buyer" means BC Acquisition Corp., a Delaware corporation.
"Cash Payment" shall have the meaning set forth in Section 2.3 of
this Agreement.
"CERCLA" means the federal Comprehensive Environmental
Compensation, Liability and Response Act of 1980.
"Closing" means the U.S. Closing or the France Closing, as the
case may be.
"Closing Date" means the U.S. Closing Date or the France Closing
Date, as the case may be.
"Closing Statement" shall have the meaning set forth in Section
2.6(b) of this Agreement.
PAGE
"Code" means the Internal Revenue Code of 1986, as amended.
"Continuing Employee" means each Designated Employee who accepts
employment with the Buyer pursuant to Section 7.8 of this
Agreement or who, as a result of this Agreement or the Acte de
Cession de Fonds de Commerce entered into at the France Closing,
transfers to a subsidiary of the Buyer pursuant to the Transfer
Regulations.
"Contracts in Progress" means all contracts in progress and
binding purchase orders for the sale of equipment and/or the
provision of services which have not been shipped or provided as
of the U.S. Closing (or, with respect to contracts in progress or
binding orders of BC France, the France Closing) and which relate
to the Business.
"Damages" means any and all debts, obligations and other
liabilities (whether absolute, accrued, contingent, fixed or
otherwise, or whether known or unknown, or due or to become due
or otherwise), monetary damages, fines, fees, penalties, interest
obligations, shortfalls, diminutions in value, losses and
expenses (including without limitation amounts paid in
settlement, interest thereon at the rate at which interest is
paid on the Escrow Fund from the date of liquidation of the claim
until paid, court costs, costs of investigators, fees and
expenses of attorneys, accountants, financial advisors and other
experts, and other expenses of litigation). To the extent
Damages are incurred in a currency other than U.S. Dollars,
Damages shall be paid in U.S. Dollars based on the applicable
exchange rate in effect on the date on which such Damages are
finally determined in accordance with Article VIII of this
Agreement.
"December 31, 1996 Balance Sheet" means the unaudited balance
sheet of the Business as of December 31, 1996 attached hereto as
Exhibit A.
"Designated Employee" means (a) each employee of the Sellers
based in the United States and employed primarily in the conduct
of the Business and (b) each employee of the Sellers based
outside of the United States and listed on Schedule 1.33 attached
hereto.
"Designated Transferee" shall have the meaning set forth in
Section 10.4 of this Agreement.
"Disclosure Schedule" shall have the meaning set forth in the
introduction to Article III of this Agreement.
"Employee Benefit Plan" means any "employee pension benefit plan"
(as defined in Section 3(2) of ERISA), any "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA), and any
other written or oral plan, agreement or arrangement involving
direct or indirect compensation, including without limitation
insurance coverage, severance benefits, disability benefits,
medical benefits, deferred compensation, bonuses, stock options,
PAGE
stock purchase, phantom stock, stock appreciation, profit sharing
or other forms of incentive compensation or post-retirement
compensation relating to any employee of the Black Clawson Group.
"Environmental Law" means any Law or Regulation or the common law
relating to the environment or occupational health and safety,
including without limitation any statute, regulation or order
pertaining to (a) treatment, storage, disposal, generation and
transportation of industrial, toxic or hazardous substances or
solid or hazardous waste; (b) air, water and noise pollution;
(c) groundwater and soil contamination; (d) the release or
threatened release into the environment of industrial, toxic or
hazardous substances, or solid or hazardous waste, including
without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants, pesticides or
chemicals; (e) the protection of wildlife, marine sanctuaries and
wetlands, including without limitation all endangered and
threatened species; (f) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and
other receptacles; (g) health and safety of employees and other
persons; and (h) manufacture, processing, use, distribution,
treatment, storage, disposal, transportation or handling of
pollutants, contaminants, pesticides, chemicals or industrial,
toxic or hazardous substances or oil or petroleum products or
solid or hazardous waste. As used herein, the terms "release"
and "environment" shall have the meaning set forth in CERCLA.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means any entity which is or was at any time
after December 31, 1990 a member of (a) a controlled group of
corporations (as defined in Section 414(b) of the Code, (b) a
group of trades or businesses under common control (as defined in
Section 414(c) of the Code), or (c) an affiliated service group
(as defined under Section 414(m) of the Code or the regulations
under Section 414(o) of the Code), any of which includes or
included any of the Sellers.
"Escrow Agent" means Bank One Trust Company, N.A., in its
capacity as escrow agent under the Escrow Agreement or the BC
France Escrow Agreement, as the case may be.
"Escrow Agreement" shall have the meaning set forth in
Section 2.4(b)(x) of this Agreement.
"Escrow Fund" shall have the meaning set forth in Section 2.8(a)
of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" means (a) any assets related primarily to BC
International's converting, Unidac, Bristol Former and United
Container Machinery Inc. business, (b) the real property owned by
BC International and located in Newport, South Wales of the
United Kingdom, (c) the real property owned by BC France and
PAGE
located in Floirac, France, (d) any machine tools owned by BC
France, (e) any machine tools owned by BC International and not
used exclusively in connection with the Business (it being
understood that the tools located at BC International and
described in Section 3.9(c) of the Disclosure Schedule are used
exclusively in connection with the Business), (f) any raw
materials owned by BC International and not used exclusively in
connection with the Business, (g) the shares of capital stock of
Black Clawson Converting Machinery Corp. and Black Clawson
Partner, Inc. owned by Black Clawson, (h) any interest of any of
the Sellers in 1st Urban Fiber Operations, Inc., Hagerstown Fibre
Limited Partnership or Lafayette Paper, L.P., (i) any of the
Sellers' cash, short-term investments, deposits, bank accounts,
traded securities or shares in United States Filter Corporation,
(j) any assets owned or leased by any of the Sellers and
comprising the Black Clawson corporate office in New York, New
York, other than any books, records or other data in such office
relating to or used in connection with the Business, (k) the
furniture, fixtures, filing cabinets and office equipment owned
or leased by any of the Sellers and located in Black Clawson's
corporate office in Middletown, Ohio and listed on
Schedule 1.44(k) attached hereto, (l) any Restricted Assets that
are not assignable to the Buyer as a matter of law, (m) any
intercompany receivable due any Seller from any other Seller or
an Affiliate of such other Seller, other than receivables
evidencing products sold in the Ordinary Course of Business to
any Affiliate of any Seller for use or resale in connection with
any business other than the Business, (n) any rights under the
contracts, agreements or instruments listed on Schedule 1.44(n)
attached hereto, (o) any rights under the Contracts in Progress
of BC France, and (p) any key-man life insurance policies on the
life of the Principal.
"Financial Statements" means the December 31, 1996 Balance Sheet,
together with the unaudited consolidated income statement of the
Business for the twelve months ended December 31, 1996 attached
hereto as Exhibit B.
"France Assets" means all of the Acquired Assets owned by BC
France.
"France Closing" means the closing of the purchase and sale of
the France Assets on the France Closing Date.
"France Closing Date" shall have the meaning set forth in Section
2.4(c) of this Agreement.
"France Liabilities" means all of the Assumed Liabilities which
constitute liabilities or obligations of BC France.
"French Bankruptcy Court" means the Tribunal de Commerce de
Bordeaux, France.
"GAAP" means United States generally accepted accounting
principles.
PAGE
"General Manager" shall have the meaning set forth in Section
7.15(d) of this Agreement.
"Governmental Entity" means any foreign, federal, state or local
governmental, regulatory or administrative authority or agency,
court or arbitrational tribunal.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Indemnified Party" means any Party or Parties seeking
indemnification under Article VIII of this Agreement.
"Indemnifying Party" means any Party or Parties from whom
indemnification is sought under Article VIII of this Agreement.
"Initial Closing Statement" shall have the meaning set forth in
Section 2.6(a) of this Agreement.
"Intellectual Property" means any and all (a) patents, patent
applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, re-examination,
utility model, certificate of invention and design patents,
patent applications, registrations and applications for
registrations, (b) trademarks, service marks, trade dress, logos,
trade names and corporate names and registrations and
applications for registration thereof, (c) copyrights and
registrations and applications for registration thereof, (d) mask
works and registrations and applications for registration
thereof, (e) computer software, data and documentation, (f) trade
secrets and confidential business information, whether patentable
or nonpatentable and whether or not reduced to practice,
know-how, technical drawings, manufacturing and product processes
and techniques, research and development information,
copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans and
customer and supplier lists and information, (g) other
proprietary rights relating to any of the foregoing (including
without limitation remedies against infringements thereof and
rights of protection of interest therein under the Laws and
Regulations of all jurisdictions), and (h) copies and tangible
embodiments thereof.
"Laws and Regulations" means all federal, state, regional,
county, local or foreign laws, statutes, codes, rules, decrees,
regulations, ordinances and orders.
"Material Adverse Effect" means Damages to the Business and/or
the Buyer of more than $200,000.
"Materials of Environmental Concern" means any chemicals,
pollutants or contaminants, hazardous substances (as such term is
defined under CERCLA), solid wastes and hazardous wastes (as such
terms are defined under the federal Resources Conservation and
Recovery Act), pesticides, toxic materials, oil or petroleum and
petroleum products or any other material subject to regulation
under any Environmental Law.
PAGE
"Net Tangible Assets" means the excess of (a) the tangible
Acquired Assets (including accounts receivable and prepaid
expenses), over (b) the Assumed Liabilities.
"Neutral Accountants" shall have the meaning set forth in
Section 2.6(b) of this Agreement.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with
respect to frequency and amount).
"Owned Real Property" means all real property owned by any member
of the Black Clawson Group, other than (a) the real property
owned by BC International and located in Newport, South Wales of
the United Kingdom and (b) the real property owned by BC France
and located in Floirac, France.
"Parent" means Thermo Fibertek Inc., a Delaware corporation and
the sole stockholder of the Buyer.
"Parties" means the Buyer, Black Clawson, BC Shartle, BC
International, BC Canada and BC France.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" means all permits, licenses, registrations,
certificates, orders, approvals, franchises, variances and
similar rights used in connection with the Business.
"Post-Closing Periods" shall have the meaning set forth in
Section 7.10(a)(ii) of this Agreement.
"Pre-Closing Periods" shall have the meaning set forth in
Section 7.10(a)(i) of this Agreement.
"Principal" means Carl C. Landegger.
"Purchase Price" shall have the meaning set forth in Section 2.3
of this Agreement.
"Restricted Assets" means each contract, agreement or instrument
that would, but for the operation of Section 2.10 hereof,
constitute an Assigned Contract, and in each case which cannot be
validly assigned, transferred, subleased or sublicensed without
the consent or waiver of the issuer thereof or the other party
thereto or a third person (including a Governmental Entity), or
with respect to which such assignment, transfer, sublease or
sublicense or attempted assignment, transfer, sublease or
sublicense is reasonably likely to (a) constitute a breach
thereof or a violation of any Law or Regulation or (b) entitle
the other party thereto to terminate such contract, agreement or
instrument or receive any additional payment thereunder.
"Restricted Employee" means any person who either (a) was an
employee of the Buyer or the Parent on either the date of this
Agreement or either Closing Date or (b) (i) was employed by any
PAGE
member of the Black Clawson Group (other than BC France) on
either the date of this Agreement or the U.S. Closing Date and
received an employment offer from the Buyer within five days
following the U.S. Closing Date, or (ii) was employed by BC
France on either the date of this Agreement or the France Closing
Date and received an employment offer from the Buyer within five
days following the France Closing Date.
"Retained Liabilities" shall have the meaning set forth in
Section 2.2(b) of this Agreement.
"Retirement Plans" shall have the meaning set forth in
Section 3.19(b) of this Agreement.
"Savings Plan" means The Black Clawson Company 401 Member Savings
Plan.
"Security Interest" means any mortgage, pledge, security
interest, encumbrance, charge or other lien (whether arising by
contract or by operation of law).
"Sellers" means Black Clawson, BC Shartle, BC International,
BC France and BC Canada.
"Sellers' Knowledge" means the actual knowledge or awareness,
after due inquiry, of any Seller.
"Sellers' Obligations" means the obligations and liabilities of
the Sellers with respect to the Business under the agreements and
arrangements listed on Schedule 1.82 attached hereto.
"Sellers' Representative" shall have the meaning set forth in
Section 2.11 of this Agreement.
"Sellers' Welfare Plans" means each welfare benefit plan
sponsored by any of the Sellers or any Affiliate of any of the
Sellers.
"Seller's UK Scheme" means the Black Clawson International, Ltd.
Retirement Benefits Plan (1973).
"SOREP" means Ste de Realisations et Etudes Papetieres S.A.R.L.,
a limited liability company organized under the laws of France
and registered with the Registry of Commerce and Companies of
Bordeaux under number RCS-B-384-653-989.
"Special Provisions Order" shall have the meaning set forth in
Section 7.14 of this Agreement.
"Subsidiary" means (a) any corporation with respect to which
another corporation or entity, directly or indirectly, has the
power to vote or direct the voting of sufficient securities to
elect a majority of the directors or (b) any corporation or other
entity with respect to which another corporation or entity,
directly or indirectly, owns 50% or more of the aggregate equity
interest.
PAGE
"Taxes" means all taxes, charges, fees, levies or other similar
assessments or liabilities, including without limitation income,
gross receipts, ad valorem, premium, value-added, excise, real
property, personal property, sales, use, transfer, withholding,
business, professional, employment, payroll and franchise taxes
and social security charges imposed by the United States of
America or any state, local or foreign government, or any agency
thereof, or other political subdivision of the United States or
any such government, and any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to
or incurred in connection with any tax or any contest or dispute
thereof and any obligation to pay or reimburse any other parties
for any such liabilities of such other party.
"Tax Returns" means all reports, returns, declarations,
statements or other information required to be supplied to a
taxing or social security authority in connection with Taxes.
"Transfer Regulations" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981 of the United Kingdom
and Article L. 122-12 of the French Labor Code.
"Transfer Taxes" shall have the meaning set forth in Section 2.9
of this Agreement.
"UK Employee" means any employee who is assigned to the Business
in so far as it is carried out at any establishment in the United
Kingdom.
"U.K. Reporting Package" means a detailed statement of the
tangible Acquired Assets (including accounts receivable and
prepaid expenses) of BC International and the Assumed Liabilities
of BC International, in each case as of the close of business on
the U.S. Closing Date, together with such back-up and supporting
documentation as the Buyer may reasonably request.
"Union" means the International Association of Machinists and
Aerospace Workers, A.F.L. - C.I.O.
"Union Agreements" shall have the meaning set forth in
Section 3.18(b) of this Agreement.
"U.S. Closing" means the closing of the transactions contemplated
by this Agreement, other than the transactions to be consummated
at the France Closing.
"U.S. Closing Date" shall have the meaning set forth in
Section 2.4(a) of this Agreement.
"VAT" means the U.K. value added tax.
"VATA" shall have the meaning set forth in Section 7.14 of this
Agreement.
ARTICLE II
PAGE
THE PURCHASE
Purchase and Sale of the Acquired Assets. Upon and subject
to the terms and conditions of this Agreement, the Buyer shall
purchase from the Sellers, and the Sellers shall sell, transfer,
convey, assign and deliver to the Buyer, for the consideration
specified below in this Article II, (a) at the U.S. Closing, all
of the Acquired Assets other than the France Assets, and (b) at
the France Closing, all of the France Assets. Notwithstanding
the foregoing, the Acquired Assets shall not include any of the
Excluded Assets.
Assumption of Liabilities.
(a) Subject to the terms and conditions of this Agreement,
the Buyer shall assume and become responsible for, (i) from and
after the U.S. Closing, the Assumed Liabilities other than the
France Liabilities, and (ii) from and after the France Closing,
the France Liabilities.
(b) Notwithstanding anything to the contrary set forth
herein, the Buyer shall not assume or become responsible for, and
the Sellers shall remain solely liable for, any and all
liabilities or obligations (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated,
whether accrued or unaccrued, whether due or to become due, and
whether claims with respect thereto are asserted before or after
the applicable Closing) of the Sellers which are not Assumed
Liabilities (collectively, the "Retained Liabilities"). The
Retained Liabilities shall include, without limitation, the
following: all liabilities and obligations of any of the Sellers
for costs and expenses incurred in connection with the
preparation and negotiation of this Agreement or the consummation
of the transactions contemplated by this Agreement;
(i) all liabilities and obligations of any of the
Sellers under this Agreement or any of the Ancillary Agreements;
(ii) all liabilities and obligations of any of the
Sellers for any Taxes for Pre-Closing Periods;
(iii) all liabilities and obligations of any of the
Sellers under any agreements, contracts, leases or licenses which
are not Assigned Contracts;
(iv) all obligations of any of the Sellers arising and
due to be performed prior to the U.S. Closing (or, in the case of
obligations of BC France, the France Closing) under the Assigned
Contracts, and all liabilities for any breach, act or omission by
any of the Sellers prior to the U.S. Closing (or, in the case of
liabilities of BC France, the France Closing) under any Assigned
Contract;
(v) except as specifically set forth in Section 1.7(e),
all liabilities of any of the Sellers for any product liability
claim, including damage to persons or property, relating to
PAGE
products sold prior to the U.S. Closing (or, in the case of
products sold by BC France, the France Closing);
(vi) all liabilities and obligations of any of the Sellers
arising out of events, conduct or conditions existing or
occurring prior to the U.S. Closing (or, in the case of
liabilities or obligations of BC France, the France Closing) that
constitute a violation of or noncompliance with any Law or
Regulation, any judgment, decree or order of any Governmental
Entity, or any Permit;
(vii) all liabilities and obligations of any of the Sellers
(including without limitation costs of cleanup and remediation)
resulting from (A) any releases of any Materials of Environmental
Concern into the environment in connection with the operation of
the Business or any other business by any Seller or any
predecessor business or company prior to the U.S. Closing Date
(or, with respect to the portion of the Business or any other
business operated by BC France, the France Closing Date) or for
which any Seller is liable pursuant to any indemnity or
otherwise; (B) the existence of any Materials of Environmental
Concern at any site on which the business or operations of the
Business or any predecessor business or company was conducted
prior to the Closing Date (or, with respect to the portion of the
Business or any other business operated by BC France, the France
Closing Date) or to which any such Materials of Environmental
Concern were transported; (C) any release of any Materials of
Environmental Concern at any such location if such release could
give rise under any Environmental Law to liability on the part of
any Seller or any predecessor business or company; or (D) any
violation of any Environmental Law by any Seller or any
predecessor business or company which occurred prior to the
Closing (or, with respect to any such violation by BC France or
any predecessor thereto, the France Closing); provided, however,
that the liabilities and obligations referred to in this clause
(viii) shall constitute Retained Liabilities only to the extent
asserted by the Buyer prior to the fifth anniversary of the
applicable Closing Date; provided further, however, that Retained
Liabilities shall include all Damages which result from an event,
condition, release or violation asserted by the Buyer prior to
such date whether or not such Damages are known or incurred
before such fifth anniversary;
(viii) except as specifically set forth in Section
1.7(e), all liabilities and obligations of any of the Sellers for
injury to or death of persons or damage to or destruction of
property occurring prior to the Closing (or, in the case of
liabilities or obligations of BC France, the France Closing),
including without limitation any workers compensation claim;
(ix) all intercompany liabilities of the Sellers and
their Affiliates;
(x) any claims against, or liabilities or obligations
of or in connection with, any Employee Benefit Plans, including
without limitation any excise Taxes, penalties or other
liabilities imposed under ERISA or the Code, except as otherwise
PAGE
expressly provided in Sections 2.2(b)(xii), 2.2(b)(xiii) or 7.9
of this Agreement;
(xi) except as specifically set forth in Sections
7.15(e) and (f), all liabilities and obligations of any of the
Sellers to pay severance, termination pay, redundancy pay, pay in
lieu of notice, accrued vacation pay or other benefits to any
current or former employee of any of the Sellers whose employment
is terminated (or treated as terminated) in connection with the
consummation of the transactions contemplated by this Agreement
(other than liabilities or obligations for severance, termination
pay, redundancy pay, pay in lieu of notice, accrued vacation pay
or other benefits to any Continuing Employees who are terminated
by the Buyer or any successor to the Buyer following the U.S.
Closing (or, in the case of Continuing Employees who are former
employees of BC France, the France Closing)) and all liabilities
resulting from the termination of employment of employees of any
of the Sellers prior to the U.S. Closing (or, in the case of
employees of BC France, the France Closing), including without
limitation any liabilities of the Sellers pursuant to agreements
and plans listed in Section 3.19(l) of the Disclosure Schedule;
(xii) all liabilities and obligations of any of the
Sellers for all compensation and benefits accrued or incurred
prior to the U.S. Closing (or, with respect to liabilities and
obligations of BC France, the France Closing) by employees of the
Sellers employed in the Business, including without limitation
accrued vacation and personal time and personal time, premiums or
benefits under any Employee Benefit Plan and severance pay;
provided, however, that the Buyer shall assume liability for
accrued vacation and personal time for Continuing Employees to
the extent of the accrual therefor set forth on the Closing
Statement;
(xiii) except as specifically set forth in
Sections 1.7(d) and 1.7(e), all liabilities and obligations of
any of the Sellers arising out of any claim, suit, action,
arbitration, proceeding, investigation or other similar matter
which commenced or relates to the ownership of the Acquired
Assets or the operation of the Business on or prior to the U.S.
Closing (or, with respect to any such liabilities or obligations
of BC France, the France Closing), including without limitation
any obligations or liabilities arising out of the matters
disclosed in Section 3.16 of the Disclosure Schedule and any
litigation related thereto or arising out of the subject matter
thereof;
(xiv) fifty percent (50%) of the liabilities and
obligations for any Transfer Taxes (other than any VAT);
(xv) all liabilities and obligations under foreign
currency contracts to which any Seller is a party, other than the
foreign currency contracts listed on Schedule 2.2(b)(xvi)
attached hereto;
PAGE
(xvi) all liabilities and obligations of any of the
Sellers with respect to any overdraft facility, bank credit line
or indebtedness for borrowed money;
(xvii) all liabilities and obligations of any of the
Sellers relating to any of the Excluded Assets;
(xviii) all liabilities and obligations under
Restricted Assets to the extent the Sellers do not obtain the
consents and waivers necessary to assign, transfer, sublease or
sublicense such Restricted Assets to the Buyer and the Sellers do
not provide to the Buyer the benefits of such Restricted Assets
pursuant to Section 2.10(b);
(xix) all liabilities and obligations with respect to
the matters for which any provision of this Agreement provides
that the Buyer shall assume no liability;
(xx) all liabilities and obligations of any of the
Sellers not related primarily to the Business;
(xxi) all liabilities and obligations of any of the
Sellers under any agreements relating to the disposition of
assets (other than product sales in the Ordinary Course of
Business by members of the Black Clawson Group), businesses or
companies (whether by sale of assets, sale of stock, merger or
otherwise) entered into at any time prior to the U.S. Closing
(or, with respect to any such liabilities or obligations of BC
France, the France Closing);
(xxii) all claims, liabilities and costs arising out of
anything done or omitted to be done in relation to the employment
of any U.K. Employee of any of the Sellers prior to the U.S.
