EXHIBIT 10.31
EXECUTION COPY
RECAPITALIZATION AND STOCK PURCHASE AND SALE AGREEMENT
dated as of November 14, 1994
among
UNION CARBIDE CORPORATION,
MITSUBISHI CORPORATION,
UCAR INTERNATIONAL INC.,
AND
UCAR INTERNATIONAL ACQUISITION INC.
TABLE OF CONTENTS
Page
TITLE...........................................................1
RECITALS........................................................1
ARTICLE 1 - PURCHASE AND SALE OF SHARES; RECAPITALIZATION;
CLOSING............................................2
1.1 Purchase and Sale of Shares; Recapitalization.........2
1.2 Closing...............................................3
1.3 Payments..............................................6
1.4 Closing Deliveries....................................6
1.5 Recapitalization Price Adjustment.....................9
1.6 Termination of Agreements on Closing Date............11
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES REGARDING BUYER....13
2.1 Organization.........................................13
2.2 Authorization........................................13
2.3 No Breach............................................13
2.4 Consents.............................................14
2.5 Purchase for Investment..............................15
2.6 Investigation by Buyer...............................15
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES REGARDING UNION
CARBIDE...........................................15
3.1 Organization.........................................15
3.2 Authorization........................................15
3.3 No Breach............................................16
3.4 Consents.............................................17
3.5 Ownership of Capital Stock...........................17
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES REGARDING
MITSUBISHI........................................17
4.1 Organization.........................................17
4.2 Authorization........................................17
4.3 No Breach............................................18
4.4 Consents.............................................19
4.5 Ownership of Capital Stock...........................19
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES REGARDING UCAR.....19
5.1 Organization.........................................19
5.2 Authorization........................................20
5.3 No Breach............................................20
5.4 Consents.............................................22
5.5 Organizational Instruments...........................22
5.6 Capital Stock........................................23
5.7 Subsidiaries.........................................24
5.8 Financial Statements.................................25
5.9 Tax Matters..........................................26
5.10 Real Property........................................28
5.11 Owned Personal Property..............................30
5.12 Title to Owned Properties............................30
5.13 Contracts; Leases; Licenses..........................31
5.14 Performance of Contracts, Leases and Licenses........33
5.15 Compliance with Laws.................................34
5.16 Permits; Licenses....................................35
5.17 Environmental Conditions.............................35
5.18 Litigation; Claims; Proceedings......................42
5.19 Patents; Technology..................................43
5.20 Trademarks; Copyrights...............................45
5.21 Human Resources......................................46
5.22 Business Operations..................................51
5.23 Health and Safety Conditions.........................52
5.24 Insurance............................................53
5.25 Liabilities..........................................53
5.26 Entire Business......................................54
5.27 Full Disclosure......................................54
5.28 Limitation on Representations........................55
5.29 Receivables..........................................55
5.30 Limitations on Representations.......................56
ARTICLE 6 - PRE-CLOSING COVENANTS.............................56
6.1 Conduct By Buyer.....................................56
6.2 Conduct by Stockholders and UCAR.....................57
6.3 Conduct of the Business..............................59
6.4 Filings and Consents.................................61
6.5 Fulfillment of Conditions............................62
6.6 Supplemental Disclosure..............................63
6.7 Limitation of Stockholders' Liabilities..............63
6.8 Tax Certificate......................................64
ARTICLE 7 - BUYER'S CONDITIONS TO CLOSING.....................64
ARTICLE 8 - STOCKHOLDERS' AND UCAR'S CONDITIONS TO CLOSING....66
ARTICLE 9 - EFFECTIVENESS; TERMINATION; SURVIVAL OF AGREEMENT.68
9.1 Effectiveness........................................68
9.2 Termination..........................................68
9.3 Survival after Termination...........................69
ARTICLE 10 - TAX MATTERS; POST-CLOSING COVENANTS..............70
10.1 Transactional Taxes and Costs........................70
10.2 Records Retained by Stockholders.....................71
10.3 Access by Stockholders...............................73
10.4 Preservation of Records..............................73
10.5 Agreement Not To Compete.............................74
ARTICLE 11 - EMPLOYEES AND BENEFITS...........................77
ARTICLE 12 - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.....79
12.1 Survival of Representations and Covenants of Buyer...79
12.2 Survival of Representations and Covenants of Union
Carbide..............................................80
12.3 Survival of Representations and Covenants of
Mitsubishi...........................................81
12.4 Indemnification by Buyer.............................82
12.5 Indemnification by Stockholders......................83
12.6 Indemnification by UCAR..............................87
12.7 Indemnification Procedure............................88
ARTICLE 13 - PUBLICITY; CONFIDENTIALITY.......................93
13.1 Publicity............................................93
13.2 Confidentiality......................................94
13.3 Survival.............................................96
ARTICLE 14 - NOTICES..........................................96
ARTICLE 15 - BROKERAGE FEES; CERTAIN EXPENSES.................98
15.1 Brokerage Fees.......................................98
15.2 Certain Expenses.....................................98
ARTICLE 16 - GOVERNING LAW; FORUM.............................99
ARTICLE 17 - BINDING EFFECT; ASSIGNMENT; THIRD PARTY
BENEFICIARIES....................................99
ARTICLE 18 - ENTIRE AGREEMENT................................100
ARTICLE 19 - FURTHER ASSURANCES..............................101
ARTICLE 20 - AMENDMENTS......................................101
ARTICLE 21 - WAIVERS.........................................102
ARTICLE 22 - REMEDIES LIMITED................................103
ARTICLE 23 - HEADINGS; COUNTERPARTS..........................103
ARTICLE 24 - SEVERABILITY....................................104
ARTICLE 25 - CERTAIN REFERENCES..............................104
25.1 Affiliate...........................................104
25.2 Knowledge...........................................105
25.3 Person..............................................105
ARTICLE 26 - INDEX TO DEFINED TERMS..........................105
EXHIBITS
Exhibit A Stockholders' Agreement
*Exhibit B Amended and Restated Certificate of
Incorporation of UCAR
*Exhibit C Amended and Restated By-Laws of UCAR
[Note: With respect to the Certificate of Incorporation and
By-Laws of UCAR, the only changes that will be made relate to
eliminating the class of common stock currently held by
Mitsubishi, and specifying an authorized number of shares of
common stock, which would result in the only unissued shares being
those reserved for issuance to management.]
* To be appended after execution of the Agreement.
UCC will furnish to the Commission supplementally on request
a copy of the above Exhibits which have been omitted.
DISCLOSURE SCHEDULES
I SUBSIDIARIES AND AFFILIATES
II FINANCIAL STATEMENTS; CERTAIN TAX MATTERS
III REAL PROPERTY
IV CONTRACTS
V PERMITS & LICENSES
VI ENVIRONMENTAL CONDITIONS
VII LITIGATION, CLAIMS & PROCEEDINGS
VIII PATENTS
IX TRADEMARKS & COPYRIGHTS
X EMPLOYEES
XI EMPLOYEE BENEFIT PLANS
XII HEALTH AND SAFETY CONDITIONS
XIII INSURANCE
XIV CONSENTS
XV LIENS
XVI BUSINESS OPERATIONS, CAPITAL EXPENDITURES AND OTHER
MATTERS
XVII INTERNATIONAL EMPLOYEE BENEFIT MATTERS
UCC will furnish to the Commission supplementally on request a
copy of the above Disclosure Schedules which have been ommitted.
RECAPITALIZATION AND STOCK PURCHASE AND SALE AGREEMENT (the
"Agreement") dated as of November 14, 1994 among UNION CARBIDE
CORPORATION, a corporation validly existing under the laws of New
York ("Union Carbide"), MITSUBISHI CORPORATION, a corporation
validly existing under the laws of Japan ("Mitsubishi"), UCAR
INTERNATIONAL INC., a corporation validly existing under the laws
of Delaware ("UCAR"), and UCAR INTERNATIONAL ACQUISITION INC., a
corporation validly existing under the laws of Delaware ("Buyer"),
W I T N E S S E T H:
WHEREAS, Union Carbide and Mitsubishi (collectively,
"Stockholders") own all of the issued and outstanding shares of
capital stock of UCAR (the "Capital Stock");
WHEREAS, UCAR is engaged in the development, manufacture,
marketing, use, sale, distribution and servicing of carbon and
graphite products, components and systems for furnaces, and
related products and equipment throughout the world (the
"Business"); and
WHEREAS, UCAR desires to issue and sell to Buyer, and Buyer
desires to purchase from UCAR, newly issued shares of the Capital
Stock on the terms and subject to the conditions set forth herein;
WHEREAS, in connection with such sale of Capital Stock to
Buyer, Union Carbide, Mitsubishi, Buyer and UCAR (collectively,
the "Parties" and, sometimes individually, a "Party") desire to
recapitalize UCAR by virtue of extensions of credit to UCAR and
its Subsidiaries (as hereinafter defined in Article 5.3 hereof)
and to effect certain related transactions as more fully set forth
herein;
WHEREAS, the Parties desire to utilize the proceeds from such
extensions of credit and such sale of Capital Stock to Buyer to
(i) repay or redeem certain outstanding indebtedness of UCAR and
its Subsidiaries, (ii) redeem all of the Capital Stock currently
held by Mitsubishi, and (iii) pay a cash dividend to Union
Carbide, in each case as more fully set forth herein;
NOW, THEREFORE, in consideration of the premises,
representations and warranties and the mutual covenants and
agreements contained herein and other good, valuable and
sufficient consideration, the receipt of which is hereby
acknowledged, each of the Parties, intending to be legally bound,
hereby agrees as follows:
ARTICLE 1 - PURCHASE AND SALE OF SHARES; RECAPITALIZATION; CLOSING
1.1 Purchase and Sale of Shares; Recapitalization.
(a) Subject to the terms and conditions set forth
herein, at the Closing (as defined in Article 1.2 hereof), UCAR
shall issue, sell and deliver to Buyer, and Buyer shall purchase
and accept from UCAR, seven hundred fifty (750)1 shares of common
__________________
1 Based upon 1,000 shares to be outstanding following the Closing,
the actual number to be determined.
stock, $1.00 par value, of UCAR (the "Acquired Shares"), free and
clear of all preemptive rights, liens, claims and encumbrances
(the "Acquisition"). In consideration for the Acquired Shares,
Buyer will pay UCAR in cash an aggregate purchase price of not
less than one hundred ninety-five million U.S. dollars
($195,000,000) and not more than two hundred two million five
hundred thousand U.S. dollars ($202,500,000), as determined by the
Buyer (the "Purchase Price").
(b) Subject to the terms and conditions set forth
herein, at the Closing the Stockholders shall cause UCAR and its
Subsidiaries to collectively borrow (the "Borrowings"), and Buyer
shall cause certain providers of financing (the "Lenders") to
collectively lend to UCAR and its Subsidiaries with respect to
such Borrowings, such amount so that, when taken together with the
Purchase Price and other cash available to UCAR and its
Subsidiaries, UCAR has sufficient cash at the Closing (net of any
fees, expenses or other costs required to be paid by UCAR in
connection with the Transactions (as defined below)) to (i) repay
or redeem certain indebtedness of UCAR and its Subsidiaries (the
"Repayment"), (ii) redeem (the "Redemption") the two hundred fifty
(250) shares of Class A Common Stock currently held by Mitsubishi
(the "Redeemed Shares") and (iii) pay a cash dividend (the
"Dividend") to Union Carbide. The aggregate amount of the price
to be paid for the Redeemed Shares (the "Redemption Price") and
the Dividend shall be equal to eight hundred twenty million U.S.
dollars ($820,000,000) minus one-third of the Purchase Price (the
"Recapitalization Amount"), subject to adjustment as provided in
Article 1.5. The Acquisition, the Borrowings, the Repayment, the
Redemption, the Dividend and the other transactions contemplated
hereby are collectively referred to herein as the "Transactions."
1.2 Closing.
(a) The closing of the Transactions (the "Closing")
shall take place at the offices of Union Carbide located at 39 Old
Ridgebury Road, Danbury, Connecticut or such other place as the
Parties may mutually agree (the "Closing Place") on the day (the
"Closing Date") which is the fifth day following the satisfaction
or waiver by the affected Party of each condition to the
obligations of the Parties to this Agreement set forth in
Articles 7 and 8; provided, however, that Buyer shall have the
right to defer the Closing to not later than January 31, 1995 (the
"Deferral Date") if there have not previously been sold not less
than $375,000,000 of senior subordinated securities of UCAR or a
new subsidiary of UCAR to be incorporated under the laws of a
state in the United States (the "New Non-Foreign Subsidiary");
provided further that, the Deferral Date shall be December 29,
1994, if Chemical Bank agrees to such date. Subject to
completion, the Closing shall be deemed to have been consummated
and become effective for all purposes as of 12:01 AM New York time
on the Closing Date; provided, that to the extent necessary or
desirable, any Borrowing relating to a Subsidiary whose
jurisdiction of organization is (i) outside of the United States
or (ii) Puerto Rico (a "Foreign Subsidiary") may be closed at a
location in such jurisdiction; provided, further, that such
closings shall be considered part of the Closing for all purposes
hereof.
(b) At the Closing, the Stockholders shall cause
UCAR to take the following actions:
(i) UCAR and each of its Subsidiaries
(including in certain cases the New Foreign Subsidiaries
(as defined below)) shall consummate the Borrowings on such
terms and conditions as the Buyer shall determine in its
sole discretion;
(ii) UCAR shall (A) form such new
subsidiaries (the "New Foreign Subsidiaries") as are
necessary or desirable to consummate the Borrowings with
respect to any Foreign Subsidiary, and (B) cause each such
New Foreign Subsidiary to merge with or purchase the Foreign
Subsidiary whose jurisdiction of organization is the same as
that of the New Foreign Subsidiary;
(iii) UCAR shall, to the extent required by
any of the Lenders, (A) contribute or cause to be contributed
the capital stock of certain of its Subsidiaries (which may
include New Foreign Subsidiaries) to the New Non-Foreign
Subsidiary, and the New Non-Foreign Subsidiary shall
consummate certain Borrowings and otherwise serve as the
obligor on certain extensions of credit relating to certain
other Borrowings, (B) pledge the capital stock of the New
Non-Foreign Subsidiary and cause the New Non-Foreign
Subsidiary to pledge the capital stock of its subsidiaries
to such Lenders as collateral with respect to the
Borrowings, (C) pledge its assets and cause its
Subsidiaries (which may include the New Non-Foreign
Subsidiary) to pledge their respective assets to such
Lenders as collateral with respect to the Borrowings and
(D) to the extent consistent with applicable laws, cause
its Foreign Subsidiaries or New Foreign Subsidiaries to
guarantee certain obligations of certain other Subsidiaries;
(iv) UCAR shall repay all amounts outstanding
under (A) the $100,000,000 Credit Agreement, dated as of
September 15, 1994, by and among UCAR, Credit Suisse, as
Agent, and the Banks parties thereto, and (B) the $50,000,000
Credit Agreement, dated as of September 15, 1994 by and among
UCAR, Credit Suisse, as Agent, and the Banks parties thereto;
(v) UCAR shall redeem all of the outstanding
UCAR 7.88% Series A Senior Notes due June 1, 2004 and UCAR
8.18% Series B Senior Notes due June 1, 2009;
(vi) UCAR shall redeem the Redeemed Shares as
provided in Article 1.3 below and otherwise on the terms and
subject to the conditions set forth herein;
(vii) The Stockholders shall cause UCAR to
pay the Dividend as provided in Article 1.3 below and
otherwise on the terms and subject to the conditions set
forth herein;
(viii) UCAR shall, along with Union Carbide and
Buyer, enter into a Stockholders' Agreement in the form
attached hereto as Exhibit A;
(ix) UCAR shall amend and restate UCAR's
Certificate of Incorporation and By-laws in the forms
attached hereto as Exhibits B and C, respectively.
1.3 Payments. At the Closing, (a) Buyer shall pay the
Purchase Price to UCAR by wire transfer of immediately available
funds, and (b) immediately following the consummation of the
Borrowings and the Acquisition, and the receipt by UCAR of the
proceeds therefrom, UCAR shall pay to each of Union Carbide and
Mitsubishi, such portion of the Recapitalization Amount (net of
any applicable withholding taxes) as shall be mutually determined
by Union Carbide and Mitsubishi prior to the Closing Date by wire
transfer of immediately available funds. Prior to the Closing,
the Parties shall provide all necessary information as to the
accounts to which such payments shall be made.
1.4 Closing Deliveries.
(a) At the Closing, Stockholders shall each deliver
to Buyer or the Stockholders shall cause UCAR to deliver to Buyer,
as applicable:
(i) one (1) copy of the resolutions adopted
by the Boards of Directors of Union Carbide and Mitsubishi,
respectively, authorizing the Transactions certified by
appropriate authorized officers of Union Carbide and
Mitsubishi, respectively;
(ii) one (1) copy of the resolutions adopted
by the Board of Directors of UCAR authorizing the
Transactions, certified by the Secretary or an Assistant
Secretary of UCAR;
(iii) evidence of the action taken by the
Stockholders as the sole holders of Capital Stock authorizing
the Transactions, certified by the Secretary or an Assistant
Secretary of UCAR;
(iv) one (1) copy of the resolutions adopted
by the Board of Directors of each of the Subsidiaries
authorizing, to the extent required, any of the Transactions,
in each case certified by an appropriate authorized officer
of each of such Subsidiaries;
(v) evidence of the action taken by the
stockholder of each of the Subsidiaries authorizing, to the
extent required, any of the Transactions, in each case
certified by an appropriate authorized officer of each of
such Subsidiaries;
(vi) certificates to the effect of Articles
7(v) and 7(vi) hereof executed by appropriate authorized
officers of Union Carbide and Mitsubishi respectively;
(vii) the duly executed and sealed stock
certificates representing the Acquired Shares registered in
the name of the Buyer; and
(viii) resignations of all directors of UCAR
serving in office immediately prior to the Closing.
(b) At the Closing, Buyer shall deliver or cause to
be delivered to Union Carbide and Mitsubishi:
(i) one (1) copy of the resolutions adopted
by the Board of Directors (or equivalent) of Buyer
authorizing the Transactions certified by the Secretary or
an Assistant Secretary of Buyer;
(ii) a certificate to the effect of Articles
8(v) and 8(vi) hereof executed by an appropriate authorized
officer of Buyer; and
(iii) one (1) copy of the resolutions adopted
by the Board of Directors (or equivalent) of Blackstone
Capital Partners II Merchant Banking Fund L.P. and of
Blackstone Offshore Capital Partners II L.P. authorizing the
Guaranty provided herewith certified by the Secretary or an
Assistant Secretary (or equivalent Person) of each such
entity.
(c) At the Closing, Mitsubishi shall deliver to UCAR
the stock certificates representing the Redeemed Shares currently
owned by it duly endorsed in blank or accompanied by stock
transfer powers in proper form for transfer and duly endorsed in
blank and such certificates shall immediately be cancelled by
UCAR.
(d) At the Closing, each of the Parties shall
execute, deliver and acknowledge, or cause to be executed,
delivered and acknowledged, to the other Parties such certificates
and other documents related to the consummation of the
Transactions as may be reasonably requested by the other Parties.
1.5 Recapitalization Price Adjustment.
(a) The Recapitalization Amount shall be reduced for
all purposes hereof by an amount (the "Adjustment Amount") equal
to the greater of:
(i) the amount by which $194.2 million
exceeds Net Worth (as defined below); and
(ii) the amount by which Net Indebtedness
(as defined below) exceeds $256.3 million.
(b) For purposes of Article 1.5(a), "Net Worth"
shall mean, as of the Closing Date, the aggregate amount of all
assets of UCAR and its Subsidiaries on a consolidated basis less
the aggregate amount of all liabilities of UCAR and its
Subsidiaries on a consolidated basis, in each case, calculated in
a manner consistent with the basis and manner of preparation of
the Audited Financial Statements (as defined in Article 5.8(a)).
