PURCHASE AND SALE AGREEMENT

EXHIBIT 2.1

Execution Copy

 

PURCHASE AND SALE AGREEMENT

Dated as of November 27, 2006

AMONG

GRAFTECH INTERNATIONAL LTD.

UCAR SNC

UCAR HOLDINGS

AND

ALCAN FRANCE

 

 

 

TABLE OF CONTENTS

 

Page

 

 

 

ARTICLE 1		DEFINITIONS; INTERPRETATION			1
	SECTION 1.1		Definitions		1
	SECTION 1.2		Interpretation	18
	SECTION 1.3		Exhibits	19
ARTICLE 2		PURCHASE AND SALE OF PURCHASED ASSETS		20
	SECTION 2.1		Transfer of Purchased Assets	20
	SECTION 2.2		Excluded Assets	23
	SECTION 2.3		Assumed Liabilities	24
	SECTION 2.4		Excluded Liabilities	25
	SECTION 2.5		Purchase Price	26
	SECTION 2.6		Purchase Price and Other Closing Date Payments	26
	SECTION 2.7		Post Closing Adjustments	27
	SECTION 2.8		Payment Mechanics	31
	SECTION 2.9		Allocation	31
ARTICLE 3		closing matters		31
	SECTION 3.1		Closing; Closing Obligations and Deliveries	31
	SECTION 3.2		Recording of Documents; Transactional Taxes	33
	SECTION 3.3		Subsidiary Purchase Agreements	33
	SECTION 3.4		Permits and Undertakings	34
	SECTION 3.5		Assignment of Assets	36

 

SECTION 3.6

Recapitalization of CS Brazil Operating and Repayment of Indebtedness for Borrowed Money           37

 

SECTION 3.6

Recapitalization of CS Brazil Operating and Repayment of Indebtedness for Borrowed Money           37

 

ARTICLE 4		REPRESENTATIONS AND WARRANTIES REGARDING BUYER		38
	SECTION 4.1		Organization	38
	SECTION 4.2		Authorization, Execution and Enforceability	39
	SECTION 4.3		No Breach	39
	SECTION 4.4		Consents	40
	SECTION 4.5		Purchase for Investment	40
	SECTION 4.6		Brokers; Finders	40
	SECTION 4.7		Engagement Letter	40

ARTICLE 5
REPRESENTATIONS AND WARRANTIES REGARDING GTI AND THE BUSINESS              40

 

 

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TABLE OF CONTENTS

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	SECTION 5.1		Organization	40
	SECTION 5.2		Authorization, Execution and Enforceability	41
	SECTION 5.3		No Breach; Certain Consents	41
	SECTION 5.4		Governmental and Other Consents	42
	SECTION 5.5		Organizational Documents	42
	SECTION 5.6		CS Companies	43
	SECTION 5.7		Financial Statements	44
	SECTION 5.8		Tax Matters	44
	SECTION 5.9		Real Property	46
	SECTION 5.10		Personal Property	46
	SECTION 5.11		Title to Owned Properties	47
	SECTION 5.12		Contracts	47
	SECTION 5.13		Performance of Contracts	49
	SECTION 5.14		Sufficiency and Condition of Purchased Assets	49
	SECTION 5.15		Permits	49
	SECTION 5.16		Patents; Technology	50
	SECTION 5.17		Trademarks; Copyrights; Other Intellectual Property Matters	52
	SECTION 5.18		Human Resources	53
	SECTION 5.19		Changes in Business Operations	55
	SECTION 5.20		Compliance with Laws	56
	SECTION 5.21		Litigation; Proceedings	56
	SECTION 5.22		Environmental Conditions	57
	SECTION 5.23		Health and Safety Matters	58
	SECTION 5.24		Inventory; Accounts Receivable	59
	SECTION 5.25		Insurance	60
	SECTION 5.26		Customers	60
	SECTION 5.27		Absence of Certain Business Practices	60
	SECTION 5.28		Liabilities	60
	SECTION 5.29		Brokers; Finders	61
	SECTION 5.30		Certain Interests	61
	SECTION 5.31		Financial Model	61
ARTICLE 6		PRE-CLOSING COVENANTS		62

 

 

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TABLE OF CONTENTS

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	SECTION 6.1		Conduct by Buyer	62
	SECTION 6.2		Conduct by GTI	62
	SECTION 6.3		Conduct of the Business	63
	SECTION 6.4		Governmental Filings	67
	SECTION 6.5		No Solicitation; Other Offers	68
	SECTION 6.6		Fulfillment of Conditions	68
	SECTION 6.7		Further Assurances	68
	SECTION 6.8		Consultation	68
	SECTION 6.9		Termination of Existing Agreements	69
	SECTION 6.10		Disposal of PCBs	69
	SECTION 6.11		Oil Tank Remediation	69
	SECTION 6.12		Pitch and Spare Parts Inventory	70
	SECTION 6.13		Inventory Purchases	70
	SECTION 6.14		Warehouse Agreements	70
	SECTION 6.15		Mercer Report	70
	SECTION 6.16		Procurement Contracts	70
ARTICLE 7		CONDITIONS TO CLOSING		71
	SECTION 7.1		Buyer’s Conditions to Closing	71
	SECTION 7.2		GTI’s Conditions to Closing	72
ARTICLE 8		POST-CLOSING COVENANTS		73
	SECTION 8.1		Change of Name	73
	SECTION 8.2		Employment and Employee Benefits	73
	SECTION 8.3		Incentive Compensation Plan	74
	SECTION 8.4		Welfare Benefits	74
	SECTION 8.5		Redacted Contracts	75
	SECTION 8.6		Retirement and Vested Plans	75
	SECTION 8.7		Stock Incentive Plans	75
	SECTION 8.8		Documentation	75
	SECTION 8.9		Records Retained by GTI	75
	SECTION 8.10		Access by GTI	76
	SECTION 8.11		Preservation of Records	76
	SECTION 8.12		Non-Competition by Sellers	76

 

 

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TABLE OF CONTENTS

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	SECTION 8.13		Brazil Machining Assets Removal	78
	SECTION 8.14		Removal of Excluded Assets	78
	SECTION 8.15		Sale of Graphite Particles	79
	SECTION 8.16		D&O Insurance Claims	79
ARTICLE 9		SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION		79
	SECTION 9.1		Survival of Representations and Covenants of Buyer	79
	SECTION 9.2		Survival of Representations and Covenants of GTI	80
	SECTION 9.3		Indemnification by Buyer	81
	SECTION 9.4		Indemnification by GTI	81
	SECTION 9.5		Indemnification Procedure	82
	SECTION 9.6		Characterization of Indemnity Payments	85
	SECTION 9.7		No Duplicative Adjustments	85
	SECTION 9.8		Limitation of Liability of Seller Group	85
ARTICLE 10		TERMINATION; SURVIVAL OF AGREEMENT		87
	SECTION 10.1		Termination	87
	SECTION 10.2		Survival of Agreement	88
ARTICLE 11		MISCELLANEOUS PROVISIONS		89
	SECTION 11.1		Publicity	89
	SECTION 11.2		Confidentiality	89
	SECTION 11.3		Non-Solicitation	90
	SECTION 11.4		Compliance with Restrictive Covenants	91
	SECTION 11.5		Limitations as to Representations and Warranties	92
	SECTION 11.6		Notice	93
	SECTION 11.7		Brokerage Fees	94
	SECTION 11.8		Certain Expenses	94
	SECTION 11.9		Governing Law; Arbitration	94
	SECTION 11.10		Binding Effect; Assignment; Third Party Beneficiaries	96
	SECTION 11.11		Entire Agreement	96
	SECTION 11.12		Amendments	97
	SECTION 11.13		Waivers	97
	SECTION 11.14		Remedies Limited	97
	SECTION 11.15		Headings; Counterparts	97

 

 

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TABLE OF CONTENTS

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SECTION 11.16	Severability	97
SECTION 11.17	Schedules	98
SECTION 11.18	Currency Conversion	98
SECTION 11.19	Interpretation	98
SECTION 11.20	No Consequential Damages	98

 

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TABLE OF CONTENTS

(continued)

 

 

List of Schedules

Schedule 1.1(a)

Excluded Real Property

Schedule 1.1(b)

Transferred SNC Employees

Schedule 1.1(c)

Existing Agreements

Schedule 2.1(b)(i)

Transferred Real Property

Schedule 2.1(b)(ii)

Transferred Tangible Business Assets

Schedule 2.1(b)(iv)

SNC Transferred Contracts

Schedule 2.1(b)(v)(x)

Trademarks

Schedule 2.1(b)(v)(y)

Trademark Licenses

Schedule 2.1(b)(vi)

Copyrights

Schedule 2.1(b)(vii)(x)

Patents

Schedule 2.1(b)(vii)(y)

Patent Licenses

Schedule 2.1(c)(i)

Brazil Machining Assets

Schedule 2.2(a)

Excluded Tangible Business Assets

Schedule 2.2(c)

Excluded Contracts

Schedule 2.2(l)

Other Excluded Assets

Schedule 2.9

Allocation

Schedule 3.1(b)(iv)

Required Consents

Schedule 5.1

Organization

Schedule 5.3

Conflicts

Schedule 5.4

Consents

Schedule 5.5

Organizational Documents

Schedule 5.6

CS Companies

Schedule 5.7

Financial Statements

Schedule 5.8

Tax Matters

Schedule 5.9

Real Property

Schedule 5.10

Personal Property

Schedule 5.12

Scheduled Contracts

Schedule 5.15

Permits

Schedule 5.16

Patents; Technology

Schedule 5.17

Trademarks; Copyrights; Other Intellectual Property Matters

 

Schedule 5.18

Human Resources

Schedule 5.19

Changes in Business Operations

Schedule 5.20

Compliance with Laws

Schedule 5.21

Litigation; Proceedings

Schedule 5.22

Environmental Conditions

Schedule 5.23

Health and Safety Conditions

Schedule 5.24

Inventory and Accounts Receivable

Schedule 5.24(e)

Inventory Transfer

Schedule 5.25

Insurance

Schedule 5.30

Certain Interests

Schedule 6.3

Conduct of the Business

Schedule 6.12

Pitch and Spare Parts Inventory

Schedule 7.1(f)

Material Adverse Effect

Schedule 8.2

Canadian Employee Benefits

 

 

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TABLE OF CONTENTS

(continued)

 

 

 

Schedule 8.14

Removal of Excluded Assets

 

List of Exhibits

 

Exhibit A	Form of Brazil Purchase Agreement (English)
Exhibit B-1	Form of SNC Asset Purchase Agreement (English)
Exhibit B-2	Form of SNC Asset Purchase Agreement (French)
Exhibit C	Form of IT Services Agreement
Exhibit D	Form of Tolling Agreement
Exhibit E	Form of Technology License Agreement
Exhibit F	Form of Mutual Release
Exhibit G	Form of Property License
Exhibit H	Form of Transition Services Agreement

Exhibit I                 Form of Machining Services Agreement

 

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PURCHASE AND SALE AGREEMENT , dated as of November 27, 2006, among GRAFTECH INTERNATIONAL LTD., a Delaware corporation (“ GTI ”), UCAR HOLDINGS, a French société par actions simplifiée (“ UCAR Holdings ”), UCAR SNC, a French société en nom collectif (“ SNC ”) and ALCAN FRANCE, a French société par actions simplifiée (formerly known as Pechiney) (“ Buyer ”).

W I T N E S S E T H :

WHEREAS, GTI is engaged, through its subsidiaries (principally Carbone Savoie (as defined hereafter) and SNC), in the Business (as defined hereafter); and

WHEREAS, GTI indirectly owns 70% of Carbone Savoie, a French société par actions simplifiée (“ Carbone Savoie ”), and Buyer, an indirect subsidiary of Alcan Inc., a corporation organized under the laws of Canada (“ Alcan ”), owns 30% of Carbone Savoie; and

WHEREAS, Carbone Savoie is engaged exclusively in the Business; and

WHEREAS, GTI indirectly owns 100% of UCAR Holdings and indirectly owns 100% of SNC, which, among other activities, owns and operates manufacturing facilities at which it toll manufactures products for Carbone Savoie that constitute part of the Business;

WHEREAS, Buyer desires to purchase, and GTI through its subsidiaries, UCAR Holdings and SNC, desires to sell, the Business on the terms and subject to the conditions set forth herein; and

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, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

 

DEFINITIONS; INTERPRETATION

SECTION 1.1   Definitions . As used herein, the following terms shall have the following meanings:

“ 2007 Procurement Contracts ” shall have the meaning assigned to such term in Section 6.16.

“ Affiliate ” with respect to any Person, shall mean any other Person which Controls, is Controlled by or is under common Control with, directly or indirectly, such Person, and, if such Person is a natural person, includes any member of such Person’s immediate family, or, if such Person is an entity, includes any trustee, member, general partner, manager, director or executive officer of, or any Person performing similar functions for, such Person.

“ Agreement ” shall mean this Purchase and Sale Agreement, including the Schedules and Exhibits, in each case, as amended or supplemented from time to time.

 

 

 

 

 

“ Alcan ” shall have the meaning assigned to such term in the preamble.

“ Applicable Buyer Survival Period ” shall have the meaning given to such term in Section 9.1(c).

“ Applicable Seller Survival Period ” shall have the meaning given to such term in Section 9.2(c).

“ Assigned Business Records ” shall mean the SNC Transferred Business Records and the Brazil Transferred Business Records.

“ Assumed Liabilities ” shall have the meaning given to such term in Section 2.3.

“ Audited Financial Statements ” shall mean the audited statutory financial statements of Carbone Savoie as of and for the year ended December 31, 2005 and as of and for the year ended December 31, 2004, attached hereto as part of Schedule 5.7 .

