CONTRIBUTION AGREEMENT DATED AS OF JANUARY 31, 2006 among HERCULES INCORPORATED, WSP, INC., SPG/FV INVESTOR LLC and FIBERVISIONS DELAWARE CORPORATION
EXHIBIT
10.33
CONTRIBUTION
AGREEMENT
DATED
AS OF JANUARY 31, 2006
among
HERCULES
INCORPORATED,
WSP,
INC.,
SPG/FV
INVESTOR LLC
and
FIBERVISIONS
DELAWARE CORPORATION
Table
of Contents
|
SECTION
1
|
Definitions
|
|
SECTION
2
|
Transaction
|
|
2.1
|
Transaction
and Closing
|
|
2.2
|
Total
Transaction Costs
|
|
2.3
|
Redemption
Price Adjustments
|
|
SECTION
3
|
Representations
and Warranties of Hercules and WSP
|
|
3.1
|
Organization;
Good Standing; Corporate Power
|
|
3.2
|
Noncontravention
|
|
3.3
|
Brokers
|
|
3.4
|
Equity
Investments
|
|
3.5
|
Financial
Statements
|
|
3.6
|
Operations
in the Ordinary Course; No Material Adverse Effect
|
|
3.7
|
Undisclosed
Liabilities
|
|
3.8
|
Legal
Compliance
|
|
3.9
|
Tax
Matters
|
|
3.10
|
Real
Property
|
|
3.11
|
Intellectual
Property
|
|
3.12
|
Capitalization
of the Company and its Subsidiaries
|
|
3.13
|
Issuance
of Securities
|
|
3.14
|
Required
Consents; Approvals
|
|
3.15
|
Contracts
|
|
3.16
|
Insurance
|
|
3.17
|
Environmental
Matters
|
|
3.18
|
Litigation
|
|
3.20
|
Employment
Relations
|
|
3.21
|
Employee
Benefit Plans
|
|
3.22
|
Transactions
with Interested Persons
|
|
3.23
|
Customers
and Suppliers
|
|
3.24
|
Inventory
|
|
3.25
|
Accounts
Receivable; Accounts Payable
|
|
3.27
|
Bank
Accounts
|
|
3.26
|
Title
|
|
3.27
|
Asbestos
|
|
3.28
|
Former
Business Transactions
|
|
3.29
|
Survival
of Representations
|
|
SECTION
4.
|
Representations,
and Warranties of SPG
|
|
4.1
|
Organization;
good Standing; Corporate Power
|
|
4.2
|
Noncontravention
|
|
4.3
|
Investment
|
|
4.4
|
Knowledge
|
|
4.5
|
Accredited
Investor
|
|
4.6
|
Accuracy
of Certain Information
|
|
4.7
|
Brokers
|
|
4.8
|
Required
consents; Approvals
|
|
4.9
|
Survival
of Representations
|
|
SECTION
5.
|
Covenants
|
|
5.1
|
Conduct
of the Business
|
|
5.2
|
Payment
of Earnout to Hercules
|
|
5.3
|
Debt
Financing
|
|
5.4
|
Regulatory
Filings and Approvals
|
|
5.5
|
|
|
5.6
|
Transition
Services Agreement
|
|
5.7
|
Option
Agreement
|
|
5.8
|
Transaction
Costs
|
|
5.9
|
Resignations
|
|
5.10
|
Non-Competition
|
|
5.11
|
Intentionally
Omitted
|
|
5.12
|
Amendment
to Credit Agreement
|
|
5.13
|
Efforts
to Consummate
|
|
5.14
|
Further
Assurances
|
|
5.15
|
Non-Solicitation;
Non-Hire
|
|
5.16
|
Employee
Matters
|
|
5.17
|
Tax
Cooperation
|
|
5.18
|
Debt/Cash
of Company
|
|
5.19
|
Exclusive
Dealing
|
|
5.20
|
Intellectual
Property Rights
|
|
5.21
|
Transition
Services Planning
|
|
5.22
|
Consents
and Approvals
|
|
5.23
|
Insurance
|
|
5.24
|
Additional
Payment
|
|
5.25
|
General
Cooperation
|
|
SECTION
6.
|
Conditions
Precedent to Closing
|
|
6.1
|
Conditions
to Each Party’s Obligations to Close
|
|
6.2
|
Conditions
to the Obligations of Hercules and WSP
|
|
6.3
|
Conditions
to the Obligations of SPG
|
|
SECTION
7.
|
Closing
Deliveries
|
|
7.1
|
Company
Closing Deliveries
|
|
7.2
|
Hercules
and WSP Closing Deliveries
|
|
7.3
|
SPG
Closing Deliveries
|
|
SECTION
8.
|
Indemnification
|
|
8.1
|
Indemnification
by Parties
|
|
8.2
|
Limitations
on Indemnity
|
|
8.3
|
Effect
of Insurance
|
|
8.4
|
Exclusive
Remedy
|
|
8.5
|
Notice
of Claim
|
|
8.6
|
Third
Person Claims
|
|
8.7
|
Set
Off
|
|
8.8
|
Purchase
Price Adjustment
|
|
SECTION
9.
|
Termination
and Waiver
|
|
9.1
|
Termination
|
|
9.2
|
Notice
of Termination
|
|
9.3
|
Effect
of Termination
|
|
9.4
|
Return
of Documents
|
|
SECTION
10.
|
Miscellaneous
|
|
10.1
|
Binding
Agreement
|
|
10.2
|
Notices
|
|
10.3
|
Consents
and Waivers
|
|
10.4
|
Assignments,
Successors, and No Third-Party Rights
|
|
10.5
|
Amendments
and Termination
|
|
10.6
|
Governing
Law; Consent to Jurisdiction
|
|
10.7
|
Prior
Agreements
|
|
10.8
|
Confidential
and Embedded Information
|
|
10.9
|
Public
Announcements
|
|
10.10
|
Severability
|
|
10.11
|
Counterparts
|
|
10.12
|
Captions
44
|
|
10.13
|
Exhibits,
Schedules and Other References
|
|
10.14
|
Rules
of Construction
|
Exhibits
and Schedules
Exhibit
ACertificate
of Incorporation
Exhibit
BStockholders
Agreement
Exhibit
COption
Agreement
Exhibit
DTransition
Services Agreement
Exhibit
ECommitment
Letters
Exhibit
FForm
of
Employee Lease Agreement
Schedule
1.1Hercules’
Knowledge
Schedule
1.2Permitted
Encumbrances
Schedule
1.3Subsidiaries
Schedule
2.3(b)(i)Net
Working Capital
Schedule
2.3(b)(ii)Adjusted
EBITDA
Schedule
3.2Noncontravention
Schedule
3.3Stockholders’
Brokers
Schedule
3.4Equity
Investments
Schedule
3.5Financial
Statements
Schedule
3.6(a)Material
Adverse Effect
Schedule
3.6(d)Material
Transactions or Commitments Not in Ordinary Course
Schedule
3.6(e)Transfer
or Mortgage of Non-Current Assets
Schedule
3.6(g)Capital
Expenditures
Schedule
3.6(h)Discharge
of Encumbrances
Schedule
3.6(i)Transfer
of Intellectual Property Rights
Schedule
3.6(j)(i)Principal
Officers
Schedule
3.6(j)(ii)Resignations
Schedule
3.6(k)Loans
or
Guarantees to Officers, Directors, etc.
Schedule
3.6(t)Material
Changes in Customer Terms
Schedule
3.7Undisclosed
Liabilities
Schedule
3.10(a)Owned
Real Property
Schedule
3.10(b)Leased
Real Property
Schedule
3.10(c)Other
Real Property
Schedule
3.10(f)Material
Written Notice
Schedule
3.11(a)(i)Registered
Intellectual Property
Schedule
3.11(a)(ii)Intellectual
Property Licenses
Schedule
3.11(b)Royalties;
License Fees
Schedule
3.11(c)Employee
Intellectual Property Rights
Schedule
3.11(d)Unregistered
Intellectual Property Rights
Schedule
3.11(e)(i)Certain
Intellectual Property Registrations
Schedule
3.11(e)(ii)Pursuit
of Registrations
Schedule
3.12(a)Capitalization
Schedule
3.12(b)Anti-Dilution
Schedule
3.12(d)Registration
Rights
Schedule
3.14Required
Consents
Schedule
3.16Insurance
Schedule
3.17Environmental
Matters
Schedule
3.18Litigation
Schedule
3.19(a)(i)Compliance
with Certain Employment-Related Laws
Schedule
3.19(a)(ii)Employee
Agreements
Schedule
3.20(a)Employee
Benefit Plans
Schedule
3.20(c)Employee
Plan Compliance
Schedule
3.20(d)ERISA
Plans
Schedule
3.20(f)Plan
Litigation
Schedule
3.20(g)Effect
of
Agreement on Plans
Schedule
3.20(j)Open
Relocation Cases
Schedule
3.21Transactions
with Interested Persons
Schedule
3.25Bank
Accounts
Schedule
3.28Former
Business Transactions
Schedule
4.1Organization;
Good Standing; Corporate Power
Schedule
4.6Legal
Name; Principal Office
Schedule
4.7SPG’s
Brokers
Schedule
5.1Conduct
of Business
Schedule
5.2Earnout
EBITDA
Schedule
5.2(c)(v)Term
Note
Provisions
Schedule
5.9Resignations
Schedule
5.10Non-Competition
Schedule
5.15Executive
Officers
Schedule
5.16Transferred
Employees
CONTRIBUTION
AGREEMENT
THIS
CONTRIBUTION AGREEMENT
dated as
of January 31, 2006 is made by and among Hercules Incorporated, a Delaware
corporation (“Hercules”),
WSP,
Inc., a Delaware corporation (“WSP”
and
together with Hercules, the “Stockholders”)
and a
wholly-owned subsidiary of Hercules, SPG/FV INVESTOR LLC, a Delaware limited
liability company (“SPG”)
and
FiberVisions Delaware Corporation, a Delaware corporation (including any
predecessor entity, the “Company”).
Background
WHEREAS,
Hercules presently owns 510 shares of common stock, par value $.01 per share
of
the Company (“Hercules
Shares”),
which
represents 51% of the Stock (as defined below) ;
WHEREAS,
WSP presently owns 490 shares of common stock, par value $.01 per share of
the
Company (“WSP
Shares”),
which
represents 49% of the Stock;
WHEREAS,
the Hercules Shares and the WSP Shares, collectively, constitute all of the
issued and outstanding capital stock of the Company (collectively, the
“Stock”);
WHEREAS,
on the Closing Date (as defined below), the Company and FiberVisions, A/S,
a
corporation organized and existing under the laws of the Kingdom of Denmark
(“FV
Denmark”)
and a
wholly owned subsidiary of the Company, shall incur the Debt Financing (as
defined below) on the terms provided herein;
WHEREAS, FV
Denmark, holds all of the outstanding equity (“FPI
Equity”)
of
FiberVisions Products, Inc., a Georgia corporation (“FPI”).
WHEREAS,
on the Closing Date, FV Denmark shall make a dividend of the FPI Equity to
the
Company and, upon the consummation of such dividend, FPI shall be a wholly-owned
subsidiary of the Company and (ii) FV Denmark shall dividend its portion
of the
Debt Financing proceeds to the Company (the “Restructuring”).
WHEREAS,
immediately following the consummation of the Debt Financing and the
Restructuring on the Closing Date, the Company shall pay the Hercules Dividend
(as defined below) to Hercules and the WSP Dividend (as defined below) to
WSP;
WHEREAS,
on the Closing Date, SPG shall contribute the Contribution Amount (as defined
below) to the Company in exchange for 33.78% of the Stock of the Company
(the
“SPG
Shares”);
WHEREAS,
immediately following the Contribution on the Closing, the Company shall
redeem
all of the Hercules Shares in exchange for the payment by the Company to
Hercules of the Redemption Price (as defined below) and the right to receive
the
Earnout Payments (as defined below);
WHEREAS,
WSP and SPG shall have entered into the Option Agreement (as defined below),
pursuant to which WSP shall grant to SPG an option to acquire 140 shares
of
Stock, which represents 14% of the Stock, from WSP on the terms set forth
in the
Option Agreement; and
WHEREAS,
this Agreement provides for, among other things, each of the following, which
are expressly conditioned on each other: (i) the Debt Financing; (ii) the
Restructuring; (iii) certain dividends to each of Hercules and WSP; (iv)
the Contribution by SPG; and (v) the redemption by the Company of the Hercules
Shares.
NOW,
THEREFORE, in consideration of the mutual covenants and promises set forth
herein, the parties hereto, intending to be legally bound, agree as
follows:
SECTION
1. Definitions
.
For
purposes of this Agreement, the following terms when appearing with initial
capital letters will have the following meanings:
“Adjusted
EBITDA Floor”
shall
have the meaning set forth in Section 2.3(e).
“Affiliate”
of
a
Person shall mean a Person Controlling, Controlled by or under common Control
with such Person.
“Agent”
shall
mean Credit Suisse First Boston, as administrative agent under the Credit
Agreement.
“Agreement”
shall
mean this Contribution Agreement and the Schedules and Exhibits attached
hereto.
“Basket
Amount”
shall
have the meaning set forth in Section 8.2(b).
“Cap
Amount”
shall
have the meaning set forth in Section 8.2(b).
“Certificate
of Incorporation”
shall
mean the certificate of incorporation of the Company as filed with the Secretary
of State of the State of Delaware and attached hereto as Exhibit A.
“Closing”
shall
have the meaning set forth in Section 2.1(b).
“Closing
Date”
shall
have the meaning set forth in Section 2.1(b).
“Closing
Date Financial Statements”
shall
have the meaning set forth in Section 2.3(a).
“Closing
Date Net Working Capital Statement”
shall
have the meaning set forth in Section 2.3(a).
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Company”
shall
have the meaning set forth in the preamble hereto.
“Company
Group”
shall
have the meaning set forth in Section 3.20(c).