For purposes of Article 1.5(a), "Net Indebtedness" shall
mean, as of the Closing Date, the aggregate amount of all
indebtedness of UCAR and its Subsidiaries on a consolidated basis,
less cash and cash equivalents held by UCAR and its Subsidiaries
on a consolidated basis (excluding cash and cash equivalents held
by UCAR Carbon S.A.), in each case, calculated in a manner
consistent with the basis and manner of preparation of the Audited
Financial Statements.
For purposes of Article 1.5(a), (i) any accruals, expenses or
payments relating to the worker's compensation claim by Union
Carbide set forth on Schedule VII and (ii) the Borrowings and any
payments to be made as part of the Closing, shall be excluded in
the calculation of Net Worth or Net Indebtedness.
(c) Buyer shall provide Stockholders full access
during normal business hours to the books and records of Buyer and
its Affiliates (as defined in Article 25.1 hereof) pertaining to
UCAR and the Subsidiaries for the purpose of determining the
Adjustment Amount. Stockholders shall deliver to Buyer within
thirty (30) days following the Closing Date a statement (the
"Statement") setting forth the Adjustment Amount.
(d) Within thirty (30) days after delivery to the
Buyer of the Statement the Buyer shall notify the Stockholders of
any dispute of any item contained therein, which notice shall set
forth in reasonable detail the basis for such dispute (the "Notice
of Dispute"). If the Buyer fails to deliver to the Stockholders
any such Notice of Dispute within such thirty (30) day period, the
Statement shall be deemed to be final and binding.
(e) In the event that the Buyer timely delivers a
Notice of Dispute to the Stockholders of any dispute, the Buyer
and the Stockholders shall cooperate in good faith to resolve such
dispute as promptly as possible. If the Buyer and the
Stockholders are unable to resolve such dispute within ten (10)
days after delivery by the Buyer of the Notice of Dispute, such
dispute shall be submitted to and finally resolved by, within
thirty (30) days after submission, a nationally recognized firm of
accountants mutually agreeable to the Parties (the "Arbitrator"),
whose determination with respect to such dispute shall be final
and binding upon the Parties. Any expenses relating to the
engagement of the Arbitrator shall be shared equally by UCAR and
the Stockholders. The Statement shall be deemed final as modified
by the resolution of any dispute by the Buyer and the Stockholders
or by the Arbitrator.
(f) The Stockholders shall each pay to UCAR the
Adjustment Amount in such proportions as shall be mutually agreed
between the Stockholders at the Post-Closing referred to in
Article 1.5(g) hereof, in immediately available funds by wire
transfer to such account as Buyer shall specify prior to the date
of the Post-Closing.
(g) The closing of the transactions contemplated by
this Article 1.5 (the "Post-Closing") shall take place (i) if the
Buyer does not deliver a Notice of Dispute to the Stockholders
within the time period specified in Article 1.5(d) hereof, on the
fifth day after the expiration of such period, or (ii) if the
Buyer delivers a Notice of Dispute to the Stockholders within the
specified time period, on the fifth day after the final resolution
of any dispute detailed in such Notice of Dispute by the Buyer and
the Stockholders, or by the Arbitrator, as the case may be.
1.6 Termination of Agreements on Closing Date. The
following agreements shall be terminated at the Closing:
(i) The Stockholders Agreement dated as of
November 9, 1990;
(ii) Amendment to the Stockholders Agreement
dated as of May 27, 1993;
(iii) The Letter Agreement dated as of
November 9, 1990 entitled "Re: Stockholders Agreement";
(iv) The Letter Agreement dated as of
February 25, 1991 entitled "Re: Miscellaneous Issues";
(v) The Letter Agreement dated as of
February 25, 1991 entitled "Re: Project Atlas";
(vi) The Letter Agreement regarding "C&M"
dated September 4, 1992;
(vii) The Letter Agreement dated December 31,
1993 entitled "Re: Stockholders Agreement";
(viii) The Stockholders Agreement dated as of
December 31, 1993; and
(ix) Summary of Agreements agreed as of
October 8, 1992.
Upon such termination, notwithstanding any provisions
contained in the documents listed in subparagraphs (i) through
(ix) above (the "Documents") to the contrary, the consequent force
and effect of the Documents shall be nullified and none of the
provisions thereof shall survive the termination for any reason.
Notwithstanding anything contained herein to the contrary,
the Stockholders and their Affiliates who are parties to the
contracts indicated with an asterisk in Schedule IV (other than
the Documents) shall remain bound thereby after the Closing.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES REGARDING BUYER
Buyer represents and warrants as of the date hereof as
follows:
2.1 Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware. Buyer has all corporate power and authority necessary to
(i) execute, deliver and perform its obligations under this
Agreement and (ii) consummate the Transactions.
2.2 Authorization. The execution and delivery by Buyer
of this Agreement, the performance by Buyer of its obligations
hereunder and the consummation by Buyer of the Transactions have
been duly authorized by all necessary corporate actions on the
part of Buyer. This Agreement constitutes a legal, valid and
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws which
may affect creditors' rights and remedies generally and by
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
2.3 No Breach. The execution and delivery by Buyer of
this Agreement, the performance by Buyer of its obligations
hereunder and the consummation by Buyer of the Transactions will
not:
(i) conflict with, result in a violation of,
or constitute a default under, the Articles of Incorporation
or Bylaws (or comparable instruments) of Buyer, as amended to
date;
(ii) constitute a default under, result in a
violation or breach of, result in the cancellation or
termination of, accelerate the performance required under or
result in the creation of any lien, claim or encumbrance upon
any of the material properties of Buyer pursuant to any
material mortgage, guaranty, deed of trust, note, indenture,
bond, lease, agreement or other instrument to which Buyer is
a party or by which any of such properties is bound; or
(iii) result in a violation of or conflict
with any law, ordinance, rule or regulation or any order,
writ, judgment, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of
competent jurisdiction applicable to Buyer or any of its
material properties, which default, breach, cancellation,
termination, acceleration, creation, violation or conflict
would have a Material Adverse Effect (as defined in
Article 5.1 as it would relate to Buyer) on the consummation
by Buyer of the Transactions.
2.4 Consents. Except as otherwise contemplated by
Article 6.4 hereof, no consent, approval, exemption or
authorization is required to be obtained from, no notice is
required to be given to and no filing is required to be made with
any third party (including, without limitation, governmental and
quasi-governmental agencies, authorities and instrumentalities of
competent jurisdiction) by Buyer, in order (i) for this Agreement
to constitute a legal, valid and binding obligation of Buyer or
(ii) to authorize or permit the consummation by Buyer of the
Transactions.
2.5 Purchase for Investment. Buyer is purchasing the
Acquired Shares for its own account and investment and not with a
view toward, or for resale in connection with any distribution
thereof.
2.6 Investigation by Buyer. Buyer has conducted its
own independent review and analysis of the business, operations,
technology, assets, liabilities, results of operations, financial
condition and prospects of the Business, UCAR and the Subsidiaries
and acknowledges that Stockholders have provided, caused to be
provided, made available to or caused to be made available to
Buyer the personnel, properties, premises and records of UCAR and
the Subsidiaries for this purpose; provided, that this Article 2.6
in no way limits the representation contained in Article 5.27.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES REGARDING UNION CARBIDE
Union Carbide represents and warrants as of the date hereof
as follows:
3.1 Organization. Union Carbide is a corporation duly
organized, validly existing and in good standing under the laws of
New York. Union Carbide has all corporate power and authority
necessary to (i) execute, deliver and perform its obligations
under this Agreement and (ii) consummate the Transactions.
3.2 Authorization. The execution and delivery by Union
Carbide of this Agreement, the performance by Union Carbide of its
obligations hereunder and the consummation by Union Carbide of the
Transactions have been duly authorized by all necessary corporate
actions on the part of Union Carbide. This Agreement constitutes
a legal, valid and binding obligation of Union Carbide,
enforceable against Union Carbide in accordance with its terms,
except insofar as enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws which may affect creditors'
rights and remedies generally and by principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.3 No Breach. The execution and delivery by Union
Carbide of this Agreement, the performance by Union Carbide of its
obligations hereunder and the consummation by Union Carbide of the
Transactions will not:
(i) conflict with, result in a violation of,
or constitute a default under, the Certificate of
Incorporation or Bylaws of Union Carbide, each as amended to
date;
(ii) constitute a default under, result in a
violation or breach of, result in the cancellation or
termination of, accelerate the performance required under or
result in the creation of any lien, claim or encumbrance upon
any of the material properties of Union Carbide or the Class
B Common Stock (as defined in Article 5.6 hereof) pursuant to
any material mortgage, guaranty, deed of trust, note,
indenture, bond, lease, agreement or other instrument to
which Union Carbide is a party or by which any of such
properties or the Class B Common Stock is bound; or
(iii) result in a violation of or conflict
with any law, ordinance, rule or regulation or any order,
writ, judgment, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of
competent jurisdiction applicable to Union Carbide or any of
its material properties or the Class B Common Stock, which
default, breach, cancellation, termination, acceleration,
creation, violation or conflict would have a material adverse
effect on the consummation by Union Carbide of the
Transactions.
3.4 Consents. Except as otherwise contemplated by
Article 6.4 hereof, or as set forth in Schedule XIV attached
hereto, no consent, approval, exemption or authorization is
required to be obtained from, no notice is required to be given to
and no filing is required to be made with any third party
(including, without limitation, governmental and quasi-
governmental agencies, authorities and instrumentalities of
competent jurisdiction) by Union Carbide in order (i) for this
Agreement to constitute a legal, valid and binding obligation of
Union Carbide or (ii) to authorize or permit the consummation by
Union Carbide of the Transactions.
3.5 Ownership of Capital Stock. All of the issued and
outstanding shares of Class B Common Stock are owned by Union
Carbide, free and clear of all preemptive rights, liens, claims
and encumbrances other than restrictions on transfer under federal
and state securities laws.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES REGARDING MITSUBISHI
Mitsubishi represents and warrants as of the date hereof as
follows:
4.1 Organization. Mitsubishi is a corporation duly
organized and validly existing under the laws of Japan.
Mitsubishi has all corporate power and authority necessary to (i)
execute, deliver and perform its obligations under this Agreement
and (ii) consummate the Transactions.
4.2 Authorization. The execution and delivery by
Mitsubishi of this Agreement, the performance by Mitsubishi of its
obligations hereunder and the consummation by Mitsubishi of the
Transactions have been duly authorized by all necessary corporate
actions on the part of Mitsubishi. This Agreement constitutes a
legal, valid and binding obligation of Mitsubishi, enforceable
against Mitsubishi in accordance with its terms, except insofar as
enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws which may affect creditors' rights and
remedies generally and by principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or
at law).
4.3 No Breach. The execution and delivery by
Mitsubishi of this Agreement, the performance by Mitsubishi of its
obligations hereunder and the consummation by Mitsubishi of the
Transactions will not:
(i) conflict with, result in a violation of,
or constitute a default under, the Articles of Incorporation
of Mitsubishi, as amended to date;
(ii) constitute a default under, result in a
violation or breach of, result in the cancellation or
termination of, accelerate the performance required under or
result in the creation of any lien, claim or encumbrance upon
any of the material properties of Mitsubishi or the Class A
Common Stock (as defined in Article 5.6 hereof) pursuant to
any material mortgage, guaranty, deed of trust, note,
indenture, bond, lease, agreement or other instrument to
which Mitsubishi is a party or by which any of such
properties or the Class A Common Stock is bound; or
(iii) result in a violation of or conflict
with any law, ordinance, rule or regulation or any order,
writ, judgment, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of
competent jurisdiction applicable to Mitsubishi or any of its
material properties or the Class A Common Stock, which
default, breach, cancellation, termination, acceleration,
creation, violation or conflict would have a material adverse
effect on the consummation by Mitsubishi of the Transactions.
4.4 Consents. Except as otherwise contemplated by
Article 6.4 hereof, or as set forth in Schedule XIV hereto, no
consent, approval, exemption or authorization is required to be
obtained from, no notice is required to be given to and no filing
is required to be made with any third party (including, without
limitation, governmental and quasi-governmental agencies,
authorities and instrumentalities of competent jurisdiction) by
Mitsubishi in order (i) for this Agreement to constitute a legal,
valid and binding obligation of Mitsubishi or (ii) to authorize or
permit the consummation by Mitsubishi of the Transactions.
4.5 Ownership of Capital Stock. All of the issued and
outstanding shares of Class A Common Stock are owned by
Mitsubishi, free and clear of all preemptive rights, liens, claims
and encumbrances other than restrictions on transfer under federal
and state securities laws.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES REGARDING UCAR
Stockholders represent and warrant as of the date hereof as
follows:
5.1 Organization. UCAR is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware. UCAR has all corporate power and authority necessary to
(i) execute, deliver and perform its obligations under this
Agreement and (ii) consummate the Transactions. UCAR has all
corporate power and authority necessary to (A) own, lease or use
the properties owned, leased or used by it and (B) conduct the
Business as presently conducted by it. UCAR is duly qualified or
licensed and in good standing as a foreign corporation authorized
to do business under the laws of the jurisdictions where the
failure to be so qualified or licensed would have a material
adverse effect, individually or in the aggregate, on (i) the
business, assets, properties, financial condition or results of
operations of UCAR and the Subsidiaries taken as a whole, or (ii)
the ownership, leasing or use by UCAR and any of the Subsidiaries
of the properties owned, leased or used by them (which is material
to UCAR and the Subsidiaries taken as a whole) as presently owned,
leased or used by them (a "Material Adverse Effect").
5.2 Authorization. The execution and delivery by UCAR
of this Agreement, the performance by UCAR of its other
obligations hereunder and the consummation by UCAR of the
Transactions have been duly authorized by all necessary corporate
actions on the part of UCAR. This Agreement constitutes a legal,
valid and binding obligation of UCAR, enforceable against UCAR in
accordance with its terms except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws which
may affect creditors' rights and remedies generally and by
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5.3 No Breach. The execution and delivery by
Stockholders and UCAR of this Agreement, the performance by
Stockholders and UCAR of their other respective obligations
hereunder and the consummation by Stockholders and UCAR of the
Transactions will not:
(i) except as set forth in Schedule XVI,
constitute a default under, result in a violation or breach
of, result in the cancellation or termination of (except as
specifically contemplated by Article 1.6), accelerate the
performance required under or result in the creation of any
lien, claim or encumbrance (other than liens, claims or
encumbrances arising under this Agreement) upon any of the
material properties owned, leased or used by UCAR and the
subsidiaries and Affiliates listed on Schedule I attached
hereto (collectively, the "Subsidiaries" and, sometimes
individually, a "Subsidiary") pursuant to any mortgage,
guaranty, deed of trust, note, indenture, bond, lease,
agreement or other instrument to which UCAR or any Subsidiary
is a party or by which any of such properties is bound;
(ii) result in a violation of or conflict
with any law, ordinance, rule or regulation or any order,
writ, judgment, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of
competent jurisdiction applicable to UCAR, any Subsidiary or
any of the properties owned, leased or used by UCAR and the
Subsidiaries; or
(iii) conflict with, result in a violation
of or constitute a default under the charters or other
organizational documents of UCAR or any Subsidiary, in each
case as amended to date;
except, in the case of subparagraphs (i), (ii) and (iii) above,
for any defaults, breaches, cancellations, terminations,
accelerations, creations, violations or conflicts which would not
have a Material Adverse Effect.
5.4 Consents. Except as otherwise contemplated by
Article 6.4 hereof, or set forth in Schedule XIV attached hereto,
no consent, approval, exemption or authorization is required to be
obtained from, no notice is required to be given to and no filing
is required to be made with any third party (including, without
limitation, governmental and quasi-governmental agencies,
authorities and instrumentalities of competent jurisdiction) by
UCAR or any of its Subsidiaries (A) in order (i) for this
Agreement to constitute a legal, valid and binding obligation of
UCAR or (ii) to authorize or permit the consummation by UCAR of
the Transactions or (B) under or pursuant to any governmental or
quasi-governmental permits, licenses, consents, authorizations or
approvals held by or issued to UCAR or any Subsidiary (including,
without limitation, environmental, health, safety and operating
permits and licenses) by reason of this Agreement or the
consummation of the Transactions.
5.5 Organizational Instruments. Stockholders have
delivered to Buyer complete and accurate copies of the Certificate
of Incorporation and By-laws of UCAR, in each case as amended to
date. UCAR is not in violation of any provision of its
Certificate of Incorporation or By-laws, in each case as amended
to date. Stockholders have made available or caused to be made
available to Buyer complete and accurate copies of the charter or
other organizational documents of each of the Subsidiaries, in
each case as amended to date. No Subsidiary is in violation of
any provision of its charter or other organizational documents, in
each case as amended to date. Except for this Agreement, there
are no agreements or commitments which obligate or require
Stockholders or UCAR to amend or authorize an amendment of the
Certificate of Incorporation or By-laws of UCAR, in each case as
amended to date. Except for this Agreement, there are no
agreements or commitments which obligate or require Stockholders,
UCAR or any Subsidiary to amend or authorize an amendment of the
charter or other organizational documents of any Subsidiary, in
each case as amended to date. Stockholders have made available or
caused to be made available to Buyer complete and accurate copies
of the minute books with respect to meetings of the Board of
Directors and shareholders of UCAR since February 25, 1991 and the
stock books of (i) UCAR and (ii) each of the Subsidiaries. Such
minute books contain complete and accurate copies of all records
of all meetings and consents in lieu of a meeting of (a) the board
of directors (and any committee thereof) of UCAR and its non-
Foreign Subsidiaries, and to the knowledge of the Stockholders, of
each of the Foreign Subsidiaries, and (b) the stockholders of UCAR
and its non-Foreign Subsidiaries, and to the knowledge of the
Stockholders, of each of the Foreign Subsidiaries.
5.6 Capital Stock. The authorized capital stock of
UCAR consists of five hundred (500) shares of Class A Common
Stock, par value $1.00 per share ("Class A Common Stock"), of
which two hundred and fifty (250) shares have been duly authorized
and validly issued and are outstanding, fully paid and non-
assessable and five hundred (500) shares of Class B Common Stock,
par value $1.00 per share ("Class B Common Stock"), of which two
hundred and fifty (250) shares have been duly authorized and
validly issued and are outstanding, fully paid and non-assessable.
Except for this Agreement, there are no outstanding subscriptions,
options, warrants, rights, convertible or exchangeable securities,
agreements or commitments which obligate or require Stockholders
or UCAR to issue, sell or transfer any shares of Capital Stock.
The Acquired Shares, when issued and delivered at the Closing
in accordance herewith, shall be duly authorized, validly issued,
fully paid and non-assessable and shall be sold and delivered to
Buyer, free and clear of all preemptive rights, liens, claims and
encumbrances except for such rights, liens, claims and
encumbrances of which the Buyer or its Affiliates have knowledge.
5.7 Subsidiaries. UCAR does not directly or indirectly
own or have the power to vote shares of the capital stock or other
ownership interests of any corporation or other Person (as defined
in Article 25.3 hereof) such that it has voting power to elect a
majority of the directors of such corporation, or other Persons
performing similar functions for such Person, as the case may be,
other than the Subsidiaries. Neither UCAR nor any Subsidiary is a
partner of any partnership or a member of any joint venture or
other business entity other than the partnerships and joint
ventures listed on Schedule I attached hereto. Except as set
forth in Schedule I attached hereto, UCAR or its nominees own all
of the outstanding shares of capital stock of each Subsidiary
directly or indirectly through another Subsidiary free and clear
of all liens, claims and encumbrances (other than liens, claims
and encumbrances on such shares owned by its nominees in favor of
UCAR or such other Subsidiary) and there are no outstanding
subscriptions, options, warrants, rights, convertible or
exchangeable securities, agreements or commitments which obligate
or require Stockholders, UCAR, any Subsidiary or any of such
nominees to issue, sell or transfer (i) any shares of capital
stock of any Subsidiary (other than agreements or commitments by
such nominees to transfer such shares owned by such nominees to
UCAR, a Subsidiary or other such nominees) or (ii) any securities
convertible into or exchangeable for shares of capital stock of
any Subsidiary. UCAR's nominees and the percentage of outstanding
shares of capital stock of each Subsidiary owned by them are
listed on Schedule I attached hereto. Each Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction under which it has been
organized, which are set forth on Schedule I attached hereto. All
of the issued and outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued.