“ Benefit Plan ” shall mean a bonus, equity, stock purchase, stock option, incentive, compensation, severance, deferred compensation, termination, pension, savings, profit sharing, retirement, health, dental, disability, life insurance, loan, vacation, tuition reimbursement, relocation, unemployment, accidental death and dismemberment, retiree life and medical supplemental retirement, or other welfare plan, policy, program, arrangement or agreement under which an employee or former employee of a Person has any current or future rights to benefits, other than (a) a collective bargaining agreement or other Contract with a labor union or association, (b) a Contract relating to the appointment of a sales agent or representative or a distributor, (c) a Contract relating to the indemnification of a director, officer or employee, (d) a Contract relating to the employment of any employee or the engagement of any consultant or (e) any Organizational Document.

“ Brazil Financial Statements ” shall mean the unaudited statutory financial statements for CS Brazil Operating, as of and for the year ended December 31, 2005, and the unaudited financial statements of CS Brazil Operating as of June 30, 2006 and for the six months then ended, attached hereto as part of Schedule 5.7 .

“ Brazil Machining Assets ” shall have the meaning given to such term in Section 2.1(c)(i).

“ Brazil Merger ” shall have the meaning given to such term in Section 5.6(a).

“ Brazil Purchase Agreement ” shall have the meaning given to such term in Section 3.3(a).

“ Brazil Purchased Assets ” shall mean the assets of CS Brazil Operating referred to in Section 2.1(c).

“ Brazil Subsidiaries ” shall mean CS Brazil Holding and CS Brazil Operating.

 

 

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“ Brazil Subsidiary Loan ” shall have the meaning given to such term in Section 3.6(a)(i).

“ Brazil Transferred Business Records ” shall have the meaning given to such term in Section 2.1(c)(vii).

“ Brazil Transferred Contracts ” shall have the meaning given to such term in Section 2.1(c)(iii).

“ Business ” shall mean the development, manufacturing, marketing and sale of Cathodes by the subsidiaries of GTI, including the CS Companies.

“ Business Day ” shall mean any day of the year other than (a) any Saturday or Sunday or (b) any other day on which the banks located in the State of New York, United States of America, or France generally are closed for business.

“ Business Records ” shall mean the Assigned Business Records and the CS Business Records.

“ Buyer ” shall have the meaning given to such term in the title.

“ Buyer Affiliate ” shall mean any creditworthy Affiliate of Buyer which shall have been designated by Buyer to be the purchaser of any of the Purchased Assets, including, at the Closing, Carbone Savoie. Buyer shall make such designation by giving written notice to that effect to GTI at least 20 Business Days prior to the Closing.

“ Buyer Closing Certificate ” shall have the meaning given to such term in Section 7.2(g).

“ Buyer Group ” shall mean Buyer, the Affiliates of Buyer (including the Buyer Affiliates), the respective Representatives of Buyer and such Affiliates and the respective successors, transferees and permitted assigns of Buyer, such Affiliates and such Representatives.

“ Canadian Employee ” shall mean Mr. Andrew S. MacLeod, an employee of UCAR Inc., a Canadian corporation and an indirect subsidiary of GTI, who is engaged in the Business in Canada.

“ Carbone Savoie ” shall have the meaning given to such term in the preamble.

“ Carved-Out Businesses ” shall mean the graphite specialties business and graphite connecting pin business, including all assets and Liabilities related thereto, of GTI and its subsidiaries (other than Carbone Savoie), a portion of which are currently conducted and located at NDB.

“ Cathodes ” shall mean cathode bottom blocks, graphitized and non-graphitized carbon blocks, sidewall blocks, preformed sidewall blocks (combining carbon and silicon carbide materials), materials (glue and ramming paste), as well as all other carbon or graphite

 

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based materials used for the lining of aluminum electrolysis cells (which for clarity does not include anodes).

“ CCR Retirement Plan ” shall mean the accord sur le C.C.R . referred to in Section 8.6.

“ Claim ” shall mean any complaint, allegation, charge, petition, appeal, demand, notice, filing or claim of any kind that commences, alleges a basis to commence or threatens to commence any Proceeding by or before any Governmental Authority or Judicial Authority or that asserts, alleges a basis to assert or threatens to assert any right, breach, default, violation, noncompliance, termination, cancellation or other action or omission that could reasonably be expected to result in a Liability or Loss.

“ Closing ” shall have the meaning given to such term in Section 3.1(a).

“ Closing Date ” shall have the meaning given to such term in Section 3.1(a).

“ Closing Document ” shall mean any certificate, document or instrument required to be delivered pursuant to Section 7.1 or 7.2.

“ Closing Estimates ” shall have the meaning given such term in Section 2.6(a).

“ Confidentiality Agreement ” shall mean the Confidentiality Agreement, dated as of May 20, 2005, between GTI and Buyer, as supplemented by the Letter of Intent, dated as of June 7, 2006, between GTI and Buyer.

“ Confidential Memorandum ” shall mean the redacted Confidential Memorandum, dated as of August 2005, sent to Buyer by GTI.

“ Consent ” shall mean any approval, authorization, exemption, waiver, permission or consent of any kind of any Person, whether related to any Contract or otherwise, other than a Permit.

“ Contract ” shall mean any written or oral contract, agreement, note, bond, mortgage, indenture, deed of trust, lease, sublease, license, sublicense, purchase or sale order, quotation or other commitment, obligation or instrument of any kind that is or is intended to be (or, upon acceptance by the other intended party or parties thereto, would be) legally binding or enforceable under applicable Law.

“ Control ” of a Person shall mean possession, directly or indirectly, of the right or power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, through rights under Contracts, or otherwise.

“ Copyrights ” shall have the meaning given to such term in Section 2.1(b)(vi).

“ Court ” shall have the meaning given to such term in Section 11.9(d).

 

 

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“ CS Brazil Holding ” shall mean Carbone Savoie Brasil Holding S.A., a company organized under the laws of the Federative Republic of Brazil.

“ CS Brazil Operating ” shall mean Carbone Savoie Brasil S.A., a company organized under the laws of the Federative Republic of Brazil.

“ CS Business Records ” shall mean all books, records, papers and files of any kind (including those in electronic form) of Carbone Savoie, including minute books, stock records and Organizational Documents of Carbone Savoie. CS Business Records do not include those held by GTI or any of its subsidiaries (other than Carbone Savoie) in its capacity as a shareholder of, or a supplier or service provider to, Carbone Savoie.

“ CS Companies ” shall mean Carbone Savoie, CS Brazil Operating and CS Brazil Holding and each, a “ CS Company ” provided , however , that, from and after the Closing, such term shall mean Carbone Savoie.

“ CS Employees ”, as of any time, shall mean the employees of Carbone Savoie as of such time, including any of such employees who are on leave of absence or disability as of such time.

“ CS Equity ” shall have the meaning given to such term in Section 2.1(a).

“ Disclosed ” shall mean any event, condition, circumstance, fact or development that is set forth with reasonable specificity in this Agreement, any Related Agreement or any of the Schedules that relate to the matter for which such disclosure is made (subject to Section 11.17) or to any Related Agreement. If specific disclosure of a fixed amount is made as to such event, condition, circumstance, fact or development, then such event, condition, circumstance, fact or development is deemed to be disclosed to (but only to) the extent of the amount set forth therein. If specific disclosure of an estimated amount is made, then it is deemed to be disclosed to (but only to) the extent of an amount that is within a reasonable range (in light of the nature of such event, condition, circumstance or development and such estimate) of such estimate. If no specific disclosure of an amount is made, then it is deemed to be disclosed without limitation as to an amount.

“ Effective Time ” shall mean the time immediately prior to the Closing (after giving effect to all transactions set forth herein that are required to be consummated immediately prior to Closing).

“ Employees ”, as of any time, shall mean (a) all Transferred SNC Employees, (b) all CS Employees and (c) the Canadian Employee, in each case, as of such time.

“ Engagement Letter ” shall have the meaning given to such term in Section 5.31(a)(ii).

“ Environmental Claim ” shall mean any Claim or Proceeding arising from (a) any actual violation of any Environmental Law, (b) any Hazardous Substance, (c) any Remediation in connection with any Hazardous Substance, (d) any damage, injury, threat or harm to health, safety or the environment or (e) any Environmental Condition.

 

 

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“ Environmental Condition ” shall mean any condition (including any Hazardous Substances Contamination) with respect to the indoor or outdoor environment (including failure to protect human health and safety, other than in respect of occupational health and safety) as a result of which any Person (a) has incurred or could reasonably be expected to incur any Liability or Loss, (b) has or could reasonably be expected to become subject to any Claim or Proceeding or (c) has or could reasonably be expected to become subject to any obligation to Remediate such condition, including any condition resulting from the business or activities of Carbone Savoie or the business or activities of any other Person on any of the Real Property.

“ Environmental Law ” shall mean any Law relating to pollution or protection of the indoor or outdoor environment (including protection of human health and safety, other than in respect of occupational health and safety), or any Hazardous Substance or any Release or Remediation thereof.

“ Environmental Liabilities ” shall mean all Liabilities arising from any Environmental Claim or Environmental Condition.

“ Equity Interests ” of a Person shall mean capital stock, capital stock equivalents (including stock options, restricted stock units, stock appreciation rights and phantom stock), partnership interests, membership interests, participations, shares and other equity interests of any class or kind (however designated) of such Person.

“ Estimated Intercompany A/P Payable by Carbone Savoie ” shall mean Intercompany A/P Payable by Carbone Savoie as of the Effective Time, as estimated in good faith by GTI and included in the Closing Estimates.

“ Estimated Intercompany A/R Owed to Carbone Savoie ” shall mean the Intercompany A/R Owed to Carbone Savoie as of the Effective Time, as estimated in good faith by GTI and included in the Closing Estimates.

“ Estimated Net Available Cash ” shall mean the Net Available Cash as of the Effective Time, as reasonably estimated in good faith by GTI and included in the Closing Estimates.

“ Excluded Assets ” shall have the meaning given to such term in Section 2.2.

“ Excluded Inventory ” shall have the meaning given to such term in Section 2.2(b).

“ Excluded Liabilities ” shall have the meaning given to such term in Section 2.4.

“ Excluded Real Property ” shall mean all of the real property owned by SNC at NDB other than the parcels to be transferred that are described in Schedule 1.1(a) .

“ Exclusivity Period ” shall have the meaning given to such term in Section 8.12(b).

 

 

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“ Existing Agreements ” shall mean the Shareholders’ Agreement and the other existing agreements related to the Business between (a) Buyer and its Affiliates, on the one hand, and GTI and its Affiliates (other than Carbone Savoie), on the other hand, and (b) Carbone Savoie, on the one hand and GTI and its Affiliates (other than Carbone Savoie), on the other hand, in each case, listed on Schedule 1.1(c) .

“ Final Determination Date ” shall have the meaning given to such term in Section 2.7(h).

“ Final Intercompany A/P Payable by Carbone Savoie ” shall mean the Intercompany A/P Payable by Carbone Savoie set forth in the Post-Closing Certificate (as it may be revised pursuant to Section 2.7) that shall have become final and binding as described in Section 2.7.

“ Final Intercompany A/R Owed to Carbone Savoie ” shall mean the Intercompany A/R Owed to Carbone Savoie set forth in the Post-Closing Certificate (as it may be revised pursuant to Section 2.7) that shall have become final and binding as described in Section 2.7(h).

“ Final Net Available Cash ” shall mean the Net Available Cash set forth in the Post-Closing Certificate (as it may be revised pursuant to Section 2.7) that shall have become final and binding as described in Section 2.7(h).

“ Final Payment Date ” shall have the meaning given to such term in Section 2.7(h).

“ First Notice ” shall have the meaning given to such term in Section 11.9(d).

“ France ” shall mean the French Republic.

“ GAAP ” shall mean, with respect to the Audited Financial Statements and the Interim Financial Statements, statutory accounting principles in France, and, when relevant, Brazil, consistently applied.

“ Governmental Authority ” shall mean any government (including any United States, French or Brazilian Federal, foreign, state, provincial, city, municipal, cantonal or county government), any political subdivision thereof and any governmental, administrative, ministerial, regulatory, central bank, self-regulatory, quasi-governmental, taxing, executive or legislative department, commission, body, agency, authority or instrumentality of any thereof.

“ GTI ” shall have the meaning given to such term in the title.

“ GTI Acquisition Date ” shall mean January 2, 1997, which is the date on which UCAR Holdings acquired 70% of the outstanding Equity Interests in Carbone Savoie.

“ GTI Closing Certificate ” shall have the meaning given to such term in Section 7.1(h).

 

 

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“ Guarantee ” of or by any Person, as of any date, shall mean, without duplication, (a) any direct or indirect obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “ primary obligor ”) in any manner, including any obligation of such Person to (i) purchase or pay (or advance funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, agreements to keep well, to take-or-pay or to stop losses, or otherwise) or to purchase or lease property, securities or services for the purpose of assuring the payment of such Indebtedness or (ii) maintain any working capital, equity capital or other financial condition (including cash, working capital, net assets, operating results or liquidity) of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness is assumed by such Person, in the case of each clause above as of such date; provided , however , that the term “Guarantee” shall not include endorsements for collection or deposit, in either case, in the ordinary course of business consistent with past practices.

“ Hazardous Substance ” shall mean any substance as to which any Liability or regulatory requirement of any kind is imposed under any Law of any kind relating to pollution or the protection of the environment (including protection of human health and safety, other than in respect of occupational health and safety), including any hazardous waste or any flammable, corrosive, toxic, reactive, explosive or radioactive material (including any source, byproduct or special nuclear material), radon, asbestos, formaldehyde, urea formaldehyde, polychlorinated biphenyl, petroleum, petroleum constituent, petroleum product, polycyclic aromatic hydrocarbons, methane or medical waste.

“ Hazardous Substances Contamination ” shall mean the presence in the indoor or outdoor environment of a Hazardous Substance caused by a Release in concentrations or amounts that require or would reasonably be expected to require Remediation under any Environmental Law.

“ Health and Safety Condition ” shall mean any condition with respect to occupational health and safety as a result of which any Person (a) has incurred or could reasonably be expected to incur any Liability or Loss, (b) has or could become subject to any Claim or Proceeding or (c) has or could become subject to any obligation to Remediate such condition, in each case, under any Health and Safety Law.