“Company
Indemnified Parties”
shall
have the meaning set forth in Section 8.1(d).
“Company
Indemnifying Parties”
shall
have the meaning set forth in Section 8.1(a).
“Competing
Business”
shall
mean the development, manufacture, marketing, sale and distribution of viscose,
polypropylene, polyethylene, polyester, bi-component (defined as but not
limited
to staple fibers and continuous filaments made of two or more thermoplastic
polymers having different melting points), staple fibers and filament yarns
with
and without additives to impart properties to the staple fibers and/or the
filament yarns such as, but not limited to, color (solution dyed), dyeability,
wettability and antimicrobial, and used in applications such as, but not
limited
to the production of nonwoven fabrics using a carded thermal bonded process,
spunlace process, needlepunch process, airlaid process and combination thereof,
the production of woven and knitted fabrics and the use in industrial
applications such as, but not limited to, concrete reinforcement, concrete
cracking prevention, automotive nonwoven, tea bags, wet laid applications,
and
binder fibers.
“Confidential
Information”
shall
have the meaning set forth in Section 10.8(a).
“Contract”
means
any agreement, contract, obligation, promise, or undertaking (whether written
or
oral, express or implied) that is legally binding.
“Contribution”
shall
have the meaning set forth in Section 2.1(b)(i).
“Contribution
Amount”
shall
have the meaning set forth in Section 2.1(b)(i).
“Control”
and
each derivative thereof shall mean the possession, directly or indirectly,
of
the power to direct or cause the direction of the management of a Person,
whether through ownership of voting securities, by contract or
otherwise.
“Control
Premium”
shall
mean the Earnout Payments payable to Hercules by the Company, in respect
of
Hercules’ ownership of a controlling interest in the Company, which distribution
amount shall be calculated in accordance with Section 5.2 hereof.
“Credit
Agreement”
shall
mean the Amended and Restated Credit Agreement dated as of April 8, 2004
by and
among Hercules, certain subsidiaries of Hercules, several banks and financial
institutions named therein, and Agent, as amended by that certain First
Amendment dated as of August 12, 2004, as further amended by that certain
Second
Amendment dated as of June 29, 2005, and as further amended, restated, modified
or supplemented.
“Debt
Financing”
shall
have the meaning set forth in Section 5.3 of this Agreement.
“Debt
Financing Costs”
shall
mean those certain fees and expenses specifically listed on Schedule
2.2(a)
incurred
by the Company in connection with the consummation of the Debt
Financing.
“Definitive
Agreements”
shall
mean this Agreement, the Stockholders Agreement, the Transition Services
Agreement, the Option Agreement and all other agreements, documents,
certificates and other instruments to be executed and delivered by any party
at
the Closing.
“Divestiture
Notice”
shall
have the meaning set forth in Section 5.10(a)(iii).
“Earnout
Accountant”
shall
have the meaning set forth in Section 5.2(c)(ii).
“Earnout
EBITDA”
shall
have the meaning set forth in Section 5.2(c)(i).
“Earnout
Payment”
shall
have the meaning set forth in Section 5.2(a).
“Election
Notice”
shall
have the meaning set forth in Section 5.10(a)(iii).
“Encumbrance”
shall
mean any encumbrance, security interest, mortgage, lien, pledge, claim, lease,
agreement, right of first refusal, option, limitation on transfer or use
or
assignment or licensing, restrictive easement, charge or any other restriction
or third party rights of any kind with respect to any property or assets
(tangible or intangible), including any restriction on the ownership, use,
voting, transfer, possession, receipt of income or other exercise of any
attributes of ownership of such property or assets (whether tangible,
intangible, real or personal).
“Environmental
Laws”
shall
mean any Law relating to pollution or protection of the environment or human
health or safety, including, without limitation, the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
“Environmental
Permits”
shall
mean any permit, approval, identification number, license or other authorization
required under or issued pursuant to any Environmental Law.
“ERISA”
shall
have the meaning set forth in Section 3.20(a).
“Estimated
Earnout EBITDA”
shall
have the meaning set forth in Section 5.2(b)(i).
“Executive
Officers”
shall
have the meaning set forth in Section 5.15(a).
“FiberVisions
Business”
shall
mean the development, manufacture, marketing, sale and distribution of nonwoven
polypropylene staple fiber used in carded thermal bonded fabrics for hygiene
coverstock as well as olefin fiber for the domestic textile and industrial
markets.
“FiberVisions
Group”
shall
have the meaning set forth in Section 3.1(a).
“FiberVisions
Real Property”
shall
have the meaning set forth in Section 3.10(b).
“Final
2005 Adjusted EBITDA”
shall
have the meaning set forth in Section 2.3(b).
“Final
2005 Adjusted EBITDA Statement”
shall
have the meaning set forth in Section 2.3(b).
“Final
Closing Date Net Working Capital”
shall
have the meaning set forth in Section 2.3(b).
Final
Closing Date Net Working Capital Statement”
shall
have the meaning set forth in Section 2.3(b).
“Final
Earnout EBITDA”
shall
have the meaning set forth in Section 5.2(c)(iii).
“Financial
Statements”
shall
have the meaning set forth in Section 3.5.
“FPI”
shall
have the meaning set forth in the preamble hereto.
“FPI
Equity”
shall
have the meaning set forth in the preamble hereto.
“FV
Denmark”
shall
have the meaning set forth in the preamble hereto.
“GAAP”
shall
mean accounting principles generally accepted in the United States consistently
applied.
“Governmental
Entity”
shall
mean any court, arbitrator or other foreign, federal, state or local
governmental, regulatory or other administrative body, authority, department,
commission, board, bureau, agency or instrumentality.
“Gross
Revenues”
shall
have the meaning set forth in Section 5.10(a)(iii).
“Group
Employees”
shall
have the meaning set forth in Section 3.20(a).
“Hazardous
Material”
shall
mean (a) petroleum, petroleum products, by-products or breakdown products,
radioactive materials, asbestos or polychlorinated biphenyls, and (b) any
chemical, material or substance defined or regulated as hazardous, dangerous,
infectious or toxic or as a pollutant, contaminant or waste, or any other
term
of similar import under any Law relating to pollution or protection of the
environment or human health or safety or that could otherwise reasonably
be
expected to result in the imposition of liability under any Law relating
to
pollution or protection of the environment or human health or
safety.
“Hercules
Dividend Amount”
shall
have the meaning set forth in Section 2.1(a)(iii).
“Hercules’
Knowledge”
or
any
other phrase referring to the knowledge of Hercules means the actual knowledge,
without independent verification, of the individuals listed on Schedule 1.1.
“Hercules
Shares”
shall
have the meaning set forth in the preamble hereto.
“HSR
Act”
shall
mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and
the rules and regulations thereunder.
“Indemnified
Party”
shall
have the meaning set forth in Section 8.5.
“Indemnifying
Party”
shall
have the meaning set forth in Section 8.5.
“Infringe”
shall
have the meaning set forth in Section 3.11(a).
“Intellectual
Property Rights”
shall
mean all intellectual property rights of any nature, including, without
limitation, patents, patent applications, patent rights, trademarks, trade
names, service marks, domain names, copyrights and works of authorship, computer
programs, software and related items, trade secrets, proprietary processes,
methodologies, technology, know-how and formulae.
“Intercompany
Balances”
means
any and all intercompany balances between the FiberVisions Group, on the
one
hand, and the Hercules and WSP, and their Affiliates (other than the
FiberVisions Group), on the other hand, arising from transactions of any
kind
between or among the FiberVisions Group, whether shown on the Most Recent
Financial Statements or arising after the date of the Most Recent Financial
Statements.
“Investment
Assets”
shall
mean all debentures, notes and other evidences of indebtedness, stocks,
securities (including rights to purchase and securities convertible into
or
exchangeable for other securities), interests in joint ventures and general
and
limited partnerships, mortgage loans and other investment or portfolio assets
owned of record or beneficially by the Company (other than trade receivables
generated in the Ordinary Course of Business).
“Laws”
shall
mean laws and binding governmental requirements, including constitutions,
statutes, rules, regulations, compacts, treaties, codes, plans, injunctions,
judgments, orders, decrees, rulings, charges, and other restrictions thereunder
of each Governmental Entity.
“Leased
Real Property”
shall
have the meaning set forth in Section 3.10(b).
“Losses”
shall
have the meaning set forth in Section 8.1(a).
“Material
Adverse Effect”
shall
mean any change or effect that (a) is individually or together with any other
change or effect materially adverse to the business, operations, properties
(including intangible properties), condition (financial or otherwise), assets
or
liabilities of the Company and the Subsidiaries, taken as a whole, or
(b) impairs in any material respect the ability of the Company and the
Subsidiaries, taken as a whole, to perform its obligations under this Agreement
or the Stockholders Agreement; provided that none of the following shall
be
deemed to constitute, and none of the following shall be taken into account
in
determining whether there has been, a Material Adverse Effect: any adverse
change, event, development, or effect arising from or relating to (i)
general
business or economic conditions, including such conditions related to the
business of the Company and the Subsidiaries; (ii)
national
or
international
political or social conditions, including the engagement by the United States
in
hostilities, whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack upon the United
States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the
United
States; (iii)
financial, banking, or securities markets (including any disruption thereof
and
any decline in the price of any security or any market index); (iv)
changes
in United States generally accepted accounting principles; (v)
changes
in laws, rules, regulations, orders or other binding directives issued by
any
Governmental Entity; (vi)
the
taking of any action contemplated by this Agreement or any of the other
Definitive Agreements or any other agreements contemplated hereby and thereby;
or (vii)
any
existing event, occurrence or circumstance set forth or referenced in Schedule
3.6(a) or Schedule 5.1; provided that the events described in clauses (ii)-(v)
above do not have a disproportionate impact on the Company and the Subsidiaries
relative to other participants in the Company’s industry.
“Most
Recent Financial Statements”
shall
have the meaning set forth in Section 3.5.
“Net
Working Capital”
shall
have the meaning set forth on Schedule
2.3.
“Neutral
Accountant”
shall
have the meaning set forth in Section 2.3(b).
“Objection
Notice”
shall
have the meaning set forth in Section 2.3(b).
“Option
Agreement”
shall
mean the Option Agreement between WSP and SPG, substantially in the form
attached to this Agreement as Exhibit C,
to be
executed and delivered at the Closing.
“Order”
shall
mean any judgment, order, writ, decree, injunction or other determination
of any
authority or arbitrator or similar body whose finding, ruling or holding
is
legally binding or is enforceable as a matter of right (in any case, whether
preliminary or final).
“Ordinary
Course of Business”
shall
mean the ordinary course of business of the Company consistent with past
custom
and practice since January 1, 2003.
“Owned
Real Property”
shall
have the meaning set forth in Section 3.10(a).
“PBGC”
shall
have the meaning set forth in Section 3.20(f).
“Pension
Plan”
shall
have the meaning set forth in Section 5.16(c).
“Permitted
Encumbrance”
shall
mean as of any particular time: (a) liens for current state and local property
taxes not yet due and payable; (b) covenants, restrictions, liens, encumbrances,
servitudes, rights-of-way, easements, exceptions, limitations and agreements
contained in instruments of record which, individually or in the aggregate,
are
not material in character, amount or extent and which do not materially
adversely affect, detract from or inhibit the use or ownership of such assets
or
the conduct of the FiberVisions Business as presently used, owned or conducted;
(c) any liens or encumbrances in connection with the Debt Financing; and
(d) the
items, if any, listed in Schedule
1.2.
“Person”
shall
mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, any other
form
of business organization, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision
thereof).
“Plan”
shall
have the meaning set forth in Section 3.20(a).
“Principal
Officer”
shall
have the meaning set forth in Section 3.6(j).
“Projections”
shall
mean the twelve-month financial projections of the Company prepared by SPG
for
fiscal 2007 based on the unaudited financial statements for the ten-month
period
ended October 31, 2007 and projections for the fourth quarter ending on
December 31, 2007, which shall include the computation of the Estimated
Earnout EBITDA.
“Purchasing
Person”
shall
have the meaning set forth in Section 5.10(a)(iii).
“Real
Property”
shall
mean with respect to each parcel of land, such land, together with all
buildings, facilities, houses and other structures and improvements thereon;
all
rights, privileges, hereditaments and appurtenances appertaining thereto;
and to
the extent constituting fixtures under applicable law, all installations,
equipment and other property attached thereto or located thereon.
“Registered
Company IP”
shall
have the meaning set forth in Section 3.11(a).
“Registered
Intellectual Property Rights”
shall
mean all registered patents, trademarks, copyrights and domain
names.
“Required
Consent Contract”
shall
mean any Company Contract that requires the consent of another party to such
Contract upon a change in control of the Company as is provided for in this
Agreement.
“Restructuring”
shall
have the meaning set forth in the preamble hereto.
“Retained
Employees”
shall
have the meaning set forth in Section 5.16(a).
“Schedules”
shall
mean the disclosure schedules delivered by each of the parties hereto, and
which
form a part of this Agreement.
“Securities
Act”
shall
have the meaning set forth in Section 3.12(d).
“SPG
Indemnified Parties”
shall
have the meaning set forth in Section 8.1(a).
“SPG
Indemnifying Parties”
shall
have the meaning set forth in Section 8.1(d).
“SPG
Representatives”
shall
have the meaning set forth in Section 5.21.
“SPG
Shares”
shall
have the meaning set forth in the preamble hereto.
“SPG
Transaction Costs Cap”
shall
have the meaning set forth in Section 2.2(c).
“Stock”
shall
have the meaning set forth in the preamble hereto.
“Stockholders”
shall
have the meaning set forth in the preamble hereto.
“Stockholders
Agreement”
shall
mean the form of the Stockholders Agreement attached hereto as Exhibit B.
“Straddle
Period”
shall
have the meaning set forth in Section 8.1(a).
“Subsidiaries”
shall
mean any corporation, partnership, limited liability company or other entity
a
majority of the equity interests of which are held, directly or indirectly,
by
the Company.