Each Subsidiary has all corporate power and authority necessary to
(i) own, lease or use the properties owned, leased or used by it
and (ii) engage in the conduct of the Business as presently
conducted by it. Each Subsidiary is duly qualified or licensed and
in good standing as a foreign corporation authorized to do
business under the laws of the jurisdictions listed on Schedule I
attached hereto which are the only jurisdictions where the failure
to so qualify would have a Material Adverse Effect.
5.8 Financial Statements.
(a) Schedule II attached hereto sets forth a
complete and accurate copy of the audited consolidated balance
sheets of UCAR and the Subsidiaries as of December 31, 1992 and
1993 and the consolidated statements of operations and retained
earnings and of cash flows for each of the three calendar years in
the three calendar year period ended December 31, 1993, including
the report of KPMG Peat Marwick LLP, certified public accountants
("Peat Marwick"), thereon and the notes thereto (collectively, the
"Audited Financial Statements"). The Audited Financial Statements
(i) present fairly, in all material respects, the consolidated
financial position of UCAR and the Subsidiaries as of December 31,
1992 and 1993, respectively, and the consolidated results of
operations and retained earnings and of cash flows of UCAR and the
Subsidiaries for each of the three calendar years in the three
calendar year period ended December 31, 1993 in conformity with
generally accepted accounting principles applied on a consistent
basis other than as disclosed therein and (ii) except as otherwise
stated therein, for dates and periods on or before February 25,
1991, have been derived from the books and records of UCAR and the
Subsidiaries.
(b) Schedule II attached hereto sets forth a
complete and accurate copy of the unaudited consolidated balance
sheets of UCAR and the Subsidiaries for the nine-month period
ended September 30, 1994 (the "Balance Sheet Date") and the
consolidated statements of operations and retained earnings and of
cash flows for each of the nine- month periods ended September 30,
1993 and 1994 (collectively, the "Unaudited Financial
Statements"). The Unaudited Financial Statements (i) present
fairly, in all material respects, the consolidated financial
position of UCAR and the Subsidiaries as of the Balance Sheet Date
and the consolidated results of operations and retained earnings
and cash flows of UCAR and the Subsidiaries for the nine-month
periods ended September 30, 1993 and 1994 in conformity with
generally accepted accounting principles applied on a consistent
basis other than as disclosed therein, and subject to normal year-
end adjustments (except that footnote disclosure may not be
included therewith) and (ii) have been derived from the books and
records of UCAR and the Subsidiaries.
5.9 Tax Matters.
(a) All Tax Returns (as defined in Article 5.9(d)
hereof) required to be filed by or on behalf of UCAR or any
Subsidiary have been timely filed for all years and periods for
which such Tax Returns were due (taking into account all filing
date extensions) and to the extent required by applicable law all
Taxes (as defined in Article 5.9(c) hereof) required to be paid
during the period from February 26, 1991 through the Closing Date
(regardless of whether shown on a Tax Return) have been paid.
Except as set forth in Schedule II attached hereto, since the
Balance Sheet Date, none of UCAR or its non-Foreign Subsidiaries
nor, to the knowledge of Stockholders, any Foreign Subsidiary has
incurred any material liability with respect to any Tax except in
the ordinary course of business. Except as set forth in Schedule
II or XVII attached hereto, there are no presently pending written
claims by any foreign, federal, state or local taxing authority
which pertain to UCAR, any Subsidiary, any of the material
properties owned, used or leased by UCAR and the Subsidiaries or
any of such Tax Returns, which, if adversely determined, would
have a Material Adverse Effect.
(b) Except as set forth on Schedule II attached
hereto, with respect to all Tax Returns, (i) the statute of
limitations for the assessment of any Tax in respect of such Tax
Return has expired through the taxable years set forth in Schedule
II attached hereto and (ii) except as set forth in Schedule II
attached hereto, no audit is in progress and no waiver
or agreement is in force for the extension of time for the
assessment or payment of any Tax in respect of such Tax Returns.
(c) As used herein, the term "Tax" or "Taxes"
shall mean any or all federal, state, local and foreign taxes,
assessments, imposts, duties and other similar governmental
charges (including, without limitation, income, profits, excise,
sales, use, occupancy, value added, gross receipts, franchise, ad
valorem, capital, transfer, withholding, employment, payroll and
property taxes and import duties), any or all interest thereon,
any or all additions thereto or to any such interest and any or
all penalties with respect thereto.
(d) As used herein, the term "Tax Return" shall
mean any return, report, declaration, estimate or information
statement filed or required to be filed with any taxing authority
with respect to any Tax.
(e) Except as set forth on Schedule II, (i) none
of UCAR and its Subsidiaries has filed a consent under Code
Section 341(f) concerning collapsible corporations, (ii) except as
provided in UCAR's Long Term Incentive Compensation Plan, as
amended, none of UCAR and its Subsidiaries has made any payments,
is obligated to make any payments, or is a party to any agreement
that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G, and
(iii) neither UCAR nor any of its Subsidiaries is a party to, or
has any tax-related contractual liability with respect to, any
lease made pursuant to Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended.
5.10 Real Property.
(a) Schedule III attached hereto identifies (i)
all of the real property which is owned by UCAR or any Subsidiary
(the "Owned Real Property"), all of which UCAR and its
Subsidiaries have good and valid title to, subject to the
exceptions set forth in Article 5.12 below, (ii) all of the real
property which is leased by UCAR or any Subsidiary (the "Leased
Real Property" together with the Owned Real Property the "Real
Property"), (iii) all of the leases and subleases pertaining to
the Owned Real Property, all leases to and/or subleases by UCAR or
any Subsidiary of Leased Real Property and all amendments thereto,
including, without limitation, all of the leases to third parties
by UCAR or any Subsidiary pertaining to the Real Property
(collectively, the "Real Property Leases"), (iv) all of the suits,
actions, proceedings, investigations and written claims presently
pending or to the knowledge of Stockholders, threatened which (A)
pertain to the Owned Real Property or (B) pertain to the Leased
Real Property or the Real Property Leases and to which UCAR or any
Subsidiary is a party or, to the knowledge of Stockholders, is
threatened in writing to be made a party and (v) all of the final
orders, writs, judgments, awards, edicts and decrees of any court
of competent jurisdiction presently outstanding against UCAR or
any Subsidiary which pertain to the Owned Real Property and which
materially affect the ownership or use of the Owned Real Property
as presently owned or used by UCAR and the Subsidiaries. Except
as set forth in Schedule III attached hereto, all of the real
property which is reflected in the balance sheet included among
the Unaudited Financial Statements is owned by UCAR or one of the
Subsidiaries.
(b) Except as set forth in Schedule III attached
hereto, neither UCAR nor any of the Subsidiaries owns, holds, is
obligated under or a party to any option, right of first refusal
or other contractual right to purchase, acquire, sell or dispose
of the Real Property or any portion thereof or interest therein.
(c) The components of the buildings, structures
and other improvements which are located on the Owned Real
Property are in reasonable working order and repair for the
conduct of the Business as presently conducted by UCAR and the
Subsidiaries. The buildings, structures and other improvements
which are located on the Owned Real Property are supplied with all
utilities necessary for the operation thereof as presently
operated by UCAR and the Subsidiaries and all associated "hook-up"
fees and other similar charges due and payable through the date
hereof have been fully paid.
(d) Except as set forth in Schedule III attached
hereto, neither UCAR nor any of the Subsidiaries has received
written notice of any, and, there is not any pending, or, to the
knowledge of Stockholders, threatened, (i) condemnation proceeding
affecting the Real Property or any part thereof or (ii) sale or
other disposition of the Real Property or any part thereof in lieu
of condemnation.
(e) The representations and warranties set forth
in this Article 5.10 shall be deemed to have been breached only if
one or more events or circumstances which give rise to such a
breach would have a Material Adverse Effect.
5.11 Owned Personal Property. Except as set forth in
Schedule XVI attached hereto and except for properties sold,
transferred or otherwise disposed by UCAR or any Subsidiary in the
ordinary course of business since the Balance Sheet Date, all of
the material tangible personal property (including, without
limitation, furnishings, furniture, office equipment, vehicles,
inventories, tools, machinery, equipment, structures and movable
fixtures) which is reflected in the balance sheet included among
the Unaudited Financial Statements is (i) owned by UCAR or one of
the Subsidiaries and (ii) in reasonable working order and repair
for use as presently used by UCAR and the Subsidiaries in
connection with the Business.
5.12 Title to Owned Properties. Except as set forth in
Schedule III attached hereto with respect to the properties listed
therein or in Schedule XV attached hereto, UCAR and each
Subsidiary has good and valid title to all of the material
properties owned by it, free and clear of all liens, claims and
encumbrances other than:
(i) liens, claims and encumbrances reflected
in the Unaudited Financial Statements;
(ii) liens for taxes, charges and
assessments imposed by any taxing authority which are not yet
due and payable or which are being contested in good faith by
appropriate proceedings listed in Schedule II or VII attached
hereto;
(iii) mechanics', suppliers', installment
sales and similar liens for services rendered or materials
furnished, the charges for which are not yet due and payable
or which are being contested in good faith by appropriate
proceedings;
(iv) defects or imperfections in title,
liens, claims, easements or rights, restrictions and
encumbrances which do not materially, individually or in the
aggregate, interfere with the use of such properties as
presently used by, or the conduct of the Business as
presently conducted by, UCAR and the Subsidiaries.
5.13 Contracts; Leases; Licenses. Except for
contracts, agreements and commitments contemplated by Article 5.7
hereof, leases and subleases described in Article 5.10 hereof,
licenses and agreements described in Articles 5.19 and 5.20
hereof, plans, policies, practices, programs, agreements,
arrangements, contracts and commitments described in Article 5.21
hereof, consent orders described in Article 5.23 hereof and
insurance policies described in Article 5.24 hereof (collectively,
the "Other Scheduled Contracts"), Schedule IV attached hereto sets
forth all written contracts, agreements and commitments
(including, without limitation, leases, subleases, licenses and
installment sales contracts) to which UCAR or any Subsidiary is a
party and:
(i) which involve future expenditures with
respect to the purchase of raw materials, manufacturing
supplies or utilities used in the ordinary course of business
in excess of $1,000,000;
(ii) which involve future receipts with
respect to the sale of products in the ordinary course of
business in excess of $1,000,000;
(iii) which involve future expenditures or
receipts with respect to the purchase, sale or lease of real
property or personal property (other than raw materials,
manufacturing supplies and products described in clauses (i)
and (ii) of this Article 5.13) in excess of $1,000,000;
(iv) which involve future expenditures or
receipts with respect to the rendition of services (other
than the purchase of utilities) in excess of $1,000,000;
(v) which contain commitments of suretyship,
guaranty or indemnification (other than guarantees,
warranties and indemnities provided in connection with the
purchase, sale or lease of materials, supplies, utilities,
products or other personal property or the rendition of
services in the ordinary course of business);
(vi) which involve the handling, treatment,
storage, transportation, recycling, reclamation or disposal
of wastes or hazardous substances;
(vii) which provide for the grant of a
security interest or the extension of credit, constitute a
mortgage or lien on or pledge of any properties or relate to
the borrowing or lending of funds (other than security
interests granted and credit extended in connection with the
purchase, lease or sale of materials, supplies, utilities,
products or other personal property or the rendition of
services in the ordinary course of business and security
interests, mortgages, liens and pledges described in Article
5.12 hereof);
(viii) which relate to the disposition or
acquisition of any material business or any material equity
interest in any business;
(ix) which are material to the conduct of
the Business as presently conducted by UCAR and the
Subsidiaries;
(x) to which Union Carbide, Mitsubishi or
any of their respective Affiliates is also a party (other
than those described in Article 1.6 hereof), which are in
each case marked by an asterisk in Schedule IV;
(xi) pursuant to which UCAR or any of the
Subsidiaries agrees not to compete in any line of business
with any Person or in any geographical area; or
(xii) to which the United States government
is a party.
5.14 Performance of Contracts, Leases and Licenses.
Except as set forth in each Schedule attached hereto with respect
to the contracts, agreements and commitments listed therein, to
the knowledge of Stockholders, (i) all of the contracts,
agreements and commitments set forth in Schedule IV attached
hereto and all of the Other Scheduled Contracts are legal, valid
and binding obligations of UCAR and the Subsidiaries, as the case
may be, and are in full force and effect in all material respects,
(ii) neither UCAR nor any Subsidiary is in default, or has
received written notice of any default or of any event which, with
the passage of time, the giving of further notice or both, would
constitute a default by UCAR or any Subsidiary under any such
contract, agreement or commitment or any of the Other Scheduled
Contracts in any material respect and (iii) to the knowledge of
Stockholders none of the other parties to any such contract,
agreement or commitment or any of the Other Scheduled Contracts is
in default thereunder in any material respect.
5.15 Compliance with Laws.
(a) Except as set forth in any Schedule attached
hereto with respect to the matters set forth therein or in
Schedule VII attached hereto, to the knowledge of Stockholders,
neither Stockholders, UCAR nor any of their respective
subsidiaries (including the Subsidiaries) is in default under or
in violation of any foreign, federal, state or local law,
ordinance, regulation or rule or any judgment, writ, order, award,
edict or decree of any court of competent jurisdiction or any
governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction pertaining to UCAR, any
of the Subsidiaries or any of the properties owned, leased or used
by UCAR or any of the Subsidiaries other than such defaults and
violations, if any, which will not have a Material Adverse Effect.
(b) To the knowledge of Stockholders, neither
Stockholders, UCAR nor any of the Subsidiaries has, in connection
with the conduct of the Business, (i) made any payment to officers
or employees of any governmental agency, authority or
instrumentality, (ii) made any payment to customers for the
sharing of fees or to customers or suppliers for rebating of
charges, (iii) engaged in any other reciprocal practice or (iv)
made any payment or given any other consideration to purchasing
agents or other representatives of customers in respect of sales
made or to be made, in each case which was illegal under any
applicable United States or foreign law.
5.16 Permits; Licenses. Schedule V attached hereto
sets forth all of the governmental and quasi-governmental
consents, approvals, exemptions, permits, licenses, franchises and
other authorizations which have been issued to or are held for use
by UCAR or any Subsidiary, or for which UCAR or any Subsidiary has
applied and which are material to the conduct of the Business as
presently conducted by UCAR and any of the Subsidiaries. Except
as described in Schedule V attached hereto, to the knowledge of
Stockholders, the consummation of the Transactions will not result
in a violation or invalidation of any of such consents, approvals,
exemptions, permits, licenses, franchises or other authorizations.
Except as described in Schedule V, VI or XII attached hereto, to
the knowledge of Stockholders, UCAR and the Subsidiaries have
obtained all of the material governmental and quasi-governmental
consents, approvals, permits, exemptions, licenses, franchises and
other authorizations which are necessary in order to conduct the
Business as presently conducted by them or own, lease or use the
material properties presently owned, leased or used by them.
5.17 Environmental Conditions.
(a) Schedule VI attached hereto:
(i) lists (A) all waste treatment, storage
and disposal facilities and sites (including, without
limitation, underground storage tanks) which are located on
the Real Property and which are presently used by UCAR or any
Subsidiary and (B) as to each such facility or site, the time
period used and the type of material treated, stored or
disposed;
(ii) lists (A) all waste treatment, storage
and disposal facilities and sites which are not located on
the Real Property and which are presently used by UCAR or any
Subsidiary and (B) as to each such facility or site, the time
period used and the type of material treated, stored or
disposed;
(iii) to the knowledge of Stockholders, lists
(A) all waste treatment, storage and disposal facilities and
sites (including, without limitation, underground storage
tanks) which are located on the Real Property but are not
presently used by UCAR or any Subsidiary and (B) as to each
such facility or site, the time period used and the type of
material treated, stored or disposed;
(iv) to the knowledge of Stockholders, lists
(A) all waste treatment, storage and disposal facilities and
sites which are not located on the Real Property and which
were used in the conduct of the Business as conducted by UCAR
and the Subsidiaries but are not presently used by UCAR or
any Subsidiary and (B) as to each such facility or site, the
time period used and the type of material treated, stored or
disposed;
(v) identifies all written internal
environmental audits conducted since February 26, 1991
relating to UCAR or any of the Subsidiaries;
(vi) lists all reports of releases
(including,
without limitation, continuous release reports) of hazardous
substances relating to UCAR or any of the Subsidiaries
furnished since February 26, 1991 to any foreign, federal,
state or local governmental or quasi-governmental agency,
authority or instrumentality, including, without limitation,
all such reports furnished to the National Response Center,
any state emergency response commission, any local emergency
planning committee or the United States Environmental
Protection Agency (the "EPA") pursuant to requirements of the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (collectively, "CERCLA");
(vii) lists all reports made to the EPA or
any state or local governmental agency, authority or
instrumentality pursuant to Sections 302, 311, 312 and 313 of
Title III of the Superfund Amendments and Reauthorization Act
of 1986; and
(viii) describes all material events of non-
compliance relating to UCAR or any of the Subsidiaries
reported to or, to the knowledge of Stockholders, identified
by any governmental or quasi-governmental agency, authority
or instrumentality since February 26, 1991 with (A)
environmental permits, approvals, authorizations or licenses
or (B) the requirements of HS&EA Laws (as defined in Article
5.17(d)(iii) hereof), including without limitation, the Clean
Air Act, as amended, the Clean Water Act, as amended, the
Resource Conservation and Recovery Act, as amended, or the
Toxic Substance Control Act, as amended ("TSCA").
(b) Except as set forth in Schedule II, III, IV,
V, VI,VII or XII attached hereto, to the knowledge of
Stockholders:
(i) UCAR and the Subsidiaries are in
compliance, in all material respects, with all HS&EA Permits
(as defined in Article 5.17(d)(v) hereof) held by them and
all of such HS&EA Permits are in full force and effect and no
action to revoke any of such HS&EA Permits is pending;
(ii) neither Stockholders, UCAR nor any of
the Subsidiaries has received written notice from any
governmental or quasi-governmental authority of any event,
condition, circumstance, activity, practice, incident, action
or plan (A) which may materially interfere with or prevent
compliance with (1) any HS&EA Law in connection with the
conduct of the Business as presently conducted by UCAR and
the Subsidiaries or (2) any HS&EA Permit held by UCAR or any
Subsidiary in connection with the conduct of the Business or
(B) which may (1) require the amendment or transfer of any
HS&EA Permit held in connection with the conduct of the
Business as presently conducted by UCAR and the Subsidiaries
or (2) materially interfere with any such amendment or
transfer;
(iii) neither Stockholders, UCAR nor any of
the Subsidiaries has received written notice that it is
subject to, responsible or liable for any material HS&EA
Liabilities and Costs (as defined in Article 5.17(d)(iv)
hereof) based upon or arising out of (A) past or present
environmental conditions on, under, above or about real
property, or assets, equipment or facilities located on,
under, above or about real property, previously or presently
used by UCAR or any of the Subsidiaries, including, without
limitation, HS&EA Liabilities and Costs arising from, related
to or associated with notices given, claims made, actions and
proceedings instituted or orders issued by a federal, state,
local or foreign government or governmental agency or by any
third party, (B) the use, production, manufacture,
processing, distribution, management, handling, shipment,
transport, treatment, generation, storage, or Release (as
defined in Article 5.17(d)(vi) hereof) of any Contaminant (as
defined in Article 5.17(d)(i) hereof) in connection with the
conduct of the Business by UCAR and the Subsidiaries or (C)
the failure of such real property, assets, equipment or
facilities, or property about such real property, to comply
in full or in part with all requirements of any HS&EA Law or
any HS&EA Permit;
(iv) with respect to real property previously
or presently owned or operated in connection with the conduct
of Business by UCAR and the Subsidiaries, neither
Stockholders, UCAR nor any of the Subsidiaries or any of the
other present or prior owners or operators thereof are
subject to any outstanding written notice or order from, or
agreement with, any governmental authority or other Person in
respect of which it (A) is required to incur any material
HS&EA Liabilities and Costs or (B) is subject to any
investigation by any governmental authority evaluating
whether any material Remedial Action (as defined in Article
5.17(d)(vii) hereof) is needed to respond to a Release of a
Contaminant into the Environment (as defined in Article
5.17(d)(ii) hereof) or as a result of which other material
HS&EA Liabilities and Costs may arise;
(v) UCAR and the Subsidiaries have filed all
notices required to be filed under the HS&EA Laws indicating
past and present Releases of Contaminants used or held in
connection with the conduct of the Business by UCAR and the
Subsidiaries; and
(vi) neither Stockholders, UCAR nor any
Subsidiary has entered into any written agreement with any
governmental authority or other Person pursuant to which it
has assumed responsibility for, either directly or as a
guarantor, indemnitor, surety or Remedial Action, which
provides for future expenditures in excess of $1,000,000.
