EXHIBIT 2.1(c)
DISTRIBUTION AGREEMENT (this
"Agreement"), dated as of February 29,
1996, among HEXCEL CORPORATION, a Delaware
corporation ("Hexcel"), BROCHIER S.A., a
French corporation ("Brochier"), COMPOSITE
MATERIALS LIMITED, a United Kingdom
corporation ("CML"), SALVER, S.r.l., an
Italian corporation ("Salver", together
with Brochier and CML, the "Hexcel
Subsidiaries"), and CIBA-GEIGY LIMITED, a
Swiss corporation ("Ciba").
WHEREAS, Ciba and Hexcel have entered into a
Strategic Alliance Agreement dated as of September 29,
1995 and amended as of December 12, 1995 (the "SAA")
pursuant to which Ciba and Hexcel have agreed to combine
the Transferred Business with Hexcel's business;
WHEREAS, in connection with the SAA, Hexcel and
the Hexcel Subsidiaries desire Ciba to continue to have
Ciba's affiliates act as distributors for products of the
Transferred Business in the territories referred to on
Schedule 1 attached hereto (the "Distributors");
WHEREAS, Hexcel and Ciba are interested in a
smooth transition of the Transferred Business to Hexcel;
and
WHEREAS, Ciba is willing to have its affiliates
provide their services as Distributors for products of
the Transferred Business.
NOW, THEREFORE, in consideration of the
undertakings set forth herein and for other good and
valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto have
therefore agreed as follows:
SECTION 1. Terms not specifically defined
herein shall have the meaning assigned to them in the
SAA.
SECTION 2. (a) Ciba commits that the
affiliates of Ciba listed in Schedule 1 hereto shall
continue to act as Distributors for products of the
Transferred Business in the countries listed in
Schedule 1 under the terms and conditions at which they
have cooperated with the Transferred Business during the
six-month period immediately prior to the date of this
agreement. The Distributors shall act as independent
distributors and are in no way authorized to bind Hexcel
and/or the Hexcel Subsidiaries.
(b) In the event that Danutec is acquired by
Hexcel and/or the Hexcel Subsidiaries on or before
March 31, 1997, Danutec shall be deemed to be a Hexcel
Subsidiary under this Agreement entitled to all the
rights and benefits thereof.
(c) A list of the employees currently working
for each Distributor in connection with the Transferred
Business (the "Employees") is attached hereto as
Schedule 2.
SECTION 3. (a) The Distributors shall use all
commercially reasonable efforts to continue to solicit
and serve customers for the Transferred Business by using
the assets and employees dedicated to the Transferred
Business at present and reflected in the Balance Sheet.
The Distributors shall also provide the necessary
administrative support and related services.
(b) Hexcel and the Hexcel Subsidiaries shall
use all commercially reasonable efforts to continue to
supply the Distributors.
(c) The Distributors shall report to Hexcel
and the appropriate Hexcel Subsidiaries via the existing
regional management structure of the Transferred
Business.
(d) The Distributors shall continue to provide
budgets, latest estimates, monthly reports and one-year
plans in the format and in accordance with the timetable
to be agreed with Hexcel and the Hexcel Subsidiaries.
(e) The Distributors shall continue monthly
third party sales reporting as per the Ciba Form G02
currently used, including the end of month Ciba "quick"
report.
(f) The Distributors shall visit customers
regularly and provide to Hexcel and the appropriate
Hexcel Subsidiaries reports on key customers and assist
the personnel of Hexcel and the Hexcel Subsidiaries in
obtaining access to customers.
(g) The Distributors shall manage local
stocks, consignment stocks and the assets of the
Transferred Business in the countries listed on
Schedule I hereto in the best interest of Hexcel and the
Hexcel Subsidiaries in accordance with the direction of
the regional management structure of the transferred
business.
SECTION 4. Hexcel and all the Hexcel
Subsidiaries shall provide the Distributors with price
lists for the products of the transferred business to be
handled by the Distributors and use their commercially
reasonable efforts to fulfill all orders of the
Distributors as requested in accordance with the terms
hereof and at list prices. Hexcel, the Hexcel
Subsidiaries and the regional management structure of the
transferred business together with the Distributors shall
coordinate dealing with key customers in the countries.
SECTION 5. (a) The Distributors shall not,
without the prior agreement of Hexcel, which agreement
shall not be unreasonably withheld, transfer key
employees providing services to the Transferred Business
hereunder to other businesses of the Ciba Group.
(b) The Hexcel Subsidiaries shall ship orders
either to the Distributors or, if requested, directly to
customers.
(c) The Distributors shall not provide
customers with warranties exceeding the warranties
provided to the Distributors by Hexcel and the Hexcel
Subsidiaries.