“Tax”
or
“Taxes”
shall
mean any and all federal, state, local, or foreign taxes, charges, fees,
levies
or other assessments, including, without limitation, income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the
Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales,
use, transfer, registration, value added, alternative or add-on minimum,
and
estimated taxes, or any other tax custom, duty, or governmental fee, or other
like assessment or charge of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
“Tax
Election”
shall
have the meaning set forth in the preamble hereto.
“Tax
Return”
shall
mean any return, declaration, report, claim for refund or information return
or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof, required to be filed with the Internal Revenue
Service or any other governmental body or tax authority or agency, whether
domestic or foreign, including any consolidated, combined or unitary tax
return.
“Term
Note”
shall
mean any term note issued in connection with Section 5.2(c)(v) with the terms
set forth in Schedule
5.2(c)(v).
“Third
Person”
shall
have the meaning set forth in Section 8.6.
“Third-Person
Claim”
shall
have the meaning set forth in Section 8.6.
“Title
IV Plan”
shall
have the
meaning set forth in
Section
3.20(d).
“Transactions”
shall
mean all of the transactions contemplated in this Agreement, collectively,
including, but not limited to, each of the transactions contemplated in Section
2 hereof and all actions in furtherance thereof.
“Transaction
Costs Holdback”
shall
have the meaning set forth in Section 2.1(a)(iii).
“Transferred
Employees”
shall
have the meaning set forth in Section 5.16(a).
“Transition
Services Agreement”
shall
mean the Transition Services and Facilities Use and License Agreement between
Hercules, the Company and SPG, substantially in the form attached to this
Agreement as Exhibit D,
to be
executed and delivered at the Closing.
“Treasury
Regulations”
shall
mean the regulations issued under the Code.
“Working
Capital Floor”
shall
have the meaning set forth in Section 2.3(d)(i).
“WSP
Dividend Amount”
shall
have the meaning set forth in Section 2.1(a)(iii) of this
Agreement.
“WSP
Shares”
shall
have the meaning set forth in the preamble to this Agreement.
“WSP
Transaction Costs Cap”
shall
have the meaning set forth in Section 2.2(d).
“2005
Adjusted EBITDA”
shall
mean the Company’s adjusted EBITDA for fiscal year 2005 calculated from the
Company’s audited consolidated financial statements for the fiscal year ended
December 31, 2005 in accordance with Schedule
2.1(b)(iii).
“2005
Adjusted EBITDA Statement”
shall
have the meaning set forth in Section 2.3(a).
SECTION
2. Transactions
.
2.1 Transactions
and Closing
.
(a) The
following transactions shall take place on the Closing Date and are expressly
conditioned upon each other:
(i) Debt
Financing.
On the
Closing Date, the Company shall effectuate the Debt Financing as set forth
in
Section 5.3.
(ii) Restructuring.
On the
Closing Date immediately following the consummation of the Debt Financing,
FV
Denmark shall effectuate the Restructuring.
(iii) Dividends
to Stockholders.
On the
Closing Date immediately following the consummation of the Debt Financing
and
the Restructuring, the Company shall pay a dividend from the proceeds of
the
Debt Financing (1) to Hercules in the amount of Forty-One Million Eight Hundred
Thousand Dollars ($41,800,000) (the “Hercules
Dividend Amount”),
and
(2) to WSP in the amount of Forty Million Two Hundred Thousand Dollars ($40,
200,000) (the “WSP
Dividend Amount”).
The
remaining Eight Million Dollars ($8,000,000) in proceeds from the Debt Financing
(the “Transaction
Costs Holdback”)
shall
be used by the Company for payment of the Total Transaction Costs to the
parties
as set forth in Section 2.2(b).
(b) In
addition, the following transactions shall take place on the Closing Date
immediately following the transactions described in Section 2.(a)(i), (ii)
and
(iii) above and are expressly conditioned upon each other:
(i) Contribution
and Issuance of the SPG Shares.
On the
terms and subject to the conditions set forth in this Agreement, on the Closing
Date, SPG shall contribute to the Company in cash Twenty-Seven Million Dollars
($27,000,000) (the “Contribution
Amount’)
in
exchange for the SPG Shares (the “Contribution”).
Immediately following the Contribution, each of SPG and Hercules shall hold
33.78% of the Stock of the Company and WSP shall hold 32.44% of the Stock
of the
Company.
(ii) Redemption
of the Hercules Shares.
On the
terms and subject to the conditions set forth in this Agreement on the Closing
Date immediately following the Contribution, the Company shall redeem all
of the
Hercules Shares for (i) the redemption price of Twenty-Seven Million Dollars
($27,000,000) (the “Redemption
Price”),
subject to the post-closing adjustments as set forth in Section 2.3; and
(ii)
the right to the Earnout Payments as set forth in Section 5.2. Upon satisfaction
of the conditions set forth in this Agreement, SPG shall hold shares of Stock,
which represent, in the aggregate, 51% of the Stock and WSP shall hold shares
of
Stock, which represent, in the aggregate, 49% of the Stock.
(iii) Option
Agreement.
At the
Closing, WSP and SPG shall enter into an Option Agreement, substantially
in the
form of Exhibit C attached hereto, pursuant to which WSP grants SPG an option
to
acquire shares of Stock from WSP, which represents in the aggregate, a fourteen
percent (14%) equity interest in Stock.
(iv) Transition
Services Agreement.
At the
Closing, the Company and Hercules shall enter into a Transition Services
Agreement, substantially in the form of Exhibit D
attached
hereto, pursuant to which Hercules agrees to provide certain services and
support to the Company on a post-closing basis for a period not to exceed
one
(1) year from the Closing Date as provided in the Transition Services Agreement
in exchange for the amounts to be paid to Hercules in connection with such
services and/or support.
(c) Closing.
The
Closing shall take place on the last business day of the monthly accounting
period of the Company following the date on which the conditions set forth
in
Article VI are satisfied or such other date as mutually agreed in writing
by the
parties hereto. The consummation of the transactions contemplated hereby
shall
be referred to herein as the “Closing”
and
at
11:59 p.m. on the date on which the Closing occurs shall be herein referred
to as the “Closing
Date.”
Time
shall be of the essence with respect to the Closing Date. For the avoidance
of
doubt, the parties to this Agreement agree for tax purposes to treat the
transactions described in Section 2.1(a) as occurring prior to the transactions
described in Section 2.1(b)(i) and (ii). Any Taxes arising out of the
Restructuring will be allocable to the Pre-Closing Tax Period and the income
generated by the Restructuring will be included in the Tax Return for the
consolidated group for which Hercules is the common parent. The Closing shall
take place at the offices of Hercules Incorporated at Hercules Plaza, 0000
Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, or at such other location as the parties
hereto may mutually agree.
(d) Closing
Procedures.
At the
Closing, the parties shall deliver to each other the instruments, documents
and
consideration and shall take the actions specified in Sections 6 and 7
hereof.
(e) Payments.
All
payments to be made under this Agreement shall be paid by wire transfer of
immediately available funds.
2.2 Total
Transaction Costs
.
(a) Each
party shall pay its transaction costs at Closing and the parties shall be
reimbursed in accordance with this Section 2.2. The Company shall pay all
of the
Debt Financing Costs. Any transfer taxes, including, but not limited to,
registration or license fees, to be paid in connection with the Transactions
shall be paid by the Company. At Closing, the Company shall submit to SPG
and
WSP a statement detailing the amount of the Debt Financing Costs.
(b) At
Closing, each of SPG and WSP shall submit to the Company invoices detailing
transaction costs directly associated with this transaction, and the Company
shall reimburse the Stockholders and SPG for such transaction costs, but
only up
to the caps described in 2.2(c) and 2.2(d).
(c) SPG
shall
be reimbursed by the Company for costs paid by SPG and invoiced to the Company
in accordance with subsection (b) up to a maximum of 65% of the amount
determined after deducting Debt Financing Costs paid by the Company from
$8,000,000 (the “SPG
Transaction Costs Cap”)
(d) WSP
shall
be reimbursed by the Company for costs paid by WSP and invoiced to the Company
in accordance with subsection (b) up to a maximum of 35% of the amount
determined after deducting Debt Financing Costs paid by the Company from
$8,000,000 (the “WSP
Transaction Costs Cap”)
(e) In
the
event that the SPG transaction costs exceed the SPG Transaction Costs Cap,
SPG
shall bear all of its transaction expenses that exceed the SPG Transaction
Costs
Cap. In the event that the WSP transaction costs exceed the WSP Transaction
Costs Cap, WSP shall bear all of its transaction expenses that exceed the
WSP
Transaction Costs Cap.
(f) Except
for the expenses to be reimbursed by the Company in accordance with this
Section
2.2, or as otherwise indicated herein, each party shall bear its respective
expenses incurred in connection with the preparation and execution of the
Definitive Agreements and the consummation of the Transactions.
(g) In
the
event that SPG does not exercise the Option during the option exercise period
as
provided in the Option Agreement, then SPG shall refund to WSP an amount
equal
to 14% of the sum of the SPG Transaction Costs Cap and the WSP Transaction
Costs
Cap.
2.3 Redemption
Price Adjustments
.
(a) As
promptly as reasonably practicable, but in any event not later than 60 days
after the Closing Date, SPG shall deliver to Hercules (A) an unaudited balance
sheet of the FiberVisions Group as of the Closing, which balance sheet shall
be
prepared from
the
books
and records of the FiberVisions Group using the same accounting principles,
procedures, policies, and methods that were used to prepare the Financial
Statements, including that such statements shall be prepared in accordance
with
GAAP as consistently applied (the “Closing
Date Financial Statements”),
(B) a
written statement of the Net Working Capital (the “Closing
Date Net Working Capital Statement”)
and
(C) a written statement of the 2005 Adjusted EBITDA (the “2005
Adjusted EBITDA Statement”).
(b) The
Closing Date Balance Sheet, the Closing Date Net Working Capital Statement
(and
the Closing Date Net Working Capital set forth therein) and the 2005 Adjusted
EBITDA Statement (and the 2005 Adjusted EBITDA set forth therein) shall be
final
and binding on the parties unless, within 15 days after delivery thereof
to
Hercules, written notice is given by Hercules to SPG of its objection, setting
forth in reasonable detail Hercules’ basis for objection (the “Objection
Notice”).
Hercules may dispute items reflected on the Closing Date Financial Statements
and the Closing Date Net Working Capital Statement only on the basis that
such
items were not arrived at in conformity with the accounting principles,
procedures, policies, and methods that were used to prepare the Financial
Statements and in conformity with Schedule
2.3(b)(i).
Hercules may dispute items reflected on the 2005 Adjusted EBITDA Statement
only
on the basis that such items were not arrived at conformity with the accounting
principles, procedures, policies and methods that were used to prepare the
Financial Statements and in conformity with Schedule
2.3(b)(ii).
If the
Objection Notice is given, Hercules and SPG shall consult with each other
with
respect to the objection. If Hercules and SPG are unable to reach agreement
within 30 days after the Objection Notice has been given, the dispute shall
be
submitted, as promptly as reasonably practicable, for resolution to the New
York
office of Ernst & Young, LLP or a mutually agreeable third-party firm of
independent registered public accountants (the “Neutral
Accountant”).
Hercules and SPG agree to execute, if requested by the Neutral Accountant,
a
reasonable engagement letter with the Neutral Accountant. The Neutral Accountant
shall make a determination, based solely on presentations by Hercules and
SPG
and not by independent review, as to (and only as to) each of the items in
dispute, and shall be instructed that, in resolving such items in dispute,
it
must select a position with respect to the Closing Date Financial Statements,
the Closing Date Net Working Capital Statement and/or 2005 Adjusted EBITDA
Statement, as applicable that is either exactly SPG’s position with respect to
the Closing Date Financial Statements, the Closing Date Net Working Capital
Statement and/or 2005 Adjusted EBITDA Statement, as applicable or exactly
Hercules’ position with respect to the Closing Date Financial Statements, the
Closing Date Net Working Capital Statement and/or 2005 Adjusted EBITDA
Statement, as applicable, or that is between such position of SPG and such
position of Hercules. The Neutral Accountant shall furnish its determination
as
to the items in dispute (which determination shall have been made in accordance
with this Agreement) to Hercules and SPG in writing together with a revised
version of the Closing Date Net Working Capital Statement and/or 2005 Adjusted
EBITDA Statement, as applicable, which shall have been revised by the Neutral
Accountant to reflect its determination. The determination of the Neutral
Accountant and the revised version of the Closing Date Net Working Capital
Statement and/or 2005 Adjusted EBITDA Statement, as applicable reflecting
the
Neutral Accountant’s determination shall be final, conclusive and binding upon,
and non-appealable by, Hercules and SPG. In connection with its determination
of
the disputed items, the Neutral Accountant shall be entitled to rely upon
the
accounting records and similar materials prepared in connection with the
Closing
Date Financial Statements, the Closing Date Net Working Capital Statement
and/or
2005 Adjusted EBITDA Statement, as applicable.
The
Company shall pay the fees and expenses of the Neutral Accountant. Hercules
and
SPG shall each use reasonable efforts to cause the Neutral Accountant to
render
its decision as soon as reasonably practicable (but in no event later than
30
days following the expiration of the 30-day period provided above for Hercules
and SPG to resolve disputes before submission to the Neutral Accountant),
including by promptly complying with all reasonable requests by the Neutral
Accountant for information, books, records, and similar items. The Closing
Date
Net Working Capital Statement as finally determined pursuant to this Section
2.3(b) shall be referred to as the “Final
Closing Date Net Working Capital Statement”
and
the
Closing Date Net Working Capital as set forth in the Final Closing Date Net
Working Capital Statement shall be the “Final
Closing Date Net Working Capital.”