Closing Date; and
(xxiii) all liabilities and obligations of any of the
Sellers arising out of events, conduct or conditions existing or
occurring prior to the Closing (or, with respect to any such
liabilities or obligations of BC France, the France Closing) that
do or allegedly constitute an infringement or violation of, or do
or allegedly constitute a misappropriation of, any Intellectual
Property rights of any other person or entity.
2.3 Purchase Price. The purchase price to be paid by the
Buyer for the Acquired Assets at the U.S. Closing shall be
$104,750,000, of which amount (a) an amount equal to the
difference of (i) $86,250,000 minus (ii) the BC France Payments
(such difference being hereinafter referred to as the "Cash
Payment") shall be delivered to the Sellers' Representative, for
the benefit of the Sellers, by wire transfer of immediately
available funds to an account specified by the Sellers'
Representative at least five business days prior to the U.S.
Closing, (b) $12,000,000 shall be delivered to the Escrow Agent
pursuant to Section 2.8 (a) hereof by wire transfer of
immediately available funds to an account specified by the Escrow
Agent at least five business days prior to the U.S. Closing,
(c) $5,000,000 shall be delivered to the Escrow Agent pursuant to
PAGE
Section 2.8(b) hereof by wire transfer of immediately available
funds to an account specified by the Escrow Agent at least five
business days prior to the U.S. Closing, and (d) $1,500,000 shall
be held back by the Buyer pursuant to Section 7.18 of this
Agreement. The balance of the Purchase Price shall be evidenced
by the BC France Payments. The amount of $104,750,000, as it may
be adjusted pursuant to Section 2.6 below, is referred to as the
"Purchase Price." The Purchase Price received by Black Clawson
as the Sellers' Representative shall be subject to the terms of
Section 10.4 of this Agreement.
The Closings.
The U.S. Closing shall take place at the offices of Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts commencing at
9:00 a.m. local time on May 22, 1997, or, if all of the
conditions to the obligations of the Parties to consummate the
U.S. Closing set forth in Sections 6.1 and 6.2 have not been
satisfied or waived by such date, on such mutually agreeable
later date as soon as practicable after the satisfaction or
waiver of all of such conditions, but in no event more than five
business days after such satisfaction or waiver (the "U.S.
Closing Date").
At the U.S. Closing:
the Sellers shall deliver to the Buyer the various certificates,
instruments, agreements and other documents referred to in
Section 6.1;
the Buyer shall deliver to the Sellers the various certificates,
instruments, agreements and other documents referred to in
Section 6.2;
the Sellers (other than BC France) shall execute and deliver to
the Buyer a bill of sale in the form attached hereto as Exhibit C
and execute and deliver or obtain, as appropriate, such other
instruments of conveyance (including without limitation deeds,
trademark assignments, patent assignments, copyright and other
intellectual property licenses and assignments of leasehold
interests) as the Buyer may reasonably request in order to effect
the sale, transfer, conveyance and assignment to the Buyer of
valid ownership of the Acquired Assets other than the France
Assets, including any required consents, approvals or permits;
PAGE
the Buyer shall execute and deliver to the Sellers (other than
BC France) an instrument of assumption of liabilities in the form
attached hereto as Exhibit D and such other instruments as the
Sellers may reasonably request in order to effect the assumption
by the Buyer of the Assumed Liabilities, other than the France
Liabilities;
the Sellers (other than BC France) shall execute and deliver to
the Buyer one or more Patent Assignments in the form attached
hereto as Exhibit E;
the Sellers (other than BC France) shall execute and deliver to
the Buyer one or more Trademark Assignments in the form attached
hereto as Exhibit F;
the Buyer shall pay to the Sellers' Representative, for the
benefit of the Sellers, the Cash Payment as specified in
Section 2.3;
the Buyer shall pay to the Principal the non-competition payment
specified in Section 7.3(g);
the Sellers shall deliver to the Buyer, or otherwise put the
Buyer in possession and control of, all of the Acquired Assets
(other than the France Assets) of a tangible nature;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall execute and deliver an Escrow Agreement in the
form attached hereto as Exhibit G (the "Escrow Agreement") and
the Buyer shall deposit funds with the Escrow Agent pursuant to
the Escrow Agreement in accordance with Sections 2.3(b) and
2.8(a) hereof;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall execute and deliver an Escrow Agreement in the
form attached hereto as Exhibit H (the "BC France Escrow
Agreement") and the Buyer shall deposit funds with the Escrow
Agent pursuant to the BC France Escrow Agreement in accordance
with Sections 2.3(c) and 2.8(b) hereof; and
PAGE
the Buyer and the Sellers shall execute and deliver to each other
a cross-receipt evidencing the transactions referred to above.
The France Closing shall take place at the offices of
McLoughlin & Associes, 2, Square du Roule, 75008 Paris, France
commencing at 9:00 a.m. local time on the second business day
following the date on which all of the conditions to the
obligations of the Parties to consummate the France Closing set
forth in Sections 6.3 and 6.4 have been satisfied or waived (the
"France Closing Date"). The Parties agree and acknowledge that
(i) the France Closing is conditioned upon the occurrence of the
U.S. Closing; (ii) the U.S. Closing is not dependent upon the
subsequent occurrence of the France Closing; and (iii) in the
event that the U.S. Closing occurs and the France Closing does
not occur, the Buyer shall have no right to rescind or otherwise
unwind the transactions occurring at the U.S. Closing absent
fraud on the part of a Seller and except as otherwise required by
law.
At the France Closing:
the Sellers shall deliver to the Buyer the various certificates,
instruments, agreements and other documents referred to in
Section 6.3;
the Buyer shall deliver to the Sellers the various certificates,
instruments, agreements and other documents referred to in
Section 6.4;
BC France shall execute and deliver to the Buyer an Acte de
Cession de Fonds de Commerce in the form attached hereto as
Exhibit I and execute and deliver or obtain, as appropriate, such
other instruments of conveyance (including without limitation
deeds, trademark assignments, patent assignments, copyright and
other intellectual property licenses and assignments of leasehold
interests) as the Buyer may reasonably request in order to effect
the sale, transfer, conveyance and assignment to the Buyer of
valid ownership of the France Assets, including any required
consents, approvals or permits;
BC France shall execute and deliver to the Buyer one or more
Patent Assignments in the form attached hereto as Exhibit E;
PAGE
BC France shall execute and deliver to the Buyer one or more
Trademark Assignments in the form attached hereto as Exhibit F;
BC France shall deliver to the Buyer, or otherwise put the Buyer
in possession and control of, any of the France Assets of a
tangible nature; and
the Buyer and BC France shall execute and deliver to each other a
cross-receipt evidencing the transactions referred to above.
All transactions at each Closing shall be deemed to take place at
12:01 a.m. U.S. Eastern time on the applicable Closing Date, and
no transaction shall be deemed to have been completed and no
documents or certificate shall be deemed to have been delivered
until all other transactions are completed and all other
documents and certificates are delivered.
Allocation of Purchase Price. The Buyer and the Sellers agree
to use reasonable efforts to agree, promptly following the U.S.
Closing, on an allocation of the Purchase Price (and all other
capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes). It is
acknowledged that, in connection with the payment of the Purchase
Price and the non-competition payment contemplated by
Section 7.3(g) hereof, Black Clawson is acting as agent for the
other Sellers (other than BC France) and the Principal, and Black
Clawson, as soon as practical after the U.S. Closing, shall pay
to such Sellers that portion of the Purchase Price allocated to
each of them and to the Principal the amount set forth in
Section 7.3(g) hereof.
Post-Closing Adjustments. The Purchase Price set forth in
Section 2.3 shall be subject to adjustment after the U.S. Closing
Date as follows:
As promptly as possible after the U.S. Closing Date (but in any
event not later than 45 days thereafter), BC International shall
prepare and deliver to the Buyer the U.K. Reporting Package. As
promptly as possible thereafter (but in any event not later than
45 days after the delivery by BC International to the Buyer of
the U.K. Reporting Package), the Buyer shall prepare and deliver
to the Sellers' Representative a statement of Net Tangible Assets
(the "Initial Closing Statement") as of the close of business on
the U.S. Closing Date (without giving effect to the transactions
PAGE
contemplated by this Agreement). The Buyer shall prepare the
Initial Closing Statement in accordance with GAAP and on a basis
consistent with the accounting principles used in preparing the
December 31, 1996 Balance Sheet (to the extent such accounting
principles are consistent with GAAP); provided, that the warranty
and inventory reserves set forth on the Initial Closing Statement
shall be the same as the warranty and inventory reserves set
forth on the December 31, 1996 Balance Sheet. The accounting
principles used in preparing the December 31, 1996 Balance Sheet
are set forth on Schedule 2.6 attached hereto. The Initial
Closing Statement shall also set forth the determination of the
Purchase Price, as adjusted pursuant to this Section 2.6.
The Sellers' Representative shall deliver to the Buyer within 30
days after receiving the Initial Closing Statement a detailed
statement describing any objections thereto. Failure of the
Sellers' Representative to so object to the Initial Closing
Statement shall constitute acceptance thereof by the Sellers,
whereupon the Initial Closing Statement shall be deemed to be the
Closing Statement. The Buyer and the Sellers' Representative
shall use reasonable efforts to resolve any such objections, but
if they do not reach a final resolution within 45 days after the
Buyer has received the Sellers' Representative's statement of
objections, the Buyer and the Sellers' Representative shall
select an accounting firm (the "Neutral Accountants_) mutually
acceptable to them to resolve any remaining objections. If the
Buyer and the Sellers' Representative are unable to agree on the
choice of the Neutral Accountants, upon the request of either the
Buyer or the Sellers' Representative, the Washington, D.C. office
of an internationally-recognized accounting firm shall be
selected by the Boston, Massachusetts office of the American
Arbitration Association to serve as the Neutral Accountants
(after excluding the respective primary independent accounting
firms of the Buyer and the Sellers). The Neutral Accountants
promptly shall determine whether the objections raised by the
Sellers' Representative are appropriate in light of the
requirements of Section 2.6(a). The Initial Closing Statement
shall be adjusted to the extent such objections are determined by
the Neutral Accountants to be appropriate and, as so adjusted,
shall be the "Closing Statement." Such determination by the
Neutral Accountants shall be conclusive and binding upon the
Parties, absent fraud or manifest error. Nothing herein shall be
construed to authorize or permit the Neutral Accountants to
determine (i) any questions or matter whatever under or in
connection with this Agreement except the determination of what
items are properly included in the Initial Closing Statement and
what adjustments, if any, must be made in the items reflected in
(or, to the extent that an item is determined by the Neutral
Accountants to have been improperly omitted from the Initial
Closing Statement, omitted from) the Initial Closing Statement,
in each case to the extent that such items are the subject of
objections by the Sellers' Representative, or (ii) an adjustment
to an item on the Initial Closing Statement that is outside of
the range defined by amounts as finally proposed by the Sellers'
Representative and the Buyer, respectively.
PAGE
If the Net Tangible Assets as shown on the Closing Statement are
equal to or greater than $18,237,000 and less than or equal to
$20,237,000 the Purchase Price shall equal $104,750,000.
If the Net Tangible Assets as shown on the Closing Statement are
less than $18,237,000, the Purchase Price shall equal
$104,750,000 less the amount of such deficiency, and the Sellers
shall pay to the Buyer an amount equal to such deficiency (plus
interest thereon from the U.S. Closing Date at the rate at which
interest is actually earned on the Escrow Fund from time to
time).
If the Net Tangible Assets as shown on the Closing Statement are
more than $20,237,000, the Purchase Price shall equal
$104,750,000 plus the amount of such excess, and the Buyer shall
pay to the Sellers' Representative, for the benefit of the
Sellers, an amount equal to such excess (plus interest thereon
from the U.S. Closing Date at the rate at which interest is
actually earned on the Escrow Fund from time to time).
Any payments required to be made by the Sellers to the Buyer, or
by the Buyer to the Sellers' Representative, pursuant to this
Section 2.6 shall be made by wire transfer or other delivery of
immediately available funds, within three business days after the
date on which the Closing Statement is finally determined
pursuant to this Section 2.6; provided, however, that amounts
payable by the Sellers to the Buyer may be recovered by the Buyer
pursuant to the terms of the Escrow Agreement established in
accordance with Section 2.8 below. All obligations of the
Sellers pursuant to this Section 2.6 shall be joint and several.
If the Purchase Price is adjusted pursuant to this Section 2.6,
the allocation of the Purchase Price among the Acquired Assets
agreed upon pursuant to Section 2.5 shall be appropriately
modified to reflect increases or decreases in the various asset
categories which give rise to such adjustments to the maximum
extent allowable under Section 1060 of the Code.
The Buyer, on the one hand, and the Sellers, on the other hand,
shall share equally the fees and expenses of the Neutral
Accountants in connection with the resolution of any dispute
pursuant to Section 2.6(b) above.
PAGE
Further Assurances. At each Closing and at any time and from
time to time thereafter, at the request of the Buyer and without
further consideration, each Seller shall promptly execute and
deliver such instruments of sale, transfer, conveyance and
assignment and take all such other action as the Buyer may
reasonably determine is necessary to more effectively transfer,
convey and assign to the Buyer, and to evidence and confirm the
Buyer's rights to, title in and ownership of, the Business and
the Acquired Assets, to place the Buyer (through its ownership of
the Acquired Assets) in actual possession and operating control
of the assets, properties and business of the Business, to assist
the Buyer in exercising all rights with respect thereto and to
carry out the purpose and intent of this Agreement.
Escrow.
At the U.S. Closing, $12,000,000 of the Purchase Price otherwise
payable by the Buyer to the Sellers shall be delivered by the
Buyer to the Escrow Agent for the purpose of securing the
obligations of the Sellers under Section 2.6(f) and Article VIII
hereof. Such amount (the "Escrow Fund") shall be held by the
Escrow Agent pursuant to the terms of the Escrow Agreement. The
Escrow Fund shall be held as a trust fund and shall not be
subject to any lien, attachment, trustee process or any other
judicial process of any creditor of any party, and shall be held
and disbursed solely for the purposes and in accordance with the
terms of the Escrow Agreement.
At the U.S. Closing, $5,000,000 of the Purchase Price otherwise
payable by the Buyer to the Sellers shall be delivered by the
Buyer to the Escrow Agent for the purpose of securing the
obligation of the Buyer to pay the Purchase Price for the France
Assets at the France Closing and of the Sellers to proceed with
the France Closing under Section 2.3(c) hereof. Of such amount
(the "BC France Escrow Fund"), $3,900,000 shall evidence the
portion of the Purchase Price attributable to the France Assets
and $1,100,000 shall represent additional Purchase Price payable
with respect to the remaining Acquired Assets which shall be held
by the Escrow Agent in order to insure the consummation of the
France Closing. The BC France Escrow Fund shall be held by the
Escrow Agent pursuant to the terms of the BC France Escrow
Agreement. The BC France Escrow Fund shall be held as a trust
fund and shall not be subject to any lien, attachment, trustee
process or any other judicial process of any creditor of any
party, and shall be held and disbursed solely for the purposes
and in accordance with the terms of the BC France Escrow
Agreement.
PAGE
Transaction Taxes. Any and all federal, state, county, local or
foreign sales, use, value added, excise, stamp, transfer,
registration and other Taxes not in the nature of income taxes,
fees and duties (including any interest, additions to tax and
penalties with respect thereto) and any and all transfer,
registration, recording or similar fees and charges imposed in
connection with the consummation of the transactions contemplated
by this Agreement (collectively, "Transfer Taxes") shall be borne
equally by the Buyer, on the one hand, and the Sellers, jointly
and severally, on the other hand.
Restricted Assets.
The Sellers shall use all reasonable efforts, and the Buyer shall
cooperate reasonably with the Sellers, (i) to promptly obtain the
consents and waivers necessary to convey or cause to be conveyed
to the Buyer all of the Restricted Assets, and (ii) as of and
subject to the occurrence of each Closing, to promptly convey or
cause to be conveyed to the Buyer the Restricted Assets to be
conveyed to the Buyer at such Closing for which the Sellers have
received the necessary consents and waivers; provided, however,
that the Sellers shall not amend or change any Restricted Asset
without the prior written consent of the Buyer unless the Sellers
reasonably deem it necessary to preserve the value of the
Restricted Asset. The Sellers shall cooperate with the Buyer in
making applications and filings or taking any other action
necessary for the Buyer to obtain such franchises, licenses,
permits or other instruments or agreements, if any, as are
substantially equivalent to any Restricted Assets that are not
assignable to Buyer as a matter of law. In no event shall the
Buyer's cooperation hereunder require the Buyer to make any
payments or incur any out-of-pocket expenses, except that the
Buyer shall reimburse the Sellers on an equitable basis for any
consideration paid, with the prior approval of the Buyer, to any
person from whom a consent or waiver is requested.
To the extent that the consents and waivers necessary to assign,
transfer, sublease or sublicense any of the Restricted Assets are
not obtained, the Sellers shall, during the period commencing on
the U.S. Closing Date (or, in the case of Restricted Assets held
by BC France, the France Closing Date) and continuing for the
duration of each such Restricted Asset, use reasonable efforts to
(i) provide to the Buyer the benefits of any such Restricted
Asset not assigned, transferred or subleased due to the Sellers'
failure or inability to obtain such consent or waiver,
(ii) cooperate with the Buyer to reach a reasonable and lawful
arrangement designed to provide such benefits to the Buyer during
such period, and (iii) enforce at the request of the Buyer, or
allow the Buyer to enforce (and, for such purpose, each Seller
hereby constitutes and appoints the Buyer as its true and lawful
attorney-in-fact), any rights of any of the Sellers under any
PAGE
such Restricted Asset against the issuer thereof or the other
party or parties thereto (including the right to elect to
terminate such of the foregoing in accordance with the terms
thereof upon the request of the Buyer); provided, however, that
the reasonable costs and expenses of the Sellers incurred at the
Buyer's request with respect to any of the actions contemplated
under clause (iii) above shall be promptly paid or reimbursed by
the Buyer to the Sellers. At the end of each such period, the
Sellers shall have no further duties or obligations under this
Section 2.10 with respect to such Restricted Asset and the
failure or inability to obtain any necessary consent or waiver
with respect thereto shall not constitute a breach of this
Agreement so long as the Sellers have carried out their
obligations under this Section 2.10.
To the extent that the Buyer is provided the benefits of any
Restricted Asset pursuant to clause (b) of this Section 2.10, the
Buyer shall perform for the benefit of the issuer thereof, or the
other party or parties thereto, the obligations of the applicable
Seller thereunder or in connection therewith, but only to the
extent that (i) such action by the Buyer would not result in any
default thereunder or in connection therewith and (ii) such
obligation would have been an Assumed Liability but for the
non-assignability or non-transferability thereof; provided,
however, that if the Buyer shall fail to perform to the extent
required herein, the Sellers shall thereafter cease to be
obligated under this Section 2.10 to provide the Buyer with any
benefits in respect of the Restricted Asset which is the subject
of such failure to perform unless and until such situation is
remedied or, at the sole option of the applicable Seller, the
Buyer shall promptly pay or reimburse such Seller for all costs
reasonably incurred by such Seller to remedy such failure to
perform during such period of failure of performance.
Sellers' Representative.
In order to efficiently administer the transactions contemplated
hereby, including (i) the determination of any adjustment to the
Purchase Price pursuant to Section 2.6, (ii) the waiver of any
condition to the obligations of the Sellers to consummate the
transactions contemplated hereby, and (iii) the defense and/or
settlement of any claims for which any of the Sellers may be
required to indemnify or reimburse the Buyer pursuant to the
Escrow Agreement, the BC France Escrow Agreement or Article VIII
below, the Sellers hereby designate Black Clawson as their
representative (the "Sellers' Representative").
The Sellers hereby authorize the Sellers' Representative (i) to
make all decisions relating to the determination of any
PAGE
adjustment to the Purchase Price pursuant to Section 2.6 and the
delivery of all or any portion of the Escrow Fund with respect
thereto, (ii) to take all action necessary in connection with the
waiver of any condition to the obligations of the Sellers to
consummate the transactions contemplated hereby, or the defense
and/or settlement of any claims for which any of the Sellers may
be required to indemnify the Buyer pursuant to Article VIII
below, (iii) to give and receive all notices required to be given
under this Agreement, the Escrow Agreement or the BC France
Escrow Agreement, (iv) to waive compliance with any of the terms
of this Agreement, the Escrow Agreement or the BC France Escrow
Agreement, and (v) to take any and all additional action as is
contemplated to be taken by or on behalf of any or all of the
Sellers by the terms of this Agreement, the Escrow Agreement
and/or the BC France Escrow Agreement.
In the event that the Sellers' Representative becomes unable to
perform its responsibilities hereunder or resigns from such
position, the remaining Sellers shall select another
representative to fill such vacancy and such substituted
representative shall be deemed to be the Sellers' Representative
for all purposes of this Agreement and the documents delivered
pursuant hereto; provided, however, that if the remaining Sellers
shall fail to select another representative within ten business
days following the event giving rise to such vacancy, the Buyer
may select one of the remaining Sellers to fill such vacancy.
All decisions and actions by the Sellers' Representative,
including without limitation any agreement between the Sellers'
Representative and the Buyer relating to the determination of any
adjustment to the Purchase Price pursuant to Section 2.6 and the
defense or settlement of any claims for which any of the Sellers
may be required to indemnify the Buyer pursuant to Article VIII
below, shall be binding upon all of the Sellers and no Seller
shall have the right to object, dissent, protest or otherwise
contest the same.