(c) The representations and warranties set forth
in Article 5.17(b) hereof shall be deemed to have been breached
only if one or more events or circumstances which give rise to
such breach would have a Material Adverse Effect.
(d) As used in this Agreement, the following terms
shall have the meanings set forth below:
(i) "Contaminant" shall mean any waste,
pollutant, noise, hazardous substance, toxic substance,
hazardous material, hazardous waste, special waste,
industrial substance or waste, radioactive material or waste,
petroleum or petroleum-derived substance or waste or any
constituent of any such substance or waste (including,
without limitation, any such substance regulated under or
defined by any HS&EA Law or otherwise determined by a court
of law to be a basis for personal injury or property damage
liability).
(ii) "Environment" shall have the meanings set
forth in Section 9601(8) of Title 42 of the United States
Code and "Environmental" shall have a concomitant meaning.
(iii) "HS&EA Laws" shall mean foreign and
domestic laws, and any rules and regulations promulgated
thereunder by any governmental entity, relating to pollution,
health and safety or protection of the Environment
(including, without limitation, laws relating to the Release
or threatened Release of Contaminants into the Environment or
otherwise relating to the presence, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Contaminants).
(iv) "HS&EA Liabilities and Costs" shall mean
all liabilities, obligations, obligations to conduct Remedial
Actions, responsibilities, losses, damages, punitive damages,
consequential damages, treble damages, costs or expenses
(including, without limitation, all reasonable fees,
disbursements and expenses of counsel and experts and all
reasonable consulting fees and costs of investigations and
feasibility studies), fines, penalties, monetary sanctions
and interest resulting from any claim or demand by any person
or governmental entity, domestic or foreign, arising pursuant
to the HS&EA Laws, from (A) environmental, health or safety
conditions, or the Release or threatened Release of a
Contaminant into the Environment, as a result of the conduct
of the Business by UCAR and the Subsidiaries and
(B) conditions on, under, above or about any real property
owned or operated by UCAR or any of the Subsidiaries.
(v) "HS&EA Permit" shall mean any permit,
license, authorization, approval or registration required
pursuant to the HS&EA Laws.
(vi) "Release" shall mean any release, spill,
emission, leaking, pumping, injection, deposit, disposal,
discharge, disbursal, leaching or migration of any
Contaminant into the Environment or into, out of or through
any structure, property, air, soil, surface water or ground
water.
(vii) "Remedial Action" shall mean all actions
required to (A) clean up, remove, treat, mitigate or
remediate Contaminants in the Environment (including, without
limitation, any structure or property), or (B) perform pre-
remedial studies and investigations and post-remedial
monitoring and care with respect to Contaminants in the
Environment.
(e) No modification, revocation, reissuance,
alteration, transfer, or amendment of the HS&EA Permits, or any
review by, or approval of, any third party of the HS&EA Permits is
required in connection with the execution or delivery of this
Agreement or the consummation of the Transactions where such
modification, revocation, reissuance, alteration, transfer or
amendment would have a Material Adverse Effect.
5.18 Litigation; Claims; Proceedings. Except for
suits, actions, proceedings, investigations, audits, examinations
and written claims described in Articles 5.9, 5.10, 5.12, 5.17,
5.19, 5.20, 5.21 and 5.23 hereof and orders, judgments, writs,
decrees, awards and edicts described in Articles 5.9, 5.10, 5.15,
5.19, 5.20 and 5.23 hereof, Schedule VII attached hereto sets
forth all of the civil, criminal, administrative and arbitral
suits, actions, proceedings, investigations and written claims
presently pending or, to the knowledge of Stockholders, threatened
in writing and all of the final orders, judgments, writs, decrees,
awards and edicts presently outstanding which pertain to UCAR, any
Subsidiary or any of the material properties owned, leased or used
by UCAR and the Subsidiaries other than routine suits, actions,
proceedings, investigations and written claims (including, without
limitation, product liability, product warranty and worker's
compensation suits, actions, proceedings, investigations and
written claims) where the amount involved therein does not exceed
$1,000,000 or where the amount involved therein and in all suits,
actions, proceedings, investigations and written claims involving
substantially similar issues outstanding at any time after
February 26, 1991 does not exceed $1,000,000. Neither
Stockholders, UCAR nor any of the Subsidiaries has received
written notice of any statements, citations or decisions by any
governmental agency, authority or instrumentality stating that any
product made by UCAR or any of the Subsidiaries is defective or
unsafe or fails to meet any standards promulgated by such agency,
authority or instrumentality. To the knowledge of Stockholders,
there have been no recalls ordered by any such agency, authority
or instrumentality with respect to any such product.
5.19 Patents; Technology.
(a) Schedule VIII attached hereto lists:
(i) all of the United States and foreign
patents and patent applications owned by or licensed or
assignable to UCAR or any Subsidiary which are material to
the conduct of the Business as presently conducted by UCAR
and the Subsidiaries;
(ii) all of the licenses and non-assertion
rights granted to or by UCAR or any Subsidiary pursuant to
written agreements pertaining to patents, patent
applications, proprietary technology or inventions which are
material to the conduct of the Business as presently
conducted by UCAR and the Subsidiaries;
(iii) all of the written confidentiality,
secrecy, screening, development and settlement agreements
pertaining to patents, patent applications, proprietary
technology or inventions which are material to the conduct of
the Business as presently conducted by UCAR and the
Subsidiaries (other than confidentiality or secrecy
agreements made in connection with the purchase, sale or
lease of materials, supplies, products or other personal
property or the rendition of services in the ordinary course
of business); and
(iv) all of the suits, actions, proceedings
(including, without limitation, interference, opposition,
revocation and conflict proceedings) and written claims
presently pending or, to the knowledge of Stockholders,
threatened and all of the orders, judgments, writs, edicts,
awards and decrees presently outstanding pertaining to
patents, patent applications, proprietary technology or
inventions described in the preceding clauses of this
Article.
(b) Except as set forth in Schedule VIII attached
hereto, to the knowledge of Stockholders, all of the patents,
patent applications, trade secrets, know-how, inventions,
processes, manufacturing information, engineering information and
technical information, which are material to the conduct of the
Business as presently conducted by UCAR and the Subsidiaries and
which are not available in the public domain are owned by,
licensed to or subject to non-assertion rights granted to UCAR or
a Subsidiary. Except as set forth in Schedule VIII attached
hereto, to the knowledge of Stockholders, neither UCAR nor any of
the Subsidiaries has received written notice that it has infringed
the patent rights of third parties.
5.20 Trademarks; Copyrights.
(a) Schedule IX attached hereto lists:
(i) all of the foreign, United States and
state trademarks, service marks, trade names and copyrights
owned by or licensed or assignable to UCAR or any Subsidiary
which are material to the conduct of the Business as
presently conducted by UCAR and the Subsidiaries;
(ii) all of the written licenses and all of
the rights under registered user or other written agreements
granted to UCAR or any Subsidiary by third parties pertaining
to trademarks, service marks, trade names and copyrights
which are material to the conduct of the Business as
presently conducted by UCAR and the Subsidiaries;
(iii) all of the written licenses and all of
the rights under registered user or other written agreements
granted to third parties by UCAR or any Subsidiary pertaining
to trademarks, service marks, trade names and copyrights
which are material to the conduct of the Business as
presently conducted by UCAR and the Subsidiaries; and
(iv) all of the suits, actions, proceedings
(including, without limitation, interference, opposition and
cancellation proceedings) and written claims presently
pending or, to the knowledge of Stockholders threatened and
all of the orders, judgments, writs, edicts, awards and
decrees presently outstanding pertaining to trademarks,
service marks, trade names or copyrights described in the
preceding clauses of this Article 5.20.
(b) Except as set forth in Schedule IX attached
hereto, all of the trademarks and service marks described in
Article 5.20(a)(i) hereof have been duly registered or are the
subject of pending registration applications in the jurisdictions
indicated in Schedule IX attached hereto. Except as set forth in
Schedule IX attached hereto, to the knowledge of Stockholders,
neither Stockholders, UCAR nor any Subsidiary has received written
notice that it has infringed the trademark rights or copyrights of
third parties in connection with the conduct of the Business by
them.
5.21 Human Resources.
(a) Schedule X attached hereto sets forth a
complete and accurate list of (i) all of the collective bargaining
agreements and agreements with labor unions or associations
representing employees to which UCAR or any of the Subsidiaries is
a party and (ii) as of the dates set forth in Schedule X attached
hereto, the total number of employees of UCAR and the Subsidiaries
and the number of such employees represented by each such
agreement. Such numbers of employees have not changed since such
dates except in the ordinary course of business. Except as set
forth in Schedule X attached hereto, to the knowledge of
Stockholders, there are no organizing efforts, strikes, slowdowns,
picketing, work stoppages, labor troubles or other similar events
in which employees of UCAR or any Subsidiary are participating and
which is having or is reasonably likely to have a Material Adverse
Effect.
(b) For purposes of this Agreement, the following
terms shall have the meanings set forth below:
(i) "Benefit Plan" shall mean any plan,
agreement or arrangement which is (A) an employment, change
of control, consulting or deferred compensation agreement,
(B) an incentive, pension, profit-sharing, savings,
retirement, stock option, stock purchase, appreciation,
thrift or savings plan, (C) a severance pay plan, (D) a life,
health, disability or accident insurance plan, (E) a holiday,
vacation or other bonus practice or (F) any other material
"employee benefit plan" as defined in Section 3(3) of ERISA
(as defined below), or fringe benefit, in each of the cases
as described in clauses (A) through (F) of this clause (i)
which is maintained by UCAR or any Subsidiary or ERISA
Affiliate (as defined below) with respect to any employee,
officer, director or consultant of UCAR or any of the
Subsidiaries or any ERISA Affiliate or in respect of which
UCAR or any Subsidiary has any present or future liability
(including any foreign benefit plan).
(ii) "Code" shall mean the Internal Revenue
Code of 1986, as amended, and the regulations promulgated
thereunder.
(iii) "ERISA Affiliate" shall mean any entity,
whether or not incorporated, which is, or since February 26,
1991 has been, treated as a single employer with UCAR or any
of the Subsidiaries under Section 414(b), (c), (m) or (o) of
the Code or Section 4001(b) of ERISA.
(iv) "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder.
(v) "PBGC" shall mean the Pension Benefit
Guaranty Corporation.
(vi) "IRS" shall mean the Internal Revenue
Service.
(vii) "Pension Plan" shall mean a Benefit Plan
which is a "pension plan" as defined in Section 3(3) of ERISA
and which is covered by ERISA.
(c) Schedule XI attached hereto sets forth a
complete and accurate list of all Benefit Plans and Stockholders
have delivered to or made available to the Buyer current copies of
each such Benefit Plan including any amendments thereto since the
Balance Sheet Date (or, to the extent no such copy exists, an
accurate description thereof) and, to the extent applicable, (i)
any related trust agreement, annuity contract or other funding
instrument; (ii) any summary plan description and other material
written communications to UCAR and its Subsidiaries' employees
concerning the extent of the benefits provided under a Benefit
Plan; and (iii) the most recent (I) Form 5500s and attached
schedules, (II) determination letter, (III) audited financial
statements and (IV) actuarial valuation reports.
(d) With respect to each Benefit Plan:
(i) UCAR and each of the Subsidiaries have
made all contributions and other payments (including premiums
payable to the PBGC) due from it to date on a timely basis
and all amounts properly accrued as liabilities of UCAR or
any of the Subsidiaries which have not been paid have been
properly recorded on the books of UCAR or such Subsidiaries;
(ii) no Benefit Plan which is subject to
Section 302 of ERISA or Section 412 of the Code has incurred
an "accumulated funding deficiency" as defined in either of
such Sections (whether or not waived);
(iii) to the knowledge of Stockholders, each
Benefit Plan and its related trust agreement has been
administered in all material respects in accordance with its
terms and is in material compliance with ERISA and the Code
or, if applicable, foreign laws;
(iv) each Benefit Plan which is intended to
qualify under Section 401(a) or 403(a) of the Code has
received a favorable determination letter from the IRS with
respect to its qualification and its related trust has been
determined to be exempt from taxation under Section 501(a) of
the Code; and
(v) other than as described in Schedule VII,
X or XI attached hereto, there are no actions, suits, liens
(statutory or otherwise) or claims pending (other than
routine claims for benefits) or, to the knowledge of
Stockholders, threatened in writing against or with respect
to any Benefit Plan.
(e) With respect to each Pension Plan that is
subject to Title IV of ERISA:
(i) no filing of a notice to terminate any
such Pension Plan has been made by UCAR or any of the
Subsidiaries; and
(ii) Stockholders have received no written
notice from the PBGC of the initiation of a proceeding to
terminate any such Pension Plan and, to the knowledge of
Stockholders, no proceeding has been initiated by the PBGC to
terminate any such Pension Plan.
(f) Except as set forth in Schedule XI attached
hereto, no Benefit Plan provides medical or death benefits with
respect to any employee, officer, director or consultant of UCAR
or any of the Subsidiaries beyond their retirement or other
termination of service other than (i) COBRA coverage or (ii) death
benefits provided under any pension plan.
(g) With respect to each Benefit Plan, no such
Benefit Plan has engaged in a non-exempt "prohibited transaction"
within the meaning of Section 4975 of the Code or Section 406 of
ERISA.
(h) Except as provided in UCAR's Long Term
Incentive Compensation Plan, as amended, and as set forth in
Schedule XI, the Transactions will not result in (i) the payment
to any employee of UCAR or the Subsidiaries of any money or other
property or right, (ii) the acceleration or provision of any other
rights or benefits to any employee of UCAR or the Subsidiaries, or
(iii) any increase in benefits or compensation under any Benefit
Plan.
5.22 Business Operations.
(a) Except as set forth herein or in any Schedule
attached hereto:
(i) since the Balance Sheet Date, neither
UCAR nor any Subsidiary has, except in the ordinary course of
business, made any material change in practices, operations
or policies with respect to (A) the standard terms and
conditions of sale of products (including standard terms
regarding returns and discounts, but excluding price
changes), (B) the method of accounting for sale of products,
(C) the policy regarding maintenance of inventory levels or
(D) the conduct of accounts receivable collection and
accounts payable payment activities;
(ii) since the Balance Sheet Date, neither
UCAR nor any Subsidiary has, except in the ordinary course of
business, or as specifically contemplated by this Agreement
in connection with the Transactions, (A) engaged in any
material transaction, (B) entered into any material
agreement, (C) incurred, paid or discharged any material
obligation or liability, (D) sold or transferred any material
property, (E) waived or released any material right or
obligation, (F) guaranteed, assumed or otherwise become
responsible for the material obligations of any Person,
(G) made any material loan or advance to any Person, (H) made
any payments to any of the Stockholders or their Affiliates,
(I) made any repurchase or redemption of, or any
reclassification of, shares of its Capital Stock, (J) issued
or sold any shares of its Capital Stock or granted any of its
Capital Stock or granted any options, rights, subscriptions
or warrants to purchase any shares of its Capital Stock, or
issued any convertible or exchangeable securities or entered
into any agreements or commitments pending for the issuance
or sale of any shares of its Capital Stock, (K) acquired or
sold, leased, granted any interest in or otherwise disposed
of any material assets or businesses, or (L) entered into any
agreement or commitment, other than this Agreement, to do any
of the foregoing; provided, that one or more cash dividends
declared and paid after the Balance Sheet Date and prior to
the Closing Date shall not be considered a breach of this
Section 5.22; provided further, that this in no way limits or
otherwise modifies the provisions of Article 1.5 hereof; and
(iii) since the Balance Sheet Date, there has
been no material damage to or loss of the material properties
owned, leased or used by UCAR and the Subsidiaries
(regardless of whether such damage or destruction is covered
by insurance).
(b) Except as set forth in Schedule XVI attached
hereto, to the knowledge of Stockholders, no material
supplier or customer of UCAR and the Subsidiaries has
indicated in writing that it will cease doing business with
UCAR and the Subsidiaries as a result of the Transactions.
5.23 Health and Safety Conditions. Schedule XII
attached hereto:
(i) lists all current material safety data
sheets relating to the products currently sold by UCAR and
the Subsidiaries and the chemical substances or mixtures
currently used by UCAR and the Subsidiaries in the conduct of
the Business as presently conducted by them;
(ii) lists all written internal safety and
health audits conducted since February 26, 1991 by UCAR or
any of the Subsidiaries; and
(iii) lists all citations, notices of
violations, orders and consent orders issued and
administrative or judicial enforcement proceedings commenced
by governmental or quasi-governmental agencies, authorities
and instrumentalities (including the United States
Occupational Safety and Health Administration, any state
occupational safety and health administration and, with
respect to TSCA, the EPA) with respect to safety and health
matters relating to UCAR or any of the Subsidiaries since
February 26, 1991.
5.24 Insurance. Schedule XIII attached hereto lists
all of the material insurance policies (other than insurance
policies relating to plans, policies, practices, programs,
contracts, agreements, arrangements and commitments described in
Article 5.21 hereof) which cover employees, properties, products
or operations (including, without limitation, fire, public
liability, worker's compensation and vehicular insurance policies)
and which are held by or on behalf of UCAR or any Subsidiary for
their respective accounts. To the knowledge of Stockholders,
there is no material inaccuracy in any application for any such
policy which would form a basis for termination of any such
policy.
5.25 Liabilities. Except as set forth herein or in any
Schedule attached hereto, to the knowledge of Stockholders, there
are no material liabilities of UCAR and the Subsidiaries other
than liabilities incurred since the Balance Sheet Date in the
ordinary course of business.
5.26 Entire Business. UCAR and the Subsidiaries own,
lease or have licenses or other contractual rights to use all of
the material tangible and intangible assets used by them in the
conduct of the Business as presently conducted by them except for
(i) assets used to provide services or goods to UCAR or a
Subsidiary pursuant to a contract, agreement or commitment set
forth in Schedule IV attached hereto or one of the Other Scheduled
Contracts, and (ii) pension or other funded employee benefit plan
assets. The contracts, agreements and commitments under which
such contractual rights have been granted are listed on Schedule
IV attached hereto or included among the Other Scheduled
Contracts.