The
2005 Adjusted EBITDA Statement as finally determined pursuant to this Section
2.3(b) shall be referred to as the “Final
2005 Adjusted EBITDA Statement”
and
the
2005 Adjusted EBITDA as set forth in the Final 2005 Adjusted EBITDA Statement
shall be the “Final
2005 Adjusted EBITDA”.
(c) During
the period following the delivery of the Closing Financial Statements until
the
Final Closing Date Net Working Capital Statement and/or Final 2005 Adjusted
EBITDA Statement is finally determined, to the extent reasonably necessary,
SPG
shall and shall cause the FiberVisions Group to (A) provide Hercules and
their
authorized representatives with reasonable access to the books, records,
facilities, and employees of the FiberVisions Group, (B) provide Hercules
as
promptly as practicable after the delivery of the Closing Date Financial
Statements with financial information for the FiberVisions Group for the
period
ending on the Closing Date, and (C) cooperate fully with Hercules and their
authorized representatives.
(d) If
the
Final Closing Date Net Working Capital is:
(i) less
than
Thirty-Five Million Dollars ($35,000,000) (the “Working
Capital Floor”),
Hercules shall pay to the Company a dollar amount equal to the difference
of the
Working Capital Floor minus the Final Closing Date Net Working Capital, plus
interest on such amount at the Federal Funds Rate from the Closing Date through
the date of payment.
(ii) equal
to
or greater than the Working Capital Floor, no payment shall be required to
be
made pursuant to this Section 2.3(d).
(e) If
the
Final 2005 Adjusted EBITDA is:
(i) less
than
Nineteen Million Two Hundred Ninety-Eight Thousand Dollars ($19,298,000.00)
(the
“Adjusted
EBITDA Floor”),
Hercules shall pay to the Company, a dollar amount equal to 5.8 times the
difference of (1) the Adjusted EBITDA Floor minus (2) the Final 2005 Adjusted
EBITDA.
(ii) equal
to
or greater than the Adjusted EBITDA Floor, no payment shall be required to
be
made pursuant to this Section 2.3(e).
(f) Any
amounts required to be paid pursuant to Section 2.3 shall be paid by wire
transfer of immediately available funds to the Company’s account within five
business days after the Final Closing Date Net Working Capital and/or Final
2005
Adjusted EBITDA is determined in accordance with Section 2.3.
(g) Withholding
Rights.
SPG and
the Company shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Section 2 such amounts as
it is
required to deduct or withhold with respect to the making of such payment
under
any provision of federal, state, local or foreign tax law. If SPG or the
Company
so withholds amounts, such amounts shall be treated for all purposes of this
Agreement as having been paid to such Person in respect of which SPG or the
Company made such deduction or withholding.
SECTION
3. Representations
and Warranties of Hercules and WSP
.
Subject
to Section 5.1 and Schedule
5.1,
Hercules and WSP hereby make the representations and warranties set forth
in
this Section 3 as of the date hereof and as of the Closing Date. EXCEPT FOR
THE
REPRESENTATIONS AND WARRANTIES SPECIFICALLY PROVIDED IN THIS SECTION 3, NO
REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE, WHETHER EXPRESS
OR
IMPLIED IS MADE TO SPG.
3.1 Organization;
Good
Standing; Corporate Power
.
(a) Each
of
the Company and each Subsidiary (collectively, the “FiberVisions
Group”)
is a
corporation, limited liability company, partnership or other legal entity
duly
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization. The FiberVisions Group is duly qualified
to do business and is in good standing under the laws of each jurisdiction
in
which the ownership of property or nature of the business conducted by it
makes
such qualification necessary.
The
Company, Hercules and WSP have made available to SPG true and complete copies
of
the organizational documents of each member of the FiberVisions Group as
currently in effect and its organizational record books with respect to actions
taken by its shareholders, members, directors and managers, as
applicable.
(b) Each
member of the FiberVisions Group has the requisite power and authority, and
possesses all licenses and permits necessary, to own or lease and operate
the
properties and assets owned by it and to conduct the FiberVisions Business
conducted by it. Each member of the FiberVisions Group, Hercules and WSP
has the
requisite power and authority to execute and deliver the Definitive Agreements
to which it is a party and to consummate the Transactions. The Definitive
Agreements have been or, as applicable, will be as of Closing, duly executed
and
delivered by the FiberVisions Group, Hercules and WSP, as applicable. The
performance by the members of the FiberVisions Group, Hercules and WSP of
each
of their respective obligations under the Definitive Agreements (as applicable)
have been duly and validly authorized by all necessary action or proceeding
required to be taken therefor.
(c) This
Agreement and each of the other Definitive Agreements, when executed and
delivered by SPG, will constitute valid and legally binding obligations of
each
of the Company, Hercules and WSP, as applicable,
enforceable in accordance with their respective terms, except as may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or
affecting
the enforcement of creditors’ rights generally, (ii) applicable federal or
state securities law limiting rights of indemnification, and (iii) the
effect of rules of law governing the availability of equitable
remedies.
3.2 Noncontravention
.
Except
as set forth on Schedule
3.2,
neither
the execution, delivery and performance of the Definitive Agreements by
Hercules, WSP or the applicable members of the FiberVisions Group, nor the
consummation of the Transactions by any such Person will: (a) conflict with
or result in a violation by any member of the FiberVisions Group, Hercules,
or
WSP of their respective organizational documents; (b) conflict with or
result in a breach of the terms, conditions or provisions of, or constitute
a
default under, or result in a violation of, or give rise to the termination,
modification, cancellation or acceleration of the time for performance or
payment under, in any case, whether with or without the passage of time or
the
giving of notice or both, any material agreement, contract, lease, license,
instrument, evidence of indebtedness or other arrangement to which any member
of
the FiberVisions Group is a party or by which any member of the FiberVisions
Group is bound, or to which any of the FiberVisions Group’s assets are subject,
except in the case of clause (b) for possible defaults, actions or omissions
as
would not reasonably be expected to have a Material Adverse Effect; (c) except
for the applicable requirements of such consents, approvals, Orders,
authorizations or notices as set forth on Schedule
3.2,
violate
any provision of any existing law, statute, judgment, decree, rule or regulation
of any jurisdiction or any Order to which the Company or any of its assets
or
properties is subject; or (d) result in the creation or imposition of any
Encumbrance on any of the material assets of the Company, except for Permitted
Encumbrances, and except as would not be reasonably expected to have a Material
Adverse Effect.
3.3 Brokers
.
Except
as set forth on Schedule
3.3,
neither
the Company, WSP nor Hercules has employed or retained any broker, finder
or
intermediary in connection with the Transactions. The fees and expenses of
any
broker, finder or intermediary set forth on Schedule
3.3
shall be
paid in accordance with Section 5.8 hereof.
3.4 Equity
Investments
.
Except
as otherwise disclosed on Schedule
3.4,
the
Company does not presently own of record or beneficially, directly or
indirectly, or hold the right to acquire any capital securities or other
ownership interest (or securities convertible into capital securities or
other
ownership interests) in any corporation, association, trust, partnership,
limited liability company, joint venture, other business entity or other
Person,
except for investments in publicly traded or registered investment companies
(e.g.,
mutual
funds), equity securities, debt instruments, annuities, life insurance or
money
market type instruments (e.g.,
CDs,
bank accounts), which relate to benefit and/or pension plans issued by entities
in which the Company does not own more than five percent (5%) of the outstanding
equity and does not actively participate in the business in which such
investment is made.
3.5 Financial
Statements
.
Attached
to Schedule
3.5
hereto
are true and correct copies of the following financial statements of the
FiberVisions Group (collectively, the “Financial
Statements”):
(a) audited consolidated financial statements for the fiscal years ended
December 31, 2003 and December 31, 2004 and (b) unaudited
consolidated financial statements as of and for the nine-month period ended
September 30, 2005 (collectively, the “Most
Recent Financial Statements”).
The
Financial Statements: (i) have been prepared from the
books
and
records of the FiberVisions Group; (ii) present fairly in all material
respects the financial position of the FiberVisions Group as of the respective
dates indicated and the results of operations and cash flows for the respective
periods indicated; and (iii) have been prepared in accordance with GAAP as
consistently applied.
3.6 Operations
in the Ordinary Course; No Material Adverse Effect
.
Except
as set forth in Schedule
3.6(a),
there
has been no Material Adverse Effect since January 1, 2005. Except as
reflected in the Most Recent Financial Statements or in Schedule
3.6(a),
or, for
changes, events or transactions in the Ordinary Course of Business or that
have
not resulted in a Material Adverse Effect, since September 30, 2005, none
of the following events has occurred:
(a) any
change in the assets, liabilities, financial condition or operating results
of
the FiberVisions Group, except as contemplated by this Agreement including,
but
not limited to, the transactions set forth in Section 2.3(a);
(b) any
material damage, destruction, casualty or loss (whether or not covered by
insurance) to the assets, properties, financial condition, operating results,
or
business of the FiberVisions Group;
(c) any
increase in the benefits under, or the establishment or amendment of, any
bonus,
insurance, collective bargaining agreement, severance (including the granting
of
any severance or termination pay), deferred compensation, pension, retirement,
profit sharing, option (including the granting of options, appreciation rights,
performance awards or restricted securities awards), securities purchase
or
other employee benefit plan, or any other increase in the compensation payable
or to become payable or otherwise accruing after the date hereof by Hercules,
WSP or the FiberVisions Group to any present or former employee of the
FiberVisions Group, except for amendments required to be made by Law or
ministerial or administrative amendments;
(d) except
as
contemplated hereby or as shown on Schedule
3.6(d),
the
entry by the FiberVisions Group, other than in the Ordinary Course of Business,
into, material modification, termination, or cancellation of any transaction
or
contract material to the FiberVisions Group, or the entry into any commitment
for the same, by the FiberVisions Group;
(e) except
as
shown on Schedule
3.6(e),
any
transfer, mortgage, pledge, Encumbrance, assignment, sale or disposition
by the
FiberVisions Group of any portion of its non-current assets;
(f) any
receipt by the FiberVisions Group of written notice that any Contract to
which
the FiberVisions Group is a party has been or will be canceled or materially
altered prior to its expiration date;
(g) except
as
shown on Schedule
3.6(g),
any
capital expenditure(s) or commitment to make any capital expenditures in
the
aggregate by the FiberVisions Group in excess of $2,400,000 which items will
remain with the FiberVisions Business after the Closing Date;
(h) any
satisfaction or discharge of any Encumbrance or payment of any obligation
by the
FiberVisions Group, except as shown on Schedule
3.6(h),
or as
contemplated by this Agreement;
(i) except
as
set forth on Schedule
3.6(i),
any
sale, assignment, disposition (in whole or in material part), Encumbrance
(other
than Permitted Encumbrances), license, sale or transfer of any material
Intellectual Property Rights of the FiberVisions Group;
(j) any
resignation or termination of employment of any principal officer of the
FiberVisions Group listed on Schedule
3.6(j)(i)
(each, a
“Principal
Officer”),
or,
to Hercules’ Knowledge, any impending resignation or termination of employment
of any such Principal Officer, any such resignation or termination to be
set
forth on Schedule
3.6(j)(ii);
(k) except
as
shown on Schedule
3.6(k),
any
outstanding loans, advancement of money or property, or guarantees made by
the
FiberVisions Group, to or for the benefit of any current or former employee,
officer, manager or director, or any members of their immediate families
in
excess of $25,000;
(l) any
dividend, setting aside or payment or other distribution in respect of any
of
the Stock, or any direct or indirect redemption, purchase or other acquisition
of any of the Stock by the FiberVisions Group, except as contemplated by
this
Agreement;
(m) any
material extraordinary losses or waiver of any rights of material value by
the
FiberVisions Group;
(n) except
as
provided in this Agreement or the Option Agreement, any issuance, sale or
transfer by any member of the FiberVisions Group of any of its capital stock
or
other equity securities, securities convertible into its capital stock or
other
equity securities or warrants, options or other rights to acquire its capital
stock or other equity securities, any bonds or debt securities;
(o) any
change in any of the accounting policies, practices or procedures of the
FiberVisions Group;
(p) any
amendments or modifications of the organizational documents of any member
of the
FiberVisions Group;
(q) any
settlement or compromise by the FiberVisions Group of any suit, claim,
proceeding or dispute or threatened suit, claim, proceeding or dispute;
and
(r) any
authorization, approval, agreement or commitment by any member of the
FiberVisions Group to take any of the foregoing actions.
(s) any
adoption of or change to any material Tax election, any change to any annual
accounting period, any adoption or change to any accounting method with respect
to Taxes, any filing of any amended Tax Return, any entering into any closing
agreement, any settlement or compromise of any proceeding with respect to
any
Tax claim or assessment relating to the FiberVisions Group, any surrender
of any
right to claim a
refund
of
Taxes, any consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment relating to the FiberVisions Group,
or
the taking of any other similar action relating to the filing of any Tax
Return
or the payment of any Tax.
(t) except
as
set forth on Schedule
3.6(t),
there
have been no material changes in customer terms offered by the Company that
either extend payment dates or provide for discounts.
3.7 Undisclosed
Liabilities
.
Except
as set forth on Schedule
3.7,
no
member of the FiberVisions Group has
any
obligations or liabilities (whether accrued, absolute, contingent, or otherwise,
whether due or to become due and regardless of when or by whom asserted),
except
(i) liabilities incurred in the ordinary course of business since September
30,
2005, (ii) liabilities reflected on the Most Recent Financial
Statements or
the
notes thereto, and (iii) liabilities otherwise disclosed in this
Agreement.
3.8 Legal
Compliance
.
Except
for such matters which do not have a Material Adverse Effect, each member
of the
FiberVisions Group is in compliance with all applicable Laws.
3.9 Tax
Matters
.
(a) Each
of
the Company and the Subsidiaries has filed all material Tax Returns as required
by Law and has paid all Taxes (whether or not shown to be due on such Tax
Returns) owed by the Company and the Subsidiaries by their respective due
dates
(including extensions thereof). Such Tax Returns are correct and complete
in all
material respects. The provision for Taxes of the Company and the Subsidiaries
as shown in the Most Recent Financial Statements is adequate for taxes due
or
accrued as of such date in accordance with GAAP, subject to normal recurring
year-end adjustments.