By its execution of this Agreement, each Seller agrees that:
the Buyer shall be able to rely conclusively on the instructions
and decisions of the Sellers' Representative as to the
determination of any adjustment to the Purchase Price pursuant to
Section 2.6, the settlement of any claims for indemnification by
the Buyer pursuant to Article VIII below or any other actions
required or permitted to be taken by the Sellers' Representative
hereunder or under the Escrow Agreement or the BC France Escrow
Agreement, and no party hereunder shall have any cause of action
against the Buyer to the extent the Buyer has relied upon the
instructions or decisions of the Sellers' Representative;
PAGE
all actions, decisions and instructions of the Sellers'
Representative shall be conclusive and binding upon all of the
Sellers and no Seller shall have any cause of action against the
Sellers' Representative for any action taken, decision made or
instruction given by the Sellers' Representative under this
Agreement, except for fraud or willful breach of this Agreement
by the Sellers' Representative;
the provisions of this Section 2.11 are independent and
severable, are irrevocable and coupled with an interest and shall
be enforceable notwithstanding any rights or remedies that any
Seller may have in connection with the transactions contemplated
by this Agreement;
remedies available at law for any breach of the provisions of
this Section 2.11 are inadequate; therefore, the Buyer shall be
entitled to temporary and permanent injunctive relief without the
necessity of proving damages if the Buyer brings an action to
enforce the provisions of this Section 2.11; and
the provisions of this Section 2.11 shall be binding upon the
representatives, successors and assigns of each Seller, and any
references in this Agreement to a Seller or the Sellers shall
mean and include the successors to the Seller's rights hereunder,
whether pursuant to operation of law or otherwise.
All fees and expenses incurred by the Sellers' Representative
shall be paid by the Sellers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, jointly and severally, represents and
warrants to the Buyer that the statements contained in this
Article III are true and correct, except as set forth in the
disclosure schedule attached hereto (the "Disclosure Schedule").
The Disclosure Schedule shall be arranged in Sections
PAGE
corresponding to the numbered and lettered Sections contained in
this Article III, and the disclosures in any Section of the
Disclosure Schedule shall qualify other Sections in this Article
III only to the extent that it is clear from a reading of the
disclosure that such disclosure is applicable to such other
Sections.
Organization, Qualification and Corporate Power. Each Seller is
a corporation or other form of limited liability company duly
organized, validly existing and in corporate good standing (in
such jurisdictions where such concept is applicable) under the
laws of the jurisdiction of its incorporation or organization as
set forth in Section 3.1 of the Disclosure Schedule. Each Seller
is in good standing as a foreign corporation and licensed or
qualified to transact business in the jurisdictions listed in
Section 3.1 of the Disclosure Schedule, which are the only
jurisdictions in which the nature of the properties owned or
leased by it or the business transacted by it requires it to be
so licensed or qualified. Each Seller has all requisite
corporate power and authority to carry on the businesses in which
it is engaged and to own and use the properties owned and used by
it.
Subsidiaries. Except as set forth in Section 3.2 of the
Disclosure Schedule, no member of the Black Clawson Group holds
any direct or indirect equity interest in any Subsidiary or any
other corporation, partnership or joint venture. Section 3.2 of
the Disclosure Schedule sets forth a true and complete list of
the authorized capitalization of SOREP and the percentage of the
outstanding capital stock thereof owned by any member of the
Black Clawson Group. All of the outstanding shares of capital
stock of SOREP are duly authorized, validly issued, fully paid
and nonassessable, and all such shares owned by any member of the
Black Clawson Group, as set forth in Section 3.2 of the
Disclosure Schedule, are free and clear of all Security
Interests.
Authority. Each Seller has all requisite power and authority to
execute and deliver this Agreement and the Ancillary Agreements
to which it is a party and to perform its obligations hereunder
and thereunder. The execution and delivery of this Agreement and
the Ancillary Agreements and the performance by each Seller of
this Agreement and the Ancillary Agreements to which it is a
party and the consummation by such Seller of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate and stockholder action on
the part of such Seller. This Agreement has been duly and
validly executed and delivered by each Seller and constitutes,
and each of the Ancillary Agreements to which such Seller is a
party, upon its execution and delivery by such Seller, will
constitute, a valid and binding obligation of such Seller,
PAGE
enforceable against such Seller in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies
may be limited by general principles of equity.
Noncontravention.
Neither the execution and delivery of this Agreement or the
Ancillary Agreements by any Seller, nor the consummation by any
Seller of the transactions contemplated hereby or thereby, will,
directly or indirectly (with or without notice or lapse of time),
(i) conflict with or violate any provision of the charter or
By-laws or similar organizational documents of any Seller or any
resolution adopted by the board of directors or the stockholders
of any Seller, (ii) other than as may be required by compliance
with the HSR Act, require on the part of any Seller any filing
with, or any permit, authorization, consent or approval of, any
Governmental Entity, (iii) other than as may be required by
compliance with the HSR Act, give any Governmental Entity the
right to challenge any of the transactions contemplated by this
Agreement or the Ancillary Agreements, except for any right of
any Governmental Entity to challenge such transactions under
applicable antitrust laws which do not provide for pre-Closing
filing or notification, (iv) conflict with, result in a breach
of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or
cancel, or require any notice, consent or waiver under, any
contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other
arrangement to which any Seller is a party or by which any Seller
is bound or to which any of the assets of any Seller is subject,
(v) result in the imposition of any Security Interest upon any of
the Acquired Assets, or (vi) violate any order, writ, injunction,
decree, Law or Regulation applicable to any Seller or the
Business.
There are no Restricted Assets as to which the failure to obtain
all necessary consents and waivers for the assignment, transfer,
sublease or sublicense thereof as of the applicable Closing
would, individually or in the aggregate, result in a Material
Adverse Effect.
Financial Statements. The Financial Statements have been
prepared in accordance with GAAP consistently applied (except for
the absence of footnotes and normal year-end adjustments which
shall not, individually or in the aggregate, have a Material
Adverse Effect), fully and accurately set forth in all material
PAGE
respects the financial condition and results of operations of the
Business as of the respective dates thereof and for the periods
referred to therein and are consistent with the books and records
of the Business.
Absence of Certain Changes. Since December 31, 1996 (a) there
has not been any material adverse change in the assets, business,
financial condition, results of operations or future prospects of
the Business, nor has there occurred any event or development
which could reasonably be foreseen to result in a Material
Adverse Effect in the future, and (b) no member of the Black
Clawson Group has taken any of the actions set forth in
paragraphs (a) through (o) of Section 5.4.
Undisclosed Liabilities. To the Sellers' Knowledge, no Seller
has any liability or obligation (whether absolute or contingent,
whether liquidated or unliquidated, whether accrued or unaccrued,
and whether due or to become due, or otherwise), relating in any
way to the Business, except for (a) liabilities and obligations
shown on the December 31, 1996 Balance Sheet, other than those
discharged since December 31, 1996; (b) liabilities and
obligations which (i) have arisen after December 31, 1996 in the
Ordinary Course of Business, (ii) are similar in nature and
amount to the liabilities which arose during the comparable
period of the immediately preceding financial period, and (iii)
have not been subsequently discharged; (c) contractual
liabilities and obligations incurred in the Ordinary Course of
Business which are not required by GAAP to be reflected on the
December 31, 1996 Balance Sheet and which are not in the
aggregate material; and (d) the Retained Liabilities.
Tax Matters.
Each member of the Black Clawson Group has filed all Tax Returns
that it was required to file, all such Tax Returns were correct
and complete in all material respects, and each member of the
Black Clawson Group has paid all Taxes that are shown to be due
on any such Tax Returns, except where the failure to file Tax
Returns or to pay Taxes would not have a Material Adverse Effect
or a material adverse effect on the financial condition of the
Black Clawson Group taken as a whole. All Taxes that the members
of the Black Clawson Group are or were required by law to
withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the proper Governmental
Entity.
PAGE
No deficiencies have been asserted or assessed as a result of any
audit of any aspect of the Business or of any member of the Black
Clawson Group by any Governmental Entity and no such deficiency
or audit has been proposed or threatened. There are no liens for
Taxes (other than for current Taxes not yet due and payable) on
the Acquired Assets. None of the Acquired Assets (i) is property
that is required to be treated as being owned by any other person
pursuant to the safe harbor lease provisions of former
Section 168(f)(8) of the Code, (ii) is "tax exempt use property"
within the meaning of Section 168(h) of the Code, or (iii)
directly or indirectly secures any debt the interest on which is
tax-exempt under Section 103(a) of the Code. None of the
Purchase Price payable to any of the Sellers will be subject to
any withholding Taxes in any jurisdiction.
The Sellers have delivered or made available to the Buyer (or the
Buyer's representative) true and complete copies of the material
income, franchise, excise, sales, use, property, business,
professional, social security and employment Tax Returns (or
relevant portions thereof) filed by each member of the Black
Clawson Group, together with all material examination reports (or
relevant portions thereof) and statements of deficiencies
assessed, proposed in writing to be assessed against, or agreed
to with respect thereto by any such member of the Black Clawson
Group, since January 1, 1989.
Ownership and Condition of Assets.
The Sellers are the true and lawful owners of, and have good and
marketable title to, all of the Acquired Assets, free and clear
of all Security Interests. Upon execution and delivery by the
Sellers (other than BC France) to the Buyer of the instruments of
conveyance referred to in Sections 2.4(b)(iii), 2.4(b)(v) and
2.4(b)(vi), the Buyer will become the true and lawful owner of,
and will receive good and marketable title to, the Acquired
Assets (other than the France Assets), free and clear of all
Security Interests. Upon execution and delivery by BC France to
the Buyer of the instruments of conveyance referred to in
Sections 2.4(d)(iii), 2.4(d)(iv) and 2.4(d)(v), the Buyer will
become the true and lawful owner of, and will receive good and
marketable title to, the France Assets, free and clear of all
Security Interests.
The Acquired Assets constitute all of the tangible and intangible
property used by or in connection with the Business or necessary
for the Sellers to conduct the Business as presently conducted
and as presently proposed to be conducted. The sale and
assignment of the Acquired Assets will effectively convey to the
Buyer all of the assets, properties and rights that are used in
PAGE
connection with or are necessary to conduct the Business. The
tangible Acquired Assets have been maintained in accordance with
normal industry practice, are in good operating condition and
repair (subject to normal wear and tear) and are suitable for the
purposes for which they presently are used.
Section 3.9(c) of the Disclosure Schedule lists (i) all Acquired
Assets owned by BC International or BC France which are fixed
assets (within the meaning of GAAP), indicating the cost,
accumulated book depreciation (if any) and the net book value of
each such fixed asset as of December 31, 1996, and (ii) all other
Acquired Assets owned by BC International or BC France of a
tangible nature (other than inventories) whose book value exceeds
$25,000.
Intellectual Property.
The Sellers own or have the right to use all Intellectual
Property used in the operation of the Business or necessary for
the operation of the Business as presently proposed by the
Sellers to be conducted. Upon execution and delivery by the
Sellers to the Buyer of the instruments of conveyance referred to
in Sections 2.4(b)(iii), 2.4(b)(v), 2.4(b)(vi), 2.4(d)(iii),
2.4(d)(iv) and 2.4(d)(v), each such item of Intellectual Property
owned by the members of the Black Clawson Group will be owned by
the Buyer immediately following the U.S. Closing or the France
Closing, as the case may be, and each such item of Intellectual
Property available for use by the members of the Black Clawson
Group will be available for use by the Buyer on identical terms
and conditions immediately following the applicable Closing.
Each member of the Black Clawson Group has taken reasonable
measures to protect the proprietary nature of each item of
Intellectual Property, and to maintain in confidence all trade
secrets and confidential information, that it owns or uses in
connection with the Business. No other person or entity has any
rights to any of the Intellectual Property used in the Business
(except pursuant to agreements or licenses specified in
Section 3.10(c) or 3.10(d) of the Disclosure Schedule), and, to
the Sellers' Knowledge, no other person or entity is infringing,
violating or misappropriating any of the Intellectual Property
used in the Business.
The business, operations and activities of the Business as
presently conducted or as conducted at any time within the three
years prior to the date of this Agreement have not infringed or
violated, or constituted a misappropriation of, and do not now
infringe or violate, or constitute a misappropriation of, any
Intellectual Property rights of any other person or entity
(including without limitation any Seller or any Affiliate of any
PAGE
Seller). No Seller has received since January 1, 1992 any
complaint, claim or notice alleging any such infringement,
violation or misappropriation.
Section 3.10(c) of the Disclosure Schedule identifies each patent
or trademark registration which has been issued to or is owned by
any Seller with respect to any Intellectual Property used in,
relating to or arising out of the Business, identifies each
pending patent or trademark application or application for
registration which any Seller has made or which any Seller owns
with respect to any Intellectual Property used in, relating to or
arising out of the Business, identifies, with respect to each
such patent or trademark registration or application, (i) the
jurisdiction or jurisdictions where such filings have been made
and (ii) an estimate of the aggregate application, renewal,
continuation or other fees payable with respect to such patent or
trademark registrations and applications within six months of the
date of this Agreement, and identifies each license or other
agreement pursuant to which any Seller has granted any rights to
any third party with respect to any such Intellectual Property.
The Sellers have delivered to the Buyer correct and complete
copies of all such licenses and agreements (as amended to date)
and have made available to the Buyer correct and complete copies
of all other written documentation evidencing ownership of, and
any claims or disputes relating to, each such item, as well as
all patents and trademark registrations and applications. With
respect to each item of Intellectual Property that any Seller
owns:
the Seller possesses all right, title and interest in and to such
item;
such item is not subject to any outstanding judgment, order,
decree, stipulation or injunction; and
the Seller has not agreed to indemnify any person or entity for
or against any infringement, misappropriation or other conflict
with respect to such item.
Section 3.10(d) of the Disclosure Schedule identifies each item
of Intellectual Property (other than commercially available
software generally available to the public, which is not listed
in Section 3.10(d) of the Disclosure Schedule but with respect to
which the representations set forth below in this Section 3.10(d)
are true) used by any Seller in the operation of the Business or
that any Seller plans to use in connection with the operation of
the Business in the future, that is owned by a party other than
PAGE
the party using it. The Sellers have supplied the Buyer with
correct and complete copies of all licenses, sublicenses or other
agreements (as amended to date) pursuant to which any Seller uses
such Intellectual Property, all of which are listed on
Section 3.10(d) of the Disclosure Schedule. With respect to each
such item of Intellectual Property:
the license, sublicense or other agreement covering such item is
legal, valid, binding, enforceable and in full force and effect,
subject to the effect of bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies
may be limited by general principles of equity;
such license, sublicense or other agreement is assignable by the
applicable Seller to the Buyer without the consent or approval
of, or any payment to, any party, and such license, sublicense or
other agreement will continue to be legal, valid, binding,
enforceable and in full force and effect without acceleration
immediately following the U.S. Closing (or, in the case of
licenses, sublicenses or other agreements of BC France, the
France Closing), in each case in accordance with the terms
thereof as in effect prior to such Closing;
neither any Seller nor, to the Sellers' Knowledge, any other
party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default
or permit termination, modification or acceleration thereunder;
to the Sellers' Knowledge, the underlying item of Intellectual
Property is not subject to any outstanding judgment, order,
decree, stipulation or injunction; and
no Seller has agreed to indemnify any person or entity for or
against any interference, infringement, misappropriation or other
conflict with respect to such item.
Inventory. All inventory of the Black Clawson Group, whether or
not reflected on the December 31, 1996 Balance Sheet, consists of
a quality and quantity usable and saleable in the Ordinary Course
of Business, except for scrap, obsolete or excess items (which,
for purposes hereof, shall mean inventory not saleable in the
Ordinary Course of Business within one year) and items of
below-standard quality, all of which have been written-off or
written-down to net realizable value on the December 31, 1996
PAGE
Balance Sheet. All inventories not written-off have been priced
at the lower of cost or market on a first in, first out basis.
Contracts.
Section 3.12 of the Disclosure Schedule lists the following
written arrangements (including without limitation written
contracts, commitments, understandings and agreements but
excluding any Employee Benefit Plans) of any Seller which relate
to any of the Acquired Assets, the Assumed Liabilities or the
Business:
any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third
parties providing for lease payments in excess of $50,000 per
annum;
any written arrangement (or group of related written
arrangements) for the purchase, sale, supply or manufacture of
raw materials, commodities, supplies, products or other personal
property or for the furnishing or receipt of services (A) which
calls for performance over a period of more than one year, (B)
which involves more than the sum of $100,000, or (C) in which any
member of the Black Clawson Group has granted manufacturing
rights, "most favored nation" pricing provisions or marketing or
distribution rights relating to any products or territory or has
agreed to purchase a minimum quantity of goods or services,
agreed to make a minimum payment or has agreed to purchase goods
or services exclusively from a certain party;
any written arrangement establishing a partnership or joint
venture;
any written arrangement (or group of related written
arrangements) under which any member of the Black Clawson Group
has created, incurred, assumed or guaranteed (or may create,
incur, assume or guarantee) indebtedness (including capitalized
lease obligations) involving more than $50,000 or under which it
has imposed (or may impose) a Security Interest on any of the
Acquired Assets, tangible or intangible;
any written arrangement concerning confidentiality, assignment of
inventions or noncompetition (other than standard forms of
PAGE
confidentiality, assignment of inventions or noncompetition
agreements between any of the Sellers and any employees of the
Business, copies of which forms have previously been provided by
the Sellers to the Buyer);
any written arrangement involving any Affiliate of any member of
the Black Clawson Group;
any written arrangement under which the consequences of a default
or termination would be reasonably likely to have a Material
Adverse Effect or would be reasonably likely to result in the
granting to any third party of any rights in or to any of the
Acquired Assets;
any written arrangement limiting or otherwise restricting the
ability of the Business to compete anywhere in the world; any
bonus, incentive or deferred compensation arrangement relating to
the Business; and all profit-sharing, pension, multi-employer
pension, vacation, group insurance or employee welfare plans or
other similar plans or fringe benefits which could result in a
cost to the Business of more than $50,000 per annum;
any collective bargaining agreements or other contracts or
commitments to or with any labor union, employee representative
or group of employees;
any employment or other written arrangement with any individual
employee, agent, representative or consultant for a remuneration
which exceeds or will exceed in accordance with its terms $75,000
per annum or which cannot be terminated at any time without
liability to the employer, upon no more than six months notice;
any sales representative, distributorship or other written
arrangement providing for the distribution or marketing of
products (A) under which revenue to the Business during the year
ended December 31, 1996 exceeded $100,000 or (B) which is not
terminable by a Seller without penalty or breach upon no more
than six months prior notice to the other party thereto;
any agreement entered into since January 1, 1992 relating to the
acquisition or disposition of assets (other than the purchase or
sale of assets in the Ordinary Course of Business), businesses or
PAGE
companies (whether by sale of assets, sale of stock, merger or
otherwise); and
any other written arrangement (or group of related written
arrangements) either involving more than $100,000 or not entered
into in the Ordinary Course of Business.
The Sellers have delivered to the Buyer a correct and complete
copy of each written arrangement (as amended to date) listed in
Section 3.12 of the Disclosure Schedule. With respect to each
written arrangement so listed: (i) the written arrangement is
legal, valid, binding and enforceable and in full force and
effect with respect to each Seller which is a party thereto and,
to the Sellers' Knowledge, with respect to each other party
thereto, subject to the effect of bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and except as the availability of
equitable remedies may be limited by general principles of
equity; (ii) the written arrangement is assignable by the
applicable Seller to the Buyer (or such Seller may enter into a
subcontracting arrangement with the Buyer with regard to such
written arrangement) without the consent or approval of any party
and will continue to be legal, valid, binding and enforceable and
in full force and effect immediately following the U.S. Closing
(or, in the case of arrangements with BC France, the France
Closing), in each case in accordance with the terms thereof as in
effect prior to such Closing, subject to the effect of
bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
except as the availability of equitable remedies may be limited
by general principles of equity; and (iii) neither any Seller
nor, to the Sellers' Knowledge, any other party thereto is in
breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default or permit
termination, modification or acceleration, under the written
arrangement, nor is there any dispute between the parties
thereto. No Seller is a party to any oral contract, agreement or
other arrangement which, if reduced to written form, would be
required to be listed in Section 3.12 of the Disclosure
Schedule under the terms of this Section 3.12.
Accounts Receivable; Contracts in Progress; Accounts Payable.
All Accounts Receivable reflected on the December 31, 1996
Balance Sheet are valid receivables, and none of the Sellers has
been notified that any person intends to claim a setoff or
counterclaim with respect thereto. All such Accounts Receivable
arose in the Ordinary Course of Business and, to the extent not
collected prior to the U.S. Closing Date, are current and
PAGE
collectible within 60 days after the due date of the invoice
therefor. A complete list of all Accounts Receivable reflected
on the December 31, 1996 Balance Sheet, showing the aging
thereof, is included in Section 3.13 of the Disclosure Schedule.
All Accounts Receivable reflected in the financial or accounting
records of the Business that have arisen since December 31, 1996
are valid receivables, and none of the Sellers has been notified
that any person intends to claim a setoff or counterclaim with
respect thereto. All such Accounts Receivable arose in the
Ordinary Course of Business and, to the extent not collected
prior to the U.S. Closing Date, are collectible within 60 days
after the due date of the invoice therefor. The due date for
each Account Receivable existing as of the date of this Agreement
was, and the due date for each Account Receivable existing as of
the U.S. Closing Date will be, established in the Ordinary Course
of Business of the Sellers.
As to each Contract in Progress as of the date of this Agreement
which contemplates the payment of amounts in excess of $500,000,
Section 3.13 of the Disclosure Schedule sets forth as of May 15,
1997 (i) the costs incurred by the applicable Seller under such
contract, (ii) the Seller's reasonable estimate of the costs of
sales (in accordance with GAAP) to complete each such contract,
(iii) the revenues received by the Seller under such contract,
(iv) the Seller's reasonable estimate of the revenues to be
received through completion of such contract, and (v) the amount
of any customer deposit applicable to such contract.
The accounts payable shown on the December 31, 1996 Balance Sheet
have a weighted average aging of 26 days, and the weighted
average aging of the payables of the Business as of the date of
this Agreement is no more than 35 days.
Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of any Seller relating to the Acquired Assets
or the Business.
Insurance Policies. Section 3.15 of the Disclosure Schedule
sets forth a list (including the name of the insurer, the name of
the policyholder, the name of each insured, the periods of
coverage and the scope of coverage) of all policies of fire,
theft, casualty, liability, burglary, fidelity, workers
compensation, business interruption, environmental, product
liability, fidelity, workers compensation, product warranty,
automobile and other forms of insurance under which any member of
the Black Clawson Group is a party, a named insured or otherwise
the beneficiary of coverage. All premiums due and payable for
such insurance policies have been duly paid, and no Seller has
any reason to believe that such policies or extensions or
PAGE
renewals thereof in such amounts shall cease to be outstanding
and duly in full force without interruption until the U.S.
Closing Date (or, with respect to policies applicable to BC
France, the France Closing Date).