“ Health and Safety Law ” shall mean any Law relating to protection of occupational health and safety or any Remediation of any threat thereto other than any Environmental Law.

“ ICC Rules ” shall mean the Rules of Arbitration of the International Chamber of Commerce.

“ Indebtedness ” as of any date, of any Person, shall mean, without duplication, (a) all obligations of such Person, whether or not contingent or matured, for borrowed money or with respect to deposits or advances of any kind (other than deposits or advances in respect of deferred revenue), (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest is customarily paid

 

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(other than trade payables incurred in the ordinary course of business consistent with past practices), (d) all obligations of such Person for purchase money financing, including obligations under conditional sale or other title retention agreements or issued or assumed in respect of deferred purchase price, relating to assets purchased by such Person (other than trade payables incurred in the ordinary course of business consistent with past practices), (e) all Guarantees by such Person of any obligation of the type described in clauses (a) through (d) above of any other Person, (f) all capital lease obligations of such Person, (g) all interest rate protection, foreign currency exchange or other interest or exchange rate hedging agreements to which such Person is a party, (h) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire capital stock and (i) all obligations of such Person as an account party in respect of letters of credit and bankers’ acceptances, in the case of each clause above, as of such date. The Indebtedness of any Person includes the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor under applicable Law as a result of Equity Interests held by such Person in such other Person (except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor).

“ Indebtedness for Borrowed Money ” of any Person as of any date shall mean, without duplication, (a) all obligations of such Person, whether or not contingent or matured, for borrowed money or with respect to deposits or advances of any kind (other than deposits or advances in respect of deferred revenue), (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person for purchase money financing, including obligations under conditional sale or other title retention agreements or issued or assumed in respect of deferred purchase price, relating to assets purchased by such Person (other than trade payables incurred in the ordinary course of business consistent with past practices) and (d) all Guarantees by such Person of any obligation of the type described in clauses (a) through (c) above of any other Person. The Indebtedness for Borrowed Money of any Person includes the Indebtedness for Borrowed Money of any other Person (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor under applicable Law as a result of Equity Interests held by such Person in such other Person (except to the extent that the terms of such Indebtedness for Borrowed Money provide that such Person is not liable therefor).

“ Indemnified Loss ” shall have the meaning given to such term in Section 9.5(b).

“ Indemnitee ” shall have the meaning given to such term in Section 9.5(a).

“ Indemnitor ” shall have the meaning given to such term in Section 9.5(a).

“ Initial Period ” shall have the meaning given to such term in Section 8.12(a).

“ Intellectual Property ” shall mean any and all (a) designs, styles, concepts, inventions and discoveries of any kind, whether or not entitled to registration or protection under any patent, copyright, trademark, trade secret or Law, (b) invention rights, shop rights, utility models, patents, patent applications and statutory invention registrations, (c) trademarks, service marks, trade dress, logos, trade names, corporate names and other identifiers of source or goodwill of any kind, including registrations and applications for registration thereof, (d) domain

 

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names, websites, mask works and copyrights of any kind, including copyrights in computer software and published and unpublished works, and registrations and applications for registration thereof, and (e) confidential and proprietary information, including trade secrets, know-how (including mix formulations, processing conditions and manufacturing and engineering information), process technology, technical information, data, customer lists, plans, strategies and methodologies, in the case of each clause above, regardless of the form in which embodied or evidenced and including all databases, books, records, papers, files, recordings, imprints, pictures, drawings and blue prints associated therewith or related thereto.

“ Intercompany A/P Payable by Carbone Savoie ” shall mean, without duplication, the accounts payable and other amounts owed (excluding Indebtedness for Money Borrowed) by Carbone Savoie to GTI or any of its subsidiaries (other than Carbone Savoie), recorded or required to be recorded as such on the financial statements of Carbone Savoie as of the Effective Time prepared on a basis consistent with the Audited Financial Statements and shall include accounts payable by GTI or its subsidiaries (other than Carbone Savoie) for raw materials Inventory ordered for the Business, at the request of and for the account of SNC, but not yet delivered to SNC and paid for by SNC.

“ Intercompany A/R Owed to Carbone Savoie ” shall mean, without duplication, the accounts receivable and other amounts owed (excluding Indebtedness for Money Borrowed) by GTI or any of its subsidiaries (other than Carbone Savoie) to Carbone Savoie, recorded or required to be recorded as such on the financial statements of Carbone Savoie as of the Effective Time prepared on a basis consistent with the Audited Financial Statements.

“ Interim Financial Statements ” shall mean the unaudited financial statements of Carbone Savoie as of June 30, 2006, and for the six-month period then ended, attached hereto as part of Schedule 5.7 .

“ Inventory ” shall mean all inventories (including finished goods, work-in-process, raw and packaging materials, stores, manufacturing supplies and spare parts and inventory in transit) of any kind.

“ Inventory Transfer ” shall mean the sale to Carbone Savoie in August, 2006 by GTI or its subsidiaries (other than Carbone Savoie) of the raw materials Inventory set forth on Schedule 5.24(e) in the quantities set forth therein.

“ IT Services Agreement ” shall mean the IT Services Agreement, substantially in the form of Exhibit C .

“ January Mercer Report ” shall have the meaning given to such term in Section 6.15.

“ Judicial Authority ” shall mean any court, arbitrator, special master, receiver, tribunal or similar body of any kind.

“ July Model ” have the meaning given to such term in Section 5.31(a)(i).

 

 

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“ Knowledge ” of GTI as to a fact or matter shall mean (a) actual knowledge of such fact or matter by a designated senior officer of GTI and (b) knowledge that such officer would be expected to obtain after making the same inquiry of employees reporting directly to such officer that a prudent businessperson would have made in the management and conduct of her or his own business and affairs in order to gain a reasonable understanding of such fact or matter. For this purpose, the designated senior officers of GTI shall mean its Chief Executive Officer, its Chief Financial Officer, its General Counsel, its Director, Mergers & Acquisitions, and the Chairman of the Management Committee of Carbone Savoie and the finance director of Carbone Savoie.

“ Law ” shall mean any treaty, code, statute, law (including common law), rule, regulation, order (including arrêtés préfectoraux ) or ordinance of any kind of any Governmental Authority.

“ Liability ” shall mean any liability, duty, responsibility, obligation, assessment, cost, expense, expenditure, charge, fee, penalty, fine, contribution, premium or obligation of any kind, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due.

“ Lien ” shall mean (a) any mortgage, deed of trust, collateral assignment, lien, hypothecation, pledge, encumbrance, restriction, charge or security interest of any kind, (b) the interest of a vendor or a lessor under any conditional sales agreement, capital lease, purchase money seller financing agreement or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing), (c) any purchase option, call option or similar right (including, in the case of securities, any transfer restriction thereon, any proxy, voting agreement or similar arrangement with respect thereto, any reservation thereof for any purpose, any pre-emptive right, right of first offer or first refusal, or similar right with respect thereto, any option, warrant or right to purchase or acquire such securities, or any other securities convertible into or exercisable or exchangeable for such securities), (d) any easement, restriction, right of way or similar right of any kind or (e) any Contract to grant or enter into any arrangement described in clause (a), (b), (c) or (d) above, but in the case of securities, excluding customary restrictions under securities Laws.

“ Loss ” shall mean any Liability, shortage, damage, diminution in value, deficiency or loss of any kind.

“ Machining Services Agreement ” shall mean the Machining Services Agreement, substantially in the form of Exhibit I.

“ Major Customer ” shall mean a purchaser of Cathodes, with purchases in excess of $500,000 in 2005 or with purchases that are anticipated by GTI to exceed $500,000 in 2006.

“ Material Adverse Effect ” shall mean a material adverse effect on the business, operations, assets, liabilities, financial condition or results of operations of the Business, taken as a whole, but shall not include (a) effects resulting from changes in general economic conditions (including changes in commodity or energy prices, in interest or currency exchange rates or in capital markets), from regulatory or political conditions, or from acts of terror or war, (b) effects

 

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resulting wholly or substantially from acts or omissions by Buyer or any of its Affiliates, (c) effects resulting from circumstances that affect the industries in which the Business operates generally, (d) effects resulting directly from changes in GAAP or (e) effects resulting from the announcement or closing of the transactions contemplated by this Agreement and, in the case of (a), (c) and (d), that do not have a materially disproportionate impact on the Business as compared to other businesses which operate in the same industries generally.

“ Mercer Report ” shall have the meaning given to such term in Section 6.15.

“ Mutual Release ” shall mean the Mutual General Release and Termination Agreement substantially in the form of Exhibit F .

“ NDB ” shall mean the real property owned by SNC and located at Notre-Dame de Briançon, (73), France.

“ Net Available Cash ” shall mean (a) the sum of (i) the cash and cash equivalents (including cash on deposit, checks received but not yet deposited or cleared and certificates of deposit and marketable securities, including interest accrued but not yet credited or received thereon) of Carbone Savoie, (ii) the principal and accrued interest on Indebtedness for Borrowed Money owed to Carbone Savoie by GTI and its subsidiaries (other than the CS Companies), to the extent actually paid pursuant to Section 2.6, and (iii) the amount to be paid to Carbone Savoie pursuant to Section 2.1(d) minus (b) the sum of (x) overdrafts in deposit accounts of Carbone Savoie, (y) the accounts receivable of Carbone Savoie that have been discounted or factored and are still unpaid by customers by whom such accounts receivables are payable and (z) the principal and accrued interest on Indebtedness for Borrowed Money owed by Carbone Savoie to GTI and the other subsidiaries of GTI (other than the CS Companies), in the case of each clause above, as of the Effective Time. Net Available Cash may be a positive or negative number and shall also include the adjustments set forth in Sections 3.6(d), 6.1(d), 6.10 and 6.11, but shall disregard all Tax effects, and any potential increase in the Equity Interests of Buyer in Carbone Savoie, as a result of the payment by Buyer, on behalf of Carbone Savoie, of the purchase price for the SNC Purchased Assets, and any deemed loan or capital contribution to Carbone Savoie by Buyer as a result thereof, and the payment of all Transactional Taxes paid by Carbone Savoie, if any, with respect to any of the transactions contemplated by this Agreement.

“ Non-Business Employee Liabilities ” shall mean the Excluded Liabilities set forth in Sections 2.4(c) through 2.4(g).

“ Notice of Claim ” shall have the meaning given to such term in Section 9.5(a).

“ Objection Notice ” shall have the meaning given to such term in Section 2.7(d).

“ Oil Tank Remediation ” shall have the meaning given to such term in Section 6.11.

“ Order ” shall mean any judgment, writ, decree, directive, decision, injunction, ruling, award or order (including any consent decree or cease and desist order) of any kind of any Governmental Authority or Judicial Authority.

 

 

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“ Ordinary Course ” shall mean the ordinary course of business, operations and activities conducted by the Business consistent with past practice.

“ Organizational Documents ” of a Person shall mean (a) all certificates, articles or agreements of any kind filed with any Governmental Authority or Judicial Authority, which filings form or organize such Person, and (b) all agreements, documents or instruments creating, organizing or governing the internal affairs of such Person, including trust agreements, bylaws, codes of regulations, memoranda of incorporation or association, partnership agreements, limited liability company agreements, charters and operating agreements, in each case, as amended and in effect at the time in question.

“ Other Scheduled Contracts ” shall have the meaning given to such term in Section 5.12(a).

“ Parties ” shall mean GTI, UCAR Holdings, SNC and Buyer.

“ Patent Licenses ” shall have the meaning given to such term in Section 2.1(b)(vii).

“ Patents ” shall have the meaning given to such term in Section 2.1(b)(vii).

“ PCB Disposal ” shall have the meaning given to such term in Section 6.10.

“ Pechiney Plans ” shall mean the closed pension plans of Buyer that cover certain Employees for services or employment prior to the GTI Acquisition Date.

“ Permits ” shall mean any franchise, license, approval, authorization, certificate of need, waiver, certification or permit of any kind of any Governmental Authority.

“ Permitted Lien ” shall mean (a) Tax liens, workers or unemployment compensation liens and mechanic’s, materialman’s, supplier’s, vendor’s, laborer’s, employee’s or similar liens, in each case, arising in the Ordinary Course and securing amounts that are not yet delinquent or are being contested in good faith by appropriate Proceedings and for which there are adequate reserves (determined on a basis consistent with the Audited Financial Statements) on the books and accounts of the Business, (b) in the case of property other than the CS Equity, imperfections of title, easements, restrictions, right of ways or similar rights which, individually or in the aggregate, do not materially detract from the value or materially interfere with the current or currently contemplated use of such property, (c) in the case of the CS Equity, any Lien for the benefit of Buyer, whether under the Shareholders’ Agreement, or otherwise (d) Liens disclosed in Schedule 5.9 and (e) Liens which will be released at Closing.

“ Person ” shall mean an individual, a partnership, a sole proprietorship, a company, a firm, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a union, a group acting in concert, a Judicial Authority, a Governmental Authority or any other entity or association of any kind.

 

 

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“ Pitch and Spare Parts Inventory ” shall have the meaning given to such term in Section 6.12.

“ Post-Closing Certificate ” shall have the meaning given to such term in Section 2.7(a).

“ Principals ” shall mean Buyer and GTI.

“ Proceedings ” shall mean any action, suit, arbitration, mediation, litigation, hearing, investigation, inquiry or other proceeding of any kind involving any Governmental Authority, any Judicial Authority or any other Person. Proceedings do not include routine claims for benefits under Benefit Plans (including routine appeals within an organization or an insurance company or similar provider).

“ Property License ” shall mean the letter agreement, substantially in the form of Exhibit G , by which Carbone Savoie shall grant to SNC the right to use certain property for up to one year.

“ Protected Employees ” shall mean those employees of SNC, indicated on Schedule 1.1(b) , for whom the approval of the labor inspector is required for the transfer of the employment of such employees under French Law.

“ Purchase Price ” shall have the meaning given to such term in Section 2.5(a)(i)(A).

“ Purchased Assets ” shall mean the SNC Purchased Assets, the Brazil Purchased Assets and the CS Equity.