5.27 Full Disclosure. Stockholders have made or caused
to be made available to Buyer, upon request, complete and accurate
copies of all documents listed in the Schedules attached hereto
and all files, records and papers related to all claims, actions,
suits, proceedings and investigations listed in the Schedules
attached hereto, in each case (i) other than documents, files,
records and papers which, in the reasonable opinion of
Stockholders, contain information (including, without limitation,
price and cost data on any basis other than an aggregate basis)
the disclosure of which to competitors of UCAR or any of the
Subsidiaries might be detrimental to UCAR or any of the
Subsidiaries and (ii) except to the extent that such access would
(A) violate the terms of any agreement to which UCAR or any of the
Subsidiaries is a party, any applicable law, ordinance, rule or
regulation or any order, writ, judgment, award, edict or decree of
any court of competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of competent
jurisdiction or (B) result in the loss of any attorney-client or
other privilege. Stockholders have not knowingly withheld any
documents, files, records, papers or related materials necessary
to make the representations and warranties set forth in Articles
3, 4 and 5 hereof, in the context in which they are made, not
misleading in any material respect. To the knowledge of
Stockholders, UCAR has not furnished any documents, files,
records, papers or related materials to the Buyer that contain any
untrue statement of a material fact.
5.28 Limitation on Representations. Except as set
forth in Articles 3 and 4 hereof or this Article 5, no
representations, warranties or guarantees have been, are being or
will be made by Union Carbide, Mitsubishi or UCAR as to the
quality, condition, character, size, quantity, type, earnings,
revenues, expenses, suitability or value of UCAR, the Subsidiaries
or any of the properties owned, leased or used by UCAR or any
Subsidiary and ALL REPRESENTATIONS, WARRANTIES OR GUARANTEES
IMPLIED OR OTHERWISE CREATED UNDER ANY APPLICABLE LAW ARE
EXPRESSLY DISCLAIMED BY THE STOCKHOLDERS.
5.29 Receivables.
(a) All of UCAR's and, to the knowledge of
Stockholders, the Subsidiaries' receivables have arisen only from
bona fide transactions in the ordinary course of business.
(b) As of the Balance Sheet Date there had not
been, and since the Balance Sheet Date there have not been, sales
of any receivables or other similar assets pursuant to (i) the
Asset Purchase and Sale Agreement, dated as of June 26, 1992,
among UCAR Carbon Company Inc., Omnibus Funding Corporation and
Manufacturers Hanover Agent Bank Services and the Secondary Asset
Purchase and Sale Agreement, dated as of June 26, 1992, among UCAR
Carbon Company Inc., Internationale Nederlanden Bank N.V. and
Manufacturers Hanover Agent Bank Services or (ii) any other
similar arrangement, nor have Stockholders entered into any other
similar arrangement that remains in effect as of the date hereof.
5.30 Limitations on Representations.
Notwithstanding anything contained herein to the
contrary, to the extent any representation or warranty contained
in Article 3, 4 or 5 is not true as a result of any action (i)
taken or omitted to be taken by the Stockholders, UCAR, or the
Subsidiaries at the request of the Buyer, or (ii) that is
necessary in connection with the consummation of the Transactions
(and disclosed to Buyer as contemplated by Article 6.2(a)), then
the failure of such representation or warranty to be true shall
not be deemed to be a violation or breach of any such
representation or warranty for all purposes hereof.
ARTICLE 6 - PRE-CLOSING COVENANTS
6.1 Conduct By Buyer.
(a) From the date hereof until the Closing, Buyer
shall refrain from taking any action which would cause any
representation or warranty contained in Article 2 hereof to be
untrue or incorrect in any material respect as of the Closing.
(b) If, for any reason (including, without
limitation, termination of this Agreement pursuant to Article 9
hereof), the Closing does not take place, Buyer will, and will
cause its officers, employees and other representatives to, keep
confidential and not use in any manner any information or
documents obtained from, Stockholders, UCAR or any of the
Subsidiaries concerning UCAR's or any of its Subsidiaries'
respective properties, businesses and operations and shall
promptly (i) return to UCAR all documents, papers, books, records
and other materials (and all copies thereof) obtained by any of
them from Stockholders, UCAR, or any of their respective
subsidiaries or Affiliates (including, without limitation, the
Subsidiaries) or any of the directors, officers, employees,
agents, representatives or consultants of Stockholders, UCAR or
any of their respective subsidiaries or Affiliates (including,
without limitation, the Subsidiaries) in connection with the
investigation and evaluation of the Transactions, and the
negotiation and preparation of this Agreement or the consummation
of the Transactions, (ii) destroy all copies of all analyses,
studies and other documents prepared by or for Buyer which contain
or reflect information contained in such documents, papers, books,
records and other materials or obtained in connection with visits
to the facilities of UCAR or any of the Subsidiaries and (iii)
furnish to Stockholders a certificate signed by an appropriate
authorized officer of Buyer to the effect that such destruction
has been completed.
(c) Buyer agrees to take all reasonable action that
is necessary or desirable prior to the Closing (other than actions
to be taken by the Stockholders, UCAR and its Subsidiaries) such
that the Lenders are prepared to lend the aggregate amount of the
Borrowings on the Closing Date.
6.2 Conduct by Stockholders and UCAR.
From the date hereof until the Closing,
(a) Stockholders shall, and shall cause UCAR and its
non-Foreign Subsidiaries and shall use their reasonable efforts to
cause the Foreign Subsidiaries to (i) refrain from taking any
action which would cause any representation or warranty contained
in Article 3, 4 or 5 hereof to be untrue or incorrect in any
material respect (or in any respect, in the case of the
representations or warranties contained in Article 5.22 or
5.29(b)) as of the Closing Date and (ii) notify Buyer of any
event, condition or circumstance occurring from the date hereof
through the Closing Date that would, or but for Section 5.30
would, constitute a violation or breach of any representation or
warranty or cause such representation or warranty to be untrue as
of the Closing Date (assuming such event, condition or
circumstance existed on the Closing Date);
(b) except as otherwise provided herein,
Stockholders shall not permit UCAR to amend or authorize any
amendment of the Certificate of Incorporation or the Bylaws of
UCAR prior to the Closing;
(c) except as Buyer shall otherwise agree in
writing, Stockholders, UCAR and their Affiliates shall not enter
into any new, or amend any existing, Benefit Plan or any other
agreement, program, or arrangement in connection therewith
(including any trust agreement, insurance contract or credit
facility) or grant any increases in compensation, other than in
the ordinary course of business or pursuant to promotions, in each
case consistent with past practice; and
(d) the Stockholders shall cause UCAR and its non-
Foreign Subsidiaries, and shall use their reasonable efforts to
cause the Foreign Subsidiaries, to take such reasonable action at
the request of the Buyer (to the extent such actions are
reasonably contemplated hereby) prior to the Closing that is
necessary or desirable such that the Borrowings and the other
Transactions are consummated on the Closing Date.
6.3 Conduct of the Business.
(a) From the date hereof until the Closing,
Stockholders shall cause UCAR and its non-Foreign Subsidiaries,
and shall use their reasonable efforts to cause the Foreign
Subsidiaries, to:
(i) employ the properties owned, leased or
used by them and conduct the Business only in the ordinary
course;
(ii) use all reasonable efforts to retain
their employees and preserve their business relationships;
(iii) refrain from entering into any contract
except in the ordinary course of business;
(iv) refrain from taking any action which
would cause any representation or warranty contained in
Article 3, 4 or 5 hereof to be untrue or incorrect in any
material respect as of the Closing;
(v) provide reasonable access by Buyer and
its officers, employees and other representatives to their
books, files, papers and records upon reasonable request with
due regard to minimizing interference with the conduct of the
Business by them; provided, however, that no such access
shall be provided (A) to technical, financial or operating
books, files, papers or records (including, without
limitation, price and cost data on any basis other than an
aggregate basis) which, in the reasonable opinion of
Stockholders, contain information the disclosure of which to
competitors of UCAR or any of the Subsidiaries might be
detrimental to UCAR or any of the Subsidiaries (but only to
the extent that the lack of access of Buyer or its officers,
employees and other representatives thereto would not
materially impair the ability of Buyer to evaluate the
accuracy of the representations and warranties set forth in
Articles 3, 4 and 5 hereof) or (B) to the extent that such
access would (1) violate the terms of any agreement to which
UCAR or any of the Subsidiaries is a party, any applicable
law, ordinance, rule or regulation or any order, writ,
judgment, award, edict or decree of any court of competent
jurisdiction or any governmental or quasi-governmental
agency, authority or instrumentality of competent
jurisdiction or (2) result in the loss of any attorney-client
or other privilege;
(vi) permit with reasonable frequency senior
management and representatives of Buyer and the sources of
Buyer's financing to meet with senior management of UCAR to
discuss the Business as presently conducted by UCAR and the
Subsidiaries; provided, that the Stockholders will be given
prior notice of all such meetings, and representatives of the
Stockholders will be permitted to attend all such meetings;
provided, further, that senior management of UCAR shall not
disclose during such discussions (A) any technical, financial
or operating information or data (including, without
limitation, price and cost data on any basis other than an
aggregate basis) the disclosure of which to competitors of
UCAR or any of the Subsidiaries would, in the reasonable
opinion of Stockholders, be detrimental to UCAR or any of the
Subsidiaries (but only to the extent that the non-disclosure
by the senior management of UCAR of such information or data
would not materially impair the ability of Buyer to evaluate
the accuracy of the representations and warranties set forth
in Articles 3, 4 and 5 hereof) or (B) any information or data
the disclosure of which would (1) violate the terms of any
agreement to which UCAR or any of the Subsidiaries is a
party, any applicable law, ordinance, rule or regulation or
any order, writ, judgment, award, edict or decree of any
court of competent jurisdiction or any governmental or quasi-
governmental agency, authority or instrumentality of
competent jurisdiction or (2) result in the loss of any
attorney-client or other privilege; and
(vii) refrain from making or revoking any
elections with respect to Taxes other than in the ordinary
course of business.
(b) Notwithstanding anything contained herein to the
contrary, no action by the Stockholders, UCAR or any of the
Subsidiaries taken pursuant to the request of the Buyer or that is
necessary in connection with the consummation of the Transactions
(and disclosed to Buyer with reasonable promptness) shall be
deemed a breach of any of the covenants contained in clauses (i)
through (iv) of Article 6.3(a) hereof.
6.4 Filings and Consents.
(a) Each Party shall, at its own cost and expense,
promptly file and thereafter diligently pursue any filing required
on its part under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and all rules and regulations adopted
thereunder (collectively, the "HSR Act") in connection with the
Transactions.
(b) Each Party shall, at its own cost and expense,
promptly file and thereafter diligently pursue any filing required
on its part under the European Union regulations, as amended, and
all rules and regulations adopted thereunder (collectively, the
"EU") in connection with the Transactions.
(c) Each Party shall, at its own cost and expense,
promptly file and thereafter diligently pursue any filing required
on its part under French, Canadian, Spanish and Italian laws, if
any, in connection with the transactions contemplated by this
Agreement.
(d) Stockholders shall use all reasonable efforts to
obtain the consents, approvals or other authorizations required to
be obtained from, make all filings required to be made with and
give all notices required to be given to any third party
(including, without limitation, governmental or quasi-governmental
agencies, authorities and instrumentalities of competent
jurisdiction) that are required on their respective parts in
connection with the consummation of the Transactions (other than
those contemplated by Articles 6.4(a), 6.4(b) and 6.4(c) hereof),
in each case if (but only if) the failure to obtain, give or make
such consent, approval, authorization or filing would have a
Material Adverse Effect (collectively, the "Required Consents").
(e) Each Party shall, upon request, cooperate with
the other Parties in connection with the performance of their
respective obligations under this Article 6.4.
6.5 Fulfillment of Conditions. Each party shall use all
reasonable efforts to fulfill or cause to be fulfilled the
conditions set forth in Articles 7 and 8 hereof. Without
limitation of the foregoing, each of the Parties shall have the
right to review and consult concerning the preparation by UCAR of
the Certificate referred to in Article 8(xi).
6.6 Supplemental Disclosure. The Stockholders shall have
the right from time to time prior to the Closing to supplement the
disclosure Schedules prepared by them or UCAR, with respect to any
matter hereafter arising which, if existing or known as of the
date of this Agreement, would have been required to be set forth
or described in such Schedule. Any such supplemental disclosure
will be deemed to have cured any breach of any representation or
warranty made in this Agreement, but will not be deemed to have
been disclosed as of the date of this Agreement for purposes of
determining whether or not the conditions set forth in Articles 7
and 8 hereof have been satisfied. The Stockholders shall also
have the right through November 23, 1994 to supplement the
disclosure Schedules; provided, that such supplemental disclosure
shall, in the aggregate, taken together with the Schedules
accompanying this Agreement when first executed (the "Original
Schedules"), not disclose any liens, claims or encumbrances which
would materially and adversely impair the value of the Lender's
collateral package with respect to the Borrowings or any state of
affairs representing a Material Adverse Effect, in either case,
not disclosed on the Original Schedules.
6.7 Limitation of Stockholders' Liabilities. From and
after the Closing Date, except as expressly provided for in this
Agreement or the agreements identified with an asterisk on
Schedule IV, (a) the Stockholders shall have no obligations or
liabilities whatsoever relating to the business, properties or
assets of UCAR and the Subsidiaries as the same may exist at the
Closing Date or arise thereafter and (b) the Buyer shall release,
indemnify and hold the Stockholders harmless from all such
obligations and liabilities (including the costs of defense
thereof and reasonable attorneys' fees and expenses) that are
alleged against or might otherwise be imposed on the Stockholders.
The Buyer shall cooperate with the Stockholders, both before and
after the Closing Date, by taking, and after Closing, by causing
the appropriate entity to take, all actions the Stockholders shall
reasonably request to effect the termination of any such
Stockholders' obligation or liability.
6.8 Tax Certificate. UCAR shall deliver to Mitsubishi
prior to the Closing the certificate referred to in Article 8(xi).
ARTICLE 7 - BUYER'S CONDITIONS TO CLOSING
The obligations of Buyer to consummate the Transactions are,
unless waived by Buyer, subject to the fulfillment, at or before
the Closing, of each of the following conditions:
(i) No statute or law, no rule or regulation
of a governmental agency, authority or instrumentality of
competent jurisdiction and no injunction or restraining order
of a court of competent jurisdiction shall be in effect which
prohibits, restricts or enjoins, and no suit, action or
proceeding shall be pending or threatened which seeks to
prohibit, restrict, enjoin, nullify, seek material damages
with respect to or otherwise materially adversely affect, the
consummation of the Transactions.
(ii) The applicable waiting period under the
HSR Act, including all extensions thereof, shall have expired
or been terminated.
(iii) The applicable waiting period under the
EU regulations, including all extensions thereof, shall have
expired or been terminated.
(iv) The applicable waiting period under
French, Canadian, Spanish and Italian laws, if any, including
all extensions thereof shall have expired or been terminated.
(v) Except for such changes as may occur in
the ordinary course of business or as may be permitted or
required pursuant to the terms hereof, the representations
and warranties of Stockholders set forth in Articles 3, 4,
and 5 hereof shall be true and correct in all material
respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made
on and as of the Closing Date. The reference to "in all
material respects" in this condition is not intended to
broaden the scope of any exception for materiality contained
in any specific representation or warranty.
(vi) Stockholders shall have performed and
complied with all covenants and agreements required to be
performed or complied with by Stockholders under this
Agreement prior to or concurrently with the Closing in all
material respects. The reference to "in all material
respects" in this condition is not intended to broaden the
scope of any exception for materiality contained in any
covenant or agreement.
(vii) Buyer shall have received all
certificates and other documents, in form and substance
reasonably satisfactory to Buyer, required to be delivered to
Buyer at or before the Closing pursuant to this Agreement
duly executed by all necessary persons (other than Buyer).
(viii) Buyer shall have received the stock
certificates described in Article 1.4(a)(vii) hereof in
accordance with the terms of Article 1.4(a)(vii) hereof.
(ix) Buyer shall have received the
resignation of directors described in Article 1.4(a)(viii)
hereof.
(x) Stockholders and UCAR shall have
obtained the Required Consents.
(xi) Chemical Bank, on behalf of the Lenders,
shall not have declined to consummate the Borrowings as a
result of (i) "any material disruption of, or material
adverse change in, the financial, banking or capital markets"
or (ii) "any material adverse change in the assets, business,
properties, financial condition or results of operations of
UCAR and the Subsidiaries".
ARTICLE 8 - STOCKHOLDERS' AND UCAR'S CONDITIONS TO CLOSING
The obligations of Stockholders and UCAR to consummate the
Transactions are, unless waived by Stockholders, subject to the
fulfillment, at or before the Closing, of each of the following
conditions:
(i) No statute or law, no rule or regulation
of a governmental agency, authority or instrumentality of
competent jurisdiction and no injunction or restraining order
of a court of competent jurisdiction shall be in effect which
prohibits, restricts or enjoins, and no suit, action or
proceeding shall be pending or threatened which seeks to
prohibit, restrict, enjoin, nullify, seek material damages
with respect to or otherwise materially adversely affect, the
consummation of the Transactions.
(ii) The applicable waiting period under the
HSR Act, including all extensions thereof, shall have expired
or been terminated.
(iii) The applicable waiting period under the
EU regulations, including all extensions thereof, shall have
expired or been terminated.
(iv) The applicable waiting period under
French, Canadian, Spanish and Italian laws, if any, including
all extensions thereof shall have expired or been terminated.
(v) Except for such changes as may occur in
the ordinary course of business or as may be permitted or
required pursuant to the terms hereof, the representations
and warranties of Buyer set forth in Article 2 hereof shall
be true and correct in all material respects on and as of the
Closing Date with the same effect as though such
representations and warranties had been made on and as of the
Closing Date. The reference to "in all material respects" in
this condition is not intended to broaden the scope of any
exception for materiality contained in any specific
representation or warranty.
(vi) Buyer shall have performed and complied
with all covenants and agreements required to be performed or
complied with by Buyer under this Agreement prior to or
concurrently with the Closing in all material respects. The
reference to "in all material respects" in this condition is
not intended to broaden the scope of any exception for
materiality contained in any covenant or agreement.
(vii) Stockholders and UCAR shall have
received all certificates and other documents, in form and
substance reasonably satisfactory to Stockholders, required
to be delivered to Stockholders and UCAR at or before the
Closing pursuant to this Agreement duly executed by all
necessary persons (other than Stockholders and UCAR).
(viii) UCAR shall have received the Purchase
Price, Mitsubishi's shares of Class A Common Stock shall have
been redeemed by UCAR and cancelled, and Union Carbide shall
have received the Dividend in accordance with Article 1.3
hereof.
(ix) Stockholders and UCAR shall have
obtained the Required Consents.
(x) The Board of Directors of UCAR shall
have received a report, in form and substance, and from a
Person, satisfactory to it in the reasonable exercise of its
judgment, demonstrating that the surplus of UCAR for purposes
of the Delaware General Corporation Law is sufficient to pay
the Recapitalization Amount.
(xi) UCAR shall have delivered to Mitsubishi
the certificate described in Treasury Regulation section
1.897-2(h) under the Code with respect to the Redemption.
ARTICLE 9 - EFFECTIVENESS; TERMINATION; SURVIVAL OF AGREEMENT
9.1 Effectiveness. This Agreement shall become effective
upon the approval hereof by the Board of Directors of Mitsubishi.