Litigation. Section 3.16 of the Disclosure Schedule identifies,
and contains a brief description of, all suits, actions,
proceedings, investigations, inquiries, claims, complaints and
accusations pending at any time since January 1, 1994 or, to the
Sellers' Knowledge, threatened against the Business or any of the
Acquired Assets and to which any Seller is or would be a party,
in or brought before (by a private party or otherwise) any
Governmental Entity or before any arbitrator. There is no
outstanding (a) injunction, decree, judgment, award, fine or
penalty by any court, arbitration panel, industrial tribunal or
Governmental Entity against or affecting the Business or the
Acquired Assets, or (b) writ or order of any such entity against
or affecting the Business or the Acquired Assets.
Product Warranty; Recall.
(a) Section 3.17 of the Disclosure Schedule sets forth
the Sellers' standard terms and conditions of sale or lease for
products manufactured, sold, leased or delivered in connection
with the Business. Section 3.17 of the Disclosure Schedule sets
forth the aggregate expenses incurred by the Sellers in
fulfilling their respective obligations under guaranty, warranty,
right of return, credit and indemnity provisions in connection
with the Business during the period covered by the Financial
Statements; and no Seller knows of any reason why such expenses
should materially increase as a percentage of sales in the
future.
(b) To the Sellers' Knowledge, there is no basis for
the recall, withdrawal or suspension of any approval by any
Governmental Entity with respect to any of the products or
services sold or proposed by Seller to be sold by the Business.
None of the products or services of the Business is subject to
any recall proceedings and, to the Sellers' Knowledge, no such
proceedings have been threatened.
Employees.
The Sellers have previously provided to the Buyer a list of all
employees of the Business as of December 31, 1996. No Seller is
PAGE
aware of any employee of any of the Sellers employed in the
Business who has any plans to terminate his or her employment
with such Seller (other than for the purpose of accepting
employment with the Buyer following the U.S. Closing or, in the
case of employees of BC France, the France Closing) or not to
accept employment with the Buyer, except those employees of BC
France and BC International who will not be offered employment by
the Buyer in accordance with Section 7.8 of this Agreement. No
member of the Black Clawson Group has any employment or
consulting agreements that are not terminable at will without
penalty. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
trigger or otherwise result in any obligation of any member of
the Black Clawson Group to pay severance or related costs under
any employment or consulting agreement.
Section 3.18(b) of the Disclosure Schedule sets forth a correct
and complete list of all employees of the Business represented by
the Union. A correct and complete copy of the collective
bargaining agreement between Black Clawson and the Union, and all
amendments, supplements and agreements relating thereto (together
with such collective bargaining agreement, the "Union
Agreements"), has previously been provided by the Sellers to the
Buyer. Each member of the Black Clawson Group has complied with
all collective bargaining obligations, if any, arising out of or
pertaining to the transactions contemplated by this Agreement.
Except as set forth in Section 3.18(c) of the Disclosure
Schedule:
no employees of the Business are, in connection with their
employment by any Seller, represented by any labor organization
and no labor organization or group of employees of the Business
has made any demand of any Seller for recognition, has filed a
petition seeking a representation proceeding or given any Seller
notice of any intention to hold any election of a collective
bargaining representative. There is no strike, work stoppage, or
material labor disturbance pending or, to the Sellers' Knowledge,
threatened, which involves any employee of the Business;
there are no unfair labor practice or employee-related charges
which are presently pending or, to the Sellers' Knowledge,
threatened against any member of the Black Clawson Group or the
Business. There are no employment- related litigation,
arbitrations or administrative proceedings on behalf of the Union
and/or any employee of the Business to which any Seller is a
party or, to the Sellers' Knowledge, is threatened to be made a
party; and
PAGE
there are no presently pending or, to the Sellers' Knowledge,
threatened claims, charges, grievance, arbitrations, lawsuits or
other proceedings by any governmental authority, labor
organization or employee alleging that any member of the Black
Clawson Group or the Business has violated any applicable labor
or employment law or the provisions of any collective bargaining
or other agreement. Each Seller is in compliance with all
governmental regulations governing its employment practices in
connection with the Business, including without limitation
provisions relating to wages, hours, benefits, equal employment
opportunity, consultations with employee representatives and
payment of social security and other taxes.
For purposes of this Section 3.18, the term "employee" shall be
construed to include sales agents and other independent
contractors who spend at least 25 hours per week on the Business.
The Sellers have provided the Buyer with correct and complete
copies of the following documents relating to each member of the
Black Clawson Group: (i) any and all affirmative action plans,
summaries of affirmative action polices, affirmative action plan
documents and required reports; and (ii) any letters of
compliance, letters of commitment or conciliation agreements
resulting from any audits by the United States Department of
Labor through its Office of Federal Contract Compliance Programs.
The Sellers have provided the Buyer with (i) the reference of the
National Collective Bargaining Agreement (Convention Collective)
applicable to the employees of BC France, (ii) the text of any
agreements negotiated locally with the Labor Committee (Comite
d'Entreprise), unions or other employee representatives of
BC France, and (iii) a true and accurate list of all employee
representatives and protected employees of BC France.
Employee Benefits.
Section 3.19(a) of the Disclosure Schedule contains a complete
and accurate list of all Employee Benefit Plans maintained or
contributed to by or on behalf of any of the Sellers. Complete
and accurate copies of all Employee Benefit Plans which have been
reduced to writing have been provided to the Buyer, and the
Sellers have provided the Buyer with written summaries of any
such plans which have not been reduced to writing.
PAGE
Each of the Employee Benefit Plans which is an "employee pension
benefit plan" as such term is defined in Section 3(2) of ERISA
(collectively, the "Retirement Plans") and any corresponding
trust intended to qualify under Sections 401(a) and 501(a) of the
Code do so qualify. The Internal Revenue Service has issued a
favorable determination letter with respect to such qualification
of each Retirement Plan, no such determination letter has been
revoked and no such revocation has been threatened, and nothing
has occurred since the date of each such most recent
determination letter that could reasonably be expected to cause
the relevant Retirement Plan or trust to lose such qualification
or exemption.
To the Sellers' Knowledge, each of the Employee Benefit Plans has
been administered in compliance with its terms and the
requirements of all applicable Laws and Regulations, including
without limitation ERISA, the Act and the Pensions Acts (as such
terms are defined in Exhibit J hereto), Article 119 of the Treaty
of Rome, Financial Services Act 1986 and the Code, and all
required contributions to each Employee Benefit Plan have been
made. The Sellers have previously delivered to the Buyer correct
and complete copies of the most recently filed report on Form
5500 and summary plan description with respect to each Employee
Benefit Plan required to file such report and description, and
the most recent Internal Revenue Service determination letter
regarding each of the Retirement Plans.
To the Sellers' Knowledge, with respect to each Retirement Plan,
no Seller, ERISA Affiliate, trustee or administrator of any
Retirement Plan has engaged in a "prohibited transaction," as
defined in Section 4975 of the Code, or a transaction prohibited
by Section 406 of ERISA, that could give rise to any tax or
penalty under such Section 4975.
Except as described in Section 3.19(e) of the Disclosure
Schedule, there are no inquiries or investigations by the
Internal Revenue Service, the U.S. Department of Labor, the
Pensions Ombudsman or the PBGC, no termination proceedings and no
actions, suits, complaints to the Pensions Ombudsman or claims
(other than claims for benefits) pending or, to the Sellers'
Knowledge, threatened against any Employee Benefit Plan (or any
Seller with respect thereto) or the assets thereof.
With respect to any Employee Benefit Plan subject to Title IV of
ERISA, other than a Plan described in Section 3.19(g), except as
set forth in Section 3.19(f) of the Disclosure Schedule, (i) no
such Plan has incurred any "accumulated funding deficiency" as
such term is defined in Section 302 of ERISA and Section 412 of
PAGE
the Code (whether or not waived) and no lien has arisen under
Section 302(f) of ERISA; (ii) no event or condition exists which
would be deemed a reportable event within the meaning of
Section 4043(c) of ERISA for which the PBGC has not waived notice
in its regulations which could result in a liability to any
Seller, and no condition exists which could subject any Seller to
a fine under Section 4071 of ERISA; (iii) all premium payments
with respect to such Plans required to be made prior to the U.S.
Closing Date to the PBGC have been or will be made prior to the
U.S. Closing Date; (iv) no Seller or ERISA Affiliate has filed a
notice of intent to terminate any such Plan or adopted any
amendment to treat any such Plan as terminated, and the PBGC has
not instituted proceedings to terminate any such Plan; (v) no
other event or condition has occurred which would constitute
grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any such Plan; and
(vi) the Sellers have delivered to the Buyer for each such Plan
copies of the Form PBGC-1 filed in the most recent plan year of
such Plan and the most recent actuarial report for such Plan.
Each actuarial report referred to in clause (vi) of the preceding
sentence fairly presents the financial condition and the results
of operations of the subject Plan as of the date to which it
relates, in accordance with GAAP, and from such date through the
U.S. Closing Date, no amendment, termination, merger, spin-off or
transfer of Plan assets, or any other transaction outside of the
ordinary course of operations of such plan (other than the
transaction contemplated by this Agreement), has occurred which
would have the effect of materially increasing the unfunded
benefit obligations of the Plan. No amendment has been made to
any Employee Benefit Plan subject to Section 412 of the Code
which would require the provision of additional security pursuant
to Section 401(a)(29) of the Code.
No Seller or ERISA Affiliate contributes to or has an obligation
to contribute to, or has at any time within six years prior to
the U.S. Closing Date contributed to or had an obligation to
contribute to, a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA. No complete withdrawal or partial
withdrawal (as defined for purposes of Sections 4203 and 4205 of
ERISA, respectively) has occurred with respect to a multiemployer
plan to which any Seller or ERISA Affiliate was ever obligated to
contribute which would subject any of the Acquired Assets to
liability from such complete withdrawal or partial withdrawal.
There are no unfunded obligations under any Employee Benefit Plan
(other than a plan subject to Title IV of ERISA) providing
benefits after termination of employment to any current or former
employee of the Business (or to any beneficiary of any such
current or former employee), including but not limited to retiree
health coverage and deferred compensation, but excluding
continuation of health coverage required to be continued under
Section 4980B of the Code and insurance conversion privileges
under state law.
PAGE
To the Sellers' Knowledge, no act or omission has occurred and no
condition exists with respect to any Employee Benefit Plan
maintained by any Seller or any ERISA Affiliate that would
subject any Seller or any ERISA Affiliate to any fine, penalty,
tax or liability of any kind imposed under ERISA or the Code.
[Intentionally omitted.]
No Employee Benefit Plan, plan documentation or agreement,
summary plan description or other written communication
distributed generally to employees of the Business prohibits any
Seller from terminating its participation in any such Employee
Benefit Plan. Each Employee Benefit Plan may be amended or
terminated without liability to any Seller, other than liability
for benefits accrued through the date of amendment or termination
under the terms of such Plan.
To the extent not previously disclosed in Section 3.12(a)(viii)
or 3.19(a) of the Disclosure Schedule, Section 3.19(l) of the
Disclosure Schedule discloses each: (i) agreement with any
director, executive officer or other employee of the Business
with an annual salary including bonus in excess of $75,000
(A) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction
involving the Business of the nature of any of the transactions
contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee, or (C) providing severance
benefits or other benefits after the termination of employment of
such director, executive officer or employee; (ii) agreement,
plan or arrangement under which any person may receive payments
from any Seller that may be subject to the tax imposed by
Section 4999 of the Code or included in the determination of such
person's "parachute payment" under Section 280G of the Code; and
(iii) agreement or plan binding any Seller, including without
limitation any stock option plan, stock appreciation right plan,
restricted stock plan, stock purchase plan, severance benefit
plan or any Employee Benefit Plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will
be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
The Seller's UK Scheme is approved by the Pension Schemes Office
of the Inland Revenue as an exempt approved scheme under the Act
(as such terms are defined in Exhibit J hereto), and nothing has
PAGE
been done or omitted to be done which may result in it ceasing to
be such an exempt approved scheme.
A contracting-out certificate has been issued by the Occupational
Pension Board (or its successor body) under the provisions of the
Pension Schemes Act 1993 in respect of the Seller's UK Scheme.
Environmental Matters.
Each Seller has complied with all Environmental Laws. There is
no pending or, to the Sellers' Knowledge, threatened civil or
criminal litigation, written notice of violation, formal
administrative proceeding, or investigation, inquiry or
information request (other than routine requests for information
pursuant to published regulations which, if not complied with,
would not, individually or in the aggregate, have a Material
Adverse Effect) by any Governmental Entity, relating to any
Environmental Law applicable to any of Sellers, the Acquired
Assets and/or the Business.
There have been no releases of any Materials of Environmental
Concern into the environment at (i) any parcel of real property
or any facility formerly or currently owned, leased, operated or
controlled by any Seller or (ii) to the Sellers' Knowledge, any
facility to which any member of the Black Clawson Group has
delivered products for manufacturing, processing, packaging or
distribution. With respect to any such releases of Materials of
Environmental Concern, each Seller has given all required notices
to Governmental Entities (copies of which have been provided to
the Buyer). No Seller is aware of any releases of Materials of
Environmental Concern at parcels of real property or facilities
other than those owned, leased, operated or controlled by the
Sellers that could reasonably be expected to have an impact on
such real property or facilities resulting in any liability to
any of the Sellers.
Set forth in Section 3.20(c) of the Disclosure Schedule is a list
of all environmental reports, site surveys, subsurface studies,
investigations and audits (whether conducted by or on behalf of
any of the Sellers or a third party, and whether done at the
initiative of any of the Sellers or, if known to any of the
Sellers, directed by a Governmental Entity or other third party)
prepared since January 1, 1991 and relating to premises currently
or previously owned, leased or operated by any of the Sellers at
which the Business has been or is currently conducted. Complete
and accurate copies of each such report, or the results of each
such investigation or audit, have been provided to the Buyer.
PAGE
Set forth in Section 3.20(d) of the Disclosure Schedule is a list
of all of the solid and hazardous waste transporters and
treatment, storage and disposal facilities that have been
utilized by any member of the Black Clawson Group. No member of
the Black Clawson Group is aware of any environmental liability
of any such transporter or facility.
Legal Compliance.
Each of the Sellers has complied and is in compliance with all
Laws and Regulations (including without limitation the U.S.
Foreign Corrupt Practices Act, the U.S. Occupational Safety and
Health Act and the Transfer Regulations and regulations
thereunder) that affect or relate to this Agreement, the
transactions contemplated hereby, the conduct of the Business or
the Acquired Assets.
No Seller has received notice or inquiry since January 1, 1992
relating to any actual or alleged violations of any Laws and
Regulations related to the Business or the Acquired Assets.
Permits. Section 3.22 of the Disclosure Schedule sets forth a
list of all Permits, other than any Permits the loss of which,
individually or in the aggregate, would not have a Material
Adverse Effect, and the status thereof (including without
limitation those issued or required under Environmental Laws)
issued to or held by any of the Sellers and relating to or used
in connection with the Acquired Assets or the Business. Such
listed Permits are the only Permits that are required for the
Black Clawson Group to conduct the Business as presently
conducted or as proposed by the Sellers to be conducted, other
than any Permits which, individually or in the aggregate, if not
obtained, would not have a Material Adverse Effect. Each such
Permit is in full force and effect and, to the Sellers'
Knowledge, no suspension or cancellation of such Permit is
threatened and there is no basis for believing that such Permit
will not be renewable upon expiration. Each such Permit is
assignable by the applicable Seller to the Buyer without the
consent or approval of, or any payment to, any party and will
continue in full force and effect following the U.S. Closing (or,
with respect to Permits held by BC France, the France Closing).
To the Sellers' Knowledge, there are no proposed or contemplated
changes in the terms of any Permit.
PAGE
Certain Business Relationships With Affiliates. No Seller (with
respect to its operations other than the Business) or Affiliate
of any Seller (other than any other Seller) (a) owns any property
or right, tangible or intangible, which is used in the Business,
(b) has any claim or cause of action against the Acquired Assets,
or (c) owes any money in connection with the Business to any
Seller. Section 3.23 of the Disclosure Schedule describes any
transaction or relationships between any Seller (with respect to
its operations other than the Business) and its Affiliates, on
the one hand, and the Business, on the other hand, which have
occurred since January 1, 1994.
Brokers' Fees. No Seller has any liability or obligation to pay
any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
Books and Records. The books, records, accounts, ledgers and
files of each Seller relating to the Business are accurate and
complete in all material respects and have been maintained in
accordance with good business and bookkeeping practices.
Customers and Suppliers. No unfilled customer order or
commitment arising out of the conduct of the Business obligating
any of the Sellers to process, manufacture or deliver products or
perform services will result in a loss upon completion of
performance. No purchase order or commitment relating to or
arising out of the conduct of the Business is in excess of normal
requirements, nor are prices provided therein in excess of
current market prices for the products or services to be provided
thereunder. Section 3.26 of the Disclosure Schedule sets forth a
list of (a) each customer that accounted for more than 3% of the
revenues of the Business during the last full fiscal year and the
amount of revenues accounted for by such customer during each
such period and (b) each supplier that is the sole supplier of
any significant material, product, component or service used in
the Business. No such customer of the Business has indicated
since January 1, 1996 that it will stop, or decrease the rate of,
buying materials, products or components produced by, or services
offered by, the Business, and no such supplier to the Business
has indicated since January 1, 1996 that it will stop, or
decrease the rate of, supplying materials, products, components
or services to the Business. Except for such suppliers, there
are no suppliers to the Business of significant goods or services
with respect to which practical alternative sources of supply, or
comparable products, are not available on comparable terms and
conditions.
Real Property Leases. Section 3.27 of the Disclosure Schedule
lists all real property leased or subleased to any member of the
PAGE
Black Clawson Group. The Sellers have delivered to the Buyer
correct and complete copies of the leases and subleases (as
amended to date) listed therein. With respect to each such lease
and sublease:
(a) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect, subject to the effect
of bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
except as the availability of equitable remedies may be limited
by general principles of equity;
(b) each lease or sublease is assignable by the
applicable Seller to the Buyer without the consent or approval
of, or any payment to, any party; all such leases or subleases
will continue to be legal, valid, binding, enforceable and in
full force and effect immediately following the U.S. Closing in
accordance with the terms thereof as in effect immediately prior
to the U.S. Closing, subject to the effect of bankruptcy,
insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the
availability of equitable remedies may be limited by general
principles of equity; and the consummation of the transactions
contemplated herein will not conflict with, result in a violation
or breach of, or constitute a default under (or would result in a
violation, breach or default with the giving of notice or the
passage of time or both) any such lease or sublease;
(c) neither any Seller nor, to Sellers' Knowledge, any
other party to the lease or sublease is in breach or default, and
no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination,
modification or acceleration thereunder;
(d) there are no disputes, oral agreements or
forbearance programs to which any Seller is a party in effect as
to the lease or sublease;
(e) no Seller has assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;
(f) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the
operation of said facilities;
PAGE
(g) to the Sellers' Knowledge, the owner of the
facility leased or subleased has good and clear record and
marketable title to the parcel of real property, free and clear
of any Security Interest, easement, covenant or other restriction
except for recorded mortgages, easements and covenants and other
restrictions which do not impair the intended uses or occupancy
of the property subject thereto by the applicable Seller;
(h) the applicable Seller has obtained a
nondisturbance agreement from each mortgage holder having a
Security Interest prior to the rights of such Seller under such
lease or sublease; and
(i) none of such leases or subleases has been
capitalized on the December 31, 1996 Balance Sheet.
Owned Real Property. Section 3.28 of the Disclosure Schedule
lists and describes the location of all Owned Real Property.
With respect to each parcel of Owned Real Property:
(a) the identified owner has good title to such
parcel, subject to easements and other matters of title which do
not materially affect the use of such parcel or the value
thereof, insurable by a recognized national title insurance
company (in the U.S. and such other jurisdictions where the
concept of title insurance is applicable) at standard rates, free
and clear of all Security Interests;
(b) there are no (i) condemnation proceedings pending
or, to the Sellers' Knowledge, threatened relating to such parcel
or (ii) litigation or administrative actions pending or, to the
Sellers' Knowledge, threatened relating to such parcel;
(c) the legal description for such parcel contained in
the deed thereof describes such parcel fully and adequately; the
buildings and improvements located thereon are located within the
boundary lines of the described parcels of land, are not in
violation of current setback requirements, zoning laws and
ordinances and do not encroach on any easement which may burden
the land; the land does not serve any adjoining property for any
purpose inconsistent with the use of the land as heretofore used;
and such parcel is not subject to any restriction for which any
PAGE
permits or licenses necessary to the use thereof as heretofore
used have not been obtained;
(d) there are no leases, subleases, licenses or
agreements granting to any party or parties the right of use or
occupancy of any portion of such parcel;
(e) there are no outstanding options or rights of
first refusal to purchase such parcel, or any portion thereof or
interest therein;
(f) all facilities located on such parcel are supplied
with utilities and other services necessary for the operation of
such facilities as heretofore operated, including gas,
electricity, water, telephone, sanitary sewer and storm sewer,
all of which services are adequate for their current uses and, to
the Sellers' Knowledge, are in accordance with all applicable
Laws and Regulations;
(g) such parcel has direct access to a public road or
access to a public road via an irrevocable, recorded easement
benefiting such parcel;
(h) there are no pending or, to the Sellers'
Knowledge, threatened proceedings to change or redefine the
zoning classification of all or any portion of the parcel in a
manner that would interfere with the use of such parcel as
heretofore used;
(i) all of the buildings and improvements constructed
on the parcel are in serviceable condition and repair, subject to
ordinary wear and tear, and, to the Sellers' Knowledge, are free
of construction defects, and all mechanical and utility systems
servicing such improvements are in serviceable condition and
repair, subject to ordinary wear and tear, and, to the Sellers'
Knowledge, are free of defects;
(j) to the Sellers' Knowledge, each parcel is an
independent unit which does not rely on any facilities (other
than the facilities of public utility and water companies)
located on any other property (i) to fulfill any zoning, building
code or other municipal or governmental requirement; (ii) for
structural support or the furnishing of any essential building
PAGE
systems or utilities, including but not limited to electric,
plumbing, mechanical, heating, ventilating and air conditioning
systems; or (iii) to fulfill the requirements of any lease. To
the Sellers' Knowledge, no building or other improvement not
included in the parcel relies on any part of the parcel to
fulfill any zoning, building code or other municipal or
governmental requirement or for structural support or the
furnishing of any essential building systems or utilities. Such
parcel is assessed by local property assessors as a tax parcel or
parcels separate from all other tax parcels; and
(k) there are no pending agreements relating to any
material construction or alteration of any buildings on any
parcel.