SECTION 6. (a) This Agreement shall become
effective on the Closing Date and shall remain in effect
until March 1, 1997. Hexcel shall be entitled to give
two (2) months written notice effective at the end of any
calendar month to terminate this Agreement for one or
more specified Distributors at any time.
(b) Upon termination of this Agreement in its
entirety or for specified Distributors, Hexcel and/or the
Hexcel Subsidiaries shall acquire the Inventory and Fixed
Assets of the Distributor(s) which constitute the
Deferred Assets. Such Inventory shall consist of those
products of the Transferred Business purchased from
Hexcel and the Hexcel Subsidiaries by the Distributor(s).
Such Inventory shall be acquired by Hexcel or the Hexcel
Subsidiaries at a purchase price equal to the landed cost
of such Inventory to the Distributor(s). Fixed Assets
shall consist of the assets listed on Schedule 3 hereto.
Such fixed assets shall be transferred to Hexcel and the
Hexcel Subsidiaries free of charge, with the exception of
the fixed assets in South Africa for which Hexcel shall
pay Ciba (i) U.S.$318,477, plus (ii) U.S.$139,053 if the
Spartan plan land and building are also transferred.
(c) Upon termination of this Agreement in its
entirety or with respect to one or more specified
Distributors, Hexcel and/or the Hexcel Subsidiaries shall
have the right to offer and where by law obliged to
actually offer employment to the relevant Employees.
Employment shall be offered on compensation and benefit
terms that are reasonably competitive considering the
country involved, then prevailing economic conditions,
the industry sector in which the relevant Employees are
engaged and the relevant Employees' skills and
experience. Prior to employment by Hexcel or any of the
Hexcel Subsidiaries, the Distributor(s) (or if
applicable, Ciba) shall fully vest the relevant Employees
in any pension scheme or other employee benefit program
in which such Employees have participated and
Distributor(s) (of if applicable, Ciba) shall retain any
and all liabilities with respect thereto. If Hexcel and
the Hexcel Subsidiaries fail to offer employment to one
or more of such Employees and within three (3) months
thereafter the applicable Distributor(s) terminates the
employment of any such Employee, then Hexcel shall
contribute an amount up to the amount specified by law
and if no such law exists an amount to be agreed to by
the parties, which amount shall not exceed one year's
total compensation for the respective Employee(s).
Except as otherwise provided in this Agreement, Hexcel
shall treat all Employees no less favorably than other
employees of Hexcel who are employed in comparable
positions in comparable locations.
(d) Hexcel and the Hexcel Subsidiaries shall
be free to negotiate either an extension of this
Agreement or one or more new agreements with any of the
Distributors.
(e) Sections 8.07 and 8.08 of the SAA are
incorporated by reference herein and shall be deemed to
constitute part of this Agreement.
SECTION 7. Notices. All notices and other
communications hereunder shall be in writing (including
fax) and shall be sent, delivered or mailed, addressed,
or faxed:
(a) if to Hexcel or any of the Hexcel
Subsidiaries, to:
Hexcel Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx,XX 00000
(T) (000) 000-0000 (x4257)
(F) (000) 000-0000
Attention of Xxxxxxx X. Xxxxxxx
and
Xx. Xxxxxx X. Xxxxx
(T) 510 847-9500 (x4383)
(F) 000 000-0000
(b) if to Ciba to:
Ciba-Geigy Limited
XX 0000
Xxxxx, Xxxxxxxxxxx
(T) (00) 00 000-0000
(F) (00) 00 000-0000
Attention of Xx. Xxxxx Xxxxxx
Each such notice, request or other communication shall be
given (i) by hand delivery, (ii) by nationally recognized
courier service or (iii) by fax, receipt confirmed. Each
such notice, request or communication shall be effective
(A) if delivered by hand or by nationally recognized
courier service, when delivered at the address specified
in this Section 7 (or in accordance with the latest
unrevoked written direction from the party to whom such
notice is delivered) and (B) if given by fax, when such
fax is transmitted to the fax number specified in this
Section 7 (or in accordance with the latest unrevoked
written direction from the party to whom such notice is
transmitted), and the appropriate confirmation is
received.
IN WITNESS WHEREOF, the parties hereto have
caused this Distribution Agreement to be duly executed by
their respective authorized officers as of the date first
above written.
HEXCEL CORPORATION,
by /s/ XXXX M.D. XXXXXXXXX
Name: Xxxx M.D. Xxxxxxxxx
Title: Head of Regional Finance
and Control
CIBA-GEIGY LIMITED,
by /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Senior Division Counsel
COMPOSITE MATERIALS LIMITED,
by /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Authorized Representative
BROCHIER, S.A.,
by /s/ JEAN YVES LE CAM
Name: Jean Yves Le Cam
Title: President du Directione
SALVER, S.r.l.,
by /s/ XXXXXXX XXXXXXXXX
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