9.2 Termination. Notwithstanding anything contained
herein to the contrary, this Agreement may be terminated:
(i) at the Closing or at any time prior
thereto, by mutual written agreement of Stockholders and
Buyer;
(ii) at any time after March 31, 1995 (the
"Termination Date") and prior to the Closing, by Buyer, if
(A) the Closing shall not have been consummated on or before
the Termination Date and (B) the failure to consummate the
Closing on or before the Termination Date did not result from
the failure by Buyer to perform or comply with any covenant
or agreement contained in this Agreement required to be
performed or complied with prior to the Closing by Buyer; or
(iii) at any time after the Termination Date
and prior to the Closing, by Union Carbide or Mitsubishi, if
(A) the Closing shall not have been consummated on or before
the Termination Date and (B) the failure to consummate the
Closing on or before the Termination Date did not result from
the failure by Union Carbide or Mitsubishi to perform or
comply with any covenant or agreement contained in this
Agreement required to be performed or complied with prior to
the Closing by Union Carbide or Mitsubishi.
If this Agreement so terminates, it shall become null and void and
have no further force or effect, except as provided in Article 9.3
hereof.
9.3 Survival after Termination. If this Agreement is
terminated in accordance with Article 9.2 hereof and the
Transactions are not consummated, this Agreement shall become null
and void and of no further force and effect, except for the
provisions of Articles 6.1(b), 13, 14, 15, 16, 17, 18 and 22;
provided, however, that none of the Parties shall have any
liability in respect of a termination of this Agreement.
ARTICLE 10 - TAX MATTERS; POST-CLOSING COVENANTS
10.1 Transactional Taxes and Costs.
(a) Stockholders shall be responsible for all sales,
transfer, conveyance, gains, stamp, value added or gross income
taxes (other than gross income taxes based on revenue or income of
UCAR or Buyer) or other taxes, duties, excises or governmental
charges, fees, imposts or assessments, and any interest or
penalties thereon, imposed by any taxing jurisdiction (the
foregoing are hereinafter referred to as "Transactional Taxes")
with respect to the Acquisition, the Dividend or the Redemption,
to the extent that such Transactional Taxes would have been due if
the Acquisition, the Dividend and the Redemption had been
structured as a sale of 75% of the Capital Stock owned by each of
the Stockholders (the "Stockholder Transactional Taxes"). UCAR
shall be responsible for all Transactional Taxes relating to the
Transactions other than the Stockholder Transactional Taxes. Each
Party shall provide the other Parties with appropriate exemption
certificates or direct pay certificates where possible, or shall
promptly pay and discharge any Transactional Taxes for which such
Party is responsible pursuant to the first two sentences of this
Article 10.1(a). The foregoing notwithstanding, in the event any
Party shall be required to pay any Transactional Taxes for which
any other Party is responsible pursuant to the first two sentences
of this Article 10.1(a), such other Party shall promptly reimburse
such Party and hold such Party harmless from any Transactional
Taxes paid by such Party on behalf of such other Party. In the
event any taxing jurisdiction subsequently determines that any
additional Transactional Taxes (including interest or penalties
thereon) are due, the Party responsible for such Transactional
Taxes pursuant to the first two sentences of this Article 10.1(a)
shall hold any other Party harmless therefrom.
(b) Notwithstanding anything to the contrary
contained in this Agreement, Union Carbide's assumption of
"Assumed UCAR Tax Liabilities" pursuant to Section 9.2 of the
Stock Purchase and Sale Agreement, dated November 9, 1990, among
Mitsubishi, Union Carbide, and UCAR Carbon Company, Inc. shall
continue in effect pursuant to its terms.
(c) Buyer will be responsible for and shall hold
Stockholders harmless from any Tax arising from any election by
Buyer under Section 338 of the Internal Revenue Code.
(d) UCAR shall be responsible for all recording fees
and notarial fees arising out of the sale of the Acquired Shares
or otherwise on account of this Agreement or the Transactions.
UCAR shall promptly pay and discharge such fees and shall promptly
reimburse Buyer for any amounts Buyer may have expended on such
fees.
10.2 Records Retained by Stockholders.
(a) Except as otherwise provided in Articles
10.2(b), 10.2(c) and 10.2(d) hereof or in any other agreement to
which UCAR or any of the Subsidiaries and Stockholders or any of
their respective subsidiaries are parties which are in each case
shown on Schedule IV, Stockholders shall deliver or cause to be
delivered to UCAR or the Subsidiaries within sixty (60) days after
the Closing, all books, records and files which pertain to the
Business as conducted by UCAR and the Subsidiaries, UCAR, any
Subsidiary or any of the properties owned, leased or used by UCAR
or any Subsidiary, to the extent such books and records relate
solely to the Business and do not contain any information
pertaining to the Stockholders or Stockholders' Affiliates (other
than UCAR and the Subsidiaries) and which are possessed by
Stockholders, or their respective subsidiaries or their respective
directors, officers, employees, agents, representatives or
nominees (the "Business Records").
(b) All Business Records which are (i) required by
Stockholders or their subsidiaries or their respective directors,
officers, employees, agents, representatives or nominees in
connection with any pending or threatened claim, suit, action,
proceeding or investigation or termination or (ii) subject to any
"Hold Order" issued pursuant to the Records Retention and
Protection Manual of Union Carbide (a complete and accurate copy
of which has been made available to Buyer) shall be retained by
Stockholders or such subsidiary, director, officer, employee,
agent, representative or nominee until the final termination of
such claim, suit, action, proceeding or investigation or
termination of such "Hold Order" as the case may be. Prior to
such termination, copies of such Business Records shall be
delivered to UCAR or the Subsidiaries. After such final
termination, such Business Records shall be delivered to UCAR or
the Subsidiaries.
(c) Nothing contained herein shall obligate or
require Stockholders to deliver or cause to be delivered to UCAR
or the Subsidiaries any Business Records which pertain to the
Transactions and the photocopies of Business Records contained in
the data room for the Transactions.
(d) All Business Records which contain information
relating to Stockholders or any of their respective subsidiaries
or Affiliates shall be retained by Stockholders or such subsidiary
or Affiliate and copies of such Business Records (from which such
information shall have been deleted) shall be delivered to UCAR or
the Subsidiaries.
10.3 Access by Stockholders. At any time and from time
to time after the Closing, upon reasonable request by
Stockholders, UCAR shall, and shall cause the Subsidiaries to, (i)
provide full access, during normal business hours, to Stockholders
and their respective subsidiaries and the officers, employees,
other representatives and counsel of Stockholders and their
respective subsidiaries to the facilities, books, records, files,
paper, data and information relating to UCAR, any Subsidiary or
any of the properties owned, leased or used by UCAR or any
Subsidiary and (ii) make their employees available to Stockholders
and their respective subsidiaries and the officers, employees,
other representatives and counsel of Stockholders and their
respective subsidiaries, in each case to the extent reasonably
necessary and within a reasonable time period in connection with
any tax, pension or employee benefit matter pertaining to
Stockholders or any of their respective subsidiaries or any Taxes
for which Stockholders are responsible under this Agreement, at no
charge to Stockholders or such subsidiaries, officers, employees,
other representatives or counsel; provided, however, that
Stockholders shall reimburse UCAR and the Subsidiaries for travel,
lodging, meal and other expenses directly and reasonably incurred
by such employees in connection with such request.
10.4 Preservation of Records. After the Closing, UCAR
shall, and shall cause the Subsidiaries to, preserve all books,
records, files, papers, data and information which is possessed by
it or them and which relates to UCAR or the Subsidiaries for (i) a
period of seven (7) years after the Closing and (ii) for such
longer period as may be required (A) by an agreement, law,
ordinance, rule, regulation or any order, writ, judgment,
stipulation, edict, award or decree known to UCAR or any of the
Subsidiaries or (B) in connection with any pending or threatened
claim, suit, action, proceeding or investigation (including,
without limitation, tax examinations and audits) known to UCAR or
any of the Subsidiaries. If, upon the expiration of such period,
UCAR or any Subsidiary desires to destroy any of such books,
records, files, papers, data or information, UCAR shall, or shall
cause such Subsidiary to, give written notice to that effect to
Stockholders not more than one hundred eighty (180) and not less
than ninety (90) days prior to such destruction. Stockholders
shall have the right, at their respective cost and expense, to
take possession of such books, records, files, papers, data or
information; provided, that Stockholders give written notice to
that effect to UCAR within ninety (90) days after such notice
shall have been given and takes such possession within one hundred
eighty (180) days thereafter. UCAR shall, and shall cause the
Subsidiaries to, cooperate with Stockholders in connection with
taking such possession.
10.5 Agreement Not To Compete. (a) Neither Union Carbide
nor Mitsubishi shall, or shall permit its Controlled Affiliates
(as defined below) to, directly or indirectly develop,
manufacture, service, market, sell or otherwise distribute Certain
Products (as defined below) in the UCAR Home Markets (as defined
below) at any time after the Closing Date until the Release Date
(as defined below).
(b) Notwithstanding the foregoing, Mitsubishi and
Union Carbide and their respective Controlled Affiliates may sell
or otherwise distribute Certain Products in the UCAR Home Markets
if appointed by UCAR or a Subsidiary as a distributor or other
agent of UCAR or a Subsidiary, on such terms and conditions as are
mutually agreed between the respective parties thereto; provided,
however, that such terms and conditions shall include the right of
any party to such distributorship or other agency to terminate at
any time.
(c) Except as otherwise provided in this Article
10.5, Union Carbide and Mitsubishi and their respective Affiliates
shall have the right to (1) engage in any and all businesses and
activities of any kind whatsoever, (2) use, lease and own any and
all assets, rights and properties of any kind whatsoever, however
used, leased or owned and wherever used, leased or owned, and (3)
receive compensation or profit therefrom for its or their own
account and without in any manner being obligated to disclose or
offer such businesses, activities, assets, rights, properties,
compensation or profit to the other Parties or their Affiliates.
(d) Nothing contained herein shall be deemed or
construed to restrict, limit or otherwise reduce the right of UCAR
and its Controlled Affiliates to engage in the Business anywhere
in the world at any time.
(e) Each of the Parties agrees that any breach of
this Article 10.5 by a Party would cause irreparable damage to the
other Parties and that, in the event of such breach, the other
Parties and their Affiliates shall have, in addition to any and
all other rights and remedies, the right to an injunction, an
order of specific performance or other equitable relief to prevent
or redress such breach.
(f) For purposes of this Article 10.5:
(i) "Certain Products" shall mean carbon or
graphite electrodes, carbon or graphite blocks (other than
NDK Blocks) (as defined below), flexible graphite, graphite
specialties (other than isotropic graphite), graphite anode
and calcined coal.
(ii) "Controlled Affiliate" shall mean, with
respect to any Person, any other Person which, directly or
indirectly, is controlled by such Person; provided, however,
that neither UCAR nor any of the Controlled Affiliates of
UCAR shall be deemed to be a "Controlled Affiliate" of Union
Carbide or Mitsubishi for the purposes hereof.
(iii) "NDK Blocks" shall mean carbon or
graphite blocks used as lining for furnaces, of substantially
the size and type presently manufactured by Nippon Electrode
Co., Ltd., a Japanese corporation.
(iv) "UCAR Home Markets" shall mean Austria,
Belgium, Brazil, Canada, Denmark, Switzerland, France,
Germany (including the territory formerly known as East
Germany), Greece, Iceland, Ireland, Italy, Luxembourg,
Mexico, the Netherlands, Norway, Portugal, South Africa,
Spain, Sweden, the United Kingdom, and the United States.
(v) "Release Date" shall mean (A) with
respect to Mitsubishi, the date that is four (4) years after
the Closing Date, and (B) with respect to Union Carbide, the
date that is two (2) years after the date upon which Union
Carbide is no longer represented on the UCAR Board of
Directors, shall beneficially own less than ten percent (10%)
of the issued and outstanding Capital Stock, and shall have
no contractual right (or shall have permanently waived any
contractual right) to recommend, nominate or have, or require
to be, elected any Director of UCAR, which shall in no event
be a date that is less than four (4) years after the Closing
Date.
ARTICLE 11 - EMPLOYEES AND BENEFITS
At the Closing, Buyer shall cause UCAR to continue to employ
the employees listed in Schedule X attached hereto (collectively,
the "Employee(s)") (i) in equivalent or greater positions, (ii) at
the same or greater wage rates, and (iii) with benefit plans,
compensation policies and practices which in the aggregate are
substantially equivalent to the Benefit Plans set forth on
Schedule XI attached hereto (the "Benefits"). Buyer agrees to
maintain the Benefits for at least two (2) years from and after
the Closing Date. Buyer shall accept and credit to all Employees
all previous service recognized by the UCAR Retirement Plan ("UCAR
Pension Plan") and Union Carbide benefit plans and compensation
practices under all of Buyer's benefit plans, compensation
policies and practices where such service is applicable.
(a) United States and Canada. In the event any
salaried Employee in the United States or Canada is terminated
involuntarily by Buyer or UCAR (other than for cause) within one
year of the Closing Date, in lieu of the regular layoff allowance,
such Employee will be provided those severance benefits listed in
Schedule XI for which such employee is eligible in addition to any
other benefits (other than the regular layoff allowance) to which
such Employee is entitled. The following provisions shall pertain
to the UCAR Pension Plan and the UCAR Carbon Savings Plan ("UCAR
Savings Plan") (collectively, the "UCAR Plans").
(1) Pension Plan. Buyer shall cause UCAR to
continue to maintain the UCAR Pension Plan for at least two
(2) years from and after the Closing Date. The UCAR Pension
Plan shall continue to recognize service and earnings
recognized under the Retirement Program Plan for Employees of
Union Carbide Corporation and its Participating Subsidiary
Companies ("UCC Plan") prior to February 25, 1991. No
transfer of assets from the UCC Plan to the UCAR Pension Plan
shall be made with respect to any Employee. Upon each
Employee's retirement from UCAR, the UCC Plan shall provide
to such Employee the benefits to which such Employee is
entitled under the UCC Plan as of the Closing Date, based on
earnings and service with UCAR prior to the Closing Date, but
only to the extent any obligation to recognize such service
and earnings exists prior to the Closing Date. UCAR may
reduce any benefit payable to such Employee under the UCAR
Pension Plan by the amount paid to such Employee under the
Union Carbide Plan. Union Carbide shall have the right to
suspend payment of benefits under the UCC Plan to any
Employee, or to any person who was an employee of Union
Carbide at any time during the twelve (12) month period
immediately preceding February 25, 1991 ("Former Employees"),
for any period during which such Employee or Former Employee
is or was either an employee of UCAR or, unless otherwise
agreed to in writing by Union Carbide, an independent
contractor or consultant performing duties for UCAR on a
substantially full-time basis. UCAR or Buyer shall notify
Union Carbide within ten (10) days of employment, as
employee, independent contractor or consultant, of any person
who was a Former Employee, or re-employment of any Employee
whose employment with UCAR terminates after the Closing Date.
(2) For purposes of Buyer's and UCAR's
obligations with respect to Employees under this Article 11,
former Employees shall be deemed to be Employees as of the
first date of employment with UCAR.
(3) Buyer shall continue to maintain the UCAR
Savings Plan for at least two (2) years from and after the
Closing Date.
(b) International. Schedule XVII attached hereto
sets forth the international benefit plans, compensation policies
and practices provided to Employees of UCAR and certain Foreign
Subsidiaries (collectively, the "International Plans"). Buyer
agrees to cause UCAR to maintain benefit plans, compensation
policies and practices which in the aggregate are substantially
equivalent to the International Plans for at least two (2) years
from and after the Closing Date.
ARTICLE 12 - SURVIVAL OF REPRESENTATIONS INDEMNIFICATION
12.1 Survival of Representations and Covenants of Buyer.
The representations and warranties set forth in Article 2 hereof
shall survive the execution, delivery and performance of this
Agreement and the consummation of the Transactions for a period of
eighteen (18) months following the Closing Date. Except as
otherwise provided in the next sentence, the covenants and
agreements of Buyer set forth in this Agreement shall survive such
execution, delivery, performance and consummation for a period of
eighteen (18) months following the Closing Date. Each covenant and
agreement of Buyer set forth in this Agreement which, by its
terms, is not required to be fully performed or complied with
prior to the Closing shall survive such execution, delivery,
performance and consummation for a period of eighteen (18) months
following the date by which such covenant or agreement is so
required to be fully performed or complied with. No suit, action
or proceeding may be commenced by Stockholders or UCAR with
respect to any claim arising out of or relating to such
warranties, representations, covenants or agreements after the
expiration of the period for which such representations,
warranties, covenants and agreements shall survive pursuant to
this Article 12.1 (the "Applicable Buyer Survival Period");
provided, however, that subject to this Article 12 and Article 22
hereof, Stockholders and UCAR shall have the right to commence a
suit, action or proceeding after the expiration of the Applicable
Buyer Survival Period with respect to claims arising out of or
relating to such representations, warranties, covenants or
agreements which shall have been asserted by Stockholders or UCAR
under Article 12.7 hereof before the expiration of the Applicable
Buyer Survival Period.
12.2 Survival of Representations and Covenants of Union
Carbide. The representations and warranties set forth in Articles
3 and 5 hereof shall survive the execution, delivery and
performance of this Agreement and the consummation of the
Transactions for a period of eighteen (18) months following the
Closing Date, except (i) in the case of representations and
warranties set forth in Article 5.9 as to which the period shall
be three years following the Closing Date and (ii) for the
indemnity set forth in Article 12.5(a)(iii) as to which the period
shall be ten years following the Closing Date. Except as
otherwise provided in the next sentence, the covenants and
agreements of Union Carbide set forth in this Agreement shall
survive such execution, delivery, performance and consummation for
a period of eighteen (18) months following the Closing Date. Each
covenant and agreement of Union Carbide set forth in this
Agreement which, by its terms, is not required to be fully
performed or complied with prior to the Closing shall survive such
execution, delivery, performance and consummation for a period of
eighteen (18) months following the date by which such covenant or
agreement is so required to be fully performed or complied with.
No suit, action or proceeding may be commenced by Buyer with
respect to any claim arising out of or relating to such
warranties, representations, covenants or agreements after the
expiration of the period for which such representations,
warranties, covenants and agreements shall survive pursuant to
this Article 12.2 (the "Applicable UCC Survival Period");
provided, however, that, subject to this Article 12 and Article 22
hereof, Buyer shall have the right to commence a suit, action or
proceeding after the expiration of the Applicable UCC Survival
Period with respect to claims arising out of or relating to such
representations, warranties, covenants and agreements which shall
have been asserted by Buyer under Article 12.7 hereof before the
expiration of the Applicable UCC Survival Period.
12.3 Survival of Representations and Covenants of
Mitsubishi. The representations and warranties set forth in
Articles 4 and 5 hereof shall survive the execution, delivery and
performance of this Agreement and the consummation of the
Transactions for a period of eighteen (18) months following the
Closing Date, except (i) in the case of representations and
warranties set forth in Article 5.9 as to which the period shall
be three years following the Closing Date and (ii) for the
indemnity set forth in Article 12.5(a)(iii) as to which the period
shall be ten years following the Closing Date. Except as
otherwise provided in the next sentence, the covenants and
agreements of Mitsubishi set forth in this Agreement shall survive
such execution, delivery, performance and consummation for a
period of eighteen (18) months following the Closing Date. Each
covenant and agreement of Mitsubishi set forth in this Agreement
which, by its terms, is not required to be fully performed or
complied with prior to the Closing shall survive such execution,
delivery, performance and consummation for a period of eighteen
(18) months following the date by which such covenant or agreement
is so required to be fully performed or complied with. No suit,
action or proceeding may be commenced by Buyer with respect to any
claim arising out of or relating to such warranties,
representations, covenants or agreements after the expiration of
the period for which such representations, warranties, covenants
and agreements shall survive pursuant to this Article 12.3 (the
"Applicable MC Survival Period"); provided, however, that, subject
to this Article 12 and Article 22 hereof, Buyer, shall have the
right to commence a suit, action or proceeding after the
expiration of the Applicable MC Survival Period with respect to
claims arising out of or relating to such representations,
warranties, covenants and agreements which shall have been
asserted by Buyer under Article 12.7 hereof before the expiration
of the Applicable MC Survival Period.