(b) There
is
no audit exam, notice of deficiency, refund litigation, tax claim, or notice
of
assessment or proposed assessment pending, or to the Knowledge of the Company,
threatened, involving the Company or any of the Subsidiaries, except with
respect to tax years 2002 and 2003, which are currently open and subject
to
audit. Neither the Company nor any Subsidiary has granted or been requested
to
grant waivers of any statute of limitations applicable to any claim for taxes
that are still in effect.
(c) There
are
no liens for Taxes with respect to the assets of the Company and the
Subsidiaries (except for statutory liens for current Taxes not yet
due).
(d) Each
of
the Company and the Subsidiaries has complied with all applicable Laws relating
to the withholding of Taxes (including withholding of Taxes pursuant to Sections
1441 and 1442 of the Code) and has, within the time and within the manner
prescribed by Law, withheld and paid over to the proper taxing authorities
all
amounts required to be withheld and paid over under all applicable Laws in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.
(e) No
closing agreement pursuant to section 7121 of the Code (or any similar provision
of state, local or foreign law) has been entered into by or with respect
to the
FiberVisions Group.
(f) No
member
of the FiberVisions Group has granted any waiver of any federal, state, local
or
foreign statute of limitations with respect to, or any extension of a period
for
the assessment of, any Tax.
(g) Neither
the Company nor any of its U.S. Subsidiaries will be required to include
any
item of income in, or exclude any item of deduction from, taxable income
for any
taxable period (or portion thereof) ending after the Closing Date as a result
of
any (A) change in method of accounting for a taxable period ending on or
prior
to the Closing Date, (B) “closing agreement” as described in Section 7121 of the
Code (or any corresponding or similar provision of state or local income
Tax
law) executed on or prior to the Closing Date, (C) intercompany transactions
or
any excess loss account described in Treasury Regulations under Section 1502
of
the Code (or any corresponding or similar provision of state or local income
Tax
law), (D) installment sale or open transaction disposition made on or prior
to
the Closing Date, or (E) prepaid amount received on or prior to the Closing
Date.
(h) Neither
the Company nor any U.S. Subsidiary has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the
Code.
(i) The
FiberVisions Group has not engaged in any transaction that could give rise
to
(i) a registration obligation with respect to any Person under Section 6111
of
the Code or the regulations thereunder, (ii) a list maintenance obligation
with
respect to any Person under Section 6112 of the Code or the regulations
thereunder, or (iii) a disclosure obligation as a “reportable transaction” under
Section 6011 of the Code and the regulations thereunder.
(j) None
of
the Company’s non-U.S. Subsidiaries is a passive foreign investment company as
defined under Sections 1291 and 1298 of the Code. None of the Company’s non-U.S.
Subsidiaries has recognized a material amount of Subpart F income as defined
in
Section 952 of the Code during a taxable year of such Subsidiary that includes
but does not end on the Closing Date.
3.10 Real
Property
.
(a) Schedule
3.10(a)
describes all Real Property owned by the Company or any of the Subsidiaries
that
is used in the FiberVisions Business (the “Owned
Real Property”).
The
Company and each Subsidiary listed on Schedule
3.10(a),
as
applicable, owns fee simple title to all of the Owned Real Property set forth
opposite each parties’ name on Schedule
3.10(a)
free and
clear of any Encumbrances other than the Debt Financing and Permitted
Encumbrances. None of the Owned Real Property is currently leased by any
member
of the FiberVisions Group to any Affiliate of the Company or to any third
party.
(b) Schedule
3.10(b)
lists
all of the Real Property leased to the FiberVisions Group (the “Leased
Real Property”
and,
together with the Owned Real Property, the “FiberVisions
Real Property”),
together
with a list of all such leases, including respective expiration dates and
monthly rentals. To Hercules’ Knowledge, the FiberVisions Group has good and
valid title to the leasehold estates in all Leased Property. Each of the
leases
listed on Schedule
3.10(b)
is in
full force and effect and constitutes a legal, valid and binding obligation
of
the Company or a Subsidiary, as the case may be, and, to Hercules’ Knowledge,
the other respective parties thereto and is enforceable in accordance with
its
terms. Under any such lease there is not any existing material breach or
violation or default by any member of the FiberVisions Group, as the case
may
be, or to Hercules’ Knowledge, the other party thereto (or event or condition
that, with notice or lapse of time would constitute a default).
(c) Except
as
set forth on Schedule
3.10(c),
there
is no Real Property used in the FiberVisions Business that is not listed
on
Schedule
3.10(a)
or
Schedule
3.10(b).
(d) No
Taxes,
assessments, water charges or sewer charges relating to any of the Real Property
are delinquent and there are no special Taxes, assessments or charges pending
or, to the Knowledge of the Company, threatened against any of the Real
Property, except for any Taxes that are currently the subject of an ongoing
good
faith dispute or appeal to the relevant governmental authority.
(e) All
water, sewer, gas, electric, telephone and drainage facilities and other
utilities required in the use and operation, in the ordinary course, of the
Real
Property, currently service the Real Property in such capacities are in
compliance with applicable law.
(f) The
Real
Property being operated by the FiberVisions Group is maintained in compliance
with all building code, zoning and other applicable local, state and federal
ordinances, regulations and requirements that affect the use and operation
thereof, except where a failure to comply with any such building code, zoning
or
other applicable local, state or federal ordinance would not have a Material
Adverse Effect. Except as set forth on Schedule 3.10(f), no member of the
FiberVisions Group has received any written notice of violation of any law,
municipal ordinance, Order or requirement having jurisdiction over or affecting
the Real Property and which could reasonably be expected to have a material
adverse effect on the Real Property as presently used primarily in or held
for
use by the FiberVisions Business.
(g) The
zoning classification of the various tracts comprising the Real Property
permits
the use of all and any part of the Real Property for the purposes and in
the
manner it is currently used. No member of the FiberVisions Group has received
any written notice of any pending or contemplated change in the status of
the
zoning for any of Real Property. No member of the FiberVisions Group has
any
agreements currently in effect with any county or township in which any of
the
Real Property is located, or any other entity, public or private, that would
prevent the use of any of the Real Property for the conduct of the FiberVisions
Business in the ordinary course.
(h) There
are
no pending or, to Hercules’ Knowledge, threatened eminent domain proceedings,
appropriation or other proceedings involving the taking of any of the Real
Property.
3.11 Intellectual
Property
.
(a) Schedule
3.11(a)(i) hereto sets forth all Registered Intellectual Property Rights
owned
by (x) the FiberVisions Group or (y) Hercules or WSP or their Affiliates
used
primarily in or held for use by the FiberVisions Business (the “Registered
Company IP”).
Except as set forth in Schedule 3.11(a)(ii) hereto, (A) the FiberVisions
Group
owns or possesses a valid license to use or otherwise has the right to use
all
of the Registered Company IP used in its business as currently conducted
or
proposed to be conducted, free of all Encumbrances, except for Encumbrances
incurred in connection with the Debt Financing and Permitted Encumbrances;
(B)
all of such Registered Company IP are valid and enforceable, to Hercules’
Knowledge, and have not expired or been abandoned; (C) to Hercules’ Knowledge,
such Registered Company IP, and the operation of the FiberVisions Business,
do
not infringe, misappropriate or otherwise violate (“Infringe”)
the
rights of others and are not being Infringed by others; (D) there is no pending,
or to Hercules’ Knowledge, threatened action or Order before any Governmental
Entity against the FiberVisions Group with respect to Registered Intellectual
Property Rights, excluding any patent, trademark, copyright or domain name
applications, and, to Hercules’ Knowledge, there is no valid basis for same; (E)
the FiberVisions Group does not share any right, title or interests in or
use
any material Intellectual Property Rights with Hercules or any Affiliate;
and
(F) as of the Closing Date, Hercules and its Affiliates will have transferred
to
the FiberVisions Group Intellectual Property Rights owned or held by any
of them
primarily for the use or benefit of the FiberVisions Group.
(b) Except
as
reflected in the Most Recent Financial Statements or as set forth on
Schedule
3.11(b),
no
royalties, license fees or other compensation are payable by the FiberVisions
Group to any other Person by reason of the ownership or use of any Intellectual
Property Rights, and to Hercules’ Knowledge, no member of the FiberVisions Group
has received written notice from any Person claiming any obligation or liability
of any member of the FiberVisions Group (including any cease and desist letter
or request to take a license) with respect to Intellectual Property
Rights.
(c) Except
as
set forth on Schedule
3.11(c),
to
Hercules’ Knowledge, none of the FiberVisions Group’s or any Stockholders’
officers, contractors, agents or employees has any claims whatsoever (whether
direct, indirect or contingent) of right, title or interest in or to any
of the
Registered Company IP; nor, to Hercules’ Knowledge, are any of such individuals
precluded by an agreement from engaging in any business which any member
of the
FiberVisions Group proposes to conduct as of the Closing Date. The FiberVisions
Group takes all reasonable actions to protect and maintain their Registered
Company IP and their ownership hereof.
(d) Except
as
set forth in Schedule
3.11(d),
there
is, to Hercules Knowledge, no unregistered Intellectual Property Rights material
to the Company and the Subsidiaries, taken as a whole, and (i) used in the
operation of the FiberVisions Business, which Infringes the rights of others,
and (ii) essential to the operation of the FiberVisions Business, which are
being Infringed by others.
(e) Schedule
3.11(e)(i)
sets
forth (i) all registrations being pursued but not yet obtained or issued
and
(ii) all applications for registration of patents, trademarks, copyrights
and
domain names
made
by
or on behalf of either the FiberVisions Group or Hercules, WSP or any of
their
Affiliates in connection with Intellectual Property Rights of the FiberVisions
Group or Intellectual Property Rights used primarily in or held for use by
the
FiberVisions Group (the "Registrations").
Except as set forth in Schedule
3.11(e)(ii),
to
Hercules' Knowledge, the Registrations were made and prosecuted in good faith
and, if granted, any such resultant patent, trademark, copyright or domain
name
shall be considered valid and enforceable.
3.12 Capitalization
of the Company and its Subsidiaries
.
(a) Capitalization.
As of
the date hereof: (i) the authorized capital stock of the Company, and number
of
shares of each class of capital stock that is issued and outstanding, are
set
forth on Schedule
3.12(a);
and
(ii) except as set forth on Schedule
3.12(a),
or as
contemplated by this Agreement or the Stockholders Agreement, there are no
outstanding equity or convertible securities of the Company or options,
warrants, subscriptions, convertible debentures or other rights, commitments
or
any other similar agreements for the purchase of any capital stock of the
Company.
As of
the Closing Date: (i) the only outstanding equity interests in the Subsidiaries
are set forth on Schedule
3.12(a);
and
(ii) except as set forth on Schedule
3.12(a),
or as
contemplated by this Agreement or the organizational documents of the
Subsidiaries, there are no outstanding equity or convertible securities of
the
Subsidiaries or options, warrants, subscriptions, convertible debentures
or
other rights, commitments or any other similar agreements for the purchase
of
any equity interests from the Subsidiaries. All Subsidiaries of the Company
are
set forth on Schedule
1.3.
(b) Anti-Dilution.
Except
as contemplated by this Agreement, the Stockholders Agreement, the Certificate
of Incorporation of the Company or as disclosed on Schedule
3.12(b)
attached
hereto, there are no anti-dilution or price adjustment provisions contained
in
any of the Stock issued by any member of the FiberVisions Group (or in any
agreement providing rights to Stockholders) that will be triggered by the
transfer of the Hercules Shares.
(c) Voting
Agreements, etc.
Other
than as set forth in the Stockholders Agreement, there are no voting trusts
or
agreements, stockholders agreements, pledge agreements, buy-sell agreements,
transfer restrictions, rights of first refusal, rights of first offer, calls,
preemptive rights, proxies relating to the equity interests of any member
of the
FiberVisions Group (whether or not such Person is a party thereto) or other
rights or other agreements or commitments of any character obligating any
such
Person to issue, purchase, transfer or sell any of the equity
interests.
(d) Registration
Rights.
Except
as set forth on Schedule
3.12(d),
no
Person has any right to cause the Company to effect the registration under
the
Securities Act of 1933, as amended (the “Securities
Act”)
of any
of the Stock.
(e) Valid
Issuances.
All
outstanding shares of Stock are, or upon issuance against consideration therefor
will be, duly and validly authorized, validly issued, fully paid and
non-assessable.
3.13 Issuance
of Securities
.
All of
the Stock has been duly authorized and validly issued, fully paid and
non-assessable and, assuming the accuracy of the representations and warranties
of SPG in this Agreement, will be issued in compliance with all applicable
federal and state securities laws.
3.14 Required
Consents;
Approvals
.
Except
as specifically contemplated by this Agreement or the Stockholders Agreement,
no
member of the FiberVisions Group is required to obtain any consent, approval,
permit, authorization or order of, or make any filing or registration with,
any
Governmental Entity or stock market or any third party, including, without
limitation, any filing under the HSR
Act,
in order
for it to execute, deliver or perform any of its obligations under this
Agreement or any other Definitive Agreement in accordance with the terms
hereof
or thereof or to transfer the Stock. Except as disclosed in Schedule
3.14
hereto,
all consents, approvals, permits, authorizations, orders, filings and
registrations which the FiberVisions Group is required to obtain pursuant
to the
preceding sentence have been obtained or effected on or prior to the date
hereof.