“ PwC ” shall have the meaning given to such term in Section 2.7(a).

“ Real Property ” shall have the meaning given to such term in Section 5.9.

“ Raw Material ” shall have the meaning given to such term in Section 6.16.

“ Related Agreements ” shall mean (a) the SNC Asset Purchase Agreements, (b) the IT Services Agreement, (c) the Tolling Agreement, (d) the Transition Services Agreement, (e) the Property License, (f) the Technology License Agreement, (g) the Brazil Purchase Agreement, (h) the Mutual Release and (i) the Machining Services Agreement.

“ Release ” shall mean any release or threat of release within the meaning of any Environmental Law, but shall not include any such release or threat of release of a routine nature permitted by Environmental Laws.

“ Remediation ” shall mean abatement, removal, remediation, correction or other responsive action of any kind necessary to bring any Environmental Condition into compliance with Environmental Law or necessary to bring any Health and Safety Condition into compliance with any Health and Safety Law.

 

 

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“ Removable Excluded Assets ” shall have the meaning given to such term in Section 8.14.

“ Representatives ” of a Person shall mean controlling persons, partners, directors, officers, managers, trustees, employees, agents, representatives, consultants, affiliates, advisors, counsel or nominees of such Person.

“ Redacted Contracts ” shall have the meaning given to such term in Section 5.12(d).

“ Request ” shall have the meaning given to such term in Section 11.9(d).

“ Restrictive Covenants ” shall have the meaning given to such term in Section 11.4(a).

“ Restricted Territories ” shall mean Canada, United States, Mexico, Trinidad and Tobago, the countries of the European Union, Switzerland, Russia and each of the other members of the Commonwealth of Independent States, Norway, Turkey, Romania, Slovenia, Bulgaria, Iceland, Australia, New Zealand, United Arab Emirates, Kuwait, Saudi Arabia, Oman, Bahrain, Egypt, Libya, Algeria, Congo, Cameroun, Mozambique, South Africa, Malaysia, Indonesia, Brunei, Vietnam, Iran, China, India, Venezuela, Chile, Argentina, Brazil and each other country where GTI or any Affiliate currently engages in the Business or where Alcan engages in, or in respect of which Buyer shall have given written notice at any time prior to the fifth anniversary of the date hereof to GTI that Alcan or its subsidiaries intends to engage in, the Business.

“ Restructuring ” shall mean the restructuring, previously announced by GTI, of production at NDB by SNC to cease production of graphite electrode connecting pins and to reduce production of graphite specialties (other than the machining of graphite specialties) and increase production of Cathodes (including the related cessation of production of Cathodes for CS Brazil Operating), including the related reductions in workforce which have been submitted to the Works’ Council of SNC and for which a final opinion was received from the Works’ Council of SNC on February 10, 2006.

“ Scheduled and Transferred Contracts ” shall mean the Transferred Contracts and the Contracts set forth on Schedules 5.6 , 5.9 , 5.12 , 5.16 , 5.17 , 5.18 , 5.22 , 5.23 and 5.25 to which a CS Company is a party.

“ Schedules ” shall mean the Schedules, dated November 27, 2006, attached hereto and made a part of this Agreement.

“ Seller Competitive Activities ” shall have the meaning given to such term in Section 8.12(a).

“ Seller Group ” shall mean GTI, the Affiliates of GTI (other than, prior to the Closing, the CS Companies and, after the Closing, other than Carbone Savoie), the respective Representatives of GTI and such Affiliates and the respective successors, transferees and assigns of GTI, such Affiliates and such Representatives.

 

 

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“ Sellers ” shall mean UCAR Holdings, SNC and CS Brazil Operating.

“ Shareholders’ Agreement ” shall mean the Shareholders’ Agreement among Pechiney, GTI (formerly, UCAR International Inc.) and UCAR Holdings, dated as of December 23, 1996, as amended by the letter agreements among Pechiney, GTI and UCAR Holdings dated March 30, 2001, June 3, 2002 and March 24, 2003.

“ SNC ” shall have the meaning given to such term in the title.

“ SNC Asset Purchase Agreement ” shall have the meaning given to such term in Section 3.3(b).

“ SNC/CS Plan ” shall mean the local incentive compensation plan established for employees of SNC and Carbone Savoie.

“ SNC Purchased Assets ” shall have the meaning given to such term in Section 2.1(b).

“ SNC Transferred Business Records ” shall have the meaning given in Section 2.1(b)(viii).

“ SNC Transferred Contracts ” shall have the meaning given to such term in Section 2.1(b)(iv).

“ Social Security Amounts ” shall have the meaning given to such term in Section 9.8(a)(iii).

“ Specified Covenants ” shall mean the covenants and agreements of GTI or its subsidiaries (including, prior to the Closing, any CS Company) set forth in Article 2, Sections 3.5, 3.6, 6.3 except 6.3(a)(ii)(A), 6.5, 6.10 through 6.12, 6.14, 8.1 through 8.6, 8.9, 8.13 through 8.15, Article 9 and Article 11.

“ Statutory Retirement Benefit ” shall mean the one-time payment to employees upon their retirement required by the Laws of France.

“ Subcontracting Agreement ” shall mean the Subcontracting Agreement, effective as of January 2, 1997, between SNC and Carbone Savoie.

“ Swissco ” shall mean UCAR S.A., a Swiss corporation.

“ Tax ” shall mean any federal, national, state, provincial or local income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, capital stock, stamp, excise, conveyance, documentary, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, import (including custom duty), export, French professional tax ( taxe professionnelle ) estimated or other tax or assessment of any kind, whether computed on a separate, consolidated, unitary, combined or other basis, including any interest or penalty thereon or addition thereto.

 

 

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“ Tax Return ” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes.

“ Technology License Agreement ” shall mean the Technology License Agreement, substantially in the form of Exhibit E .

“ Termination Date ” shall have the meaning given to such term in Section 10.1(d).

“ Tolling Agreement ” shall mean the Tolling Agreement, substantially in the form of Exhibit D .

“ Trademark Licenses ” shall have the meaning given to such term in Section 2.1(b)(v).

“ Trademarks ” shall have the meaning given to such term in Section 2.1(b)(v).

“ Transactional Taxes ” shall mean all sales, use, transfer, conveyance, bulk transfer, excise, stamp, documentary, value added and other similar taxes, and all other governmental duties, charges, fees, imposts and assessments (other than taxes, duties, charges, fees, imposts and assessments on or measured by the net income (including capital gains) or franchise taxes of GTI or any of its subsidiaries (other than Carbone Savoie)), and all interest and penalties thereon and additions thereto, imposed at any time by any taxing authority with respect to this Agreement, the transfer, assignment, conveyance or delivery of the Purchased Assets, the assumption of the Assumed Liabilities or the consummation of the transactions contemplated hereby.

“ Transferred Contracts ” shall mean the Brazil Transferred Contracts and the SNC Transferred Contracts.

“ Transferred Inventory ” shall have the meaning given such term in Section 2.1(b)(iii). Transferred Inventory shall also include raw materials ordered by GTI or its subsidiaries (other than Carbone Savoie) for the Business, at the request of and for the account of SNC, but not yet delivered to SNC and paid for by SNC.

“ Transferred Real Property ” shall have the meaning given such term in Section 2.1(b)(i).

“ Transferred SNC Employees ” shall mean those employees of SNC listed on Schedule 1.1(b) and including any of such employees who are on leave of absence or disability on the Closing Date (but not including the Protected Employees if the approval of the relevant labor inspector in France is not received for their transfer of employment, in which case, with the consent of any such designated employee, GTI may designate other employees reasonably acceptable to Buyer to replace such Protected Employees as Transferred SNC Employees), but excluding any of such employees who retire prior to the Closing Date.

“ Transferred Statutory Retirement Benefit ” shall mean the aggregate of the Statutory Retirement Benefit for each Transferred SNC Employee covered by the Mercer Report, which for each Transferred SNC Employee shall equal (a) the present value of future benefits

 

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obligations in respect of the Statutory Retirement Benefit (including for purposes of this calculation of 50% of all social security amounts payable in connection therewith in a manner consistent with the January Mercer Report) that would be paid to such Transferred SNC Employee upon his retirement (as set forth in the Mercer Report), multiplied by (b) a fraction, the numerator of which is the number of years that such Transferred SNC Employee was employed by GTI or any of its subsidiaries (other than Carbone Savoie) and the denominator of which is the number of years that Mercer assumed such Transferred SNC Employee would be credited as having worked for purposes of calculating such Statutory Retirement Benefit.

“ Transferred Tangible Business Assets ” shall have the meaning given to such term in Section 2.1(b)(ii).

“ Transition Plan ” shall have the meaning given to such term in the IT Services Agreement.

“ Transition Services Agreement ” shall mean the Transition Services Agreement, substantially in the form of Exhibit H .

“ UCAR Carbon ” shall mean UCAR Carbon Company Inc., a Delaware corporation.

“ UCAR Holdings ” shall have the meaning given to such term in the title.

“ UCAR ICP ” shall mean the UCAR Incentive Compensation Plan as in effect as of the date hereof.

“ UCAR Produtos ” shall mean UCAR Produtos de Carbono S.A., a company organized under the laws of the Federative Republic of Brazil.

“ UCAR Retirement Plan ” shall mean the UCAR defined contribution plan.

“ Undertaking ” shall mean any bid bond, performance bond, and similar undertaking (however designated, and including any letter of credit or Guarantee related thereto intended to fulfill a similar purpose) with respect to the Purchased Assets or the Business.

SECTION 1.2   Interpretation . Unless otherwise expressly specified in this Agreement:

(a)        the words “ hereof ”, “ hereby ” and “ hereunder ”. and correlative words, refer to this Agreement as a whole and not any particular provision;

(b)        the words “ includes ” and “ including ”, and correlative words, are deemed to be followed by the phrase “ without limitation ”

(c)        the word “ written ” and the phrase “ in writing ”, and correlative words and phrases, include electronic and facsimile transmissions;

 

 

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(d)        the words “ asset ” and “ property ” are synonymous and include owned, leased and licensed real, personal and intangible property of every kind, including contractual rights, tort claims, cash, securities and information;

(e)        the masculine, feminine or neuter form of a word includes the other forms of such word and the singular and plural forms of a word have correlative meanings;

(f)         words and phrases defined herein shall have the same meanings in each Closing Document and each Related Agreement, unless expressly stated otherwise in such Closing Document or Related Agreement;

(g)	the word “ or ” is not exclusive;

(h)        the word “ will ” shall be construed to have the same meaning and effect as the word “ shall ”

(i)         references to a Person shall include the successors and assigns thereof permitted by this Agreement;

(j)         references to any Consent, Contract, Law, Order, Permit or Tax Return mean such Consent, Contract, Law, Order, Permit or Tax Return as amended, modified or supplemented and, in the case of any Law, also means any successor Law and, in the case of any Contract or Tax Return, includes any and all exhibits, annexes, schedules and documents attached thereto or incorporated therein or constituting a part thereof;

(k)        references to a “ board of directors ” of a Person mean the board of directors or correlative governing body or authority of such Person and include any committee thereof, references to an “ officer ” or “ director ” of a Person mean an officer, director, executive, manager or trustee of such Person or an individual performing correlative functions for such Person, the words “ stockholder ” and “ shareholder ” are synonymous and references to the “ stockholders ” or “ shareholders ” of a Person mean the stockholders, shareholders or other owners of Equity Interests (including partners and members) of such Person;

(l)         references to an Article, Section, Schedule or Exhibit mean an Article or Section of, or a Schedule or Exhibit to, this Agreement;

(m)       references to “ amendments ” of a Contract or other document, and correlative terms, include amendments, modifications, supplements, novations, waivers, releases, discharges and other changes to such Contract or document as agreed by the parties thereto;

(n)        references to “ environment ” include ambient air and waters (including subsurface waters) and the ground (including soil and underground);

(o)        references to “ graphite ” mean synthetic graphite only, and not natural graphite; and

(p)        capitalized terms that are correlative to terms defined in Section 1.1 shall have correlative meanings.

 

 

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SECTION 1.3   Exhibits . Each of the Exhibits may be changed after the date hereof by mutual agreement of the Principals and references herein to such Exhibits shall mean such Exhibits as so changed.

ARTICLE 2

 

PURCHASE AND SALE OF PURCHASED ASSETS

SECTION 2.1

Transfer of Purchased Assets .

(a)        Upon the terms and subject to the conditions contained herein, at the Closing, GTI shall cause UCAR Holdings to, and UCAR Holdings shall, sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase and accept from UCAR Holdings, all of UCAR Holdings’ right, title and interest in and to all issued and outstanding shares of capital stock of Carbone Savoie owned by UCAR Holdings (the “ CS Equity ”).