12.4 Indemnification by Buyer.
Subject to Articles 12.1, 12.7 and 22 hereof, Buyer shall
indemnify Stockholders and their respective directors, officers,
employees, affiliates, successors and assigns ("Stockholders'
Indemnitees") for, and shall hold, Stockholders' Indemnitees
harmless from and against, any and all damages, claims, losses,
liabilities and expenses (including, without limitation, interest,
penalties and reasonable legal, accounting and other expenses)
asserted against or incurred or sustained by Stockholders'
Indemnitees arising out of:
(i) any breach of any covenant or agreement
contained in Article 6,10 or 11 hereof by Buyer; or
(ii) any breach of any of the warranties or
representations set forth in Article 2 hereof.
12.5 Indemnification by Stockholders.
(a) Subject to Articles 12.2, 12.3, 12.5(d),
12.5(e), 12.7 and 22, Stockholders shall indemnify UCAR (to the
extent set forth below), Buyer, and Buyer's directors, officers,
employees, affiliates, successors and assigns (to the extent set
forth below) (collectively "Buyer's Indemnitees") for, and shall
hold Buyer's Indemnitees harmless from and against, any and all
damages, claims, losses, liabilities and expenses (including,
without limitation, interest, penalties and reasonable legal,
accounting and other expenses) asserted against or incurred or
sustained by Buyer's Indemnitees arising out of:
(i) any breach of any covenant or agreement
contained in Article 6 or 10 hereof by Stockholders (to the
extent such breach is not attributable to any action, delay
in acting or failure to act after the Closing by Buyer, UCAR
or their respective subsidiaries or Affiliates);
(ii) any breach of any of the warranties or
representations set forth in Article 5 hereof; or
(iii) any liabilities for personal injury or
property damage alleged to arise out of emissions from UCAR's
facility in Yabucoa, Puerto Rico.
(b) Subject to Articles 12.2, 12.3, 12.5(d),
12.5(e), 12.7 and 22 hereof Union Carbide shall indemnify Buyer's
Indemnitees for and shall hold Buyer's Indemnitees harmless from
and against, any and all damages, claims, losses, liabilities and
expenses (including, without limitation, interest, penalties and
reasonable legal, accounting and other expenses) asserted against
or incurred or sustained by Buyer's Indemnitees arising out of any
breach of any of the warranties or representations set forth in
Article 3 hereof.
(c) Subject to Articles 12.2, 12.3, 12.5(d),
12.5(e), 12.7 and 22 hereof Mitsubishi shall indemnify Buyer's
Indemnitees for and shall hold Buyer's Indemnitees harmless from
and against, any and all damages, claims, losses, liabilities and
expenses (including, without limitation, interest, penalties and
reasonable legal, accounting and other expenses) asserted against
or incurred or sustained by Buyer's Indemnitees arising out of any
breach of any of the warranties or representations set forth in
Article 4 hereof.
(d) Buyer's Indemnitees shall be entitled to
indemnification (i) under Article 12.5(a)(i) or (ii) with respect
to Taxes imposed on or measured by net income of UCAR or any
Subsidiary thereof ("Income Taxes") only when, and only with
respect to amounts by which, the aggregate amount of all claims,
damages, losses, liabilities and expenses for Income Taxes with
respect to which Buyer's Indemnitees would otherwise be entitled
to indemnification under Article 12.5(a)(i) or (ii) hereof with
respect to Income Taxes exceeds Ten Million U.S. Dollars
($10,000,000); (ii) under Article 12.5(a)(iii) hereof only when,
and only with respect to amounts by which, the aggregate amount of
all claims, damages, losses, liabilities and expenses with respect
to which Buyer's Indemnitees would otherwise be entitled to
indemnification under Article 12.5(a)(iii) hereof exceeds Twenty
Million U.S. Dollars ($20,000,000); and (iii) under Articles
12.5(a)(i) or (ii), (b) or (c) hereof with respect to items other
than Income Taxes only when, and only with respect to amounts by
which, the aggregate amount of all claims, damages, losses,
liabilities and expenses with respect to which Buyer's Indemnitees
would otherwise be entitled to indemnification under Articles
12.5(a)(i) or (ii), (b) and (c) hereof, with respect to items
other than Income Taxes, exceeds Ten Million U.S. Dollars
($10,000,000). In no event shall the aggregate amount of
indemnification to which Buyer's Indemnitees would otherwise be
entitled under Articles 12.5(a)(i), (a)(ii), (b) and (c) hereof,
with respect to items other than Income Taxes, hereof exceed Fifty
Million U.S. Dollars ($50,000,000). The limitations contained in
this Article 12.5(d) shall not apply to indemnities relating to
Articles 10.1(a) or 10.1(b).
(e) If any event shall occur or circumstance shall
exist which would otherwise entitle Buyer's Indemnitees to
indemnification under Articles 12.5(a), (b) or (c) hereof, no
loss, damage, claim, liability or expense shall be deemed to have
been asserted against or incurred or sustained by Buyer's
Indemnitees to the extent of any proceeds recovered or recoverable
by Buyer, UCAR or any of their respective subsidiaries or
Affiliates from any third party (including, without limitation,
any insurance company) with respect thereto. Buyer agrees (i) in
good faith, to diligently seek recovery, and to cause UCAR, Buyer
and their respective subsidiaries and Affiliates to diligently
seek to recover, at its and their cost and expense, from all third
parties (including, without limitation, all insurance companies)
with respect to all losses, claims, damages, liabilities and
expenses with respect to which Buyer's Indemnitees make or may
make a claim for indemnification hereunder and (ii) to keep
Stockholders fully and promptly informed of all material matters
related thereto. No insurance recovery by UCAR or any of its
Subsidiaries will reduce the limits on indemnification specified
in Article 12.5(d); provided, that in no way shall the foregoing
be construed to apply to any payment by a Stockholder under
Article 12.5, including payments by a Stockholder using the
proceeds from an insurance policy held by either of them or their
Affiliates.
(f) Payments pursuant to this Article 12.5 arising
out of any breach of any warranties or representations set forth
in Article 5 hereof or any covenants or agreements under this
Agreement relating to UCAR or any of its Subsidiaries shall be
made to UCAR. Other payments pursuant to this Article 12.5 shall
be made as Buyer shall direct.
(g) The indemnities provided by Stockholders under
this Article 12.5 with respect to Taxes shall not be diminished as
a result of any additional disclosure provided pursuant to Article
6.6 hereof after November 23, 1994.
(h) Notwithstanding anything to the contrary set
forth in this Agreement, if any Taxes are required to be withheld
(other than withholding Taxes under section 1445 of the Code), but
are not withheld, from a payment made to a Stockholder pursuant to
this Agreement, such Stockholder shall indemnify UCAR or Buyer and
shall hold UCAR or Buyer harmless from and against, any and all
damages, claims, losses, liabilities and expenses (including
without limitation, interest, penalties and reasonable legal,
accounting and other expenses) asserted against or sustained by
UCAR or Buyer as a result of UCAR or Buyer failing to withhold any
Taxes required to be withheld. If UCAR fails to withhold with
respect to the Redemption pursuant to section 1445 of the Code and
the IRS later asserts a claim against Buyer or UCAR with respect
to such failure to withhold, Mitsubishi shall indemnify Buyer or
UCAR, as the case may be, for any Taxes or interest thereon (and
associated legal, accounting and other expenses), but not for any
penalties, additions to Tax or interest thereon (and associated
legal, accounting and other expenses).
12.6 Indemnification by UCAR.
(a) As used herein, the term "Stockholders Group"
shall mean Mitsubishi, Union Carbide, their respective
subsidiaries, the shareholders, partners, directors, officers,
employees, agents, representatives and consultants of Mitsubishi,
Union Carbide and their respective subsidiaries and the
successors, transferees and assigns of Mitsubishi, Union Carbide,
their respective subsidiaries and the shareholders, partners,
directors, officers, employees, agents, representatives and
consultants of Mitsubishi, Union Carbide and their respective
subsidiaries.
(b) Except as otherwise provided in Article
12.6(c) hereof, after the Closing, UCAR shall, or shall cause its
subsidiaries to, indemnify the Stockholders Group for, and shall
hold, or shall cause its subsidiaries to hold, the Stockholders
Group harmless from, any and all claims, demands, allegations,
suits, actions, proceedings, investigations, liabilities,
obligations, losses, expenses, expenditures, costs, duties, fines,
fees, taxes, levies, imposts, charges, assessments, deficiencies,
penalties, damages, settlements and judgments of any kind or
nature whatsoever asserted against or incurred or sustained by any
or all of the members of the Stockholders Group arising out of,
related to or associated with UCAR, its subsidiaries or Affiliates
or the conduct of the Business, regardless of whether they are
reflected in any of the Schedules attached hereto, regardless of
whether they arise out of, relate to or are associated with events
occurring or circumstances existing before or after the Closing,
regardless of whether they are asserted, incurred or sustained
before or after the Closing, regardless of when they became fixed
or known, regardless of whom they are asserted by or against,
regardless of where they are asserted, incurred or sustained, and
regardless of whether they arise out of, relate to or are
associated with health, safety, the environment, personal injury,
contracts, property damage, employment, negligence, recklessness,
violation of law, rule or regulation, misrepresentation, strict
liability or product liability (collectively, the "Business
Liabilities").
(c) Notwithstanding anything contained in Article
12.6(b) hereof, any now existing contracts, agreements or
commitments or any agreement contemplated hereby to the contrary,
Stockholders agree that UCAR shall not be obligated to indemnify
or cause its or their respective subsidiaries or Affiliates to
indemnify any member of the Stockholder Group for, or to hold or
cause its subsidiaries or Affiliates to hold them harmless from,
any of the Business Liabilities under Article 12.6(b) hereof (i)
where indemnification in respect of the same Business Liabilities
would deprive Buyer or UCAR of the benefit of indemnification to
which it is entitled pursuant to Articles 12.5 (a), (b) and (c)
hereof or (ii) where such Business Liabilities arise out of a
breach by any of them of any contract, agreement or commitment
entered into by any of them with UCAR or any of its subsidiaries
or Affiliates after the date hereof.
12.7 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, a Person who
may be entitled to indemnification hereunder (the "Indemnitee")
shall promptly give the Party who may be obligated to provide such
indemnification (the "Indemnitor") written notice of any Loss (as
defined in Article 12.7(b) hereof) which the Indemnitee has
determined has given or could give rise to a claim for
indemnification hereunder (a "Notice of Claim"). A Notice of Claim
shall specify in reasonable detail the nature and all known
particulars related to a Loss. The Indemnitor shall perform its
indemnification obligations in respect of a Loss described in a
Notice of Claim under Articles 12.4, 12.5, or 12.6 hereof, as the
case may be, within thirty (30) days after the Indemnitor shall
have received such Notice of Claim; provided, however, such
obligation shall be suspended (i) so long as the Indemnitor is in
good faith performing its obligations under Article 12.7(c) hereof
with respect to such Loss and (ii) in the case of a Notice of
Claim given by Buyer's Indemnitees, until Buyer's Indemnitees
shall have fully performed their respective obligations under
Article 12.5(c) hereof with respect to a Loss for which Buyer's
Indemnitees may be entitled to recovery from a third party
(including, without limitation, any insurance company).
(b) As used in this Article 12.7, the term "Loss"
shall mean a damage, claim, suit, notice, loss, liability,
expense, cost, tax, penalty or interest described in Articles
12.4, 12.5(a), 12.5(b) and 12.5(c), and one of the Business
Liabilities or a fee, commission, compensation or payment
described in Article 15.1 hereof, as the case may be.
(c) Subject to Articles 12.7(d), 12.7(e) and
12.7(f) hereof, the Indemnitor shall have the sole and exclusive
right and obligation in good faith and at its own cost and
expense, to cure, remediate, mitigate, remedy or otherwise handle
any event or circumstance which gives rise to a Loss (including
events and circumstances which can be cured, remediated, mitigated
or remedied through the expenditure of money and events and
circumstances which give rise to a Loss which can be measured in
terms of money), regardless of whether such Loss arises out of a
breach of or default under any representation, warranty, covenant
or agreement contained in this Agreement or otherwise. Such right
and obligation shall include, without limitation, (i) the right to
investigate any such event or circumstance, (ii) the sole and
exclusive right and obligation to cure, mitigate, remediate,
remedy and otherwise handle any such event or circumstance on such
terms and conditions and by such means as the Indemnitor may
determine, in its sole discretion, and (iii) the sole and
exclusive right to defend, contest or otherwise oppose any third
party claim, demand, suit, action or proceeding related to such
event or circumstance with legal counsel selected by it. The
Indemnitor shall promptly inform the Indemnitee of all material
developments related to any such event or circumstance.
Notwithstanding anything contained herein (other than Articles
12.7(d), 12.7(e) and 12.7(f), hereof) to the contrary, the
Indemnitee shall have the right, but not the obligation, to
participate, at its own cost and expense, in the defense, contest
or other opposition of any such third party claim, demand, suit,
action or proceeding through legal counsel selected by it and
shall have the right, but not the obligation, to assert any and
all cross-claims or counterclaims which it may have. So long as
the Indemnitor is in good faith performing its obligations under
this Article 12.7(c), the Indemnitee shall, and shall cause its
subsidiaries to, (i) at all times, at its and their own cost and
expense, cooperate in all reasonable ways with, make its and their
relevant files and records available for inspection and copying
by, make its and their employees reasonably available to and
otherwise render reasonable assistance to the Indemnitor upon
request and (ii) not compromise or settle any such claim, demand,
suit, action or proceeding without the prior written consent of
the Indemnitor. If the Indemnitor fails to perform its
obligations under this Article 12.7(c), the Indemnitee shall have
the right, but not the obligation, to take the actions which the
Indemnitor would have had the right to take in connection with the
performance of such obligations and, if the Indemnitee is entitled
to indemnification hereunder in respect of the event or
circumstance as to which the Indemnitee takes such actions, then
the Indemnitor shall also indemnify the Indemnitee for all of the
legal, accounting and other costs, fees and expenses reasonably
and actually incurred in connection therewith. If the Indemnitor
proposes to settle or compromise any such third party action,
demand, claim, suit or proceeding, the Indemnitor shall give
written notice to that effect (together with a statement in
reasonable detail of the terms and conditions of such settlement
or compromise) to the Indemnitee a reasonable time prior to
effecting such settlement or compromise. Notwithstanding anything
contained herein (other than Article 12.7(d) hereof) to the
contrary, the Indemnitee shall have the right (i) to object to the
settlement or compromise of any such third party action, demand,
claim, suit or proceeding whereupon (A) the Indemnitee will assume
the defense, contest or other opposition of any such third party
action, demand, claim, suit or proceeding for its own account and
as if it were the Indemnitor and (B) the Indemnitor shall be
released from any and all liability with respect to any such third
party action, demand, claim, suit or proceeding to the extent that
such liability exceeds the liability which the Indemnitor would
have had in respect of such a settlement or compromise; provided,
however, that the Indemnitor shall not be so released if the
reason for the Indemnitee's so objecting is that, in the
reasonable opinion of the Indemnitee, such settlement or
compromise would have a materially adverse effect on the conduct
of the Business by UCAR and the Subsidiaries as presently
conducted or upon the Indemnitee, or (ii) to assume, at any time
by giving written notice to that effect to the Indemnitor, the
cure, mitigation, remediation, remedy or other handling of such
event or circumstance and the defense, contest or other opposition
of any such third party action, demand, claim, suit or proceeding
for its own account whereupon the Indemnitor shall be released
from any and all liability with respect to such event or
circumstance and such third party action, demand, claim, suit or
proceeding.
(d) Stockholders shall have the right, at their
own cost and expense, to participate in the defense, contest or
other opposition of all of the actions, claims, demands, suits or
proceedings which involve events occurring or circumstances
existing prior to the Closing with respect to the Business or the
properties owned, leased or used by UCAR or any of the
Subsidiaries and which, in the sole opinion of Stockholders, might
have an adverse impact on Stockholders or their respective
subsidiaries or Affiliates. Stockholders shall give prompt
written notice to Buyer and UCAR of their election to exercise
such right. After the Closing, UCAR shall not, and shall not
permit the Subsidiaries to, settle or compromise any action,
demand, claim, suit or proceeding in respect of which Stockholders
shall have given such a notice without the prior written consent
of Stockholders. If Stockholders do not consent to such a
settlement or compromise, Stockholders will assume the defense,
contest or other opposition of such action, demand, claim, suit or
proceeding for their own account whereupon UCAR and the
Subsidiaries shall be released from any liability with respect to
such action, claim, demand, suit or proceeding to the extent that
such liability exceeds the liability which UCAR and the
Subsidiaries would have had in respect of such a settlement or
compromise. Except as otherwise provided in the preceding
sentence, neither such right nor the exercise thereof shall be
construed to modify, expand or enlarge the obligations or
liabilities of Stockholders hereunder in any respect.
(e) Each Party shall, and shall cause its
subsidiaries to, take all actions which may be necessary to enable
the Indemnitor to exercise its rights and perform its obligations
under Article 12.7(c) hereof.
(f) Notwithstanding anything contained herein to
the contrary, each Party shall use, and shall cause its
subsidiaries and Affiliates to use, all reasonable efforts to
mitigate any and all Losses, in respect of which it may be
entitled to indemnification hereunder.
ARTICLE 13 - PUBLICITY; CONFIDENTIALITY
13.1 Publicity. No Party shall or shall permit its
subsidiaries to issue any publicity, release or announcement
concerning the execution and delivery of this Agreement, the
provisions hereof or the Transactions without the prior written
approval of the form and content of such publicity, release or
announcement by the other Parties hereto; provided, however, that
no such approval shall be required when such publicity, release or
announcement is required by (i) any applicable law, ordinance,
rule or regulation, (ii) any applicable rules or regulations of a
national or foreign stock exchange or the Automated Quotation
System maintained by the National Association of Securities
Dealers, Inc. or (iii) any order, writ, judgment, award, edict or
decree of any court of competent jurisdiction or any governmental
or quasi-governmental agency, authority or instrumentality of
competent jurisdiction and, provided further, that, prior to
issuing any publicity, release or announcement without such prior
written approval, the Party issuing or whose subsidiary is issuing
such publicity, release or announcement shall have given
reasonable prior notice to the other Parties of such intended
issuance and, if requested by any of the other Parties, shall have
used reasonable efforts at its own cost and expense to obtain a
protective order or similar protection for the benefit of such
other Party.
13.2 Confidentiality.
(a) All data, reports, records and other
information of any kind received by a Party or the Affiliates,
subsidiaries, shareholders, directors, partners, officers,
employees, agents, representatives, consultants or lenders of a
Party (such Party being hereinafter referred to as the "Receiving
Party") from one of the other Parties or the Affiliates,
subsidiaries, shareholders, partners, directors, officers,
employees, agents, representatives, consultants or lenders of one
of the other Parties (such other Party being hereinafter referred
to as the "Delivering Party") under this Agreement or in
connection with the Transactions shall be treated as confidential
(collectively, "Confidential Information"). Except as otherwise
provided herein, the Receiving Party shall not use (and shall not
permit its Affiliates, subsidiaries, shareholders, directors,
officers, partners, employees, agents, representatives,
consultants or lenders to use) Confidential Information for its
own (or their own) benefit and shall use all reasonable efforts
(and shall cause its Affiliates, subsidiaries, shareholders,
partners, directors, officers, employees, agents, representatives,
consultants and lenders to use all reasonable efforts) to maintain
the confidentiality of Confidential Information. If the Receiving
Party or any of its Affiliates, subsidiaries, shareholders,
directors, officers, partners, employees, agents, representatives,
consultants or lenders is required to disclose Confidential
Information by or to any court of competent jurisdiction or any
governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction, the Receiving Party
shall, prior to such disclosure, immediately notify the Delivering
Party of such requirement and all particulars related to such
requirement. The Delivering Party shall have the right, at its
expense, to object to such disclosure and to seek confidential
treatment of any Confidential Information to be so disclosed on
such terms as it shall determine.