3.15 Contracts
. (a)
True
and correct copies of all Material Contracts to which any member of the
FiberVisions Group is a party or by which any of the properties, rights or
assets used in the FiberVisions Business is bound or affected have been made
available to SPG, or its advisers or representatives. “Material
Contract”
shall
mean any (i) Contract to which any member of the FiberVisions Group is a
party which involve payments to or from any such member in excess of $75,000
under its remaining term; (ii) material license agreements (other
than licenses arising from the purchase of “off the shelf” or other standard
software products); (iii) material distributor, dealer, manufacturer’s
representatives, sales agency, advertising, property, management or brokerage
contracts; (iv) contracts outside of the Ordinary Course of Business for
the future purchase of materials, supplies, services, merchandise or equipment
involving payments of more than $75,000 under its remaining term; (v) contracts
outside the Ordinary Course of Business for the purchase or sale of any real
or
personal property having a value of more than $150,000 or agreements or
arrangements for the grant of any preferential rights to purchase any of
the
assets used in the FiberVisions Business, properties or rights having a value
of
more than $150,000; (vi) collective bargaining agreement or contract with
any
labor union, other than the national agreements described on Schedule
3.19(a)(ii);
(viii) guaranty of any obligation for borrowed money or other guaranty;
(xi) lease or agreement under which it is lessee of, or holds or operates
any real or personal property owned by any other party, for which the annual
rental exceeds $75,000, other than as described on Schedule
3.10(b);
(ix) lease or agreement under which it is the lessor of or permits any
third party to hold or operate any property, real or personal (including
equipment), for which the annual rental exceeds $150,000; (x) joint venture
agreements or arrangements or other agreements involving the sharing of profits,
other than as described on Schedule
3.10(b);
(xi) Contracts with any Person that has the effect of limiting or
restricting in any material respect, the FiberVisions Group’s ability to market,
promote, sell or provide factoring in any geographic area as to or for the
benefit of any Person; (xii) Contracts (or group of related contracts)
under which the consequences to the FiberVisions Group of a default (by either
the member of the FiberVisions Group, as the case may be, or the other party
or
parties to the contract(s) in question) or termination would have a Material
Adverse Effect; and (xiii) Contracts with (A) Hercules or WSP or any
Affiliate of either (other than the members of the FiberVisions Group) for
matters other than those covered by the Transition Services Agreement, or
(B)
any officer, director or employee of another member of the FiberVisions Group,
Hercules, WSP or any Affiliate of Hercules or WSP (other than employment
agreements covered by clause (ii) above and other than as listed on Schedule
3.19(a)(ii)).
(b) Each
of
the Contracts: (i) has been duly and validly executed by the Company or a
Subsidiary, as applicable, (ii) is in full force and effect in accordance
with its terms, and (iii) constitutes the legal, valid and binding
obligation of the applicable member of the FiberVisions Group and to Hercules’
Knowledge the other parties thereto and is enforceable by the Company or
such
Subsidiary, except as such enforcement may be limited by (1) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, (2) applicable federal or state securities laws limiting rights
of indemnification and (3) the effect of rules of law governing the
availability of equitable remedies.
3.16 Insurance
.
Schedule
3.16
hereto
sets forth information regarding all material insurance policies maintained
by
or for the benefit of the FiberVisions Group, including the insurer, the
amount
of the coverage (including applicable deductibles), the type of insurance,
the
policy number, any pending material claims thereunder as to which the
FiberVisions Group has received notice and which relate to the FiberVisions
Group and a summary of all material claims made thereunder as to which the
FiberVisions Group has received notice and which relate to the FiberVisions
Group in the twelve (12) months immediately preceding the date hereof. All
of
the insurance policies described on Schedule 3.16
are in
full force and effect in all material respects and will be maintained in
full
force and effect as they apply to any matter, action or event occurring through
the Closing Date, and no member of the FiberVisions Group has reached or
exceeded its policy limits for any insurance policies in effect at any time
during the past three (3) years. No member of the FiberVisions Group is in
default with respect to its material obligations under any of such insurance
policies. The FiberVisions Group has not failed to give any notice of any
claim
under any such policy in due and timely fashion except to the extent such
failure has been remedied or otherwise would not have a Material Adverse
Effect.
The FiberVisions Group has not received written, and to Hercules’ Knowledge,
oral, notice of cancellation or nonrenewal of any such policy. The Company
has
not failed to pay premiums when due under the insurance policies described
on
Schedule
3.16,
except
to the extent such failure has been remedied or otherwise would not have
a
Material Adverse Effect.
3.17 Environmental
Matters
.
Except
as set forth in Schedule 3.17, (i) the Company and each of the Subsidiaries
operates, and during the term of all applicable statutes of limitation operated,
in compliance in all material respects with all applicable Environmental
Laws
and, to Hercules' Knowledge, no condition or circumstance currently exists
that
would reasonably be expected to prevent or materially interfere with such
compliance; (ii) there has been no release, threatened release, discharge,
treatment, storage, installation, arranging for disposal or disposal by the
Company, any of the Subsidiaries, or, to Hercules' Knowledge, any other Person,
of Hazardous Materials on, at, under or from any Real Property (including
any
improvement thereon) or any other facility currently or previously owned,
leased
or operated by the Company or any of its Subsidiaries which would reasonably
be
expected to result in the imposition of any material liability on the Company
or
any Subsidiary under any Environmental Law; (iii) the Company and the
Subsidiaries have all material Environmental Permits necessary to conduct
the
FiberVisions Business; (iv) no action, suit, claim, proceeding, inquiry or
investigation is pending, or,
to
Hercules' Knowledge, threatened, by any Governmental Entity or other Person
against the Company or any of the Subsidiaries relating to any Environmental
Law; (v) the Company has made available to SPG, or its advisers or
representatives, copies of all non-privileged material reports, studies,
analyses, tests or monitoring possessed, controlled or initiated by the Company
pertaining to either any Hazardous Materials released on, at or under any
Real
Property or any other facility currently or previously owned, or leased or
operated by the Company or any of the Subsidiaries or the Company's or the
Subsidiaries' compliance with, or liability under, Environmental Laws; and
(vi)
neither the execution of this Agreement by Hercules or WSP nor their respective
consummation of the Transactions requires a consent, filing, notice or
submission under or relating to any applicable Environmental Law.
3.18 Litigation
. Except
as
set forth on Schedule
3.18,
(a)
there is no action, suit, claim, proceeding, inquiry or investigation at
law or
in equity before any Governmental Entity, pending or, to Hercules’ Knowledge,
threatened against or relating to any member of the FiberVisions Group or
any of
their respective officers, managers or directors in their capacity as such,
including, but not limited to, discrimination claims, retaliatory discharge
claims, sexual harassment claims and claims of unfair labor practices, that
would have a Material Adverse Effect and, to Hercules’ Knowledge, there are no
facts or circumstances that would reasonably be expected to result in such
action, and (b) no
member
of the FiberVisions Group is subject to any arbitration proceedings under
collective bargaining agreements or otherwise, or to any outstanding judgment,
order or decree of any court or Governmental Entity.
3.19 Employment
Relations
.
(a) Except
as
set forth on Schedule
3.19(a)(i),
(i)
each member of the FiberVisions Group is in material compliance with all
federal, state or other applicable laws, respecting employment and employment
practices, safety, terms and conditions of employment and wages and hours,
and,
to Hercules’ Knowledge, has not and is not engaged in any unfair labor practice
and has not been advised of any effort to organize any of the Company’s work
force for collective bargaining purposes, (ii) none of the members of the
FiberVisions Group have or maintain written employment or consultation
agreements with any employee of, or consultant to, any member of the
FiberVisions Group (other than those employment and consultant agreements,
including national agreements, listed on Schedule
3.19(a)(ii)),
and
(iii) none of the members of the FiberVisions Group extend any perquisite
or benefits to any employee or consultant other than the perquisites and
benefits described in Sections
3.15, 3.19 or 3.20
hereto.
(b) No
member
of the FiberVisions Group maintains or sponsors any defined benefit pension
plan
covered by Title IV of ERISA nor has any member of the FiberVisions Group
ever
participated in any multi-employer pension trust (Xxxx Xxxxxx pension plan).
Except as set forth on Schedule
3.20(a),
no
member of the FiberVisions Group on its own, or together with any other member
of the FiberVisions Group, maintains or is it a contractual party to any
welfare
benefit plan as defined in Title I of ERISA other than its participation
in
Hercules sponsored welfare benefit plans.
3.20 Employee
Benefit Plans
.
(a) Schedule
3.20(a)
contains
a true and complete list of each “employee benefit plan” within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”),
except for employee benefit plans as to which the expenses and liabilities
thereunder could not exceed $25,000 in any one year, including, without
limitation, all severance, bonus, equity compensation, pension, retirement,
insurance, collective bargaining, profit sharing, medical, vision, hearing,
dental, prescription drug, health, life insurance, disability, flexible benefit,
employee assistance, employee loan, tuition reimbursement, dependent care
assistance, pre-paid legal, employment, consulting, retention, change of
control, deferred compensation, incentive compensation, stock purchase, stock
option or fringe benefit plans, agreements, programs, policies or other
arrangements or understandings, whether or not subject to ERISA (including
any
funding mechanism therefor now in effect or required in the future as a result
of the transactions contemplated by this Agreement or otherwise) whether
written
or unwritten, formal or informal, legally binding or not, under which (i)
any
current or former employee, officer, director or independent contractor of
the
Company or of any other member of the FiberVisions Group (the “Group
Employees”)
has
any present or future right to benefits and which are contributed to, sponsored
by or maintained by any member of the FiberVisions Group or of the Company
Group
(as defined below), or (ii) any member of the FiberVisions Group or of the
Company Group has had or has any present or future liability providing benefits
for any Group Employee. Each such plan, agreement, program, policy and
arrangement (including any such arrangement contained within the provisions
of
an individual employment or consulting agreement and employee benefit plans
as
to which the expenses and liabilities thereunder could not exceed $25,000
in any
one year) shall each be referred to as a “Plan”.
(b) With
respect to each Plan, except for employee benefit plans as to which the expenses
and liabilities thereunder could not exceed $25,000 in any one year, Hercules
has delivered or otherwise made available to SPG, or its advisers or
representatives, true and complete (i) copies of all plan documents (including
all amendments), trust documents, employee benefit insurance contracts and
summary plan descriptions.
(c) Each
Plan
hereto has at all times been maintained and administered in all material
respects in accordance with its terms and the applicable requirements of
the
Code, ERISA and any other applicable Law. Except as set forth on Schedule
3.20(c),
(i) no
event has occurred and no condition exists that would subject the Company
or any
other member of the FiberVisions Group by reason of their affiliation with
any
member of their controlled group of organizations (within the meaning of
Section
414(b), (c), (m) or (o) of the Code) (collectively, the “Company
Group”)
to any
tax, fine, lien, penalty or other liability imposed by ERISA, the Code or
other
applicable Law, (ii) no “reportable event” (as such term is defined in Section
4043 of ERISA) that could reasonably be expected to result in liability has
occurred with any Plan, and (iii) no nonexempt “prohibited transaction” (as such
term is defined in Section 406 of ERISA and Section 4975 of the Code) has
occurred with respect to any Plan.
(d) Except
as
set forth on Schedule
3.20(d),
no
member of the FiberVisions Group or of the Company Group (i) now maintains
or
has ever maintained a plan (whether or not identified on Schedule
3.20(a))
that is
subject to Title IV of ERISA (each, a “Title
IV Plan”),
(ii)
participates in, contributes to, or at any
time
during the last 15 years participated in or has been obligated to contribute
to,
a “multiemployer plan” (within the meaning of Section 3(37) of ERISA), or has
ever incurred any withdrawal liability with respect to a multiemployer pension
plan which remains unsatisfied; or (iii) now maintains or has ever maintained
a
plan (whether or not identified on Schedule
3.20(a))
which
provides for benefits or coverage of any former Group Employee or his or
her
dependents, except to the extent required by Section 4980B of the Code or
Section 601, et seq.,
of
ERISA.
(e) All
material contributions required to have been made to any Plan or Title IV
Plan
by any member of the FiberVisions Group or any member of the Company Group
have
been made within the time required by the Plan or Title IV Plan and applicable
Law.
(f) Except
as
set forth on Schedule
3.20(f),
there
are (i) no material actions, suits, negotiations, demands, proposals,
investigations, proceedings or claims pending, or to Hercules’ Knowledge,
threatened (other than routine claims for benefits) with respect to any Plan
or
Title IV Plan, (ii) no written or oral communication has been received from
the
Pension Benefit Guaranty Corporation (the “PBGC”)
in
respect of any Title IV Plan concerning the funded status of any such plan
or
any transfer of assets and liabilities from any such plan in connection with
the
transactions contemplated herein, and (iii) no administrative investigation,
audit or other administrative proceeding by the Department of Labor, the
PBGC,
the Internal Revenue Service or other governmental agencies are pending,
threatened or in progress (including, without limitation, any routine requests
for information from the PBGC).
(g) Except
as
set forth on Schedule
3.20(g),
no plan
exists that, as a result of the execution of this Agreement, shareholder
approval of this Agreement, or the transactions contemplated by this Agreement
(whether alone or in connection with any subsequent event(s)), could result
in:
(i) severance pay or any increase in severance pay upon any termination of
employment after the date of this Agreement, (ii) accelerate the time of
payment or vesting or result in any payment or funding (through a grantor
trust
or otherwise) of compensation or benefits under, increase the amount payable
or
result in any other material obligation pursuant to, any of the Plans,
(iii) limit or restrict the right of any member of the FiberVisions Group
to merge, amend or terminate any of the FiberVisions Group sponsored Plans,
(iv) cause any member of the FiberVisions Group to record additional
compensation expense on its income statement with respect to any outstanding
stock option or other equity-based award, or (v) result in payments under
any of the Plans which would not be deductible under Section 280G of the
Code.
(h) No
member
of the FiberVisions Group, or any member of the Company Group has any unpaid
civil liability under Section 502(l) of ERISA.
(i) Each
Plan
that is intended to be qualified under Section 401(a) of the Code has received
a
favorable determination letter that is currently effective as to such
qualification from the Internal Revenue Service, or is entitled to rely on
a
favorable opinion letter that is currently effective issued by the Internal
Revenue Service to a prototype plan sponsor. Neither the Company, nor any
member
of the Company Group knows of an event that has occurred, either by reason
of
any action or failure to act, which would cause any such Plan not to be so
qualified under Section 401(a) of the Code.