(b)        Upon the terms and subject to the conditions contained herein and in the SNC Asset Purchase Agreement, at the Closing, GTI and UCAR Holdings shall cause SNC to sell, convey, transfer, assign and deliver to Carbone Savoie, and Buyer shall cause Carbone Savoie to purchase and accept from SNC, all of SNC’s right, title and interest in and to the SNC Purchased Assets, free and clear of any Liens except Permitted Liens, and to assume the Assumed Liabilities. Subject to the other terms and conditions contained herein, “ SNC Purchased Assets ” shall mean all of SNC’s right, title and interest in and to the following assets and properties owned or held by SNC and primarily used in the Business, after giving effect to such changes (but only such changes) therein as are permitted from the date hereof through the Closing pursuant to Section 6.3:

(i)         all owned real property listed in Schedule 2.1(b)(i) , including all buildings, improvements and structures located thereon and all appurtenances belonging thereto (collectively, the “ Transferred Real Property ”);

(ii)         all furnishings, furniture, office equipment, vehicles, tools, machinery, manufacturing equipment, movable structures and fixtures, and other tangible personal property, including construction in progress, which is located on the Transferred Real Property and used or held for use in the Business, including those items listed in Schedule 2.1(b)(ii) (the “ Transferred Tangible Business Assets ”);

(iii)        all Inventory which is used or held for use in the Business, but excluding the Excluded Inventory (the “ Transferred Inventory ”);

(iv)        all Contracts to which SNC is a party or by which it is bound directly relating to the Business or the other Purchased Assets, including those Contracts listed in Schedule 2.1(b)(iv), but excluding the Excluded Contracts (collectively, the “ SNC Transferred Contracts ”);

(v)        all (x) trademarks, trade names and service marks, and registrations and applications therefor, listed in Schedule 2.1(b)(v)(x) (the “ Trademarks ”) and (y) trademark licenses listed in Schedule 2.1(b)(v)(y) (the “ Trademark Licenses ”);

 

 

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(vi)        all copyrights, and registrations and applications therefor, listed in Schedule 2.1(b)(vi) (the “ Copyrights ”);

(vii)       all (x) patents and patent applications listed in Schedule 2.1(b)(vii)(x) (the “ Patents ”) and (y) patent licenses listed in Schedule 2.1(b)(vii)(y) (the “ Patent Licenses ”);

(viii)      (x) all books, records, papers and files of any kind (including those in electronic form) which relate primarily to the Business, the Transferred SNC Employees, the Purchased Assets and the Assumed Liabilities and (y) copies of all books, records, papers and files of any kind (including those in electronic form) which relate to, but not primarily to, the Business, the Transferred SNC Employees, the Purchased Assets and the Assumed Liabilities, in each case which are possessed by SNC or any of its Representatives (the “ SNC Transferred Business Records ”);

(ix)        (x) all vendor lists which relate primarily to the Business, subject to the right of GTI and its subsidiaries to keep and use for itself or themselves and otherwise transfer to any third party successor or transferee of the other business to which they relate, in each case, in a manner consistent with its and their obligations under Sections 8.12 and 11.2, copies of any vendor list (or any portion thereof) which do not relate exclusively to the Business, (y) all files and documents (including credit information) which relate to vendors primarily of the Business, subject to the right of GTI and its subsidiaries to keep and use for itself or themselves and otherwise transfer to any third party successor or transferee of the other business to which they relate, in each case, in a manner consistent with its and their obligations under Sections 8.12 and 11.2, copies of any such files and documents, and (z) copies of files and documents (including credit information) which relate to vendors relating to, but not primarily to, the Business;

(x)        all Claims against third parties (including insurance companies) arising out of the Business (but only to the extent arising out of the Business), the Purchased Assets or the Assumed Liabilities, in each case, except to the extent that SNC shall have paid the Loss in respect of which such right is asserted or Claim is made;

(xi)	all prepaid expenses arising out of the Business;

(xii)       all accounts receivable of the Business, subject to the provisions of Sections 2.6 and 2.7;

(xiii)      all Permits which are used by SNC primarily in the Business, subject to the provisions of Section 3.4;

(xiv)      all sales and promotional literature and other sales-related materials related to the Business; and

(xv)	the goodwill of GTI and its subsidiaries relating to the Business.

(c)        Upon the terms and subject to the conditions contained herein, immediately prior to the Closing, the Principals shall cause Carbone Savoie to cause CS Brazil

 

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Operating to sell, convey, transfer, assign and deliver to Carbone Savoie (as a Buyer Affiliate) and to purchase and accept from CS Brazil Operating, the Brazil Purchased Assets free and clear of any Liens except Permitted Liens. Subject to the other terms and conditions contained herein, “ Brazil Purchased Assets ” shall mean the following assets, owned or held by CS Brazil Operating, after giving effect to such changes (but only such changes) therein as are permitted pursuant to Section 6.3:

(i)         all tools, machinery, manufacturing equipment, movable structures and fixtures, and other tangible personal property, which is located on the site that CS Brazil Operating leases from UCAR Produtos at Estrada Salvador-Mataripe, Km 39-Candeias, Bahia, Brazil 43800-000 and used or held for use in the Business, including those items listed in Schedule 2.1(c)(i) (the “ Brazil Machining Assets ”);

(ii)         all Inventory, if any, which is used or held for use in the Business (the “ Brazil Inventory ”).

(iii)        all Contracts with customers or for the sale of products of the Business to which CS Brazil Operating is a party (the “ Brazil Transferred Contracts ”);

(iv)	all accounts receivable, if any, of CS Brazil Operating;

(v)        all sales and promotional literature and other sales related materials, if any, of CS Brazil Operating;

(vi)	the goodwill of CS Brazil Operating;

(vii)       all books, records, papers and files of any kind (including those in electronic form) of CS Brazil Operating relating to the Brazil Purchased Assets and any Liabilities of CS Brazil Operating assumed by Carbone Savoie, but excluding those relating to tax or employees matters and the stock records, minute books and other Organizational Documents of CS Brazil Operating (the “ Brazil Transferred Business Records ”); and

(viii)      (x) all customer and vendor lists which relate primarily to the Business, subject to the right of GTI and its subsidiaries to keep and use for itself or themselves and otherwise transfer to any third party successor or transferee of the other business to which they relate, in each case, in a manner consistent with its and their obligations under Sections 8.12 and 11.2, copies of any customer or vendor list (or any portion thereof) which do not relate exclusively to the Business, (y) all files and documents (including credit information) which relate to customers and vendors primarily of the Business, subject to the right of GTI and its subsidiaries to keep and use for itself or themselves and otherwise transfer to any third party successor or transferee of the other business to which they relate, in each case, in a manner consistent with its and their obligations under Sections 8.12 and 11.2, copies of any such files and documents, and (z) copies of files and documents (including credit information) which relate to customers and vendors relating to, but not primarily to, the Business.

If Buyer desires to have a Buyer Affiliate other than Carbone Savoie purchase and accept the Brazil Purchased Assets, Buyer shall give written notice to that effect to GTI at least 20 Business Days prior to the Closing.

 

 

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(d)        Upon the terms and subject to the conditions contained herein, at the Closing, after the capital contribution contemplated by Section 3.6 and satisfaction of Indebtedness for Borrowed Money that is owed as of the Effective Time to Carbone Savoie by CS Brazil Operating, GTI and Buyer shall cause Carbone Savoie to sell, convey, transfer, assign and deliver to Swissco or another Affiliate of GTI, and GTI shall cause Swissco or another Affiliate of GTI to purchase and accept from Carbone Savoie, all of Carbone Savoie’s right, title and interest in and to the Equity Interests owned by Carbone Savoie in CS Brazil Holding for consideration of the amount of net cash held by CS Brazil Operating, after discharge of all payables in accordance with Section 3.6(a)(ii) and (iii) (as estimated in the Closing Estimates).

SECTION 2.2   Excluded Assets . Only those assets which are specifically identified as Purchased Assets shall be sold, conveyed, transferred, assigned or delivered to Buyer, a designated Buyer Affiliate or Carbone Savoie hereunder, and all other assets of SNC and CS Brazil Operating, and all assets of the other members of the Seller Group (other than Carbone Savoie), are excluded from the transactions contemplated by this Agreement, including the following (collectively, the “ Excluded Assets ”):

(a)        the furnishings, furniture, office equipment, computers, vehicles, tools, machinery, manufacturing equipment, movable structures and fixtures, and other tangible personal property, including construction in progress, which is located on the Excluded Real Property or used or held for use primarily in the Carved-Out Businesses or office furniture, office equipment, computers or vehicles which are used exclusively by employees of SNC who are not Transferred SNC Employees, including those items listed in Schedule 2.2(a) ;

(b)        all Inventory which is primarily used or held for use by SNC in any business, including in the Carved-Out Businesses, other than the Business (the “ Excluded Inventory ”);

(c)        all Contracts to which SNC is a party that do not relate primarily to the Business or the Purchased Assets, that are listed on Schedule 2.2(c) , or to which GTI or any of its subsidiaries (other than SNC or any CS Company) is the contracting party (collectively, the “ Excluded Contracts ”);

(d)        all cash on hand, cash on deposit, checks received but not yet deposited or cleared, wire transfers transmitted but not yet received, cash equivalents, certificates of deposit, and marketable securities, including accrued interest thereon, held by or on behalf of SNC;

(e)        all assets of funded pension or other funded employee benefit plans of SNC;

(f)         all rights or Claims of SNC to the refund of any income or franchise Taxes (whether any such refund relates to any period or date or is received prior to, on or after the Closing Date) or any other Taxes paid prior to the Closing;

(g)        all rights to the names and marks “UCAR”, “UCAR CARBON” and “GRAFTECH”, together with all variations thereof;

(h)	all Equity Interests held by SNC;

 

 

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(i)	the Excluded Real Property;

(j)         all Intellectual Property (other than Intellectual Property listed in Schedules 2.1(b)(v)(x) , 2.1(b)(v)(y) , 2.1(b)(vi) , 2.1(b)(vii)(x) and 2.1(b)(vii)(y) ), and all goodwill and all Claims (including those for infringement, misappropriation, dilution or other violations) associated with or arising out of all Intellectual Property owned by SNC (other than Intellectual Property listed in Schedules 2.1(b)(v)(x) , 2.1(b)(v)(y) , 2.1(b)(vi) , 2.1(b)(vii)(x) and 2.1(b)(vii)(y) ) or licensed to Buyer and the Buyer Affiliates under the Technology License Agreement;

(k)        all rights or Claims against third parties (including insurance companies) to the extent that SNC shall have paid the Loss in respect of which such rights are asserted or Claim is made; and

(l)	the assets, rights, interests and properties set forth in Schedule 2.2(l) .

SECTION 2.3   Assumed Liabilities . Upon the terms and subject to the conditions contained herein (including the right to indemnification pursuant to Article 9), other than Excluded Liabilities, upon, from and after the Closing, Buyer shall, and shall cause Carbone Savoie or another Buyer Affiliate to, without any further liability of, or recourse to, any member of the Seller Group, absolutely and irrevocably assume and be solely liable for any and all Liabilities of any kind or nature arising out of, related to or associated with the Business, the products or services of the Business, the Employees, the Purchased Assets (including the conduct of the Business, the manufacture and sale of such products, the provision of such services and the ownership, leasing or use of the Purchased Assets (collectively, the “ Assumed Liabilities ”); provided , however , that, notwithstanding the foregoing, neither Buyer nor Carbone Savoie or any designated Buyer Affiliate shall assume any Liability of CS Brazil Operating other than (a) Liabilities to customers of the Business with respect to Cathodes sold by CS Brazil Operating and (b) Liabilities to customers of CS Brazil Operating under the Brazil Transferred Contracts. Assumed Liabilities shall include:

(a)	Liabilities under SNC Transferred Contracts;
(b)	Liabilities with respect to Transferred Real Property;

(c)        all Liabilities with respect to Transferred SNC Employees, including Statutory Retirement Benefits, but excluding Non-Business Employee Liabilities and Liabilities under the CCR Retirement Plan;

(d)	all Liabilities to customers of the Business with respect to Cathodes sold;

(e)        all Tax Liabilities with respect to Transactional Taxes and Taxes (including taxe professionelle and taxe foncière ) in respect of the operation of the Business to the extent that such Taxes relate to the period starting on the Closing but, in each case, excluding those due on dates on or before the Closing or payable for periods prior to the Closing and excluding those which are included in the Excluded Liabilities;

(f)	all Liabilities with respect to the Transferred Tangible Business Assets;

 

 

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(g)        all Liabilities arising out of Litigation to which SNC is or becomes a party or Claims made against SNC to the extent such Liabilities relate to the Business;

(h)        accounts payable to third parties by SNC in respect of the Business, but excluding the accounts payable specified in Section 2.4(h) of the Agreement.

SECTION 2.4   Excluded Liabilities . Upon the terms and subject to the conditions contained herein, from and after the Closing, GTI shall, and shall cause the other members of the Seller Group (including the Brazil Subsidiaries) to, without any liability of, or recourse to, any member of the Buyer Group, absolutely and irrevocably retain and be solely liable for the following Liabilities (the “ Excluded Liabilities ”):

(a)        all Liabilities arising out of, relating to or associated with any business of GTI or any of its subsidiaries (other than the Business), the products or services of such business, its or their employees (other than the Employees), or its or their assets (other than the Purchased Assets), including the conduct of such business, the manufacture and sale of such products, the provision of such services and the ownership, leasing or use of such assets;

(b)        the authorization of the sale of the Business, including the Purchased Assets;

(c)        all Liabilities for which GTI or any of its subsidiaries (other than Carbone Savoie) have Liability under Sections 8.3, 8.4 and 8.6;

(d)        all Liabilities relating to or arising from the termination of employees in connection with the Restructuring;

(e)        all Liabilities relating to employees of SNC who retired prior to, or who have not worked in the Business at any time since, January 2, 1997;

(f)         all Liabilities for pension, retirement and other benefits, as well as incentive and other compensation, for employees of GTI and its Affiliates (other than the CS Companies) who retire prior to the Closing;

(g)        all Liabilities arising out of Proceedings brought by Transferred SNC Employees that relate to or arise out of their employment, that are directly related to events occurring prior to the Closing and that are not Disclosed in the relevant Schedules or accrued on the Interim Financial Statements (excluding liabilities in respect of Transferred SNC Employees who were employees of Carbone Savoie, or of Buyer or its Affiliates, prior to the GTI Acquisition Date that relate to or arise out of events, conditions, circumstances or developments occurring prior to the GTI Acquisition Date);

(h)        Liabilities with respect to trade payables or costs of manufacture of Cathodes which have been included in the calculation of the Intercompany A/P Payable by Carbone Savoie for the toll manufacturing of Cathodes; and

(i)         all Liabilities of GTI and its subsidiaries (including SNC and the Brazil Subsidiaries, but excluding Carbone Savoie) for any income, franchise, capital gains or other

 

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Taxes (whether any such Tax relates to any period or date or is payable prior to, on or after the Closing) other than Transactional Taxes.

SECTION 2.5

Purchase Price .