(b) The restrictions set forth in Article 13.2(a)
hereof shall not apply to the use or disclosure of Confidential
Information to the extent, but only to the extent, (i) permitted
or required pursuant to any other agreement between or among the
Parties (or their respective subsidiaries and Affiliates), (ii)
necessary by a Party (or its subsidiaries or Affiliates) in
connection with exercising its (or their) rights or performing its
(or their) duties or obligations under this Agreement or any other
agreements, instruments and documents contemplated hereby or
thereby or the other agreements described in clause (i) of this
Article 13.2(b), (iii) contemplated by the last two (2) sentences
of Article 13.2(a) hereof or (iv) that the Receiving Party can
demonstrate Confidential Information (A) is or becomes generally
available to the public through no fault or neglect of the
Receiving Party, (B) is received in good faith on a non-
confidential basis from a third party who discloses such
Confidential Information without violating any obligations of
secrecy or confidentiality or (C) was already possessed at the
time of receipt as shown by prior dated written records. The
restrictions set forth in Article 13.2(a) hereof shall not apply
to the use or disclosure by UCAR or any of its subsidiaries or
Affiliates of Confidential Information which consists of data,
reports, records and information relating to the Business or the
ownership, leasing or use of the properties owned, leased or used
by UCAR or any of its subsidiaries or Affiliates and which is used
or disclosed in connection with the conduct of the Business.
(c) For the purposes of this Article 13.2, (i)
information which is specific shall not be deemed to be within an
exception set forth in Article 13.2(b) hereof merely because it is
embraced by general information which is within such an exception
and (ii) a combination of information shall not be deemed to be
within an exception set forth in Article 13.2(b) hereof merely
because individual aspects of such combination are within such an
exception unless the combination of information itself, its
principle of operation and its value or advantages are within such
an exception.
13.3 Survival. This Article 13 shall survive the
termination of this Agreement for any reason and the consummation
of the Transactions.
ARTICLE 14 - NOTICES
All notices required or permitted to be given pursuant to
this Agreement shall be given in writing in the English language,
shall be transmitted by personal delivery, by registered or
certified mail, return receipt requested, postage prepaid, or by
telecopier or other electronic means and shall be addressed as
follows:
When Mitsubishi is the intended recipient:
Mitsubishi Corporation
6-3 Marunouchi 2-chome
Chiyoda-ku
Tokyo 100-86, Japan
Attention: General Manager of the Carbon Division
Telecopy No: (81-3) 3210-8357
When Union Carbide is the intended recipient:
Union Carbide Corporation
Corporate Acquisitions and Divestitures
39 Old Ridgebury Road
Danbury, Connecticut 06817
Attention: Mr. Robert F.X. Fusaro
Associate General Counsel
Telecopy No: (1-203)794-4423
When UCAR is the intended recipient:
UCAR International Inc.
39 Old Ridgebury Road
Danbury, Connecticut 06817
Attention: President
Telecopy No: (1-203) 794-3180
When Buyer is the intended recipient:
UCAR International Acquisition Inc.
c/o Blackstone Capital Partners II
Merchant Banking Fund L.P.
118 North Bedford Road
Suite 300
Mount Kisco, New York 10549
Attention: Mr. David Stockman
Telecopy: (1-914) 241-3786
A Party may designate a new address to which notices required or
permitted to be given pursuant to this Agreement shall thereafter
be transmitted by giving written notice to that effect to the
other Parties. Each notice transmitted in the manner described in
this Article 14 shall be deemed to have been given, received and
become effective for all purposes at the time it shall have been
(i) delivered to the addressee as indicated by the return receipt
(if transmitted by mail), the affidavit of the messenger (if
transmitted by personal delivery) or the answer back or call back
(if transmitted by telecopier or other electronic means) or (ii)
presented for delivery to the addressee as so indicated during
normal business hours, if such delivery shall have been refused
for any reason.
ARTICLE 15 - BROKERAGE FEES; CERTAIN EXPENSES
15.1 Brokerage Fees. Each Party agrees to indemnify the
other Parties for, and to hold the other Parties harmless from,
any claim or liability for any fee, commission, compensation or
other payment by any broker, finder or similar agent who claims to
have been, or who was in fact, engaged by or on behalf of it in
connection with the Transactions in accordance with the procedure
set forth in Article 12.7 hereof. Without limiting the foregoing,
Stockholders agree to pay all fees and expenses of Goldman, Sachs
& Co. and CS First Boston Corporation relating to the
Transactions.
15.2 Certain Expenses. Except as otherwise provided in
this Agreement and regardless of whether the Transactions are
consummated, each Party agrees to pay all expenses, fees and costs
(including, without limitation, legal, accounting and consulting
expenses) incurred by it in connection with the Transactions.
ARTICLE 16 - GOVERNING LAW; FORUM
The validity, interpretation, performance and enforcement of
this Agreement shall be governed by the law of the State of New
York (without giving effect to the laws, rules or principles of
the State of New York regarding conflicts of laws). Each Party
agrees that any proceeding arising out of or relating to this
Agreement or the breach or threatened breach of this Agreement
shall be commenced and prosecuted in a court in the State of New
York. Each Party consents and submits to the non-exclusive
personal jurisdiction of any court in the State of New York in
respect of any such proceeding. Each Party consents to service of
process upon it with respect to any such proceeding by registered
mail, return receipt requested, and by any other means permitted
by applicable laws and rules. Each Party waives any objection
that it may now or hereafter have to the laying of venue of any
such proceeding in any court in the State of New York and any
claim that it may now or hereafter have that any such proceeding
in any court in the State of New York has been brought in an
inconvenient forum. Each Party waives trial by jury in any such
proceeding.
ARTICLE 17 - BINDING EFFECT; ASSIGNMENT; THIRD PARTY BENEFICIARIES
This Agreement shall be binding upon the Parties and their
respective successors and assigns and shall inure to the benefit
of the Parties and their respective successors and permitted
assigns. No Party shall assign any of its rights or delegate any
of its duties under this Agreement (by operation of law or
otherwise) without the prior written consent of the other Parties.
Any assignment of rights or delegation of duties under this
Agreement by a Party without the prior written consent of the
other Parties if such consent is required hereby, shall be void;
provided, that Buyer may, without such prior written consent,
assign all of its rights and obligations under this Agreement on
or prior to the Closing to one or more of its Affiliates; and
provided further, that Buyer or UCAR may without such prior
written consent, for collateral security purposes assign its
rights (but not its obligations) effective on or after the Closing
Date to providers of financing in connection with the
Transactions. No Person shall be, or be deemed to be, a third
party beneficiary of this Agreement.
ARTICLE 18 - ENTIRE AGREEMENT
This Agreement and the Schedules and Exhibits attached hereto
constitute the entire contract among the Parties with respect to
the subject matter hereof and cancel and supersede all of the
previous or contemporaneous contracts, representations, warranties
and understandings (whether oral or written), including without
limitation, the Counteroffer, dated November 14, 1994 from
Mitsubishi and Union Carbide to the Buyer, by, between or among
the Parties with respect to the subject matter hereof. Except as
otherwise provided in Articles 5.21(a) and 7(vi) hereof, all of
the Schedules attached hereto shall be deemed to be dated the date
hereof. Except for the representations and warranties expressly
set forth in this Agreement, Buyer disclaims reliance upon (i) any
representations, warranties or guarantees (whether express or
implied and whether oral or written) by Stockholders, UCAR, any of
the Subsidiaries or any of their respective Affiliates, officers,
employees, agents or representatives (including, without
limitation, any projections of future sales, revenues, expenses or
earnings and any statements regarding the prospects of the
Business) or (ii) any other information with respect to the
Business, UCAR or the Subsidiaries provided by or on behalf of
them. Buyer represents and warrants that it has relied on its own
projections in connection with the Transactions. Each Party
agrees that the other Parties have the right to rely upon the
representations, warranties, covenants and agreements of such
party contained in this Agreement. Except as otherwise provided
in Articles 20 and 21 hereof, nothing contained in any document or
instrument of conveyance, transfer, assignment or delivery
executed or delivered at the Closing pursuant to this Agreement
shall amend, extend, modify, renew or alter in any manner any
representation, warranty, covenant, agreement or indemnity
contained herein. Nothing contained in this Agreement or in any
of the Schedules or Exhibits attached hereto shall constitute or
be interpreted or construed as an admission by any Party or any of
its subsidiaries or Affiliates of liability to third parties,
whether under any foreign, federal, state or local laws, rules,
regulations or ordinances or otherwise, or as an admission that
any Party or any of its subsidiaries or Affiliates are in
violation of or have ever violated any such laws, rules,
regulations or ordinances.
ARTICLE 19 - FURTHER ASSURANCES
At any time and from time to time after the Closing, the
Parties shall execute, deliver and acknowledge such other
documents and take such further actions as may be reasonably
required in order to consummate the Transactions.
ARTICLE 20 - AMENDMENTS
No addition to, and no cancellation, renewal, extension,
modification or amendment of, this Agreement shall be binding upon
a Party unless such addition, cancellation, renewal, extension,
modification or amendment is set forth in a written instrument
which states that it adds to, amends, cancels, renews, extends or
modifies this Agreement and which is executed and delivered on
behalf of such Party by an officer of, or attorney-in-fact for,
such Party. No addition to, and no cancellation, renewal,
extension, modification or amendment of, the Tradename and
Trademark License Agreement, dated as of November 1, 1990, (the
"Trademark License") between Union Carbide and UCAR Carbon
Technology Corporation ("UCAR Technology"), by UCAR or UCAR
Technology, respectively, or to which UCAR or UCAR Technology,
respectively, is a party shall be effective unless Buyer shall
have given its prior written approval thereto. [Note: At the
Closing Date the Trademark License will have a remaining term of
not less than 20 years.]
ARTICLE 21 - WAIVERS
No waiver of any provision of this Agreement shall be binding
upon a Party unless such waiver is expressly set forth in a
written instrument which is executed and delivered on behalf of
such Party by an officer of, or attorney-in-fact for, such Party.
Such waiver shall be effective only to the extent specifically set
forth in such written instrument. Neither the exercise (from time
to time and at any time) by a Party of, nor the delay or failure
(at any time or for any period of time) to exercise, any right,
power or remedy shall constitute a waiver of the right to
exercise, or impair, limit or restrict the exercise of, such
right, power or remedy or any other right, power or remedy at any
time and from time to time thereafter. No waiver of any right,
power or remedy of a Party shall be deemed to be a waiver of any
other right, power or remedy of such Party or shall, except to the
extent so waived, impair, limit or restrict the exercise of such
right, power or remedy.
ARTICLE 22 - REMEDIES LIMITED
The sole and exclusive rights, powers and remedies of the
Parties, other than such injunctive or other equitable remedies as
may be available to a Party, for a breach of or default under this
Agreement (including, without limitation, a breach of or default
under any of the representations, warranties, covenants or
agreements contained in this Agreement) shall be termination under
Article 9 hereof and indemnification under Articles 12 and 15
hereof, in each case limited as set forth therein. None of the
Parties shall, for any reason or under any legal theory, be liable
for any special, indirect, incidental or consequential damages
arising out of any breach of or default under this Agreement, even
if informed of the possibility of such damages in advance.
ARTICLE 23 - HEADINGS; COUNTERPARTS
The headings set forth in this Agreement have been inserted
for convenience of reference only, shall not be considered a part
of this Agreement and shall not limit, modify or affect in any way
the meaning or interpretation of this Agreement. This Agreement
may be signed in any number of counterparts, each of which (when
executed and delivered) shall constitute an original instrument,
but all of which together shall constitute one and the same
instrument. This Agreement shall become effective and be deemed
to have been executed and delivered by all of the Parties at such
time as counterparts shall have been executed and delivered by
each of the Parties, regardless of whether each of the Parties has
executed the same counterpart. It shall not be necessary when
making proof of this Agreement to account for any counterpart
other than a sufficient number of counterparts which, when taken
together, contain signatures of all of the Parties.
ARTICLE 24 - SEVERABILITY
If any provision of this Agreement shall hereafter be held to
be invalid, unenforceable or illegal in whole or in part, in any
jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and legal while
preserving the intent of the Parties as expressed in, and the
benefits to the Parties provided by, this Agreement or (ii) if
such provision cannot be so reformed, such provision shall be
severed from this Agreement and an equitable adjustment shall be
made to this Agreement (including, without limitation, addition of
necessary further provisions to this Agreement) so as to give
effect to the intent as so expressed and the benefits so provided.
Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other
jurisdiction or under any other circumstances. Neither such
holding nor such reformation or severance shall affect or impair
the legality, validity or enforceability of any other provision of
this Agreement.
ARTICLE 25 - CERTAIN REFERENCES
25.1 Affiliate. As used herein, reference to an
affiliate means, with respect to any Person, any other Person
controlling, controlled by or under common control with, or the
parents, spouse, lineal descendants or beneficiaries of, such
Person. The term "control" (including the terms "controlling",
"controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause
the direction of management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
25.2 Knowledge. As used herein, references to knowledge
of Union Carbide, Mitsubishi or UCAR shall mean the actual
knowledge of a senior officer or a director of Union Carbide or
Mitsubishi, as the case may be, or of a director of UCAR or the
Chairman, Chief Executive Officer, President, Chief Financial
Officer, Chief Operating Officer, Secretary, Treasurer or a Vice
President of UCAR.
25.3 Person. As used herein, references to a person
shall mean an individual or an entity, including, without
limitation, a corporation, limited liability company, partnership,
limited liability partnership, joint venture, trust, joint stock
company, association, unincorporated organization or group acting
in concert.
ARTICLE 26 - INDEX TO DEFINED TERMS
The capitalized terms set forth below have been defined
herein in the respective Articles or other parts hereof set forth
below:
Defined Term Article
Acquired Shares 1.1(a)
Acquisition 1.1(a)
Adjustment Amount 1.5(a)
Affiliates 25.1
Agreement Preamble
Applicable Buyer Survival Period 12.1
Applicable MC Survival Period 12.3
Applicable UCC Survival Period 12.2
Arbitrator 1.5(e)
Audited Financial Statements 5.8(a)
Balance Sheet Date 5.8(b)
Benefits 11.1
Benefit Plan 5.21(b)(i)
Borrowings 1.1(b)
Business 2nd Whereas
Business Records 10.2(a)
Business Liabilities 12.6(b)
Buyer Preamble
Buyer's Indemnitees 12.5(a)
Capital Stock 1st Whereas
CERCLA 5.17(a)(vi)
Class A Common Stock 5.6
Class B Common Stock 5.6
Closing 1.2(a)
Closing Date 1.2(a)
Closing Place 1.2(a)
Code 5.21(b)(ii)
Confidential Information 13.2(a)
Contaminant 5.17(d)(i)
Deferral Date 1.2(a)
Delivering Party 13.2(a)
Dividend 1.1(b)
Documents 1.6
Employee(s) 11.1
Environment and Environmental 5.17(d)(ii)
EPA 5.17(a)(vi)
ERISA Affiliate 5.21(b)(iii)
ERISA 5.21(b)(iv)
EU 6.4(b)
Foreign Subsidiary 1.2(a)
Former Employees 11.1(a)
Hold Order 10.2(b)(ii)
HS&EA Laws 5.17(d)(iii)
HS&EA Liabilities and Costs 5.17(d)(iv)
HS&EA Permits 5.17(d)(v)
HSR Act 6.4(a)
Income Taxes 12.5(d)(i)
Indemnitee 12.7(a)
Indemnitor 12.7(a)
International Plans 11.1(b)
IRS 5.21(b)(vi)
Knowledge 25.2
Leased Real Property 5.10(a)
Lenders 1.1(b)
Loss 12.7(b)
Material Adverse Effect 5.1
Mitsubishi Preamble
Net Indebtedness 1.5(b)
Net Worth 1.5(b)
New Non-Foreign Subsidiary 1.2(a)
New Foreign Subsidiaries 1.2(b)(ii)
Notice of Claim 12.7(a)
Notice of Dispute 1.5(d)
Original Schedules 6.6
Other Scheduled Contracts 5.13
Owned Real Property 5.10(a)
Parties 4th Whereas
Party 4th Whereas
PBGC 5.21(b)(v)
Peat Marwick 5.8(a)
Pension Plan 5.21(b)(vii)
Person 25.3
Post Closing 1.5(g)
Purchase Price 1.1(a)
Real Property 5.10(a)
Real Property Leases 5.10(a)
Recapitalization Amount 1.1(b)
Receiving Party 13.2(a)
Redeemed Shares 1.1(b)
Redemption 1.1(b)
Redemption Price 1.1(b)
Release 5.17(d)(vi)
Remedial Action 5.17(d)(vii)
Repayment 1.1(b)
Required Consents 6.4(d)
Statement 1.5(c)
Stockholder Transactional Taxes 10.1(a)
Stockholders 1st Whereas
Stockholders Indemnitees 12.4
Stockholders Group 12.6(a)
Subsidiaries 5.3(i)
Subsidiary 5.3(i)
Tax 5.9(c)
Taxes 5.9(c)
Tax Return 5.9(d)
Termination Date 9.1(ii)
Trademark License 20
Transactional Taxes 10.1(a)
Transactions 1.1(b)
TSCA 5.17(a)(viii)
Unaudited Financial Statements 5.8(b)
UCAR Preamble
UCAR Pension Plan 11.1
UCAR Plans 11.1(a)
UCAR Savings Plan 11.1(a)
UCAR Technology 20
UCC Plan 11.1(a)(1)
Union Carbide Preamble
IN WITNESS WHEREOF, the Parties have duly executed and
delivered this Agreement as of the date first above written.
UNION CARBIDE CORPORATION
By: /s/ Robert D. Kennedy
Name: Robert D. Kennedy
Title: Chairman and Chief Executive Officer
MITSUBISHI CORPORATION
By: /s/ Hiro Kawamura
Name: Hiro Kawamura
Title: Managing Director
UCAR INTERNATIONAL INC.
By: /s/ Robert P. Krass
Name: Robert P. Krass
Title: President and Chief Executive Officer
UCAR INTERNATIONAL ACQUISITION INC.
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Chairman
GUARANTY
The undersigned unilaterally, unconditionally and irrevocably
guarantee to the Stockholders the full and timely performance by
Buyer or its assigns of all obligations of Buyer and such assigns
under the Recapitalization and Stock Purchase and Sale Agreement
dated as of November 14, 1994, among Union Carbide Corporation,
Mitsubishi Corporation, UCAR International Inc., and UCAR
International Acquisition Inc., including, without limitation, all
obligations for the payment of all damages, costs and expenses
which may become payable in accordance therewith; provided that
the obligations of the undersigned pursuant to this guaranty shall
be limited in amount by the aggregate sum of Eighty Million
Dollars ($80,000,000). This Guaranty has been duly authorized,
executed and delivered by the undersigned and constitutes a legal,
valid and binding agreement enforceable against the undersigned in
accordance with its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws which
may affect creditors' rights and remedies generally and by
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). The undersigned
unconditionally waive any and all notices of any nature in
connection with their guaranty obligations pursuant to this
Guaranty and also unconditionally waive any and all rights they
might otherwise have to require that the Stockholders first make a
demand or institute a proceeding against the Buyer or any other
person, entity or enterprise, or to resort to any security or
other guaranty, as conditions to the obligations of the
undersigned under this Guaranty.
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: Blackstone Management
Associates II L.P.,
General Partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: General Partner
By: /s/ Stephen A. Scharzman
Name: Stephen A. Schwarzman
Title: General Partner
BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P.
By: Blackstone Management
Associates II L.P.,
General Partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: General Partner
By: /s/ Stephen A. Schwarzman
Name: Stephen A. Schwarzman
Title: General Partner