Indebtedness and Guaranties.
Section 3.29 of the Disclosure Schedule sets forth a true and
complete list (including the obligor, the beneficiary, the amount
and the date of maturity or expiration) of all debt instruments,
loan agreements, indentures, guaranties or other obligations
which relate to (i) indebtedness of any member of the Black
Clawson Group for borrowed money or (ii) money loaned by any
member of the Black Clawson Group to others, provided that the
Sellers shall not be required to list any such obligations which
(A) involve less than $250,000 or (B) are general corporate
obligations of a member of the Black Clawson Group, which are not
secured by any of the Acquired Assets and which do not constitute
an Assumed Liability. All of the foregoing arrangements were
entered into in the Ordinary Course of Business, are valid and
binding, in full force and effect and are enforceable in
accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
except as the availability of equitable remedies may be limited
by general principles of equity; there exists no breach or
default, or any event which with notice or lapse of time or both,
would constitute a breach or default, by any party thereto; and
there are no prepayment penalties associated therewith.
None of the obligations or liabilities of the Sellers under any
of the Sellers' Obligations relate to matters other than the
Business.
Government Contracts. No member of the Black Clawson Group is
or has been suspended or debarred from bidding on contracts or
subcontracts with any Governmental Entity; no such suspension or
PAGE
debarment has been initiated or, to the Sellers' Knowledge,
threatened; and the consummation of the transactions contemplated
by this Agreement will not result in any such suspension or
debarment of the Business. No member of the Black Clawson Group
has since January 1, 1992 been audited or investigated or is now
being audited or, to the Sellers' Knowledge, investigated by the
U.S. Government Accounting Office, the U.S. Department of Defense
or any of its agencies, the Defense Contract Audit Agency, the
U.S. Department of Justice, the Inspector General of any U.S.
Governmental Entity, any similar agencies or instrumentalities of
any foreign Governmental Entity, or any prime contractor with a
Governmental Entity nor, to the Sellers' Knowledge, has any such
audit or investigation been threatened. To the Sellers'
Knowledge, there is no valid basis for (a) the suspension or
debarment of any member of the Black Clawson Group or the
Business from bidding on contracts or subcontracts with any
Governmental Entity or (b) any claim pursuant to an audit or
investigation by any of the entities named in the foregoing
sentence. No member of the Black Clawson Group has any
agreements, contracts or commitments with respect to the Business
which require it to obtain or maintain a security clearance with
any Governmental Entity.
Disclosure. No representation or warranty by any of the Sellers
contained in this Agreement, and no statement contained in the
Disclosure Schedule or any other document, certificate or other
instrument delivered to or to be delivered by or on behalf of any
of the Sellers pursuant to this Agreement, and no other statement
made by any of the Sellers or any of their representatives in
connection with this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary, in
light of the circumstances under which it was or will be made, in
order to make the statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers as follows:
Organization. Each of the Buyer and the Parent is a corporation
duly organized, validly existing and in corporate and tax good
standing under the laws of the State of Delaware.
PAGE
Authority.
(a) The Buyer has all requisite power and authority to
execute and deliver this Agreement and the Ancillary Agreements
to which it is a party and to perform its obligations hereunder
and thereunder. The execution and delivery of this Agreement and
the Ancillary Agreements and the performance by the Buyer of this
Agreement and the Ancillary Agreements to which it is a party and
the consummation by the Buyer of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Buyer. This
Agreement has been duly and validly executed and delivered by the
Buyer and constitutes, and each of the Ancillary Agreements to
which the Buyer is a party, upon its execution and delivery by
the Buyer, will constitute, a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and except as the availability of
equitable remedies may be limited by general principles of
equity.
(b) The Parent has all requisite power and authority
to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this
Agreement and the performance by the Parent of this Agreement and
the consummation by the Parent of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action on the part of the Parent. This Agreement has
been duly and validly executed and delivered by the Parent and
constitutes a valid and binding obligation of the Parent,
enforceable against the Parent in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies
may be limited by general principles of equity.
Noncontravention. Neither the execution and delivery by the
Buyer or the Parent of this Agreement or, with respect to the
Buyer, the Ancillary Agreements, nor the consummation by the
Buyer or the Parent of the transactions contemplated hereby or
thereby, will, directly or indirectly (with or without notice or
lapse of time), (a) conflict with or violate any provision of the
charter or By-laws of the Buyer or the Parent or any resolution
adopted by the board of directors or stockholders of the Buyer or
the Parent, (b) other than as required to be disclosed by any of
the Sellers on the Disclosure Schedule and other than as may be
required by compliance with the HSR Act, require on the part of
the Buyer or the Parent any filing with, or permit,
authorization, consent or approval of, any Governmental Entity,
PAGE
(c) other than as may be required by compliance with the HSR Act,
give any Governmental Entity the right to challenge any of the
transactions contemplated by this Agreement or the Ancillary
Agreements, except for any right of any Governmental Entity to
challenge such transactions under applicable antitrust laws which
do not provide for pre-Closing filing or notification,
(d) conflict with, result in breach of, constitute a default
under, result in the acceleration of, create in any party any
right to accelerate, terminate, modify or cancel, or require any
notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, Security
Interest or other arrangement to which the Buyer or the Parent is
a party or by which it is bound or to which any of its assets is
subject, or (e) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer or the Parent
or any of their respective properties or assets.
Brokers' Fees. Neither the Buyer nor the Parent has any
liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions
contemplated by this Agreement.
ARTICLE V
PRE-CLOSING COVENANTS
Best Efforts. Each Party shall use its best efforts to take all
actions and to do all things necessary, proper or advisable to
consummate the transactions contemplated by this Agreement.
Notices and Consents. Each of the Sellers, on the one hand, and
the Buyer, on the other hand, shall obtain, at its expense, all
such waivers, permits, consents, approvals or other
authorizations from third parties and Governmental Entities, and
effect all such registrations, filings and notices with or to
third parties and Governmental Entities, as may be necessary or
desirable for the consummation by such Party of the transactions
contemplated by this Agreement and the Ancillary Agreements.
HSR Act. Each Party and the Principal has, prior to the date
hereof, filed any Notification and Report Forms and related
material that it or he may be required to file with the Federal
PAGE
Trade Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act. The Buyer has
previously paid, and shall not seek reimbursement from the
Sellers for, the filing fee paid to the Federal Trade Commission
pursuant to the HSR Act.
Operation of Business. Except as contemplated by this
Agreement, during the period from the date of this Agreement to
the U.S. Closing, the Sellers shall conduct the operations of the
Business only in the Ordinary Course of Business and in
compliance with all applicable Laws and Regulations and, to the
extent consistent therewith, use all reasonable efforts to
preserve intact the current business organization of the
Business, keep the physical assets of the Business in good
working condition (subject to normal wear and tear), keep
available the services of the current officers and employees of
the Business and preserve the relationships of the Black Clawson
Group with customers, suppliers and others having business
dealings with the Business. Without limiting the generality of
the foregoing, prior to the U.S. Closing, no Seller shall take
any of the following actions with respect to the Business without
the prior written consent of the Buyer:
acquire, sell, lease, encumber or dispose of any assets or any
shares or other equity interests in or securities of any
corporation, partnership, association or other business
organization or division thereof, other than purchases and sales
of assets in the Ordinary Course of Business;
create, incur or assume any debt not currently outstanding
(including obligations in respect of capital leases), other than
in the Ordinary Course of Business;
assume, guaranty, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person;
make any loans, advances or capital contributions to, or
investments in, any other person;
enter into, adopt or amend any Employee Benefit Plan or any
employment or severance agreement or arrangement of the type
described in Section 3.19 or increase in any manner the
compensation or fringe benefits of, or materially modify the
employment terms of, its directors, officers or employees,
PAGE
generally or individually, or pay any benefit not required by the
terms in effect on the date hereof of any existing Employee
Benefit Plan or, except in the Ordinary Course of Business, hire
any new employees or consultants;
change its accounting methods, principles or practices, except
insofar as may be required by a generally applicable change in
GAAP (or in the case of Sellers which are non-U.S. entities,
generally accepted accounting principles of their respective
jurisdictions of organization), or make any new elections with
respect to Taxes affecting the Acquired Assets or any changes in
current elections with respect to Taxes affecting the Acquired
Assets after the date hereof;
discharge or satisfy any Security Interest or pay any obligation
or liability other than in the Ordinary Course of Business;
mortgage or pledge any property or assets or subject any such
assets to any Security Interest;
sell, assign, transfer, license or sublicense any Intellectual
Property, other than in the Ordinary Course of Business;
enter into, amend, terminate, take or omit to take any action
that would constitute a violation of or default under, or waive
any rights under, any contract or agreement listed in Section
3.12 of the Disclosure Schedule;
enter into any written arrangement (including written agreements)
which creates a liability on the part of any member of the Black
Clawson Group in excess of $50,000, except for purchase orders in
the Ordinary Course of Business;
make or commit to make any capital expenditure in excess of
$50,000 per item or total capital expenditures in excess of
$200,000 in the aggregate;
take any action or fail to take any action permitted by this
Agreement with the knowledge that such action or failure to take
action would result in (i) any of the representations and
warranties of any of the Sellers set forth in this Agreement
PAGE
becoming untrue or (ii) any of the conditions to the Closings set
forth in Article VI not being satisfied;
fail to take any action reasonably necessary to preserve the
validity of any Intellectual Property or Permit; or
agree in writing or otherwise to take any of the foregoing
actions.
In addition, during the period from the date of this Agreement to
the U.S. Closing, each Seller shall (i) accept customer orders in
the Ordinary Course of Business and (ii) cooperate with the Buyer
in communicating with suppliers and customers to accomplish the
transfer of the Acquired Assets (other than the France Assets)
to, and the purchase of the Business (other than the business of
BC France) by, the Buyer on the U.S. Closing Date. The Sellers
shall comply with the requirements of this Section 5.4 with
respect to the France Assets and the portion of the Business held
by BC France during the period commencing on the date of this
Agreement and ending on the France Closing Date.
Full Access. Each Seller shall permit representatives of the
Buyer to have full access to all premises, properties, financial,
Tax and accounting records, contracts, other records and
documents and personnel of or pertaining to the Business and to
conduct such tests and inspections as may be reasonable or
appropriate; provided, however, that such access shall be allowed
only during normal business hours and with reasonable advance
notice and in such manner as not to interfere unreasonably with
the normal business operations of the Business. Prior to the U.S.
Closing (and, with respect to the Business of BC France, the
France Closing), the Sellers shall also furnish to the Buyer or
its representatives such information as the Buyer may request in
connection with any review, investigation or examination of the
books and records, accounts, contracts, properties, assets,
operations and facilities of or relating to the Business. In
connection therewith, each Seller shall direct and authorize its
independent public accountants to make available to the Buyer and
to the independent public accountants representing the Buyer all
working papers pertaining to the examination and audit by such
accountants of the Business.
Notice of Breaches; Updates; Interim Financial Statements.
PAGE
The Sellers shall promptly deliver to the Buyer written notice of
any event or development that would (i) render any statement,
representation or warranty of any of the Sellers in this
Agreement (including exceptions set forth in the Disclosure
Schedule) inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by any of the Sellers of,
or a failure by any of the Sellers to comply with, any agreement
or covenant in this Agreement applicable to any of the Sellers.
No such disclosure shall be deemed to avoid or cure any such
misrepresentation or breach.
The Buyer shall promptly deliver to the Sellers written notice of
any event or development that would (i) render any statement,
representation or warranty of the Buyer in this Agreement
inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by the Buyer of, or a
failure by the Buyer to comply with, any agreement or covenant in
this Agreement applicable to the Buyer. No such disclosure shall
be deemed to avoid or cure any such misrepresentation or breach.
(i) The Sellers (other than BC France) shall promptly notify the
Buyer of any lawsuits, claims, proceedings, investigations or
inquiries against the portion of the Business conducted by such
Sellers, any member of the Black Clawson Group or any of their
respective stockholders, directors or officers, between the date
of this Agreement and the U.S. Closing Date, and (ii) BC France
shall promptly notify the Buyer of any losses, claims,
proceedings, investigations or inquiries against the portion of
the Business conducted by BC France or any of its stockholders,
directors or officers, between the date of this Agreement and the
France Closing Date, in each case which (A) are commenced or, to
the Sellers' Knowledge, threatened and may affect the
transactions contemplated by this Agreement, or (B) are commenced
or, to the Sellers' Knowledge, threatened and are reasonably
likely to have a Material Adverse Effect.
Exclusivity. Each Seller shall not, and shall cause its
Affiliates and each of its officers, directors, employees,
representatives and agents not to, directly or indirectly,
(a) encourage, solicit, initiate, engage or participate in
discussions or negotiations with any person or entity (other than
the Buyer) concerning any merger, consolidation, sale of assets,
recapitalization or other business combination including the
Business or the Acquired Assets or any material portion thereof,
or (b) provide any non-public information concerning the Business
to any person or entity (other than the Buyer). The Sellers
shall immediately notify the Buyer of, and shall disclose to the
Buyer all details of, any inquiries, discussions or negotiations
of the nature described in the first sentence of this
Section 5.7.
PAGE
Bulk Transfers Law. The Buyer and the Sellers each hereby waive
compliance with the provisions of the bulk transfers statute in
each of the jurisdictions, if any, where such compliance would be
required in connection with the transactions contemplated by this
Agreement (subject to the indemnity provided for in Article
VIII).
BC France.
(a) The Sellers shall, prior to the France Closing,
(i) inform and consult in a timely manner the Comite d'Entreprise
(labor committee) of BC France pursuant to the provisions of
Articles L-431-5 and L-432-1 of the French Labor Code, (ii) use
all reasonable efforts to obtain the avis motive (opinion) of
such Comite d'Entreprise agreeing to the transactions
contemplated under this Agreement as they relate to the France
Closing, and (iii) deliver all notices and make all filings
required to be delivered or made to or with any Governmental
Entities, unions, employees and other public and private persons
and entities in connection with the consummation by BC France of
the transactions contemplated by this Agreement.
(b) The Sellers shall take all action necessary to
cause the BC France Bankruptcy Proceeding to be terminated at or
prior to the U.S. Closing. The Buyer shall, at the Sellers'
expense, take such actions as the Sellers may reasonably request
in order to assist the Sellers in causing the BC France
Bankruptcy Proceeding to be terminated at or prior to the U.S.
Closing. Without limiting the foregoing, the Parties agree that
the following steps shall be taken in connection with the
termination of the BC France Bankruptcy Proceeding:
(i) The Buyer shall deliver to the BC France
Receiver, at least two days prior to the U.S. Closing Date,
certified bank checks representing the aggregate indebtedness
subject to the French Bankruptcy Proceeding (the aggregate amount
represented by such checks being hereinafter referred to as the
"BC France Payments"). The checks evidencing the BC France
Payments shall be made payable to the BC France Creditors in
amounts (currently estimated at a total of approximately F.F.
21,220,000) set forth on a schedule to be delivered by the
Sellers' Representative to the Buyer at least five business days
prior to the U.S. Closing Date. Such checks shall be delivered to
the BC France Receiver in escrow, to be held by the BC France
Receiver until the U.S. Closing Date for delivery to the BC
France Creditors at or after the U.S. Closing following receipt
by the Buyer of a certificate (Extrait K-bis) issued by the
PAGE
French Bankruptcy Court evidencing that BC France is no longer
subject to the BC France Bankruptcy Proceeding.
(ii) Promptly following the execution of this
Agreement, BC France shall take all necessary actions to cause
the BC France Bankruptcy Proceeding to terminate and releasing
all liens and encumbrances on the assets of BC France resulting
therefrom, such termination to be effective prior to the release
from escrow of the checks evidencing the BC France Payments.
ARTICLE VI
CONDITIONS TO CLOSING
Conditions to Obligations of the Buyer for the U.S. Closing.
The obligation of the Buyer to consummate the transactions to be
performed by it in connection with the U.S. Closing is subject to
the satisfaction, or waiver by the Buyer, of the following
conditions:
the Sellers shall have, at their expense, (i) obtained all of the
waivers, permits, consents, approvals or other authorizations
from third parties and Governmental Entities, and effected all of
the registrations, filings and notices with or to Governmental
Entities, as may be necessary to permit the Sellers to consummate
the transactions contemplated by this Agreement (other than the
transactions to be consummated at the France Closing), and
(ii) obtained all other waivers, permits, consents, approvals or
other authorizations and effected all other registrations,
filings and notices necessary or desirable in connection with the
transactions contemplated by this Agreement (other than the
transactions to be consummated at the France Closing), except in
case of clause (ii) for any which if not obtained or effected
would not have a material adverse effect on the right of the
Buyer to own, operate or control the Acquired Assets or conduct
the Business following the Closings or on the ability of the
Parties to consummate the transactions contemplated by this
Agreement.
the representations and warranties of the Sellers set forth in
Article III shall be true and correct in all material respects as
of the U.S. Closing as if made as of the U.S. Closing, except for
PAGE
representations and warranties made as of a date, which shall be
true and correct as of such date;
each Seller shall have performed or complied with its agreements
and covenants required to be performed or complied with under
this Agreement as of or prior to the U.S. Closing;
no action, suit or proceeding shall be pending before any
Governmental Entity wherein an unfavorable judgment, order,
decree, stipulation or injunction would (i) prevent consummation
of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation, or (iii) affect adversely
the right of the Buyer to own, operate or control any significant
Acquired Assets or affect adversely in any material respect the
right of the Buyer to conduct the Business as currently conducted
and as presently proposed to be conducted following either
Closing, and no such judgment, order, decree, stipulation or
injunction shall be in effect;
the Sellers shall have delivered to the Buyer a certificate
(without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified in
clauses (a) through (d) of this Section 6.1 is satisfied in all
respects;
the Buyer and the Parent shall have received from Morrison Cohen
Singer & Weinstein, LLP, U.S. counsel to the Sellers, an opinion
dated as of the U.S. Closing Date in the form attached hereto as
Exhibit K;
the Sellers shall have caused the discharge of all Security
Interests on the Acquired Assets, including without limitation
any Security Interest in favor of each of Bank One Dayton,
National Association and Barclays Bank PLC (or their respective
successors) and any Security Interest on the Acquired Assets
owned by BC France arising out of the BC France Bankruptcy
Proceeding and owned by BC International, respectively;
the Buyer shall have received an estoppel certificate from the
lessor from whom BC Shartle leases real property in Rayville,
Louisiana consenting to the transactions contemplated under this
Agreement and representing that there are no outstanding claims
against Black Clawson under such lease;
PAGE
the Buyer shall have received from Black Clawson such warranty
deeds and instruments of conveyance, assignment and transfer, in
form and substance satisfactory to the Buyer, as shall be
appropriate to convey, transfer and assign to, and to vest in,
the Buyer, good, clear, record, marketable and insurable title to
the Owned Real Property;
the Buyer shall have obtained, at its cost and expense, an ALTA
owners title insurance policy for each parcel of Owned Real
Property. Each title insurance policy shall (i) be in an amount
equal to the fair market value of the applicable parcel of Owned
Real Property, (ii) name the Buyer as the owner of such parcel of
Owned Real Property, (iii) be subject only to such exceptions as
the Buyer shall approve, and (iv) contain such endorsements as
the Buyer may require;
the Buyer shall have obtained, at its cost and expense, an ALTA
survey of each parcel of Owned Real Property. Each survey shall
be (i) prepared by a licensed surveyor or civil engineer, (ii)
certified to the Buyer and the title insurer, and (iii) in form
and substance satisfactory to the Buyer;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall have executed and delivered the Escrow
Agreement;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall have executed and delivered the BC France
Escrow Agreement;
the Buyer and BC International shall have entered into a Supply
Agreement and a Mutual Personnel and Services Agreement in the
forms attached hereto as Exhibits L-1 and L-2, respectively;
the Buyer and Black Clawson shall have entered into a Lease and
Services Agreement in the form attached hereto as Exhibit M;
the Buyer and BC Asia shall have entered into a Sublease
Agreement in the form attached hereto as Exhibit N;
PAGE
the Principal shall have, on or before the U.S. Closing Date,
repaid in full all amounts owing under that certain Note dated
February 14, 1997 in favor of Bank One, Dayton, National
Association, in the original principal amount of $6,000,000;
the Buyer shall have received any and all waivers, permits,
consents, approvals or other authorizations from third parties
and Governmental Entities, including all registrations, filings
and notices with or to Governmental Entities, as may be necessary
to permit the Buyer to consummate the transactions contemplated
by this Agreement (other than the transactions to be consummated
at the France Closing);
the Buyer shall have received from the Sellers and the Sellers'
officers all customary closing certificates as it shall have
requested; and
all actions to be taken by the Sellers in connection with the
consummation of the transactions contemplated hereby (other than
transactions to be consummated at the France Closing) and all
certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby shall be
reasonably satisfactory in form and substance to the Buyer.
Conditions to Obligations of the Sellers for the U.S. Closing.
The obligation of the Sellers to consummate the transactions to
be performed by them in connection with the U.S. Closing is
subject to the satisfaction, or waiver by the Sellers'
Representative, of the following conditions:
the Buyer shall have, at its expense, (i) obtained all of the
waivers, permits, consents, approvals or other authorizations
from third parties and Governmental Entities, and effected all of
the registrations, filings and notices with or to Governmental
Entities, as may be necessary to permit the Buyer to consummate
the transactions contemplated by this Agreement (other than the
transactions to be consummated at the France Closing), and
(ii) obtained all other waivers, permits, consents, approvals or
other authorizations and effected all other registrations,
filings and notices necessary or desirable in connection with the
transactions contemplated by this Agreement (other than the
transactions to be consummated at the France Closing), except in
the case of clause (ii) for any waivers, permits, consents,
approvals or authorizations in whose absence the Closing could be
consummated without materially adversely affecting the Sellers;
PAGE
the representations and warranties of the Buyer set forth in
Article IV shall be true and correct in all material respects as
of the U.S. Closing as if made as of the U.S. Closing, except for
representations and warranties made as of a specific date, which
shall be true and correct as of such date;
the Buyer shall have performed or complied with its agreements
and covenants required to be performed or complied with under
this Agreement as of or prior to the U.S. Closing;
the Buyer shall have delivered to the Sellers' Representative a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
in clauses (a) through (c) of this Section 6.2 is satisfied in
all respects;
the Sellers' Representative shall have received from Hale and
Dorr LLP, special counsel to the Buyer, an opinion dated as of
the U.S. Closing Date in the form attached hereto as Exhibit O;
the Buyer and Black Clawson shall have entered into a Trademark
License Agreement relating to the use of the "Black Clawson" name
in the form attached hereto as Exhibit P;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall have executed and delivered the Escrow
Agreement;
the Buyer, the Sellers, the Sellers' Representative and the
Escrow Agent shall have executed and delivered the BC France
Escrow Agreement;
the Buyer and BC International shall have entered into a Supply
Agreement and a Mutual Personnel and Services Agreement in the
forms attached hereto as Exhibits L-1 and L-2, respectively;
the Buyer and Black Clawson shall have entered into a Lease and
Services Agreement in the form attached hereto as Exhibit M;
PAGE
the Buyer and BC Asia shall have entered into a Sublease
Agreement in the form attached hereto as Exhibit N;
the Sellers' Representative shall have received from the Buyer
and the Buyer's officers all customary closing certificates as it
shall have requested; and
all actions to be taken by the Buyer in connection with the
consummation of the transactions contemplated hereby (other than
transactions to be consummated at the France Closing) and all
certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby shall be
reasonably satisfactory in form and substance to the Sellers'
Representative.