(a)        In consideration for (i) the sale, assignment, transfer, conveyance and delivery by UCAR Holdings of the CS Equity to Buyer in accordance with and upon the terms and conditions set forth herein, (ii) subject to Section 3.6, the sale, assignment, transfer, conveyance and delivery by SNC of the SNC Purchased Assets and CS Brazil Operating of the Brazil Purchased Assets, respectively, (iii) the covenant of GTI set forth in Section 8.12 and (iv) the rights granted to the Buyer Group under the Technology License Agreement, Buyer shall or shall cause the other members of the Buyer Group (including Carbone Savoie) to:

(A)       pay to GTI (on behalf of GTI, UCAR Holdings, SNC, and UCAR Carbon) the aggregate amount of $135,000,000, subject to adjustment pursuant to Section 2.6 and 2.7 (the “ Purchase Price ”), reduced by $1,000,000 (or such other amount required to be withheld by Buyer (on behalf of Carbone Savoie) under applicable Law in respect of the portion of the Purchase Price payable to GTI and UCAR Carbon for the rights granted to Carbone Savoie by Seller Group under the Technology License Agreement), which amount shall be paid by Buyer to the applicable Governmental Authority in France on behalf of and for the account of GTI and UCAR Carbon;

(B)        pay to GTI $250,000 (or such other amount required to be withheld by GTI and UCAR Carbon under applicable Law in respect of the amount payable to Carbone Savoie for the rights granted to UCAR Carbon by Carbone Savoie under the Technology License Agreement), which amount GTI shall immediately deposit with the applicable Governmental Authority in the United States on behalf of and for the account of Carbone Savoie; and

(C)       assume and duly perform and discharge, when due, all of the Assumed Liabilities.

The sum of the Purchase Price and the value of the Assumed Liabilities shall be allocated among the items set forth in Section 2.5(a) in accordance with Section 2.9.

(b)        The consideration for the Brazil Purchased Assets paid by Carbone Savoie to CS Brazil Operating in accordance with Sections 2.1(c) and 3.6 shall not reduce the amount payable pursuant to Section 2.5(a).

SECTION 2.6   Purchase Price and Other Closing Date Payments . The Purchase Price shall be subject to adjustment in accordance with this Section 2.6:

(a)        No later than 10 Business Days prior to the Closing Date then estimated in good faith by the Principals, GTI shall deliver to Buyer a written statement (the “ Closing Estimates ”) setting forth (i) the Estimated Net Available Cash and (ii) the Estimated Intercompany A/R Owed to Carbone Savoie and the Estimated Intercompany A/P Payable by Carbone Savoie and containing reasonably detailed supporting information, documents and calculations. In calculating the Estimated Intercompany A/P Payable by Carbone Savoie, GTI shall include a reasonable, good faith estimate of the amount of the final invoice that will be

 

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payable to SNC by Carbone Savoie for contracting services rendered under the Subcontracting Agreement prior to the Effective Time.

(b)        GTI and Buyer shall or shall cause their respective representatives or the representatives of their subsidiaries then serving on the management committee of Carbone Savoie, to the extent legally permissible in accordance with French corporate Law and subject to adjustment as provided in Section 2.7(h), to declare a dividend (or require a return of capital) in an amount equal to (i) the Estimated Net Available Cash in excess of $2,000,000 less (ii) the Transferred Statutory Retirement Benefit, payable on the Closing Date and subject to consummation of the Closing, and shall thereafter cause Carbone Savoie to pay such dividend concurrently with consummation of the Closing; provided , however , that if the amount calculated above is a negative amount, no dividend shall be declared by Carbone Savoie. Such payment shall constitute a distribution of earnings and profits or a return of capital, and not part of the Purchase Price.

(c)        If the Estimated Intercompany A/R Owed to Carbone Savoie exceeds the Estimated Intercompany A/P Payable by Carbone Savoie, GTI will pay or cause its subsidiaries (other than the CS Companies) to pay (in euro) an amount equal to such excess to Buyer or Carbone Savoie on the Closing Date, subject to adjustment as provided in Section 2.7(h). If the Estimated Intercompany A/P Payable by Carbone Savoie exceeds the Estimated Intercompany A/R Owed to Carbone Savoie, Buyer will pay or cause its subsidiaries (including Carbone Savoie) to pay (in euro) an amount equal to such excess to GTI on the Closing Date, subject to adjustment as provided in Section 2.7(h). Such payment and the related netting of outstanding payables and receivables shall constitute satisfaction and discharge of payables and receivables and not part of the Purchase Price.

(d)        On the Closing Date but prior to the Effective Time, GTI will cause (i) its subsidiaries to pay to Carbone Savoie the principal and accrued interest on all Indebtedness for Borrowed Money that it or any subsidiary (other than a CS Company) owes to Carbone Savoie and (ii) Carbone Savoie to pay to GTI and its other subsidiaries the principal and accrued interest on all Indebtedness for Borrowed Money that Carbone Savoie owes to GTI or its other subsidiaries (other than the CS Companies).

(e)        If the Estimated Net Available Cash is less than $2,000,000, the Purchase Price payable at the Closing will be decreased by an amount equal to the sum of (i) an amount equal to the difference between the Estimated Net Available Cash and $2,000,000 and (ii) an amount equal to 70% of the Transferred Statutory Retirement Benefit and such sum will constitute an adjustment to the Purchase Price. If the Estimated Net Available Cash is greater than $2,000,000, but the excess over $2,000,000 is less than the Transferred Statutory Retirement Benefit, the Purchase Price payable at Closing will be decreased by an amount equal to 70% of the difference between (x) the excess of the Estimated Net Available Cash over $2,000,000 and (y) the Transferred Statutory Retirement Benefit. Either such decrease shall be subject to adjustment as provided in Section 2.7(h).

SECTION 2.7

Post Closing Adjustments .

 

 

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(a)        After the Closing, Buyer shall cause Carbone Savoie to prepare and engage its auditors, PricewaterhouseCoopers LLP (“ PwC ”), to review, in accordance with GAAP, a report setting forth the Net Available Cash, the Intercompany A/P Payable by Carbone Savoie and the Intercompany A/R Owed to Carbone Savoie as of the Effective Time (the “ Post-Closing Certificate ”) and containing reasonably detailed supporting information, documents and calculations. The Intercompany A/P Payable shall include the amount that was payable to SNC by Carbone Savoie pursuant to the Subcontracting Agreement for contracting services rendered prior to the Effective Time. Buyer shall use reasonable efforts to cause such preparation and review to be completed and the Post-Closing Certificate to be delivered to Buyer and GTI within 90 days after the Closing Date.

(b)        Each of Buyer and GTI shall, and shall cause their respective Affiliates (including, in the case of Buyer, Carbone Savoie) and its and their respective Representatives, at its and their respective expense, promptly to provide to PwC and Carbone Savoie such cooperation and assistance and such copies of and access to all books, records, files, work and other papers, premises, personnel, data and other documents and information, as PwC or Carbone Savoie may reasonably request in connection with the preparation, review and delivery of the Post-Closing Certificate, subject to the execution by PwC of reasonable and customary confidentiality undertakings in favor of Buyer and GTI, as appropriate.

(c)        Promptly after the Post-Closing Certificate shall have been delivered to GTI, GTI shall review the Post-Closing Certificate. GTI shall have the right to engage independent accountants to assist it in connection with such review. Buyer shall, and shall cause its Affiliates (including Carbone Savoie) and its and their respective Representatives, at its and their expense, promptly to provide to GTI and such accountants such copies of and access to all books, records files, work and other papers, premises, personnel, data and other documents and information that it or they may have in its or their possession as GTI or such accountants may reasonably request, subject to the execution by such accountants of reasonable and customary confidentiality undertakings in favor of Buyer.

(d)        Subject to the next sentence, GTI may object to any amount or calculation set forth in the Post-Closing Certificate by giving written notice to that effect to Buyer within 30 days after the delivery of the Post-Closing Certificate to GTI (an “ Objection Notice ”); provided , however , that an Objection Notice shall describe in reasonable detail the objection and the basis therefor and is accompanied by reasonably detailed supporting information and calculations. GTI may object to an amount or calculation set forth in the Post-Closing Certificate only:

(i)         on the basis that the Post-Closing Certificate was not prepared in accordance with this Agreement, that relevant assets or liabilities were misstated, incorrectly included or incorrectly omitted, or that a mathematical error was made; and

(ii)         if the aggregate amount by which the payments or adjustments described in Section 2.6(b) and 2.6(c) would change with respect to the objection(s) described in the Objection Notice exceeds $200,000.

(e)        If GTI agrees with the amounts and calculations set forth in the Post-Closing Certificate and gives written notice to that effect to Buyer (which it shall have the right

 

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to do at any time) or fails duly to give an Objection Notice to Buyer within 30 days after delivery of the Post-Closing Certificate to GTI, the amounts and calculations set forth in the Post-Closing Certificate shall be final and binding. If GTI duly gives an Objection Notice, any amounts and calculations not specifically objected to therein shall be final and binding.

(f)         If GTI duly gives an Objection Notice, Buyer and GTI shall promptly negotiate in good faith to agree on revised amounts and calculations covered by such Objection Notice. If Buyer and GTI so agree (which they shall have the right to do at any time), the revised amounts and calculations shall be set forth in a written document signed by both of them, which shall be final and binding. If Buyer and GTI fail to so agree within 30 days after receipt by Buyer of such Objection Notice (or such later date as may be mutually agreed by Buyer and GTI), then Buyer and GTI shall promptly select and engage an independent accounting firm of recognized national standing to resolve such objections as promptly as possible. If the Parties cannot agree upon a selection, they shall select such accounting firm by lot from among the five largest accounting firms in the United States; provided , that such accounting firm shall not be or have been engaged by or performing services for GTI, Buyer or any of their respective Affiliates, unless otherwise agreed by Buyer and GTI, (i) at the time of selection or (ii) within 12 months prior to the time of selection; and, provided , further , that, if no accounting firm meets the criteria set forth in the immediately preceding proviso, then an accounting firm shall be selected in the same manner as an arbitrator is selected under ICC Rules. The choice of an accounting firm so selected shall be final and binding. Fifty percent of the fees and expenses of such accounting firm in connection with such determination shall be borne by Buyer and 50% of such fees and expenses shall be borne by GTI, and the engagement of such accounting firm shall be subject to such terms and conditions as such accounting firm may reasonably request and to reasonable and customary confidentiality undertakings in favor of each of GTI and Buyer. The Principals shall give and cause their respective Affiliates to give to such accounting firm, upon reasonable request, timely and reasonable access to books, records, files, work and other papers, data and other documents and information relevant for the purposes of such determination. In connection with such determination by such accounting firm:

(i)         Buyer and GTI shall have the right to (x) provide written documents and information to such accounting firm so long as copies thereof are concurrently provided to the other of them and (y) provide (by telephone or in person) oral information (so long as a Representative of GTI and a Representative of Buyer are present at the time such information is provided) to such accounting firm (except that this clause shall not restrict either of them from providing administrative, ministerial or procedural information);

(ii)         such accounting firm shall be bound by amounts and calculations that shall have previously become final and binding as described in this Section 2.7, shall act as experts (and not as arbitrators) and shall set forth their determination in a written document (which shall include reasonably detailed supporting analysis and shall be delivered simultaneously to Buyer and GTI); and

(iii)        the determination of such accounting firm shall be final and binding (absent an error that is manifest), and such determination shall be non-appealable and incontestable and not subject to collateral attack for any reason.

 

 

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(g)        Buyer and GTI shall have the right, acting jointly, at any time to terminate the engagement of such accounting firm. GTI shall have the right to engage, at its expense, PwC to assist it in connection with any negotiation and determination described in Section 2.7(d) so long as the personnel at PwC who are engaged by GTI are not the same as those engaged by Buyer or Carbone Savoie and PwC establishes and implements policies and practices to ensure that there are informational barriers to prevent sharing of information between the personnel of PwC engaged by GTI and the personnel of PwC engaged by Buyer or Carbone Savoie, except as permitted by Buyer and GTI.

(h)        The Post-Closing Certificate shall be deemed final for purposes of this Section 2.7 upon the earliest of (i) the failure of GTI to deliver an Objection Notice within 30 days after delivery of the Post-Closing Certificate (or such later date as may be agreed by the Principals), (ii) the resolution of all disputes by the Principals, as set forth in a written document pursuant to the second sentence of Section 2.7(f) or (iii) the resolution of all disputes by the independent accounting firm acting pursuant to Section 2.7(f) (the “ Final Determination Date ”). Within ten days after the date on which all of the amounts and calculations set forth in the Post-Closing Certificate (as they may be revised pursuant to this Section 2.7) shall have become final and binding (the “ Final Payment Date ”):

(i)         if (w) the Final Intercompany A/R Owed to Carbone Savoie exceeds the Estimated Intercompany A/R Owned to Carbone Savoie, GTI shall pay or cause the Sellers to pay to Carbone Savoie, on behalf of Buyer and the relevant Buyer Affiliate, the amount of such excess, (x) the Estimated Intercompany A/R Owed to Carbone Savoie exceeds the Final Intercompany A/R Owed to Carbone Savoie, Buyer shall pay to GTI, on behalf of the Sellers, the amount of such excess, (y) the Final Intercompany A/P Payable by Carbone Savoie exceeds the Estimated Intercompany A/P Payable by Carbone Savoie, Buyer shall pay to GTI, on behalf of the Sellers, the amount of such excess and (z) the Estimated Intercompany A/P Payable by Carbone Savoie exceeds the Final Intercompany A/P Payable to Carbone Savoie, GTI shall pay or cause the Sellers to pay to Carbone Savoie, on behalf of Buyer and the relevant Buyer Affiliate, the amount of such excess; provided , that the amounts payable under this Section 2.7(h) shall be netted so that only one payment shall be made under this Section 2.7(h); and

(ii)         if both the Estimated Net Available Cash and the Final Net Available Cash exceed $2,000,000, and (x) if the Final Net Available Cash exceeds the Estimated Net Available Cash, Buyer shall pay or cause Carbone Savoie to pay to GTI, on behalf of the Sellers, 70% of such excess, which shall be considered a distribution of earnings and profits or a return of capital, or (y) if the Estimated Net Available Cash exceeds the Final Net Available Cash, GTI shall pay or cause the Sellers to pay to Buyer, on behalf of Buyer and the Buyer Affiliates, 70% of the amount of such excess, which shall be deemed an adjustment to the dividend paid pursuant to Section 2.6(b); and

(iii)        if (x) the Estimated Net Available Cash exceeds $2,000,000 but the Final Net Available Cash is less than $2,000,000, GTI shall pay to Buyer (i) 100% of the difference between $2,000,000 and the Final Net Available Cash as an adjustment to the Purchase Price and (ii) 70% of the difference between $2,000,000 and the Estimated Net Available Cash, which shall be deemed an adjustment to the dividend paid pursuant to Section 2.6(b); (y) the Estimated Net Available Cash is less than $2,000,000 and the Final Net Available

 

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Cash is greater than $2,000,000, Buyer shall pay to GTI 100% of the difference between the Estimated Net Available Cash and $2,000,000 (which shall be treated as an adjustment to the Purchase Price) and 70% of the difference between $2,000,000 and the Final Net Available Cash, which shall be deemed an adjustment to the dividend paid pursuant to Section 2.6(b); or (z) both the Estimated Net Available Cash and the Final Net Available Cash are less than $2,000,000, GTI shall pay the difference to Buyer if the Estimated Net Available Cash exceeds the Final Net Available Cash or Buyer shall pay the difference to GTI if the Final Net Available Cash exceeds the Estimated Net Available Cash, in each case, as an adjustment to the Purchase Price.