(j) Schedule
3.20(j)
lists
open relocation cases for which the Company has accrued expenses.
3.21 Transactions
with Interested Persons
.
Except
as disclosed on Schedule
3.21
hereto,
(a) no officer, director, or 5% stockholder or Affiliate of any member of
the
FiberVisions Group, Hercules or WSP, or any individual in the immediate
household of any individual listed on Schedule
1.1
is a
party to any agreement, contract, commitment or transaction with any member
of
the FiberVisions Group nor has any material interest in any material property
used by any member of the FiberVisions Group, other than in the Ordinary
Course
of Business, and (b) to Hercules’ Knowledge, none of the foregoing owns,
directly or indirectly, a material interest in any business that is a
competitor, customer or supplier of any member of the FiberVisions Group.
To
Hercules’ Knowledge, no Principal Officer is considering termination of
employment. To Hercules’ Knowledge, there is no contractual restriction
precluding or restricting the Company from employing as a key management
employee any Person presently employed by the Company or any Person to whom
an
offer of such employment by the Company is currently pending.
3.22 Customers
and Suppliers
.
To
Hercules’ Knowledge, since the Most Recent Financial Statements, no member of
the FiberVisions Group has received any notice, to the effect that any of
the
ten largest customers or the ten largest suppliers (for the nine months ended
September 30, 2005) may terminate or materially alter its business relations
with any member of the FiberVisions Group, either as a result of the
transactions contemplated by the Definitive Agreements or
otherwise.
3.23 Inventory
.
The
inventory of each member of the FiberVisions Group (a) is sufficient for
the
operation of such entity in the ordinary course consistent with past practice,
(b) consists of items which are good and merchantable within normal trade
tolerances, (c) is of a quality and quantity presently usable or saleable
in the
ordinary course of business (subject to applicable reserves), (d) is valued
on
the books and records of such entity at the lower of cost or market with
the
cost determined under the first-in-first-out or weighted average inventory
valuation method consistent with past practice and (e) is subject to reserves
determined in accordance with GAAP consistently applied. No previously sold
inventory is subject to returns in excess of those historically experienced
by
each member of the FiberVisions Group. Stores and Spares Inventory are valued
consistent with the Hercules practices used in the Financial
Statements.
3.24 Accounts
Receivable; Accounts Payable
.
(a) The
Company, Hercules and WSP have delivered to Buyer schedules of the FiberVisions
Group’s accounts receivable as of the date of the balance sheet included in the
Most Recent Financial Statements (the “Receivables”)
showing the amount of each such Receivable and an aging of amounts due
thereunder (the “Receivables
Schedules”),
which
schedules are true and complete as of that date. Except as provided for in
the
allowance for doubtful accounts (such allowance having been determined in
accordance with Company policies consistently applied), all Receivables which
are reflected on the balance sheet included in the Most Recent Financial
Statements (i) are valid, (ii) represent monies due for goods sold and delivered
or services rendered in the ordinary course of business, (iii) are not subject
to any material refunds or material adjustments or any material
defenses,
rights of set-off, assignment, restrictions, security interests or other
Encumbrances and (iv) to Hercules’ knowledge, no debtor who, as of the date of
the balance sheet included in the Most Recent Financial Statements, owed
the
FiberVisions Group more than $100,000, is involved in or subject to a bankruptcy
or insolvency proceeding, except as provided in the reserve. Except as set
forth
on the attached Receivables Schedule, all such Receivables are current, and
there are no disputes regarding the collectibility of any such
Receivables.
(b) The
accounts payable of FiberVisions Group reflected or on the balance sheet
included in the Most Recent Financial Statements arose from bona fide
transactions in the ordinary course of business.
3.25 Bank
Accounts
.
Schedule
3.25
hereto
sets forth a list of the bank names, locations and account numbers of all
bank
and safe deposit box accounts maintained by or for the benefit of the
FiberVisions Group, including any custodial accounts for securities owned
by the
FiberVisions Group, and the names of all persons authorized to draw thereon
or
have access thereto.
3.26 Title
.
Hercules is the beneficial and record owner of all of the Hercules Shares.
Hercules has good and marketable title to the Hercules Shares, free and clear
of
any Liens, except with respect to liens granted in connection with the Debt
Financing and the Credit Agreement. WSP is the beneficial and record owner
of
all of the WSP Shares. WSP has good and marketable title to the WSP Shares,
free
and clear of any Liens, except with respect to liens granted in connection
with
the Debt Financing and the Credit Agreement. Upon consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof,
SPG will acquire good and marketable title to all of the Hercules Shares,
free
and clear of any Liens, other than transfer restrictions under federal and
state
securities laws, any Liens granted by SPG and the liens granted in connection
with the Debt Financing.
3.27 Asbestos
.
To
Hercules’ Knowledge, (i) asbestos has never been incorporated into any products
manufactured or sold by any member of the FiberVisions Group and (ii) no
claim
by any Person (including employees) has ever been asserted against any member
of
the FiberVisions Group, which claim alleges bodily injury or death from exposure
to asbestos.
3.28 Former
Business Transactions
.
Schedule 3.28 sets forth a list of all business transactions not in the ordinary
course of business consummated since January 1, 1997 by any member of the
FiberVisions Group involving sales of businesses or dispositions of capital
assets (having a net book value of more than $250,000 at the time of the
transaction).
3.29 Survival
of Representations
.
All
representations and warranties set forth in Sections 3.9 and 3.20 shall survive
until 30 days after the expiration of the applicable statute of limitations.
All
representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4,
3.12
and 3.26 shall survive indefinitely. All representations and warranties set
forth in Section 3.17 shall survive the Closing Date for a period of two
(2)
years. All other representations and warranties contained in this Section
3
shall survive the Closing Date for a period of eighteen (18)
months.
SECTION
4. Representations,
and Warranties of SPG
.
SPG
represents and warrants to the Company and the Stockholders as
follows:
4.1 Organization;
Good Standing; Corporate Power
.
(a) SPG
is a
limited liability company duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation, as set forth in
Schedule
4.1,
and is
duly qualified to do business and is in good standing under the laws of each
jurisdiction in which the ownership of property or nature of the business
conducted by it makes such qualification necessary.
(b) SPG
has
the requisite power and authority to execute and deliver the Definitive
Agreements and to consummate the Transactions. The Definitive Agreements
have
been or, as applicable, will be as of Closing, duly executed and delivered
by
SPG. The performance by SPG of its obligations under the Definitive Agreements
have been duly and validly authorized by all necessary action or proceeding
required to be taken therefor.
(c) This
Agreement and each of the other Definitive Agreements, when executed and
delivered by the Company, Hercules and WSP (as applicable), will constitute
valid and legally binding obligations of SPG, enforceable in accordance with
their respective terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, (ii) applicable federal or state securities law limiting rights
of indemnification, and (iii) the effect of rules of law governing the
availability of equitable remedies.
4.2 Noncontravention
.
The
execution, delivery and performance of the Definitive Agreements by SPG and
the
consummation by SPG of the Transactions will not (a) conflict with or
result in a violation of SPG’s organizational documents or (b) conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in a violation of, or give rise to
the
termination, modification, cancellation or acceleration of the time for
performance or payment under, in any case, whether with or without the passage
of time or the giving of notice or both, any FiberVisions Group agreement,
contract, lease, license, instrument, evidence of indebtedness or other
arrangement to which SPG is a party or by which SPG is bound, or to which
any of
SPG’s assets is subject; or (c) violate any provision of any existing law,
statute, judgment, decree, rule or regulation of any jurisdiction or any
to
which SPG or any of its properties or assets is subject. SPG is not in violation
of its organizational documents.
4.3 Investment
.
SPG is
acquiring the Hercules Shares for its own account for the purpose of investment
and not with a view to or for sale in connection with any public distribution
thereof, nor with any present intention of distributing or selling the same,
and
it has no obligation, indebtedness or commitment providing for the disposition
thereof. SPG represents that it will not distribute or transfer any of the
Hercules Shares, in the United States except in compliance with applicable
federal and state securities laws, and only in compliance with the applicable
provisions and restrictions set forth in the Stockholders Agreement. SPG
further
represents that it understands that: (a) the Hercules Shares have not been
registered under the Securities Act or the securities laws of
any
state
by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof predicated
upon SPG’s warranties contained in this Section 4; and (b) the Hercules Shares
cannot be sold unless a subsequent disposition thereof is registered under
the
Securities Act and under any applicable state securities law or is exempt
from
such registration.
4.4 Knowledge
.
SPG
represents and warrants to the Company that under all applicable securities
laws
and otherwise, it has (i) such knowledge and experience in financial and
business matters as is necessary to enable it to evaluate the merits and
risks
of an investment in the Company; and (ii) it has such liquidity and capacity
to
sustain a complete loss of its investment in the Company. SPG acknowledges
that
it, or its advisers or representatives, has been afforded: (a) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the merits and risks of
investing in the Company; (b) access to information about the Company and
the
Subsidiaries, their respective results of operations, financial condition
and
cash flow, and business, in each case sufficient to enable SPG to evaluate
whether to proceed with the execution and delivery of this Agreement and
the
acquisition of the Hercules Shares; and (c) the opportunity to obtain such
additional information that the Company or the Subsidiaries possess, or can
acquire without unreasonable effort or expense, that is necessary to make
an
informed investment decision with respect to the acquisition of the Hercules
Shares. SPG understands and acknowledges that no foreign, federal or state
authority has made any finding or determination as to the fairness for
investment of the Hercules Shares or has recommended or endorsed the Hercules
Shares.
4.5 Accredited
Investor
.
SPG is
an “accredited investor” within the meaning of Regulation D promulgated under
the Securities Act.
4.6 Accuracy
of Certain Information
.
The
state or country of SPG’s principal office and its exact legal name are
accurately set forth on Schedule
4.6
hereto.
4.7 Brokers
.
Except
as set forth on Schedule
4.7
hereto,
SPG has not employed or retained any broker, finder, or intermediary in
connection with the Transactions. The fees and expenses of any broker, finder
or
intermediary set forth on Schedule
4.7
shall be
paid in accordance with Section 5.8 hereof.
4.8 Required
Consents; Approvals
.
SPG is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court, governmental agency, regulatory agency
or stock market or any third party, including, without limitation, filings
under
the HSR
Act,
in
order for it to execute, deliver or perform any of its obligations under
this
Agreement and the Stockholders Agreement in accordance with the terms hereof
or
thereof or to purchase the Stock from Hercules.
4.9 Survival
of Representations
.
All
representations and warranties set forth in Section 4.1, 4.2 and 4.7 shall
survive indefinitely. All representations and warranties set forth in Sections
4.3, 4.4 and 4.5 shall survive until the expiration of the applicable statute
of
limitations. All other representations and warranties set forth in this Section
4 shall survive the Closing Date for a period of eighteen (18)
months.
SECTION
5. Covenants
.
5.1 Conduct
of the Business
.
(a) The
Company, Hercules and WSP covenant and agree that, before the Closing Date,
unless SPG shall otherwise consent in writing or as otherwise contemplated
by
this Agreement or as set forth in Schedule
5.1
hereto,
no member of the FiberVisions Group shall take any action, which, if taken
prior
to the date hereof and not set forth on the schedules referenced in Section
3,
would cause a representation in Section 3 to be untrue, including, that the
Company shall continue to make capital expenditures in the ordinary course
consistent with Schedule
3.6(g).
Notwithstanding anything herein to the contrary, no matter set forth in
Schedule
5.1
hereto
shall be a breach of the representations and warranties set forth in Section
3
hereof.
(b) SPG
covenants and agrees that after the Closing Date: (i) it will cause the Company
to comply with all of its obligations and agreements under the Definitive
Agreements so long as SPG controls the Company, subject to applicable Law;
and
(ii) in the event that SPG no longer controls the Company, it shall use
commercially reasonable efforts to cause the Company to comply with all of
its
obligations and agreements under the Definitive Agreements.
5.2 Payment
of Earnout to Hercules
.
The
Company shall, and SPG shall cause the Company to use commercially reasonable
efforts to pay to Hercules the sums set forth in Sections 5.2(a) and (b)
hereof
upon the terms and conditions set forth herein; provided, that such payments
do
not violate the terms of the Debt Financing.
(a) Fiscal
2006 Earnout Payment.
For
fiscal 2006, the Company shall pay to Hercules the amount (each of (i) and
(ii)
herein, the “Earnout
Payment”)
of (i)
$5,000,000 if the Earnout EBITDA (as defined below) exceeds $22,000,000 and
(ii)
to the extent that the Earnout EBITDA exceeds $25,000,000, for any excess,
an
amount equal to the Earnout EBITDA in excess of $25,000,000 multiplied by
five
(5), up to a maximum Earnout Payment of $20,000,000. The Earnout Payment
for
fiscal 2006 shall be paid to Hercules within thirty (30) days after the amount
of the Earnout EBITDA has been determined in accordance with this
Section 5.
(b) Fiscal
2007 Earnout Payment.
(i) For
fiscal 2007, the Company shall pay to Hercules an Earnout Payment equal to
the
product of the amount of any excess of the Earnout EBITDA in excess of
$27,000,000 multiplied by four (4) up to a maximum Earnout Payment of
$20,000,000. The
amount of the Earnout Payment for fiscal 2007, which shall be paid to Hercules
on December 15, 2007, shall be based on an estimated Earnout EBITDA
(“Estimated
Earnout EBITDA”)
calculated from the Projections of the Company, subject to adjustment as
set
forth in Section 5.2(b)(iii) below.