Conditions to Obligations of the Buyer for the France Closing.
The obligation of the Buyer to consummate the transactions to be
performed by it in connection with the France Closing is subject
to the satisfaction, or waiver by the Buyer, of the following
conditions:
the Sellers shall have, at their expense, (i) obtained all of the
waivers, permits, consents, approvals or other authorizations
from third parties and Governmental Entities, and effected all of
the registrations, filings and notices with or to Governmental
Entities, as may be necessary to permit the Sellers to consummate
the transactions to be consummated at the France Closing,
including without limitation all consents, approvals and
authorizations from, and all filings, notices and consultations
with or to, the Comite d'Entreprise of BC France and
(ii) obtained all other waivers, permits, consents, approvals or
other authorizations and effected all other registrations,
filings and notices necessary or desirable in connection with the
transactions to be consummated at the France Closing, except in
case of clause (ii) for any which if not obtained or effected
would not have a material adverse effect on the right of the
Buyer to own, operate or control the France Assets or conduct the
BC France portion of the Business following the France Closing or
on the ability of the Parties to consummate the transactions to
be taken at the France Closing.
the representations and warranties set forth in Article III (but
only as they relate to BC France or to the portion of the
Business conducted by BC France) shall be true and correct in all
material respects as of the France Closing as if made as of the
PAGE
France Closing, except for representations and warranties made as
of a date, which shall be true and correct as of such date;
each Seller shall have performed or complied with its agreements
and covenants required to be performed or complied with under
this Agreement as of or prior to the France Closing; provided,
however, that any failure to perform or comply with any agreement
or covenant required to be performed or complied with by any
Seller solely in connection with the consummation of the U.S.
Closing shall not excuse the France Closing unless such failure
or non compliance is reasonably likely to have or result in a
Material Adverse Affect;
no action, suit or proceeding shall be pending before any
Governmental Entity wherein an unfavorable judgment, order,
decree, stipulation or injunction would (i) prevent consummation
of any of the transactions to be taken at the France Closing,
including without limitation any action commenced by or on behalf
of the Comite d'Entreprise of BC France, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation, or (iii) affect adversely the right of
the Buyer to own, operate or control any significant France
Assets or affect adversely in any material respect the right of
the Buyer to conduct the portion of the Business conducted by
BC France as currently conducted and as presently proposed to be
conducted following the France Closing, and no such judgment,
order, decree, stipulation or injunction shall be in effect;
BC France shall have delivered to the Buyer, not less than five
business days prior to the France Closing Date, (i) the
affirmative written approval of the Comite d'Entreprise of BC
France, in form and substance satisfactory to the Buyer in its
reasonable discretion, of the transactions to be consummated at
the France Closing, or (ii) a written certification of BC France
to the effect that, despite the use of all reasonable efforts
during the period commencing on the U.S. Closing Date and ending
on September 30, 1997, BC France has been unable to obtain such
written approval;
the Sellers shall have delivered to the Buyer a certificate
(without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified in
clauses (a) through (e) of this Section 6.3 is satisfied in all
respects;
PAGE
the Buyer and the Parent shall have received from Ngo, Migueres &
Associes, French counsel to the Sellers, an opinion dated as of
the France Closing Date in the form attached hereto as Exhibit Q;
the Sellers shall have caused the discharge of all Security
Interests on the France Assets and on the BC France fonds de
commerce (on-going business);
the Buyer shall have received any and all waivers, permits,
consents, approvals or other authorizations from third parties
and Governmental Entities, including all registrations, filings
and notices with or to Governmental Entities, as may be necessary
to permit the Buyer to consummate the transactions to be
consummated at the France Closing;
the Buyer shall have received from the Sellers and the Sellers'
officers all customary closing certificates as it shall have
requested; and
all actions to be taken by the Sellers in connection with the
consummation of the transactions contemplated to occur at or in
connection with the France Closing and all certificates,
opinions, instruments and other documents required to effect the
transactions contemplated to occur at or in connection with the
France Closing shall be reasonably satisfactory in form and
substance to the Buyer.
Conditions to Obligations of the Sellers for the France Closing.
The obligation of the Sellers to consummate the transactions to
be performed by them in connection with the France Closing is
subject to the satisfaction, or waiver by the Sellers'
Representative, of the following conditions:
the Buyer shall have, at its expense, (i) obtained all of the
waivers, permits, consents, approvals or other authorizations
from third parties and Governmental Entities, and effected all of
the registrations, filings and notices with or to Governmental
Entities, as may be necessary to permit the Buyer to consummate
the transactions to be consummated at the France Closing, and
(ii) obtained all other waivers, permits, consents, approvals or
other authorizations and effected all other registrations,
filings and notices necessary or desirable in connection with the
transactions to be consummated at the France Closing, except in
the case of clause (ii) for any waivers, permits, consents,
approvals or authorizations in whose absence the France Closing
PAGE
could be consummated without materially adversely affecting the
Sellers;
the representations and warranties of the Buyer set forth in
Article IV shall be true and correct in all material respects as
of the France Closing as if made as of the France Closing, except
for representations and warranties made as of a specific date,
which shall be true and correct as of such date;
the Buyer shall have performed or complied with its agreements
and covenants required to be performed or complied with under
this Agreement as of or prior to the France Closing;
the Buyer shall have delivered to the Sellers' Representative a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
in clauses (a) through (c) of this Section 6.4 is satisfied in
all respects;
the Buyer and the Sellers' Representative shall have instructed
the Escrow Agent to release the BC France Escrow Fund to the
Sellers' Representative in accordance with the terms of the BC
France Escrow Agreement;
the Sellers' Representative shall have received from the Buyer
and the Buyer's officers all customary closing certificates as it
shall have requested; and
all actions to be taken by the Buyer in connection with the
consummation of the transactions contemplated to occur at or in
connection with the France Closing and all certificates,
opinions, instruments and other documents required to effect the
transactions contemplated to occur at or in connection with the
France Closing shall be reasonably satisfactory in form and
substance to the Sellers' Representative.
ARTICLE VII
POST-CLOSING COVENANTS
PAGE
Proprietary Information. From and after the U.S. Closing, the
Sellers and the Principal shall hold in confidence, and each of
them shall cause all of its or his Affiliates to hold in
confidence, all knowledge, information and documents of a
confidential nature or not generally known to the public with
respect to the Business, the Buyer or the Buyer's business
(including without limitation the financial information,
Intellectual Property, technical information or data relating to
the materials, products or components sold, or the services
offered, in connection with the Business and names of customers
of the Business) and shall not disclose or make use of the same
without the written consent of the Buyer, except to the extent
that such knowledge, information or documents shall have become
public knowledge other than through a breach of this Agreement by
any of the Sellers or the Principal.
Solicitation and Hiring.
During the two-year period commencing on the U.S. Closing Date,
the Sellers (other than BC France) and the Principal shall not,
and each of them shall cause its or his Affiliates not to, either
directly or indirectly as a stockholder, investor, partner,
director, officer, employee or otherwise, (i) solicit or attempt
to induce any Restricted Employee to terminate his employment
with the Buyer or any Affiliate of the Buyer or (ii) hire or
attempt to hire any Restricted Employee.
During the period commencing on the U.S. Closing Date and ending
on the second anniversary of the France Closing Date, BC France
shall not, and shall cause its Affiliates not to, either directly
or indirectly as a stockholder, investor, partner, director,
officer, employee or otherwise, (i) solicit or attempt to induce
any Restricted Employee to terminate his employment with the
Buyer or any Affiliate of the Buyer or (ii) hire or attempt to
hire any Restricted Employee.
Non-Competition; Referral of Customers.
During the four-year period commencing on the U.S. Closing Date,
the Sellers shall not, and each of them shall cause its or his
Affiliates not to, either directly or indirectly as a
stockholder, investor, partner, director, officer, employee,
consultant or otherwise, (i) develop, manufacture, market, sell,
perform or offer any material, product, component or service
PAGE
which is competitive with any material, product, component or
service developed (or under development), manufactured, marketed,
sold or offered by the Business on or prior to the U.S. Closing
Date or (ii) engage in any business competitive with the Business
as conducted or as proposed to be conducted on the date of this
Agreement or as of the U.S. Closing Date, in the United States or
any other country in which the Business was conducted (it being
understood that the conduct of the Business shall include without
limitation the commencement of the process of filing or applying
for Permits, the preparation of marketing studies or the study of
the feasibility of use of a product) during the four years prior
to the U.S. Closing Date; provided, that nothing herein contained
shall be construed as preventing (A) the Sellers, the Principal
and their respective Affiliates from holding or purchasing, as a
passive investor, up to 5% in the aggregate of any publicly
traded class of stock or securities of a company which is listed
on a national securities exchange or regularly traded in the
over-the- counter market, or (B) BC International from performing
its obligations to the Buyer and its Affiliates under the terms
of the Ancillary Agreements referred in Section 6.1(n) hereof.
Notwithstanding the foregoing, but subject to the terms of
paragraphs (b) and (c) below, nothing in this paragraph (a) shall
prevent BC France from continuing to conduct, prior to the France
Closing, the Business conducted by BC France prior to the U.S.
Closing in those territories in which BC France actively
conducted such portion of the Business prior to the U.S. Closing.
During the four-year period commencing on the France Closing
Date, BC France shall not, either directly or indirectly as a
stockholder, investor, partner, director, officer, employee,
consultant or otherwise, (i) develop, manufacture, market, sell,
perform or offer any material, product, component or service
which is competitive with any material, product, component or
service developed (or under development), manufactured, marketed,
sold or offered by the Business on or prior to the U.S. Closing
Date or the France Closing Date or (ii) engage in any business
competitive with the Business as conducted or as proposed to be
conducted on the date of this Agreement, as of the U.S. Closing
Date or, with respect to the Business of BC France, as of the
France Closing Date, in the United States or any other country in
which the Business was conducted (it being understood that the
conduct of the Business shall include without limitation the
commencement of the process of filing or applying for Permits,
the preparation of marketing studies or the study of the
feasibility of use of a product) during the four years prior to
the France Closing Date; provided, that nothing herein contained
shall be construed as preventing (A) the Sellers, the Principal
and their respective Affiliates from holding or purchasing, as a
passive investor, up to 5% in the aggregate of any publicly
traded class of stock or securities of a company which is listed
on a national securities exchange or regularly traded in the
over-the-counter market, or (B) BC France from completing its
Contracts in Progress as in existence on the France Closing Date
in accordance with Section 7.15(a) hereof.
PAGE
During the ten-year period commencing on the U.S. Closing Date,
the Principal shall not, and shall cause his Affiliates not to,
either directly or indirectly as a stockholder, investor,
partner, director, officer, employee, consultant or otherwise,
(i) develop, manufacture, market, sell, perform or offer any
material, product, component or service which is competitive with
any material, product, component or service developed (or under
development), manufactured, marketed, sold or offered by the
Business on or prior to the U.S. Closing Date or (ii) engage in
any business competitive with the Business as conducted or as
proposed to be conducted on the date of this Agreement or as of
the U.S. Closing Date, in the United States or any other country
in which the Business was conducted (it being understood that the
conduct of the Business shall include without limitation the
commencement of the process of filing or applying for Permits,
the preparation of marketing studies or the study of the
feasibility of use of a product) during the four years prior to
the U.S. Closing Date; provided, that nothing herein contained
shall be construed as preventing (A) the Sellers, the Principal
and their respective Affiliates from holding or purchasing, as a
passive investor, up to 5% in the aggregate of any publicly
traded class of stock or securities of a company which is listed
on a national securities exchange or regularly traded in the
over-the-counter market, or (B) BC International from performing
its obligations to the Buyer and its Affiliates under the terms
of the Ancillary Agreements referred in Section 6.1(n) hereof.
Notwithstanding the foregoing, but subject to the terms of
paragraphs (a) and (b) above, nothing in this paragraph (c) shall
prevent BC France from continuing to conduct, prior to the France
Closing, the Business conducted by BC France prior to the U.S.
Closing in those territories in which BC France actively
conducted such portion of the Business prior to the U.S. Closing.
During the period commencing on the U.S. Closing Date and ending
on the fourth anniversary of the U.S. Closing Date (or, with
respect to Excluded Assets or other assets or product lines of
BC France, the fourth anniversary of the France Closing Date),
the Sellers and the Principal shall not, and each of them shall
cause its or his Affiliates not to, sell or dispose of, in a
single transaction or a series of related transactions, whether
by sale of assets, stock sale, merger or otherwise, any
substantial portion of the Excluded Assets or any substantial
portion of any of the other assets or product lines retained by
the Sellers under this Agreement, unless (i) the Sellers shall
have provided the Buyer with not less than 30 days' prior written
notice thereof and (ii) prior to such transaction, the party or
parties acquiring such assets and/or product lines agree in
writing with the Buyer to be bound by the terms of this Section
7.3. Notwithstanding the foregoing, in no event shall the
Sellers be required to comply with clause (ii) above in
connection with a transaction which is subject to this paragraph
(d) if such transaction relates solely to a sale of the Sellers'
converting business located in Fulton, New York.
PAGE
Each of the Sellers and the Principal, on its or his own behalf
and on behalf of its or his Affiliates, agrees that the duration
and geographic scope of the noncompetition provision set forth in
this Section 7.3 are reasonable. In the event that any court
determines that the duration or the geographic scope, or both,
are unreasonable and that such provision is to that extent
unenforceable, the Parties and the Principal agree that the
provision shall remain in full force and effect for the greatest
time period and in the greatest area that would not render it
unenforceable. The Parties and the Principal intend that this
noncompetition provision shall be deemed to be a series of
separate covenants, one for each and every county of each and
every state of the United States of America and each and every
political subdivision of each and every country outside the
United States of America where this provision is intended to be
effective.
Each Seller shall, and shall cause its Affiliates to, from and
after the U.S. Closing (or, with respect to BC France, the France
Closing), refer all inquiries regarding the Business and its
products and services to the Buyer. Each Seller shall notify its
Affiliates in writing promptly after the U.S. Closing (or, with
respect to the portion of the Business conducted by BC France,
the France Closing) that the Business has been sold to the Buyer,
and such notice shall inform such Affiliates of their obligations
under this Section 7.3(f). Such notice shall be in form and
substance reasonably satisfactory to the Buyer.
In consideration for the Principal's agreements under
Sections 7.3(c), (d) and (e) above, on the U.S. Closing Date, the
Buyer shall pay to the Principal the sum of $3,000,000.
Sharing of Data.
The Sellers shall have the right for a period of seven years
following the U.S. Closing Date (or, with respect to BC France,
the France Closing Date) to have reasonable access to such books,
records and accounts, including financial and Tax information,
correspondence, production records, employment records and other
records that are transferred to the Buyer pursuant to the terms
of this Agreement on such Closing Date for the limited purposes
of concluding their involvement in the Business as conducted by
Black Clawson Group prior to such Closing Date and for complying
with their respective obligations under applicable securities,
Tax, environmental, employment or other Laws and Regulations.
The Buyer shall have the right for a period of seven years
PAGE
following the U.S. Closing Date (or, with respect to BC France,
the France Closing Date) to have reasonable access to (i) those
books, records and accounts, including financial and Tax
information, correspondence, production records, employment
records and other records that are retained by the Sellers
pursuant to the terms of this Agreement, and (ii) the workpapers
of the Sellers' accountants relating to the operation of the
Business prior to the U.S. Closing Date (or, with respect to BC
France, the France Closing Date), in each case to the extent that
any of the foregoing is needed by the Buyer in order to comply
with its obligations under applicable securities, Tax,
environmental, employment or other Laws and Regulations. Neither
the Buyer nor any of the Sellers shall destroy any such books,
records or accounts retained by it without first providing the
other Parties with the opportunity to obtain or copy such books,
records or accounts.
Without limiting the generality of the provisions of
paragraph (a) above, the Sellers shall make available to the
Buyer such financial information and reasonable assistance with
respect to the Business, including without limitation providing
to the Buyer and its authorized representatives reasonable access
to the workpapers of the Sellers' accountants relating to the
operation of the Business prior to the Closing Date, as is
reasonably necessary for the Buyer to prepare on a timely basis
the financial statements required by Item 2 of Form 8-K to be
filed by the Buyer under the Exchange Act with respect to the
transactions contemplated by this Agreement, which shall include
audited financial statements prepared in accordance with GAAP for
the fiscal years of the Business ended December 31, 1994, 1995
and 1996.
In addition to all files and documents required to be provided
pursuant to this Agreement or the Ancillary Agreements, promptly
upon request by the Buyer made at any time following the U.S.
Closing Date (or, with respect to BC France, the France Closing
Date), each Seller shall authorize the release to the Buyer of
all files pertaining to the Acquired Assets or the Business held
by any federal, state, county or local authorities, agencies or
instrumentalities.
Enforcement of Insurance Claims. Each Seller hereby assigns to
the Buyer the right to pursue and enforce, and hereby irrevocably
appoints the Buyer as its true and lawful attorney-in-fact with
full power in the name of and on behalf of such Seller for the
purpose of pursuing and enforcing, any and all
rights of the Seller under any insurance policies of the Seller
(other than those assigned to Buyer ) with respect to any
occurrence, claim or loss (including without limitation any
product liability claim) which is the subject of an indemnity
obligation by any of the Sellers to the Buyer under Article VIII
PAGE
of this Agreement; provided, that the Buyer may not exercise such
right or power unless the Seller fails to promptly and
expeditiously pursue and enforce its rights under its insurance
policies with respect to such occurrence, claim or loss. The
power of attorney conferred upon the Buyer by each of the Sellers
pursuant to this Section 7.5 is an agency coupled with an
interest and all authority conferred hereby shall be irrevocable,
and shall not be terminated by the dissolution or the liquidation
of any Seller or any other act of any Seller.
Cooperation in Litigation. From and after the Closing Date,
each Party shall fully cooperate with the others in the defense
or prosecution of any litigation or proceeding already instituted
or which may be instituted hereafter against or by such other
Party relating to or arising out of the conduct of the Business
prior to or after the Closing Date (other than litigation among
the Sellers, the Buyer and/or their respective Subsidiaries or
Affiliates arising out of the transactions contemplated by this
Agreement or the Ancillary Agreements). The Party requesting
such cooperation shall pay the reasonable out-of-pocket expenses
incurred in providing such cooperation (including legal fees and
disbursements) by the Party providing such cooperation and by its
officers, directors, employees and agents, but shall not be
responsible for reimbursing such Party or its officers,
directors, employees and agent for their time spent in such
cooperation.
Collection of Accounts Receivable and Contracts in Progress.
(a) Each Seller shall forward promptly to the Buyer
any monies, checks or instruments received by such Seller after
the U.S. Closing Date with respect to the Accounts Receivable and
the Contracts in Progress. The Sellers hereby authorizes the
Buyer to open any and all mail addressed to any of the Sellers
(if delivered to the Buyer) received on or after the U.S. Closing
Date (or, with respect to BC France, the France Closing Date) and
hereby grants to the Buyer a power of attorney to endorse and
cash any checks or instruments payable or endorsed to any Seller
or its order and received by the Buyer with respect to the
Acquired Assets or the Business. Each Seller shall provide to
the Buyer such reasonable assistance as the Buyer may request
with respect to the collection of any such Accounts Receivable
and Contracts in Progress, provided the Buyer pays the reasonable
out-of-pocket expenses of the Seller and its officers, directors
and employees incurred in providing such assistance. From and
after the U.S. Closing (or, with respect to the portion of the
Business operated by BC France, the France Closing), each Seller
shall refer all customer inquiries relating to the Business to
the Buyer.
PAGE
(b) Any Account Receivable existing as of the U.S.
Closing Date as to which any Seller pays the Buyer Damages in an
amount equal to the face amount of such Account Receivable
pursuant to Section 8.1 because of a breach of Section 3.13 shall
promptly be assigned by the Buyer to the Sellers (without
recourse) and any funds thereafter collected by the Buyer with
respect to such Accounts Receivable shall be paid by the Buyer to
the Sellers.
Employees. Subject to Section 7.15 below, effective as of the
U.S. Closing (or, with respect to employees of BC France, the
France Closing), each Seller shall terminate the employment of
each Designated Employee (who does not transfer pursuant to the
Transfer Regulations) and the Buyer shall offer employment to
each such Designated Employee (who does not transfer pursuant to
the Transfer Regulations) who is actively at work or on
short-term disability leave as of such Closing, terminable at the
will of the Buyer or as otherwise agreed to between the Buyer and
such employee; the Buyer shall credit service by the Continuing
Employees with any of the Sellers for purposes of vesting of
pension benefits, vacation and personal time entitlements, and
severance benefits. Except as otherwise specifically required by
Section 7.15, applicable law (subject, as between the Buyer and
the Sellers, to the provisions of Section 7.15) or the Union
Agreements, the Buyer shall not have any obligation to employ or
offer employment to any employees of the Business other than as
provided in the preceding sentence. The Buyer shall have
complete discretion to change any of the terms or conditions of
employment, compensation or benefits relating to any such
employee at any time. The parties hereto do not intend to create
any third-party beneficiary rights respecting any employee as a
result of the provisions herein and specifically hereby negate
any such intention. Each Seller hereby consents to the hiring of
such employees by the Buyer and waives, with respect to the
employment by the Buyer of such employees, any claims or rights
such Seller may have against the Buyer or any such employee under
any noncompetition, confidentiality or employment agreement.
Employee Benefit Matters. Contingent upon the occurrence of the
U.S. Closing or the France Closing, as the case may be:
Welfare Plans.