(i)         For convenience purposes, the amounts required to be paid pursuant to Sections 2.7(h) shall be netted against or added to each other, as the case may be, so that only one payment shall be made under Section 2.7(h). The netting of balances pursuant to this Section 2.7(i) shall not affect the character of the amounts set forth under Section 2.6, except as provided by Section 2.7(h)(iii).

SECTION 2.8   Payment Mechanics . Buyer shall pay or cause the Buyer Affiliates to pay, when due, to GTI (acting as agent to the Sellers) the Purchase Price, and any amounts due to GTI, Swissco, SNC or UCAR Holdings pursuant to Section 2.6, by wire transfer of immediately available Federal Reserve funds to the account of GTI maintained at LaSalle Bank N.A. (American Banking Association number 071000505) located at Chicago, Illinois (account number 5800302589). GTI shall pay or cause the Sellers to pay, when due, to Buyer (acting as agent for the Buyer Group companies) any amount due to Buyer or any other Buyer Group company (including Carbone Savoie) pursuant to Section 2.7 by wire transfer of immediately available funds to the account of Buyer, which shall be set forth in a written notice which Buyer shall give to GTI not fewer than five Business Days prior to the Closing.

SECTION 2.9   Allocation . The Purchase Price, including the Assumed Liabilities, shall be allocated among the Sellers and among the Purchased Assets in the manner set forth on Schedule 2.9. The Parties agree that such allocations were established by arms’-length negotiation between them. Buyer and GTI shall, and shall cause their respective subsidiaries to, file their Tax Returns consistently with such allocations. Neither Principal will take, or permit its subsidiaries to take, a position on any Tax Return, before any Governmental Authority charged with the collection of any Tax or in any Proceeding involving any Tax that is any way inconsistent with such allocation unless required to do so by Law. Except as otherwise provided in Section 2.7(h)(iii), any adjustment to the Purchase Price in accordance with Section 2.6 or 2.7 will be allocated to the CS Equity.

ARTICLE 3

 

CLOSING MATTERS

SECTION 3.1

Closing; Closing Obligations and Deliveries .

(a)        The closing of the transactions contemplated hereby (the “ Closing ”) shall take place at the offices of Lovells Paris, located at 6, avenue Kléber, 75116 Paris, France, on the month end immediately following the satisfaction or waiver (by the applicable Principal) of all

 

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conditions to the obligations of the Parties set forth in Article 7 (other than conditions with respect to actions contemplated to be taken at the Closing itself), but not prior to December 29, 2006, or on such other date at such other place as GTI and Buyer may mutually agree. The date applicable under this Section 3.1(a) is called the “ Closing Date ”.

(b)        Prior to or at the Closing, GTI shall deliver, or cause to be delivered, to Buyer, on behalf of Buyer and the designated Buyer Affiliates, as their interests may appear:

(i)          ordres de movement (or other appropriate instrument of conveyance) and the relevant CERFA tax form, duly executed by the record holder of the CS Equity with respect to all of the CS Equity;

(ii)         to the extent necessary or required, notarial deeds of sale in respect of each parcel of the Transferred Real Property, drawn up by a notary acceptable to the Principals and executed in the presence of such notary and, in connection therewith, to the extent necessary, written notification by the local municipality in NDB that it will not exercise its right to preempt the sale of the Transferred Real Property;

(iii)        except as provided in Section 3.4, one executed document of assignment or transfer required of the Sellers with respect to each of the Permits to be assigned;

(iv)	the Consents set forth in Schedule 3.1(b)(iv) ;

(v)        one certified copy of the resolutions of the boards of directors of GTI and each Seller evidencing the authorizations described in Section 5.2;

(vi)        each Related Agreement, in such number of originals as there are parties thereto and each duly executed by GTI and each of its subsidiaries (including the CS Companies) which is a party thereto and, with respect to each Related Agreement governed by French Law, initialed by each of them which is a party thereto;

(vii)       the resignations of the members of the management committee of Carbone Savoie who are Affiliated with or nominated by GTI or its subsidiaries;

(viii)      duly executed releases of any Liens on the Purchased Assets other than Permitted Liens;

(ix)        duly executed bills of sale or other instruments and documents, in form and substance reasonably acceptable to GTI and Buyer, with respect to the transfer of the Brazil Purchased Assets and the SNC Purchased Assets;

(x)        receipts acknowledging payment of the Purchase Price, the dividend payable to UCAR Holdings (as provided herein), the Estimated Intercompany A/P Payable by Carbone Savoie (less the Estimated Intercompany A/R Payable to Carbone Savoie) and the principal and accrued interest on all Indebtedness for Borrowed Money payable to GTI and its subsidiaries (including the Brazil Subsidiaries, but excluding Carbone Savoie), each subject to subsequent adjustment pursuant to Section 2.7;

 

 

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(xi)        such other certificates, instruments and documents, in form and substance reasonably satisfactory to Buyer, as Buyer may reasonably request.

(c)        At the Closing, Buyer shall deliver, or cause to be delivered, to GTI, on behalf of GTI and the Sellers, as their interests may appear:

(i)         one fully executed copy of each assignment and assumption agreement relating to the Assumed Liabilities, which shall, by the terms thereof, provide for execution by Buyer or a Buyer Affiliate, including Carbone Savoie;

(ii)         each Related Agreement in such number of originals as there are parties thereto and each duly executed by Buyer and each of its Affiliates (including Carbone Savoie) which is a party thereto and, with respect to each Related Agreement governed by French Law, initialed by each of them which is a party thereto;

(iii)        to the extent required by applicable Law or Organizational Documents, one certified copy of the resolutions of the boards of directors of Buyer and each Buyer Affiliate evidencing the authorizations described in Section 4.2;

(iv)        the Purchase Price, subject to subsequent adjustment pursuant to Section 2.7; and

(v)        such other certificates, instruments and documents in form and substance reasonably acceptable to GTI, as GTI may reasonably request.

SECTION 3.2   Recording of Documents; Transactional Taxes . Buyer and the designated Buyer Affiliates shall be responsible, at its and their expense, for the filing or recording of such deeds, assignments, instruments or documents as may be delivered by GTI or any of its subsidiaries hereunder, however effected, and for the preparation, recording and filing of such additional assignments, instruments or documents as may be necessary or appropriate to perfect the right, title or interest of Buyer or the designated Buyer Affiliates to or in the Purchased Assets. Buyer and the designated Buyer Affiliates shall be responsible for all Transactional Taxes with respect to the transactions contemplated herein.

SECTION 3.3

Subsidiary Purchase Agreements .

(a)        Immediately prior to the Closing, the Principals shall cause Carbone Savoie to, and shall cause Carbone Savoie to cause CS Brazil Operating to, enter into a separate transfer of assets and assumption of liability agreement (in English) (the “ Brazil Purchase Agreement ”) in respect of the Brazil Purchased Assets, substantially in the form of Exhibit A . The Brazil Purchase Agreement shall be construed so as to be consistent with this Agreement and so as not to create duplicative rights and liabilities; provided , however , that, in the event of a conflict or inconsistency between this Agreement and the Brazil Purchase Agreement as to any matter other than one mandatorily governed by Brazilian Laws or Orders, this Agreement shall govern and, in the event of a conflict or inconsistency as to any matter mandatorily so governed, (i) the Brazil Purchase Agreement shall govern as between the parties thereto and (ii) the Principals shall, or shall cause their respective Affiliates to, take such actions and make such adjustments to this Agreement (including the making of payments and assuming of Liabilities;

 

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provided , further , howeve r, that (x) the aggregate purchase price payable following such actions and adjustments shall not exceed the aggregate purchase price payable under this Agreement and (y) the aggregate Liabilities to be assumed following such actions and adjustments shall not exceed the Liabilities to be assumed under this Agreement) permitted in other jurisdictions as may be necessary to eliminate the effect of the conflict or inconsistencies mandatorily so governed. If there is a difference in interpretation between the Portuguese and English versions of the Brazil Purchase Agreement, the English version shall govern.

(b)        At the Closing, SNC shall, and the Principals shall cause Carbone Savoie (as the Buyer Affiliate that is designated by Buyer to acquire the SNC Purchased Assets) to, enter into a separate transfer of assets and assumption of liability agreement (in English and translated into French) in respect of the SNC Purchased Assets and the Assumed Liabilities related to SNC, substantially in the form of Exhibits B-1 and B-2 (the “ SNC Asset Purchase Agreement ”). Buyer shall ensure that the French version of the SNC Asset Purchase Agreement is promptly filed or registered with any applicable Governmental Authority, to the extent required by applicable Law. Buyer and SNC shall also ensure that all formalities required under French Law in respect of the SNC Asset Purchase Agreement are carried out in a timely fashion. The SNC Asset Purchase Agreement shall be construed so as to be consistent with this Agreement and so as not to create duplicative rights and liabilities; provided , however , that, in the event of a conflict or inconsistency between this Agreement and the SNC Asset Purchase Agreement as to any matter other than one mandatorily governed by French Laws or Orders, this Agreement shall govern and, in the event of a conflict or inconsistency as to any matter mandatorily so governed, (i) SNC Asset Purchase Agreement shall govern as between the parties thereto and (ii) the Principals shall, or shall cause their respective Affiliates to, take such actions and make such adjustments to this Agreement (including the making of payments and assuming of Liabilities provided , further, however , that (x) the aggregate purchase price payable following such actions and adjustments shall not exceed the aggregate purchase price payable under this Agreement and (y) the aggregate Liabilities to be assumed following such actions and adjustments shall not exceed the Liabilities to be assumed under this Agreement) permitted in other jurisdictions as may be necessary to eliminate the effect of the conflicts or inconsistencies so governed. If there is a difference in interpretation between the French and English versions of the SNC Asset Purchase Agreement, the English version shall govern.

(c)        All Claims of Buyer or any of its Affiliates, including any designated Buyer Affiliate, arising from the transactions contemplated by this Agreement, the SNC Asset Transfer Agreement and the Brazil Purchase Agreement shall be made (but shall only be made) pursuant to, and in conformity with, the terms hereof, and Buyer, on behalf of itself and its Affiliates, including the designated Buyer Affiliates, waives all rights that it or they would otherwise have to make any Claim pursuant to the SNC Asset Purchase Agreement or the Brazil Purchase Agreement. Without prejudice to the foregoing, Buyer shall not permit Carbone Savoie or any Buyer Affiliate to make any Claim pursuant to the SNC Asset Purchase Agreement or the Brazil Purchase Agreement against SNC, CS Brazil Operating or any member of the Seller Group.

SECTION 3.4

Permits and Undertakings .

 

 

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(a)        At the Closing, GTI shall cause SNC to assign and transfer to Carbone Savoie the Permits which are used by SNC primarily in the Business and which can be assigned or transferred without having to obtain the Consent of any third party.

(b)        Except as otherwise requested by Buyer in writing, GTI shall cause SNC to use all reasonable efforts to obtain any third party Consents necessary or desirable to the assignment or transfer of any other Permits used primarily in the Business which are so assignable or transferable, and, at or after the Closing, upon receipt of any such Consents, transfer or assign such Permits to Carbone Savoie. Buyer shall cause Carbone Savoie at its expense promptly to provide such cooperation to SNC and to provide to SNC such copies of and access to all books, records, files, work and other papers, premises, personnel, data and other documents and information that it or they may have in its or their possession, as SNC may reasonably request for the purpose of obtaining such Consents.

(c)        Subsequent to the Closing, to the extent permitted by Law, GTI and its subsidiaries shall have the right to cancel any Permit issued to any of them or any Undertakings made or furnished by any of them in respect of the Purchased Assets or the Business that are not assigned or transferred to Carbone Savoie in accordance with Section 3.4(a) or 3.4(b); provided , however , that GTI shall cause SNC to maintain, at Buyer’s expense, any such Permits or Undertakings necessary for the operation of the SNC Purchased Assets by Carbone Savoie which Carbone Savoie shall not have obtained in accordance with Section 3.4(d) until the earlier of the expiration thereof or one year after the Closing. Buyer shall (i) use, and cause Carbone Savoie to use, reasonable efforts to obtain new Permits and Undertakings in lieu thereof and (ii) indemnify the Seller Group for, and hold the Seller Group harmless from and against, any and all Liabilities asserted against or incurred or sustained by the Seller Group relating to, associated with or arising out of the maintenance by the Sellers of any such Permits or Undertakings. In addition, Buyer shall cause Carbone Savoie to pay, or reimburse GTI and its subsidiaries for, all out-of-pocket costs associated with assignment or transfer of any Permits used or held for use in connection with the Business and the cost of any Undertakings used or held for use in connection with the Business which cannot be cancelled as long as they remain outstanding.

(d)        Except as otherwise provided in this Section 3.4, Buyer shall cause Carbone Savoie and each other designated Buyer Affiliate, as soon as practicable, at its expense, to obtain all Permits and make or furnish all Undertakings necessary or desirable to own, operate or maintain the Business or any of the Purchased Assets or to discharge any of the Assumed Liabilities (including environmental and other operating Permits, customs bonds, and consents of the applicable Governmental Authority to novation of government Contracts). Buyer agrees that neither GTI nor any of its subsidiaries have made, are making or will make any representation, warranty or guaranty with respect to any matter related thereto.

(e)        The failure of GTI or any of its subsidiaries to cancel any Permits or Undertakings shall not affect the respective rights, obligations and liabilities (including indemnification obligations) of the Parties hereunder.

(f)         Buyer shall cause Carbone Savoie, at Closing and at Buyer’s expense, to deliver replacement Undertakings in respect of any Undertakings entered into by SNC with respect to the Business in compliance with Section 6.3(c)(xxvi).

 

 

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SECTION 3.5

Assignment of Assets .

(a)        Except for Permits described in Section 3.4, to the extent that any asset described in Section 2.1 (including any right or Contract), or any interest arising thereunder or resulting therefrom, is not capable of being assigned, transferred, conveyed or delivered without the Consent of the issuer thereof or any other Person (including any Governmental Authority) or that such assignment, transfer, conveyance or delivery or attempted assignment, transfer, conveyance or delivery would constitute a breach thereof, a default thereunder or a violation of any Law or Order or would not be practicable because it relates to matters involving the Business or the Purchased Assets together with other businesses or assets of GTI or its subsidiaries, this Agreement shall not constitute an assignment, transfer, conveyance or delivery thereof or an attempted assignment, transfer, conveyance or delivery thereof, and neither GTI nor any of its Affiliates shall be obligated to assign, transfer, convey or deliver any of its or their right, title or interest in or to such assets or interests until such obstacles have been removed.

(b)        GTI shall and shall cause its subsidiaries to use all reasonable efforts to obtain all Consents and to resolve all impracticabilities described in Section 3.5(a) as soon as practicable; provided , however , that neither GTI nor any of its subsidiaries shall be obligated to pay any consideration therefor to any third party or materially to change or disrupt any of their operations or other activities. Buyer shall, and shall cause Carbone Savoie, at its and their expense, promptly to provide such cooperation to GTI and its subsidiaries and to provide GTI and its subsidiaries such copies of and access to all books, records files, work and other papers, premises, personnel, data and other documents and information that it or they may have in its or their possession, that GTI and its subsidiaries may reasonably request for the purpose of obtaining such Consents and resolving such impracticabilities.

(c)        To the extent that any of the Consents or impracticalities described in Section 3.5(a) have not been obtained or resolved as of the Closing, GTI shall and shall cause its subsidiaries (including SNC) to use all reasonable efforts during the remaining term of such asset or interest to (i) cooperate with Buyer, Carbone Savoie and the designated Buyer Affiliate in any reasonable and lawful arrangements designed to provide the benefits of such asset or interest to Buyer, Carbone Savoie and the designated Buyer Affiliate (including continued performance by GTI or its subsidiaries of a Contractual obligation for the benefit of Buyer, Carbone Savoie and the designated Buyer Affiliate until required Consents for the transfer of that Contract to Buyer, Carbone Savoie or Buyer Affiliate are obtained) so long as Buyer fully cooperates and causes its subsidiaries including Carbone Savoie or the designated Buyer Affiliate fully to cooperate with GTI and such subsidiary in such arrangements (including reimbursement for expenses and the granting of any required sub-Contracts or Consent by Buyer, Carbone Savoie or the designated Buyer Affiliate to enable GTI and its subsidiaries to so perform) and so long as such arrangements will not cause GTI or any of its Affiliates to be considered either a public utility or a common carrier and (ii) enforce, or cause to be enforced, at the request of Buyer, Carbone Savoie and the designated Buyer Affiliate and at the expense and for the account of Buyer, Carbone Savoie and the designated Buyer Affiliate, any rights of GTI or any of its subsidiaries arising from such asset or interest against the issuer thereof or the other party or parties thereto (including the right to elect to terminate any such asset or interest in accordance with the terms thereof upon the written request of Buyer, Carbone Savoie or the designated Buyer Affiliate).

 

 

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SECTION 3.6   Recapitalization of CS Brazil Operating and Repayment of Indebtedness for Borrowed Money .

(a)        Not more than five Business Days prior to the Closing, the Principals shall cause Carbone Savoie to pay to CS Brazil Operating by wire transfer the purchase price under the Brazil Purchase Agreement (and the Transactional Taxes payable with respect to the purchase price of the Brazil Transferred Assets), and, at the closing, Buyer shall reimburse to Carbone Savoie the amount of such Transactional Taxes. Immediately after the payment of the purchase price, the Principals:

(i)         first, shall cause Carbone Savoie to cause CS Brazil Operating to reserve (from the cash and cash equivalents then held by it, including such payment of purchase price and Transactional Taxes) the aggregate amount necessary to pay Transactional Taxes payable with respect to the purchase of the Brazil Purchased Assets and, if the Indebtedness for Borrowed Money owed by CS Brazil Operating to Carbone Savoie (the “ Brazil Subsidiary Loan ”) remains unpaid, the amount of CPMF Tax and other Tax payable by CS Brazil Operating with respect to the repayment in full of the Brazil Subsidiary Loan;

(ii)         second, shall cause Carbone Savoie to cause CS Brazil Operating to discharge all of its trade or other payables, whether or not then due, and all of its other known Liabilities, except Liabilities (x) in respect of customer Claims and other Claims with respect to products sold by CS Brazil Operating (which Carbone Savoie will assume, to the extent not already responsible therefor), (y) in respect of Proceedings or (z) in respect of Taxes, other than those Taxes referred to in clause (i) above; provided , however , that, if any cash so reserved by CS Brazil Operating is not actually paid out by CS Brazil Operating within 90 days of Closing, GTI shall pay to Buyer an amount equal to 30% of any such remaining cash;

(iii)        third, shall cause Carbone Savoie to cause CS Brazil Operating to use the remaining cash and cash equivalents then held by CS Brazil Operating, including the remainder of such purchase price, to repay Carbone Savoie the interest on, and principal amount then outstanding of, the Brazil Subsidiary Loan;

(iv)        fourth, shall cause Carbone Savoie immediately prior to the Closing to make a capital contribution to CS Brazil Holdings, and to cause CS Brazil Holdings, in turn, to make a capital contribution to CS Brazil Operating (or, if the Brazil Merger shall have become effective, to make such capital contribution to CS Brazil Operating), of the remaining principal amount, if any, of the Brazil Subsidiary Loan as of the Closing Date.

(b)        The Principals shall cause CS Brazil Operating to timely register the additional equity and the repayment of the Brazil Subsidiary Loan with the Central Bank of Brazil.

(c)        No amount paid to CS Brazil Operating pursuant to this Section 3.6 shall reduce the amount payable to GTI and its subsidiaries at the Closing pursuant to the terms of Section 2.5, 2.6 or 2.7.

(d)        For purposes of determining Estimated Net Available Cash and Final Net Available Cash, the amount received by Carbone Savoie pursuant to Section 3.6(a)(iii) shall be

 

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included as cash in the calculation of Estimated Net Available Cash and Final Net Available Cash. The Intercompany A/P Payable by Carbone Savoie and Intercompany A/R Owed to Carbone Savoie shall be determined on the basis that the actions set forth in Section 3.6 (a) have been completed.

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES REGARDING BUYER

Buyer represents and warrants to GTI as of the date hereof as follows:

SECTION 4.1   Organization . Each of Buyer and each Buyer Affiliate is a corporation, partnership, limited liability company or other organization that is duly organized, validly existing and in good standing under the Laws of its jurisdiction of formation (to the extent such concept is recognized in such jurisdiction) and is duly licensed or qualified and in good standing in each jurisdiction in which the conduct of its business requires such licensing or qualification, except where the failure to be so licensed or qualified and in good standing would not have a material adverse effect on Buyer or any of the Buyer Affiliates, or the execution, delivery or performance of this Agreement, any Closing Document or any Related Agreement by Buyer or any Buyer Affiliate, to the extent that each of them is a party hereto or thereto, or the consummation by Buyer or any Buyer Affiliate of the transactions contemplated by this Agreement or any Related Agreement to be consummated by any of them. Each of Buyer and each Buyer Affiliate has the corporate, partnership, limited liability company or other organizational power and authority necessary to (a) execute, deliver and perform its obligations under this Agreement and, to the extent that it is a party thereto, each Related Agreement and each Closing Document, (b) consummate the transactions contemplated hereby and thereby to be consummated by it, (c) own, lease or use the Purchased Assets to be purchased by it and (d) conduct its business as currently conducted by it and conduct the Business to be conducted by it. Each of Buyer and each Buyer Affiliate is duly qualified or licensed and in good standing as a foreign corporation authorized to do business under the Laws of each jurisdiction in which the ownership, leasing or use of its assets or the Purchased Assets by it or the conduct of its business as currently conducted by it and the Business to be conducted by it requires such licensing or qualification, except where the failure to be so licensed or qualified and in good standing would not have a material adverse effect on Buyer or any of the Buyer Affiliates, or the execution, delivery or performance of this Agreement, any Closing Document or any Related Agreement by Buyer or any Buyer Affiliate, to the extent each of them is a party hereto or thereto, or on the consummation by Buyer or any Buyer Affiliate of the transactions contemplated hereby and thereby to be consummated by any of them. Neither Buyer nor any Buyer Affiliate is in violation of any provision of its Organizational Documents.

SECTION 4.2   Authorization, Execution and Enforceability . The execution and delivery of this Agreement, the Closing Documents and the Related Agreements by Buyer and each Buyer Affiliate, to the extent that each of them is a party hereto or thereto, and the performance by Buyer and each Buyer Affiliate of their respective obligations hereunder and thereunder, and the consummation by Buyer and each Buyer Affiliate of the transactions contemplated hereby and thereby to be consummated by each of them have been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action

 

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on the part of Buyer and each Buyer Affiliate. This Agreement constitutes and, as of the Closing, each of the Closing Documents and the Related Agreements will constitute, a legal, valid and binding obligation of Buyer and each Buyer Affiliate, to the extent that each of them is party hereto or thereto, enforceable against Buyer and each Buyer Affiliate in accordance with their respective 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). This Agreement has been, and, as of the Closing, each Closing Document and Related Agreement will have been, duly executed by Buyer and each Buyer Affiliate, to the extent that each of them is a party hereto or thereto.

SECTION 4.3   No Breach . The execution and delivery of this Agreement, the Closing Documents and the Related Agreements by Buyer and each Buyer Affiliate, to the extent that each of them is a party hereto or thereto, the performance by Buyer and each Buyer Affiliate of their respective obligations hereunder and thereunder and the consummation by Buyer and each Buyer Affiliate of the transactions contemplated hereby and thereby to be consummated by each of them do not and will not (a) conflict with, result in any violation of or constitute a default under the Organizational Documents of Buyer or any Buyer Affiliate, (b) 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 upon any of the properties of Buyer or any Buyer Affiliate pursuant to any Contract to which Buyer or any Buyer Affiliate is a party or by which any of such properties is bound (with or without the giving of notice or lapse of time, or both) or (c) result in a violation of or conflict with any Law (including any applicable employment law requirements to consult employees) or any Order applicable to Buyer or any Buyer Affiliate or any of such properties, except, in the case of clause (b) or (c) above, for such defaults, breaches, cancellations, terminations, accelerations, creations or violations that would not, in the aggregate, be material to the Buyer or would not have a material adverse effect on the execution, delivery or performance of this Agreement, any Closing Document or any Related Agreement, by Buyer or any Buyer Affiliate, to the extent any of them is a party hereto or thereto, or on the consummation by Buyer or any Buyer Affiliate of the transactions contemplated hereby and thereby to be consummated by them.

SECTION 4.4   Consents . Except with respect to filings with or notifications to and clearances from the applicable antitrust authorities in the applicable jurisdictions, no Consent is required to be obtained from, no notice is required to be given to and no filing is required to be made with any Person (including any Governmental Authority) by Buyer or any Buyer Affiliate in order (a) for this Agreement, the Closing Documents and the Related Agreements to constitute the legal, valid and binding obligations of Buyer and each Buyer Affiliate, to the extent that each of them is a party hereto or thereto, or (b) to authorize or permit the execution, delivery or performance of this Agreement, the Closing Documents and the Related Agreements by Buyer and each Buyer Affiliate, to the extent that each of them is a party hereto or thereto, or the consummation of the transactions contemplated hereby and thereby to be consummated by each of them.

SECTION 4.5   Purchase for Investment . Buyer is purchasing the CS Equity for its own account for investment and not with a view toward, or for resale in connection with, any distribution thereof. Buyer has sufficient knowledge and experience in financial and

 

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business matters so as to be capable of evaluating the merits and risks of its investment in the CS Equity and is capable of bearing the economic risks of such investment.

SECTION 4.6   Brokers; Finders . No finder, broker or similar intermediary acting on behalf of Buyer or any of its Affiliates is entitled to a commission, fee or other compensation in connection with the negotiation, execution or delivery of this Agreement or any of the Related Agreements or the consummation of any of the transactions contemplated hereby or thereby.

SECTION 4.7   Engagement Letter . Buyer has provided a correct and complete copy of the Engagement Letter to GTI.

ARTICLE 5

 

REPRESENTATIONS AND WARRANTIES

REGARDING GTI AND THE BUSINESS

GTI represents and warrants to Buyer as of the date hereof and of the Closing Date as follows:

SECTION 5.1   Organization . Each of GTI, each of the Sellers and each of the CS Companies is a corporation, partnership, limited liability company or other organization that is duly organized, validly existing and in good standing under the Laws of its jurisdiction of formation (to the extent such concept is recognized in such jurisdiction) and is duly licensed or qualified and in good standing in each jurisdiction in which the conduct of its business requires such licensing or qualification, except where the failur