Benefits Continuation. Except as provided in this
Section 7.9(a), effective as of the U.S. Closing (or, with
respect to Continuing Employees who are former employees of BC
France, the France Closing), the Buyer shall cause each
PAGE
Continuing Employee to be covered by Buyer's welfare benefit
plans to the extent that they are otherwise eligible therefor.
Disability and Certain Other Benefits. The Sellers shall be
liable for claims for benefits (other than for short-term
disability, workers' compensation and medical (including vision
care and prescription drugs) and dental benefits, which are
addressed below) by employees of the Business (active or
inactive) and by terminated employees previously employed in the
Business under the Seller's Welfare Plans arising out of
occurrences prior to the U.S. Closing Date (or, with respect to
any such employees or terminated employees of BC France, the
France Closing Date). In this regard, but not by way of limiting
the foregoing, the Sellers shall be liable for the long-term
disability benefits for those employees of the Business receiving
or qualified to receive long-term disability benefits under the
Sellers' disability programs as of the U.S. Closing Date (or,
with respect to employees of BC France, the France Closing Date),
including without limitation those employees of the Business in
the long-term disability elimination period (which employees
shall receive long-term disability benefits from the Sellers upon
the conclusion of the applicable elimination period).
Workers' Compensation Benefits. The Buyer shall not be liable
for, and the Sellers shall jointly and severally indemnify the
Buyer against, claims for workers' compensation benefits by
employees of the Business (active or inactive) and by terminated
employees previously employed in the Business with respect to
injuries or illnesses occurring on or prior to the U.S. Closing
Date (or, with respect to any such employees or terminated
employees of BC France, the France Closing Date).
Short-Term Disability Benefits. The Buyer shall not be liable
for, and the Sellers shall jointly and severally indemnify the
Buyer against, claims for short-term disability benefits under
the Sellers' Welfare Plans by employees of the Business (active
or inactive) with respect to payments due on or prior to the
U.S. Closing Date (or, with respect to employees of BC France,
the France Closing Date) and by terminated employees previously
employed in the Business.
Medical and Dental Benefits. The Buyer shall not be liable for,
and the Sellers shall jointly and severally indemnify the Buyer
against, claims for medical (including vision care and
prescription drugs) and dental benefits incurred by employees of
the Business (active or inactive) and their respective covered
dependents with respect to services and treatment rendered on or
prior to the U.S. Closing Date (or, with respect to any such
PAGE
employees of BC France and their dependents, the France Closing
Date) under the terms of the Sellers' Welfare Plans.
Transition Period. Notwithstanding anything to the contrary in
this Agreement, the Sellers shall make such arrangements as may
be necessary for the Continuing Employees in the UK for whom the
Buyer does not provide life assurance or disability cover to
remain as participants in BC International's life assurance and
disability cover schemes for a period extending through
December 31, 1997 and the Buyer shall pay the cost of providing
those benefits for and in respect of the participating Continuing
Employees during the transition period and paid after the U.S.
Closing Date in accordance with the terms of the relevant
schemes.
Retiree Medical, Dental and Life Benefits. The Sellers shall be
liable for retirement medical, retirement dental and retirement
life insurance coverage under the Sellers' Welfare Plans after
termination of employment to (A) employees of the Business whose
employment terminated prior to the U.S. Closing Date (or, with
respect to any such employees of BC France, the France Closing
Date) and (B) those employees of the Business who are eligible
therefor as of the U.S. Closing Date (or, with respect to any
such employees of BC France, the France Closing Date) or who will
become eligible therefor on or before December 31, 1997;
provided, that with respect to those employees described in the
immediately preceding clause (B) who retire on or after January
1, 1998, in each case, the Sellers' liability with respect to
such employees' medical, dental and life insurance coverage shall
be reduced to the extent that such employees are entitled to
receive any post- retirement medical, dental or life insurance
benefits under plans of the Buyer and/or its Affiliates. The
Buyer shall furnish the Sellers with written notice of any such
benefits provided by the Buyer on or before December 1, 1997.
The Sellers have, prior to the date of this Agreement, notified
(or, with respect to any such employees of BC France, the Sellers
shall, prior to the France Closing Date, notify) (I) employees of
the Business other than those described in clause (II) below that
such coverage for employees of the Business will be terminated
upon the applicable Closing Date and (II) Continuing Employees
who are eligible as of the U.S. Closing Date (or, with respect to
Continuing Employees who are former employees of BC France, the
France Closing Date) for retiree medical, dental or life
insurance coverage under such retiree plans or who will become
eligible therefor on or before December 31, 1997 that coverage
for such Continuing Employees under such plans as in effect from
time to time will be provided by the Sellers upon retirement from
the Buyer and/or its Affiliates. The Sellers shall provide the
Buyer with a reasonable opportunity to review and comment on the
notices contemplated by the preceding sentence and shall
incorporate in such notices any reasonable comments made by the
Buyer. The Buyer agrees to provide notice to the Sellers of such
retirements for purposes of the preceding sentence.
PAGE
COBRA. The Sellers shall be responsible for providing benefits
pursuant to Section 4980B of the Code to employees of the
Business who cease to be employed by any of the Sellers prior to
the U.S. Closing Date (or, with respect to any such employees of
BC France, the France Closing Date).
Limitation on Buyer's Liability. The Buyer shall have no
liability with respect to any claims for benefits under any of
the Sellers' Welfare Benefit Plans and nothing contained herein
shall limit the provisions of Section 2.2(b)(xi).
Multiemployer Plans. Neither the Buyer nor any of its Affiliates
shall assume any obligation or liability imposed on any of the
Sellers under Section 4201 of ERISA.
Savings Plans. The Buyer shall allow U.S. Continuing Employees
to make direct cash rollovers under Section 402(c) of the Code of
their account balances from the Savings Plan to a savings plan
qualified under Section 401(a) of the Code maintained by the
Buyer; provided, that the Buyer's 401(k) plan shall have no
obligation to accept rollovers of loans. The Buyer shall arrange
for payroll withholding for the purpose of making payments on
loans by Continuing Employees from any 401(k) plan maintained by
any of the Sellers.
Benefits to Union Employees. The Buyer shall assume the
obligations of Black Clawson arising following the U.S. Closing
under the Union Agreements; provided, however, that (i) by
assuming the Union Agreements the Buyer shall not in any way be
deemed to assume any obligation to provide any benefits provided
by any of the Sellers (A) to former employees who are or were
members of the Union or (B) to current employees who are members
of the Union, except to the extent the obligation to provide such
benefits is expressly set forth in the Union Agreements, and
(ii) the assumption of such obligations by the Buyer shall not be
construed as triggering the provisions of Section 4204 of ERISA.
U.K. Employee Benefits Matters. The provisions of Exhibit J
shall apply in respect of the Sellers' UK Scheme.
The parties hereto do not intend to create any third-party
beneficiary rights respecting any current or former employee as a
PAGE
result of the provisions set forth in this Section 7.9 and
specifically hereby negate any such intention. No provision in
this Section 7.9 shall increase the rights, benefits or remedies
of any employee under any Employee Benefit Plan of any of the
Sellers or the Buyer.
U.K. Employees. Each Seller shall jointly and severally
indemnify the Buyer against all claims, liabilities and costs
arising out of anything done or omitted to be done in relation to
the employment of any U.K. employee of any of the Sellers (who is
not a Continuing Employee) prior to and/or after the U.S. Closing
Date.
Tax Matters.
Except as provided in Sections 2.9 and 7.10(b) hereof:
Subject to Section 7.10(a)(ii) below, the Sellers shall be liable
for any and all claims, losses, liabilities, obligations,
damages, impositions, assessments, demands, judgments,
settlements, costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses and any applicable
assessments of interest and penalties) with respect to Taxes
attributable to the Business with respect to any and all periods,
or portions thereof, ending before the U.S. Closing Date (and,
with respect to the portion of the Business conducted by BC
France, the France Closing Date) ("Pre-Closing Periods").
The Buyer shall be liable for any and all claims, losses,
liabilities, obligations, damages, impositions, assessments,
demands, judgments, settlements, costs and expenses (including
reasonable attorneys', accountants' and experts' fees and
expenses and any applicable assessments of interest and
penalties) with respect to Taxes attributable to the Business
with respect to any and all periods, or portions thereof,
beginning on or after the U.S. Closing Date (and, with respect to
the portion of the Business conducted by BC France, the France
Closing Date) ("Post- Closing Periods"); provided, however, that
the amount of any Taxes (other than Transfer Taxes) attributable
to the operation of the Business on or after the U.S. Closing
Date (or, with respect to Tax obligations of BC France, the
France Closing Date) that are incurred as a result of the
transactions that are the subject of this Agreement or as a
result of the action of any of the Sellers after such Closing
shall be attributable to the Pre-Closing Periods.
PAGE
For purposes of this Section 7.10, any and all transactions or
events contemplated by this Agreement that occur at or prior to
an applicable Closing shall be deemed to have occurred in the
Pre-Closing Period.
In the case of any Tax that is attributable to a taxable period
which begins before the U.S. Closing Date (or, with respect to a
Tax obligation of BC France, the France Closing Date) and ends on
or after such Closing Date, the amount of Taxes attributable to
the Pre-Closing Period shall be determined as follows:
In the case of ad valorem Taxes imposed on the Acquired Assets or
any Seller, the portion attributable to the Pre-Closing Period
shall be the amount of such Taxes for the entire taxable period
multiplied by a fraction, the numerator of which is the number of
days in the Pre-Closing Period and the denominator of which is
the number of days in the entire taxable period.
In the case of all other Taxes, the portion attributable to the
Pre-Closing Period shall be determined on the basis of an interim
closing of the books of the applicable Seller as of the
applicable Closing, and the determination of the hypothetical Tax
for such Pre-Closing Period, determined on the basis of such
interim closing of the books, without annualization. The
hypothetical Tax for any period shall in no case be less than
zero.
The Buyer and the Sellers shall cooperate fully, as and to the
extent reasonably requested by the other Party or Parties, in
connection with the filing of Tax Returns and any audit,
litigation or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the request of
the other Party or Parties) 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; provided that the
Party or Parties requesting assistance shall pay the reasonable
out-of-pocket expenses incurred by the Party or Parties providing
such assistance; and provided further that no Party shall be
required to provide assistance at times or in amounts that would
interfere unreasonably with the business and operations of such
Party.
Notice and indemnification in connection with Taxes shall be
governed by Article VIII of this Agreement.
PAGE
All indemnification payments under Article VIII shall be deemed
adjustments to the Purchase Price.
Employee Notices. The Sellers shall make such notices to
employees as shall be required of the Sellers by any applicable
Laws and Regulations or by any agreements (including any notices
required to be given to any union, works council or similar
representative body).
Use of Name. Each Seller agrees, on its own behalf and on
behalf of its Subsidiaries and Affiliates, from and after the
U.S. Closing, not to use any trademark or name (including without
limitation the name "Black Clawson") previously or currently used
in the Business, or any derivation thereof, except in accordance
with the terms of the Trademark License Agreement referenced in
Section 6.2(f).
Sellers' Obligations. After the U.S. Closing, the Buyer shall
use reasonable efforts to arrange as soon as is reasonably
practicable after the U.S. Closing for the substitution of the
Buyer for the Sellers under the Sellers' Obligations; provided,
however, that this Section 7.13 shall not require (a) the Buyer
to make any payments or (b) the Buyer, or allow any of the
Sellers, to amend the terms of any obligation of the Business in
any way to provide for less favorable terms either to the
Business or to any other obligor thereof. To the extent that the
Buyer is not substituted for the applicable Seller or Sellers on
such Sellers' Obligations (and the failure to be so substituted
shall not be a breach of this Agreement), or to the extent that
the applicable Seller or Sellers are not relieved of such
Sellers' Obligations, the Buyer shall indemnify such Seller or
Sellers with respect to such Sellers' Obligations in accordance
with Section 8.2.
U.K. Value Added Tax.
All amounts expressed in this Agreement as being payable by the
Buyer are expressed exclusive of any VAT which may be chargeable.
The Parties intend that Section 49 of Value Added Tax Act 1994
("VATA") and Article 5 VAT (Special Provisions) Order 1995 (the
"Special Provisions Order") will apply to the transfer of the
PAGE
Acquired Assets held by BC International pursuant to this
Agreement. The Sellers and the Buyer shall each use its best
efforts to ensure that pursuant to the VATA and the Special
Provisions Order the sale of the Acquired Assets held by BC
International is treated as neither a supply of goods nor a
supply of services for the purposes of VAT but as the transfer of
a business as a going concern.
The Buyer represents, warrants and undertakes to the Sellers that
it (or a Designated Transferee) is, or will as a result of the
transactions contemplated hereby be liable to be, duly and
properly registered for the purposes of VAT.
BC International represents, warrants and undertakes to the Buyer
that it is duly and properly registered for the purposes of VAT.
BC International shall, as soon as reasonably practicable after
the execution of this Agreement, request a direction from HM
Customs & Excise under Section 49(1)(b) of the VATA that from and
after the U.S. Closing BC International retain and preserve all
records relating to the Acquired Assets transferred to the Buyer
by BC International which are required to be preserved by
paragraph 6 of Schedule 11 of the VATA. If HM Customs & Excise
gives such a direction, BC International shall preserve such
records for such periods as may be required by applicable law and
allow the Buyer and its agents access to, and to take copies, of
such records on reasonable notice during normal business hours.
If HM Customs & Excise notify BC International that they do not
agree that the sale of the Acquired Assets held by BC
International (or any part of them) pursuant to this Agreement
falls within Section 49 of the VATA and Article 5 of the Special
Provisions Order, BC International shall, promptly following its
receipt of such notification or at the U.S. Closing (whichever is
later), issue to the Buyer a valid VAT invoice in respect of the
sale of the Acquired Assets held by BC International (or the
relevant part thereof). The Buyer shall, promptly following its
receipt of such invoice, pay to BC International one-half of the
VAT charged on the sale of the Acquired Assets held by BC
International (or the relevant part thereof) and return to BC
International all those records referred to in paragraph (e)
above and all copies thereof.
BC France.
PAGE
At the France Closing, BC France shall transfer to the Buyer
those employees of BC France listed on Schedule 1.33 attached
hereto. Following the France Closing, BC France shall, subject
to the provisions of Section 7.3, continue to operate its
manufacturing business and shall use its best efforts to complete
the Contracts in Progress of BC France as in existence on the
France Closing Date as soon as possible following such date.
In connection with the completion of the Contracts in Progress of
BC France contemplated by paragraph (a) above, the Buyer shall
make available to BC France, for a period of 180 days commencing
on the France Closing Date, such administrative, field service
and engineering personnel transferred to the Buyer by BC France
as BC France may reasonably request. Notwithstanding the
foregoing, the Parties acknowledge that the Buyer will require
the services of such personnel in the conduct of its own
business. The Buyer shall allocate the services of such
personnel between the Buyer and BC France in good faith and in a
reasonable and prudent manner. In addition, at the request of
BC France, the Buyer shall provide warranty and field service to
customers of BC France with respect to the Contracts in Progress
of BC France as in existence on the France Closing Date. The
Buyer shall invoice BC France for (i) the services of such
personnel and such warranty and field services at a rate equal to
110% of the total salary, social security and fringe benefit
costs and travel and entertainment expenses incurred by the Buyer
in providing such personnel and services, (ii) all other
out-of-pocket expenses incurred by the Buyer in connection with
the provision of such personnel and services, and (iii) any
applicable value added Taxes. Notwithstanding the foregoing, the
Buyer shall provide warranty service for customers of BC France
at the request of BC France and at no cost to BC France or its
customers with respect to (A) products manufactured or sold by
BC France prior to the U.S. Closing Date and (B) products which
represent Contracts in Progress of BC France as in existence on
the U.S. Closing Date. The Sellers shall cause BC France to pay
such invoices within 30 days of the date thereof.
BC France shall make available to the Buyer, for a period of
180 days commencing on the France Closing Date, such accounting,
administrative and purchasing personnel retained by BC France as
the Buyer may reasonably request. Notwithstanding the foregoing,
the Parties acknowledge that BC France will require the services
of such personnel in the conduct of its own business. BC France
shall allocate the services of such personnel between BC France
and the Buyer in good faith and in a reasonable and prudent
manner. BC France shall invoice the Buyer for (i) the services
of such personnel at a rate equal to 110% of the total salary,
social security and fringe benefit costs and travel and
entertainment expenses incurred by BC France in providing such
personnel, (ii) all other out-of-pocket expenses incurred by BC
France in connection with the provision of such personnel, and
PAGE
(iii) any applicable value added Taxes. The Buyer shall pay such
invoices within 30 days of the date thereof.
The Parties acknowledge and agree that Christian Lastera, the
General Manager of BC France (the "General Manager"), shall be a
Continuing Employee. During the six-month period following the
France Closing Date, the General Manager shall be employed by
each of BC France and the Buyer with respect to one-half of his
business time. The Parties agree that the services provided by
the General Manager to BC France during such six-month period
shall be limited to the completion by BC France of its Contracts
in Progress pursuant to paragraph (a) above and shall not include
the development or administration of BC France's severance or
social welfare plans described in paragraphs (e) and (g) below.
At the request of BC France, the Buyer and BC France shall
continue the arrangements with respect to the employment of the
General Manager for up to an additional three months following
the completion of the six-month period referred to above,
provided that the General Manager shall not devote more than 25%
of his business time to employment by BC France during such
additional period.
Following the France Closing and the completion of the Contracts
in Progress of BC France contemplated by paragraph (a) above, BC
France may continue to engage in a manufacturing business subject
to the provisions of Section 7.3 or may elect to wind down its
operations. In the event that BC France elects to wind down its
operations, BC France shall develop and implement severance and
social welfare plans for the termination of all of its remaining
employees. Such plans shall be administered for BC France by
Michel Lacabarats. The Buyer shall reimburse BC France for all
severance costs paid by BC France to employees during the
18-month period following the France Closing Date in connection
with the termination of its remaining employees who were employed
by BC France as of the France Closing Date promptly following
receipt by the Buyer of evidence reasonably satisfactory to the
Buyer of payment thereof; provided, however, that (i) in no event
shall the Buyer be obligated to reimburse BC France for aggregate
severance costs which, when added to any payments made directly
by the Buyer or any of its Affiliates to current or former
employees of BC France who are not Designated Employees, exceed
$1,500,000, and (ii) in the event that the aggregate severance
costs for which BC France seeks reimbursement pursuant to this
paragraph (e) are, when added to the amount of any payments made
directly by the Buyer or any of its Affiliates to current or
former employees of BC France who are not Designated Employees,
less than $1,500,000, the Buyer shall pay to BC France, promptly
following receipt of written notice from BC France stating that
no additional severance reimbursement shall be sought from the
Buyer pursuant hereto, an amount equal to one-half of the
difference between (A) $1,500,000, minus (B) the sum of (I) the
amount of any payments made directly by the Buyer or any of its
Affiliates to current or former employees of BC France who are
PAGE
not Designated Employees and (II) the actual amount of severance
previously reimbursed pursuant to this paragraph (e). In no
event shall the Buyer have any liability for, and the Sellers
jointly and severally shall indemnify and hold harmless the Buyer
and its Affiliates from and against, any and all Damages
associated with the continuation by BC France of its
manufacturing business subject to Section 7.3 hereof, the winding
down and closing of the operations of BC France contemplated by
this Section 7.15 and/or the termination of employment of any
employees of BC France in connection therewith, other than
(X) the obligation of the Buyer for no more than $1,500,000 of
severance costs in accordance with this paragraph (e) and (Y) the
obligation of the Buyer set forth in paragraph (f) below.
In the event that any Designated Employees who are employees of
BC France do not accept the Buyer's offer of employment in
accordance with Section 7.8 of this Agreement, the Buyer shall
reimburse BC France for one-half of the severance costs paid by
BC France to such employees during the 18-month period following
the France Closing Date promptly following receipt by the Buyer
of evidence reasonably satisfactory to the Buyer of payment
thereof; provided, that in no event shall the Buyer be obligated
to reimburse BC France, with respect to a particular Designated
Employee, for an amount in excess of one-half of the estimated
severance costs set forth opposite the name of such Designated
Employee on Schedule 7.15(f) attached hereto.
BC France shall keep the Buyer regularly informed as to the
progress of the wind down of its manufacturing operations and the
termination of its remaining employees. BC France shall engage
the services of labor counsel reasonably satisfactory to the
Buyer in connection with the termination of its remaining
employees and shall instruct such counsel to consult with the
Buyer and its labor counsel prior to taking any significant
decisions or actions with respect to the termination of
employment of the remaining BC France employees or the
development or administration of the severance and social plans
referenced in this Section 7.15, including without limitation
providing the Buyer and its labor counsel with a reasonable
opportunity to review and comment on such plans. BC France shall
not take any action which could result in any of its remaining
employees having the ability to require the Buyer or any of its
Affiliates to assume the employment of any such employees
following the U.S. Closing or the France Closing.
BC France shall, until December 31, 1997 or the date 90 days
following the France Closing, whichever is later, and at no cost
to the Buyer, allow the Buyer to continue to conduct the Business
acquired by the Buyer hereunder at BC France's facility located
in Floriac, France following the France Closing in substantially
the same manner and to substantially the same extent previously
PAGE
conducted by BC France at such facility prior to the France
Closing; provided, that any employees of the Buyer based at such
facility shall respect any reasonable rules regarding the use and
operation of such facility and enforced by BC France and designed
to ensure the safety, security, maintenance and orderly operation
of such facility.
All amounts payable or reimbursable by a Party pursuant to this
Section 7.15 shall be paid in U.S. Dollars based on the
applicable exchange rate in effect on the date of receipt by such
Party of an invoice therefor.
BC International Inventory. Promptly following the U.S.
Closing, the Buyer and BC International shall, to the extent
practical, segregate at BC International's facility in Newport,
South Wales of the United Kingdom all of the inventory and other
Acquired Assets acquired by the Buyer as of the U.S. Closing
Date. BC International shall, at no charge to the Buyer, provide
the Buyer with a segregated, secure location at its facility to
store such materials and assets for the duration of the BC
International Supply Agreement referred to in Section 6.1(n) of
this Agreement. The Buyer and BC International shall cooperate
promptly following the U.S. Closing to perform a physical
inventory of the Acquired Assets transferred by BC International
to the Buyer as of the U.S. Closing Date.
Excluded Sales Contracts. Promptly following the U.S. Closing,
the Buyer and Black Clawson shall send to each of the other
parties to the Excluded Sales Contracts a joint letter, in form
and substance satisfactory to Buyer and Black Clawson, outlining
proposed arrangements for the distribution of products of the
Business by such third parties following the U.S. Closing.
Arrangements Regarding Certain Contracts. The Buyer promptly
shall pay to the Sellers in cash the $1,500,000 of the purchase
price (the "Holdback Amount") that was not paid to the Sellers at
the closing in accordance with Section 2.3(d) of this Agreement
if, on or before the 60th day after the U.S. Closing Date, the
Sellers shall have delivered to the Buyer duly executed
assignments of the BC Asia Agreements (as defined below) together
with consents to such assignments (except in the case of the
agreement referred to in clause (i) below, with respect to which
no consent shall be required) duly executed by Jin Ya Netting
Industry Co. Ltd. ("Jin Ya") or Pacific Pulp and Paper
Enterprises Ltd. ("Pacific Pulp"), as applicable, which
assignments and consents are in form and substance reasonably
satisfactory to the Buyer. For purposes of this Agreement, the
BC Asia Agreements means the following four contracts to which BC
Asia or one of the Sellers is a party: (i) Right of First Refusal
PAGE
Agreement with Jin Ya dated June 1, 1996; (ii) Distribution
Agreement with Jin Ya (a/k/a Jine Hsin Co. Ltd.) dated June 1,
1996; (iii) License Agreement with Jin Ya dated June 1, 1996; and
(iv) Subdistribution Agreement with Pacific Pulp dated June 14,
1996. If the Sellers have not so delivered all of such
assignments and consents on or before such 60th day, the Buyer
shall be entitled to retain the Holdback Amount without any
obligation to the Sellers with respect thereto.
ARTICLE VIII
INDEMNIFICATION
Indemnification by the Sellers. Each of the Sellers, jointly
and severally, shall indemnify the Buyer in respect of, and hold
the Buyer harmless against, any and all Damages incurred or
suffered by the Buyer or any Affiliate thereof resulting from,
relating to, constituting or arising out of:
any misrepresentation or breach of warranty by any of the Sellers
contained in this Agreement or any of the Ancillary Agreements;
any failure to perform any covenant or agreement of any of the
Sellers contained in this Agreement or any of the Ancillary
Agreements;
any Retained Liabilities;
any and all Taxes to the extent specified in Section 7.10(a)(i);
any and all matters relating to the Lafayette Paper, 1st Urban
Fiber/Hagerstown Fiber Limited Partnership, Gaylord Container and
Cadidavid projects or engagements, including without limitation
any actual or alleged product warranty and/or product liability
claims relating thereto, the collection of all Accounts
Receivable associated therewith, any suits, proceedings or
actions resulting therefrom, any attorneys' fees, amounts paid to
investigate, defend or settle such claims and any awards of
damages, costs or penalties related thereto;
PAGE
any guaranty, warranty, right of return, credit or other
indemnity obligation undertaken by any of the Sellers in
connection with the Business prior to the U.S. Closing (or, with
respect to any such obligation of BC France, the France Closing),
in each case to the extent such obligation is beyond the Seller's
standard terms and conditions of sale or lease;
any and all matters relating to claims or allegations made by, or
liabilities or obligations to, Christian Chu, AITC and/or their
respective Affiliates, including without limitation the matters
alleged in that certain four page letter dated April 18, 1997,
from Richard J. Schager, Jr. of Stamell & Schager, LLP to Stephen
P.H. Rachlis of Braunschweig & Osborne, and any suits,
proceedings or actions resulting therefrom, any attorneys' fees,
amounts paid to investigate, defend or settle such claims and any
awards of damages, costs or penalties related thereto;
any and all matters relating to claims or allegations by, or
liabilities or obligations to, Sulzer Inc., Voith Sulzer Paper
Technology North America, Inc., Voith Sulzer Papiertechnik GmbH,
and/or their respective Affiliates, including without limitation
the matters referred to in the Settlement and License Agreement
dated March 22, 1996 among Black Clawson and such entities;
any and all matters relating to claims or allegations by, or
liabilities or obligations to, GL&V-Paper Machine Group Inc.
and/or its Affiliates, including without limitation the matters
referred to in the Right of First Offer Agreement dated as of
March 15, 1996 among Black Clawson, Black Clawson-Kennedy, Ltd.
and GL&V-Paper Machine Group Inc.;
any and all matters relating to claims or allegations by, or
liabilities or obligations to, PWA Papierwerke
Waldhof-Aschaffenburg AG (Germany) and/or its Affiliates,
including without limitation the matters referred to in the
Settlement Agreement dated May 17, 1993 between Black Clawson and
such entity; or
the failure of the Buyer and the Sellers in connection with the
sale of the Acquired Assets by the Sellers to the Buyer pursuant
to this Agreement, to comply with and obtain for the Buyer the
benefits afforded by compliance with any applicable bulk transfer
laws.
PAGE
Indemnification by the Buyer. The Buyer shall indemnify the
Sellers in respect of, and hold the Sellers harmless against, any
and all Damages incurred or suffered by any of the Sellers or any
Affiliate thereof resulting from, relating to, constituting or
arising out of:
any misrepresentation or breach of warranty by the Buyer
contained in this Agreement or any of the Ancillary Agreements;
any failure to perform any covenant or agreement of the Buyer
contained in this Agreement or any of the Ancillary Agreements;
any Assumed Liabilities;
any Sellers' Obligations;
any liabilities or obligations of the Sellers under the federal
Worker Adjustment and Retraining Notification Act which, but for
any action taken by the Buyer following the U.S. Closing Date,
the Sellers would not have incurred as a result of the
consummation of the transactions contemplated by this Agreement;
or
any and all Taxes to the extent specified in Section 7.10(a)(ii).
Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, the Indemnified Party shall promptly
notify (in accordance with Section 10.7) the Indemnifying Party
of the claim and, when known, the facts constituting the basis
for such claim; provided, however, that no delay on the part of
the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation
hereunder except to the extent of any damage or liability caused
by or arising out of such failure. In the event of any such
claim for indemnification hereunder resulting from or in
connection with any claim or legal proceedings by a third party,
the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising
therefrom. The Indemnified Party shall not settle or compromise
any claim by a third party for which it is seeking
indemnification hereunder without the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably
withheld), unless the Indemnifying Party shall not have taken
PAGE
control of the defense of such claim as provided in Section 8.4
of this Agreement, after notification thereof pursuant to this
Section 8.3, in which case the Indemnified Party may settle or
compromise such claim without the Indemnifying Party's consent.
Defense by the Indemnifying Party. In connection with any claim
for indemnification hereunder resulting from or arising out of
any claim or legal proceeding by a third party, the Indemnifying
Party at its sole cost and expense may, upon written notice to
the Indemnified Party given within 10 days after the date of the
notice of the claim from the Indemnified Party pursuant to
Section 8.3, assume the defense of such claim or legal proceeding
with counsel approved by the Indemnified Party, which approval
shall not be unreasonably withheld, if (a) the Indemnifying Party
acknowledges to the Indemnified Party in writing the Indemnifying
Party's obligations to indemnify the Indemnified Party with
respect to all elements of such claim, (b) the third party seeks
monetary damages only, and (c) an adverse resolution of the third
party's claim would not have a material adverse effect on the
goodwill or the reputation of the Indemnified Party or the
Business or the future conduct of the business of the Indemnified
Party or the Business. If the Indemnifying Party so assumes such
defense, the Indemnified Party shall be entitled to participate
in (but not control) such defense, with its counsel and at its
own expense (except that the Indemnifying Party will be
responsible for the reasonable fees and expenses of the separate
co-counsel to the extent the Indemnified Party reasonably
concludes that the counsel the Indemnifying Party has selected
has a conflict of interest). In addition, if the Indemnifying
Party so assumes such defense, it shall take all steps necessary
in the defense or settlement thereof; provided, however, that the
Indemnifying Party shall not consent to any settlement or to the
entry of any judgment with respect to a claim or legal proceeding
which does not include a complete release of the Indemnified
Party from all liability with respect thereto or which imposes
any liability on the Indemnified Party without the written
consent of the Indemnified Party. If the Indemnifying Party does
not (or is not permitted under the terms hereof to) assume the
defense of any such claim or legal proceeding, (i) the
Indemnified Party may defend against such claim or legal
proceeding (with the Indemnifying Party responsible for the
reasonable fees and expenses of counsel for the Indemnified
Party) in such manner as it may deem appropriate, including but
not limited to settling such claim or legal proceeding on such
terms as the Indemnified Party may deem appropriate, and (ii) the
Indemnifying Party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its
own expense. The party controlling the defense of a third-party
claim pursuant to this Section 8.4 shall keep the other party
advised of the status of such action, suit or proceeding and the
defense thereof and shall consider in good faith recommendations
made by the other party with respect thereto.
PAGE
Payment of Indemnification Obligation. All indemnification by
the Indemnifying Party hereunder shall be effected promptly as
Damages are incurred by payment of cash, delivery of a cashier's
or certified check or wire transfer of immediately available
funds to an account designated by the Indemnified Party in the
amount of the indemnification liability; provided, however, that
if the Indemnifying Party is any of the Sellers, the Buyer, as
the Indemnified Party, may recover all or any portion of such
Damages pursuant to the terms of the Escrow Agreement.
Survival.
All representations, warranties, covenants and obligations in
this Agreement, the Ancillary Agreements, the Disclosure
Schedule, any supplements to the Disclosure Schedule and any
other certificate or documents delivered pursuant to this
Agreement will survive the U.S. Closing and the France Closing,
and the right to indemnification, reimbursement or other remedy
based on such representations, warranties, covenants and
obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being
acquired) about the accuracy or inaccuracy of or compliance with,
any such representations, warranty, covenants or obligations. If
the U.S. Closing occurs, an Indemnifying Party will have no
liability for indemnification with respect to any representation
or warranty in Article III or Article IV, other than those in
Sections 3.1, 3.2, 3.3, 3.4, 3.8, 3.9(a), 3.20, 4.1, 4.2 or 4.3,
unless on or before the second anniversary of the U.S. Closing
Date (or, to the extent the claim relates in any way to BC France
or its business, operations, assets or liabilities, the France
Closing Date) the Indemnifying Party is given notice of a claim
pursuant to Section 8.3 hereof. However, the preceding sentence
of this Section 8.6 will not apply to any breach of any of the
Indemnifying Party's representations and warranties of which the
Indemnifying Party had knowledge at any time prior to the date on
which such representation and warranty is made. A claim with
respect to Section 3.20 may be made at any time on or before the
fifth anniversary of the U.S. Closing Date (or, to the extent the
claim relates in any way to BC France or its business,
operations, assets or liabilities, the France Closing Date). A
claim with respect to Sections 3.1, 3.2, 3.3, 3.4, 3.8, 3.9(a),
4.1, 4.2 or 4.3, or a claim for indemnification or reimbursement
not based upon any representation or warranty in Article III or
Article IV, may be made at any time.
If a notice is given in accordance with Section 8.3 before the
expiration of the applicable survival period (if any) specified
in Section 8.6(a) with respect to any claims, then
(notwithstanding the expiration of such time period) the
representation or warranty applicable to such claims (and no
PAGE
others) shall survive until, but only for purposes of, the
resolution of such claims.
Limitations.
An Indemnifying Party will have no liability for indemnification
pursuant to Section 8.1(a) or 8.2(a) until the aggregate Damages
to the Indemnified Party exceed $1,100,000 (at which point the
Indemnified Party shall become liable for only the amount by
which such Damages exceed $1,100,000). However, the preceding
sentence of this Section 8.7 will not apply to indemnification
for any breach of any of the Indemnifying Party's representations
and warranties of which the Indemnifying Party had knowledge at
any time prior to the date on which such representation and
warranty is made and will not apply to any breach of the
representations and warranties set forth in Sections 3.1, 3.2,
3.3, 3.4, 3.8, 4.1, 4.2 or 4.3.
Except with respect to claims based on fraud and claims by the
Sellers' Representative for payment of the Purchase Price, the
rights of the Parties under this Article VIII shall be the
exclusive remedy of the Parties with respect to matters covered
by this Article VIII.
Parent Guarantee. The Parent hereby unconditionally guarantees
the due and punctual payment and performance of the Buyer's
obligations set forth in this Agreement. This guaranty is an
irrevocable guaranty of payment (and not just of collection) and
shall continue in effect notwithstanding any extension or
modification of the terms of this Agreement, any assumption of
any such guaranteed obligation by any other party or any other
act or event which might otherwise operate as a legal or
equitable discharge of the Parent under this Section 8.8. The
Parent hereby waives all special suretyship defenses and notice
requirements.
ARTICLE IX
TERMINATION
PAGE
Termination of Agreement. The Parties may terminate this
Agreement prior to the U.S. Closing as provided below:
the Parties may terminate this Agreement by mutual written
consent;
the Buyer may terminate this Agreement by giving written notice
to the Sellers in the event any of the Sellers is in breach, and
the Sellers may terminate this Agreement by giving written notice
to the Buyer in the event the Buyer is in breach, of any material
representation, warranty or covenant contained in this Agreement,
which breach is not cured within 15 days of the receipt of notice
by the breaching Party delivered in accordance with the
provisions of Section 10.7 of this Agreement;
the Buyer may terminate this Agreement by giving written notice
to the Sellers if the U.S. Closing shall not have occurred on or
before May 31, 1997 by reason of the failure of any condition
precedent under Section 6.1 hereof (unless the failure results
primarily from a breach by the Buyer of any representation,
warranty or covenant contained in this Agreement); or
the Sellers may terminate this Agreement by giving written notice
to the Buyer if the U.S. Closing shall not have occurred on or
before May 31, 1997 by reason of any failure of any condition
precedent under Section 6.2 hereof (unless the failure results
primarily from a breach by any of the Sellers of any
representation, warranty or covenant contained in this
Agreement).
Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9.1, all obligations of the Parties hereunder
shall terminate without any liability of any Party to any other
Party (except for any liability of any Party for breaches of this
Agreement, including without limitation breaches of the covenants
set forth in Article V, occurring prior to such termination).
Termination of France Closing. The Parties may terminate this
Agreement with respect to the obligation of BC France to sell to
the Buyer, and the Buyer to purchase from BC France, the France
Assets, and the requirement that the Buyer assume from BC France
the France Liabilities in connection therewith, as provided
below:
PAGE
The Parties may terminate such obligations by mutual written
consent;
The Buyer may terminate such obligations by giving written notice
to the Sellers if the France Closing shall not have occurred on
or before October 7, 1997 by reason of the failure of any
condition precedent under Section 6.3 hereof (unless the failure
results primarily from a breach by the Buyer of any
representation, warranty or covenant contained in this
Agreement); provided, however, that if the France Closing has not
occurred by such date solely as a result of a failure of the
condition precedent set forth in Section 6.3(d) hereof, then the
Buyer may only terminate such obligations if the France Closing
shall not have occurred on or before the first anniversary of the
U.S. Closing Date; or
The Sellers may terminate such obligations by giving written
notice to the Buyer if the France Closing shall not have occurred
on or before the first anniversary of the U.S. Closing Date by
reason of any failure of any condition precedent under
Section 6.4 hereof (unless the failure results primarily from the
breach by any of the Sellers of any representation, warranty or
covenant contained in this Agreement).
If any Party terminates such obligations pursuant to this
Section 9.3, all obligations of the Parties with respect to such
obligations shall terminate without any liability of any Party to
any other Party (except for any liability of any Party for
breaches of this Agreement, including without limitation breaches
of the covenants set forth in Article V, occurring prior to such
termination); provided, however, that in no event shall any such
termination effect or otherwise modify in any way any of the
other rights, responsibilities and obligations of the Parties
under this Agreement, including without limitation the
obligations of BC France pursuant to Sections 7.3 and 7.12 of
this Agreement.
ARTICLE X
MISCELLANEOUS
PAGE
Press Releases and Announcements. Prior to the U.S. Closing, no
Party shall issue any press release or announcement relating to
the subject matter of this Agreement without the prior written
approval of the other Parties; provided, however, that any Party
may make any public disclosure it believes in good faith is
required by Law or Regulation or the applicable rules of a stock
exchange; and provided, further, that the Buyer may issue press
releases or make other public announcements concerning the
execution of this Agreement and the terms thereof with the prior
written approval of the Sellers, which approval shall not be
unreasonably withheld or delayed.
No Third Party Beneficiaries. This Agreement (including without
limitation Sections 5.9, 7.8, 7.9 and 7.15 hereof) shall not
confer any rights or remedies upon any person other than the
Parties and their respective successors and permitted assigns.
Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements or
representations by or between the Parties, written or oral, that
may have related in any way to the subject matter hereof.
Notwithstanding the foregoing, the provisions of the
Confidentiality Agreement, dated February 12, by and among the
Buyer and Black Clawson shall survive until the U.S. Closing,
whereupon it shall terminate.
Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign
either this Agreement or any of its rights, interests or
obligations hereunder, whether by operation of law or otherwise,
without the prior written approval of the other Parties, except
that (a) the Buyer may assign some or all of its rights,
interests and/or obligations hereunder to one or more Affiliates
of the Buyer or the Parent (each, a "Designated Transferee"),
provided, however, that no such assignment shall relieve either
the Buyer or the Parent of its obligations hereunder, and (b) the
Sellers shall be permitted to assign portions of the Purchase
Price to repay the indebtedness set forth on Section 3.29 of the
Disclosure Schedule. If the Buyer assigns any of its rights,
interests and/or obligations hereunder to one or more Designated
Transferees, then, unless the contract otherwise requires, all
references herein to the Buyer shall mean and include any and all
such Designated Transferees. Black Clawson shall not directly or
indirectly liquidate, distribute, pay or otherwise transfer all
or any portion of the Purchase Price, including without
limitation by means of dividend, distribution, redemption,
compensation payment or any other mechanism, to any or all of its
stockholders, directors or officers, or any of their respective
Affiliates, including the other Sellers, prior to the second
PAGE
anniversary of the U.S. Closing Date without the prior written
approval of the Buyer; provided, however, that (i) Black Clawson
may distribute to its stockholders and/or the other Sellers not
more than $7,000,000 during the period commencing on the U.S.
Closing Date and ending on the first anniversary thereof and not
more than an additional $7,000,000 during the period commencing
on the first anniversary of the U.S. Closing Date and ending on
the second anniversary thereof, and (ii) Black Clawson may
contribute all or any portion of the Purchase Price to the
capital of any indirect or direct wholly-owned subsidiary of
Black Clawson if, prior to such contribution, such subsidiary
agrees in writing, in form and substance reasonably satisfactory
to the Buyer, to comply with the restriction applicable to the
Purchase Price set forth in this Section 10.4.
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice,
request, demand, claim or other communication hereunder shall be
deemed duly delivered three days after it is sent by U.S.
registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the
intended recipient as set forth below:
If to the Sellers: Copy to:
----------------- --------
The Black Clawson Company, Morrison Cohen Singer &
Weinstein, LLP
as Sellers' Representative
750 Lexington Avenue
405 Lexington Avenue
New York, NY 10022
New York, NY 10174
Telecopy: (212) 735-8708
Telecopy: (212) 916-8057
Attention: Peter D. Weinstein,
Attention: Carl C. Landegger Esq.
If to the Buyer: Copies to:
---------------- ----------
PAGE
Thermo Fibertek Inc. Thermo Electron Corporation
81 Wyman Street 81 Wyman Street
P.O. Box 9046 P.O. Box 9036
Waltham, MA 02254-9046 Waltham, MA 02254-9036
Telecopy: (617) 622-1292 Telecopy: (617) 622-1283
Attention: President Attention: General Counsel
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telecopy: (617) 526-5000
Attention: Hal J. Leibowitz,
Esq.
Any Party may also give any notice, request, demand, claim or
other communication hereunder by personal delivery or telecopy,
but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended.
Any notice sent by telecopy shall be followed by a confirmation
copy sent by reputable overnight business courier service. Any
Party may change the address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
Governing Law; Time of the Essence. This Agreement shall be
governed by and construed in accordance with the internal laws
(and not the law of conflicts) of the Commonwealth of
Massachusetts; provided, however, that matters relating to the
Seller's UK Scheme shall be governed by and construed in
accordance with the laws of England and Wales. Time is of the
essence in the performance of this Agreement.
Amendments and Waivers. The Parties (and, in the case of
Section 8.8, the Parent) may amend any provision of this
Agreement at any time by a written instrument signed by each of
the Parties (and, in the case of Section 8.8, the Parent). No
PAGE
waiver by any Party of any default, misrepresentation or breach
of warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any
other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof
is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration or area of the term
or provision, to delete specific words or phrases, or to replace
any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be
appealed.
Expenses. Except as specifically set forth in this Agreement,
the Escrow Agreement and the BC France Escrow Agreement, each
Party shall bear its own costs and expenses (including legal and
accounting fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. In the event
of any litigation, claim, proceeding or arbitration with respect
to this Agreement or the Ancillary Agreements, the prevailing
Party or Parties shall be paid its or their reasonable legal fees
and expenses by the opposing Party or Parties.
Specific Performance. Each Party and the Principal acknowledges
and agrees that the other Parties would be damaged irreparably in
the event any of the provisions of this Agreement (including
without limitation Sections 7.1, 7.2, 7.3, 7.12 and 9.3 hereof)
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party and the
Principal agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any
court of the United States or any foreign jurisdiction or any
state or province thereof having jurisdiction over the Parties
and the matter, in addition to any other remedy to which it may
be entitled, at law or in equity.
PAGE
Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express
their mutual intent, and no rule of strict construction shall be
applied against any Party. Any reference to any federal, state,
local or foreign Law or Regulation shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof. In the event of any conflict
between the provisions of this Agreement and the Acte de Cession
de fonds de Commerce attached hereto as Exhibit I, the provisions
of this Agreement shall control.
[Remainder of page intentionally left blank.]
PAGE
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
BUYER:
BC ACQUISITION CORP.
By:___________________________________
Title:__________________________________
SELLERS:
THE BLACK CLAWSON COMPANY
By:___________________________________
Title:__________________________________
BLACK CLAWSON SHARTLE MFG. CO. INC.
By:___________________________________
Title:
----------------------------------
PAGE
BLACK CLAWSON INTERNATIONAL, LTD.
By:___________________________________
Title:
----------------------------------
PAGE
BLACK CLAWSON CANADA FIBRE PROCESSING LTD.
By:___________________________________
Title:__________________________________
BLACK CLAWSON EUROPE S.A.
By:___________________________________
Title:
----------------------------------
PAGE
The undersigned agrees to his obligations set forth in Sections
5.3, 7.1, 7.2, 7.3, 9.3 and 10.12 of this Agreement.
_____________________________
Carl C. Landegger
The undersigned agrees to its obligations set forth in Section
8.8 of this Agreement.
THERMO FIBERTEK INC.
By:________________________________
Title:
-------------------------------
PAGE