Copies
of the Projections prepared by the Company setting forth its computation
of the
Estimated Earnout EBITDA for fiscal 2007 shall be submitted in writing to
Hercules by November 20, 2007, and unless Hercules notifies the Company
within ten (10) days after receipt of the Projections that it objects to
the
computation of the Estimated Earnout EBITDA set forth therein, the Projections
and the
Estimated
Earnout EBITDA shall be binding and conclusive for purposes of the Earnout
Payment for fiscal 2007, subject to adjustment as set forth in Section
5.2(b)(iii) below. Hercules shall have reasonable access to the books and
records of the Company and to its workpapers during regular business hours
to
verify the computation of the Estimated Earnout EBITDA made by the
Company.
(ii) If
Hercules notifies the Company as set forth in Section 5.2(b)(i) above, that
it
objects to the computation of the Estimated Earnout EBITDA set forth in the
Projections, the amount of the Estimated Earnout EBITDA shall be determined
by
negotiation between Hercules and SPG. If Hercules and SPG are unable to reach
agreement within ten (10) days after such notification, the amount of the
Estimated Earnout EBITDA to be paid to Hercules, subject to adjustment as
set
forth in Section 5.2(b)(iii) below, shall be the amount of the Earnout EBITDA
for the ten-month period ended October 31, 2007 calculated from the
unaudited financial statements for such period multiplied by 1.2.
(iii) Within
five (5) business days after the Final Earnout EBITDA (as defined below)
for
fiscal 2007 has been determined as set forth in Section 5.2(c)(iii) below
and if
the Final Earnout EBITDA differs from the Estimated Earnout EBITDA, then
the
Earnout Payment made to Hercules for fiscal 2007 shall be adjusted in accordance
with the calculation set forth in Section 5.2(b)(i). If the Final Earnout
EBITDA
is greater than the Estimated Earnout EBITDA, the Company shall pay Hercules
an
amount of cash equal to the difference calculated in accordance with Section
5.2(b)(i). If the Final Earnout EBITDA is less than the Estimated Earnout
EBITDA, Hercules shall refund the Company an amount of cash equal to the
difference calculated in accordance with Section 5.2(b)(i).
(c) General
Provisions for Earnout Payments
.
(i) For
purposes of this Agreement, “Earnout
EBITDA”
for
any
fiscal year shall have the meaning and be computed in the manner set forth
in
Schedule
5.2
attached
hereto.
(ii) The
Earnout EBITDA of the Company for fiscal 2006 and 2007 shall be determined
promptly after the close of each fiscal year by an audit conducted by the
Company’s independent registered public accountants unless the parties agree to
a mutually agreeable third-party firm of independent registered public
accountants (either, the “Earnout
Accountant”);
provided, however, that the parties need not select the Earnout Accountant
that
calculates the 2006 Earnout Payment for purposes of calculating the 2007
Earnout
Payment. If the Company and Hercules are unable to agree on the Earnout
Accountant within five (5) business days, then the independent registered
public
accountants for each of the Company and Hercules, shall determine the Earnout
Accountant. Copies of the Earnout Accountant’s report setting forth its
computation of the Earnout EBITDA for each fiscal year shall be submitted
in
writing to Hercules and the Company as soon as practicable, and, unless either
Hercules or the Company notifies the other within forty-five (45) days after
receipt of such reports that it objects to the computation of the Earnout
EBITDA
set forth therein, the report shall be binding and conclusive for the purposes
of this Agreement. The Company and Hercules shall have access to the books
and
records of the Company and to the Earnout Accountant’s workpapers during regular
business hours to verify the computation of Earnout EBITDA made by the Earnout
Accountant.
(iii) If
either
Hercules or the Company notifies the other in writing within forty-five (45)
days after receipt of the Earnout Accountant’s report that it objects to the
computation of the Earnout EBITDA set forth therein, the amount of the Earnout
EBITDA for the fiscal year to which such report relates shall be determined
by
negotiation between Hercules and the Company. If Hercules and the Company
are
unable to reach agreement within thirty (30) business days after such
notification, the determination of the amount of the Earnout EBITDA for the
period in question shall be submitted to the Earnout Accountant for
determination, whose determination shall be binding and conclusive on the
parties (the “Final
Earnout EBITDA”).
The
disputing party shall pay the Earnout Accountant’s fees, costs and expenses,
unless the Earnout Accountant determines that the Earnout EBITDA has been
understated or overstated by less than ten percent (10%). In the event that
the
Earnout Accountant determines that the Earnout EBITDA has been understated
or
overstated by less than ten percent (10%), then the Company shall pay the
Earnout Accountant’s fees, costs and expenses.
(iv) Intentionally
Omitted.
(v) Notwithstanding
any of the foregoing, in the event that the Company is not able to pay all
or
any portion of the Earnout Payments for fiscal 2006 or 2007 in accordance
with
this Section 5.2 because of the terms of the Debt Financing or otherwise,
the
Company shall issue a negotiable Term Note or Term Notes with the terms set
forth on Schedule
5.2(c)(v).
The
Company shall use its commercially reasonable efforts to repay any such Term
Note(s).
(vi) The
obligations of the Company set forth in this Section 5.2 shall inure to the
benefit of Hercules and be binding on any of the Company’s successors or
assigns.
(vii) SPG
shall
not be permitted to set off any amount to which it may be entitled under
this
Agreement.
(viii) Any
amount payable by Hercules and WSP under Section 8 may be set off against
amounts otherwise payable under this Section 5.2 and shall correspondingly
reduce the amounts payable under this Section 5.2.
(ix) All
payments made under this Section 5.2 shall be made by wire transfer of
immediately available funds as directed by the receiving party.
(d) Any
Earnout Payments shall be treated as an adjustment to the Redemption Price
for
tax purposes, unless otherwise required by applicable law.
5.3 Debt
Financing
.
Each of
the Company and FV Denmark shall use its reasonable best efforts to assist
SPG
to seek and obtain funds sufficient to consummate a bank financing on the
Closing Date (the “Debt
Financing”),
which
shall: (a) be substantially in the form of (i) a first lien term loan of
approximately Seventy Million Dollars ($70,000,000), a portion of which,
not to
exceed Forty Million Dollars ($40,000,000) will be made
available
to FV Denmark and (ii) a second lien term loan of approximately Twenty Million
Dollars ($20,000,000) to the Company; (b) be of no recourse to the Stockholders;
(c) permit the Company to make a dividend to Hercules of the Hercules Dividend
Amount and a dividend to WSP of the WSP Dividend Amount, as well as, the
other
Transactions contemplated hereunder; and (d) have such other terms set forth
on
the Commitment Letters set forth as Exhibit E
or on
terms and conditions reasonably acceptable to SPG, Hercules and WSP, which
consent shall not be unreasonably withheld.
5.4 Regulatory
Filings and Approvals
.
SPG,
Hercules and WSP shall cooperate and use commercially reasonable efforts
to (a)
make all registrations, filings and applications with any Governmental Entity,
(b) give all notices required by any Governmental Entity or as required by
Law
and (c) obtain any governmental transfers, approvals, Orders, qualifications
and
waivers necessary for consummation of the Transactions.
5.5 Stockholders
Agreement
.
As of
the Closing Date, WSP, SPG and the Company shall have entered into the
Stockholders Agreement.
5.6 Transition
Services Agreement
.
As of
the Closing Date, Hercules, the Company and SPG shall have entered into the
Transition Services Agreement.
5.7 Option
Agreement
.
As of
the Closing Date, WSP and SPG shall have entered into the Option
Agreement.
5.8 Transaction
Costs
.
The
Total Transaction Costs shall be borne by the Company and the parties shall
be
reimbursed for such Total Transaction Costs as set forth in Section
2.2.
5.9 Resignations
.
Hercules and WSP shall deliver to SPG the resignations, effective as of the
Closing Date, of the directors and officers of the Company, set forth on
Schedule
5.9,
at
least one day before the Closing Date.
5.10 Non-Competition
.
(a) Hercules
and WSP Non-Competition.
(i) As
of the
Closing Date, neither Hercules nor WSP shall, directly or indirectly (including
through Affiliates), engage in the Competing Business, except with the approval
of the Company, or as otherwise provided in Schedule
5.10
hereto,
until the fifth anniversary of the Closing Date.
(ii) Neither
Hercules nor WSP shall be in violation of this Section 5.10, if Hercules,
WSP or
any of their Affiliates, own, directly or indirectly, solely as an investment,
securities of any Person engaged in the Competing Business that are traded
on a
national securities exchange or the Nasdaq Stock Market (or a recognized
securities exchange outside of the United States of America) if Hercules,
WSP or
any of their Affiliates, as the case may be, (x) is not a controlling Person
or
a member of a group that controls such Person and (y) does not, directly or
indirectly, own more than 5% or more of the voting securities of such
Person.
(iii) Notwithstanding
anything in this Section 5.10(a) to the contrary, neither Hercules nor WSP
shall
be in violation of the provisions herein if Hercules, WSP, or any of their
Affiliates (in any such case, a “Purchasing
Person”)
after
the Closing Date purchases the equity or assets of, or otherwise becomes
affiliated with or participates in any enterprise engaged in the Competing
Business, if less than ten percent (10%) of the gross revenues of such
enterprise for the most recently completed fiscal year (the “Gross
Revenues”)
were
derived from the Competing Business. In the event that ten percent (10%)
or more
of the Gross Revenues were derived from the Competing Business, then neither
Hercules nor WSP shall be in violation of the provisions herein (notwithstanding
anything in this Section 5.10(a) to the contrary), so long as the Purchasing
Person shall use commercially reasonable efforts to divest, as soon as
reasonably practicable (and in any event within less than one year of the
date
of purchase), all its interest in such enterprise relating to the Competing
Business so that the Purchasing Person shall no longer have any Gross Revenues
derived from the Competing Business. With respect to any divestiture pursuant
to
the immediately preceding sentence, the Purchasing Person shall provide written
notice (the “Divestiture
Notice”)
to the
Company, which notice shall set forth the proposed amount and form of
consideration to be paid for the Competing Business to be divested and all
other
material terms and conditions of the proposed divestiture. The Company shall
have the option, exercisable within 90 days of receipt of the Divestiture
Notice, to elect to buy the Purchasing Person’s interest in the Competing
Business proposed to be divested at the price and on the terms and conditions
set forth in the Divestiture Notice by delivery of a written notice to the
Purchasing Person (the “Election
Notice”),
which
notice shall constitute the binding agreement of such other party to purchase
all of such divestiture at the price and on the terms and conditions set
forth
in the Election Notice. If an Election Notice to the Purchasing Person is
not
delivered within 90 days after the receipt of the Divestiture Notice, the
Purchasing Person may sell the business described in the Divestiture Notice
at a
price that is not less than the price (and on other terms and conditions
that
are not more favorable to the purchaser than as) set forth in the Divestiture
Notice.
(iv) Notwithstanding
anything in this Section 5.10(a) to the contrary, if after the Closing Date
a
Person acquires (whether by merger, purchase or otherwise) more that fifty
percent (50%) of the outstanding equity interests of Hercules or of the then
total assets of Hercules and such Person, directly or indirectly, is engaged
in,
or later becomes engaged in, a Competing Business, then: (A) if less than
ten
percent (10%) of the Gross Revenues of such Person are derived from the
Competing Business, such Person may, at its option, retain its interest in
the
Competing Business or (B) if more than ten percent (10%) of the Gross Revenues
of such Person are derived from the Competing Business, such Person shall
either
use commercially reasonable efforts to divest, as soon as reasonably practicable
(and in any event within less than one year of the date of acquisition),
all of
its interest in the Competing Business; provided that such Person shall first
provide the Company with a right of refusal with respect to such Competing
Business as if such right was exercised pursuant to the terms and conditions
set
forth in clause (iii) above or all of its interest in the FiberVisions Group,
subject to Section 7.2 of the Stockholders Agreement; provided, however,
that
SPG may elect (at its sole discretion) to grant a waiver to such Person from
this Section 5.10 whereby such Person shall be permitted (to the extent of
applicable law) to retain its interest in the Competing Business or otherwise
require such Person to retain its interests in the Company. In the case event
that a
Person
complies with subsections (A) or (B) above, neither Hercules, WSP nor such
Person shall be in violation of this Section 5.10. In the event that pursuant
to
applicable law such Person is not permitted to retain the Competing Business,
such Person may divest such business as soon as reasonably
practicable.
i. SPG
Non-Competition.
As of
the Closing Date, SPG shall not, directly or indirectly (including through
Affiliates), engage or invest in the Competing Business until the earliest
to
occur of (i) the third anniversary of the Closing, (ii) the date on which
SPG
ceases to own a majority of the Stock and (iii) the date on which any
Stockholder is no longer bound under Section 5.10(a). Notwithstanding the
foregoing, this Section 5.10(b) shall not prohibit (i) SPG or any of its
Affiliates from investing in or holding not more than 20% of the outstanding
capital stock or other ownership interests of any Person engaged in a Competing
Business or (ii) SPG or any of its Affiliates from hereafter acquiring and
continuing to own and operate any entity which has operations that compete
with
the Company Business if such operations account for no more than 30% of such
entity’s Gross Revenues.
(b) If
a
final judgment of a court or tribunal of competent jurisdiction determines
that
any term or provision contained in this Section 5.10 is invalid or
unenforceable, then the parties agree that the court or tribunal will have
the
power to reduce the scope, duration or geographic area of the term or provision,
to delete specific words or phrases or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable
and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision. This Section 5.10 will be enforceable as so modified after
the expiration of the time within which the judgment may be appealed. This
Section 5.10 is reasonable and necessary to protect and preserve the parties’
legitimate business interests and the value of the Stock and to prevent any
unfair advantage conferred on another party.
5.11 Intentionally
Omitted
5.12 Amendment
to Credit Agreement
.
Prior
to the Closing Date, Hercules shall have entered into an amendment to the
Credit
Agreement pursuant to which Agent shall have (a) waived any of the requirements
under the Credit Agreement with respect to the Company, (b) consented to
the
Transactions and the Definitive Agreements, (c) provided Hercules with a
letter
indicating that all applicable liens related to the FiberVisions Group have
been
satisfied and released, and (d) released the Company from any guarantees
with
respect thereto.
5.13 Efforts
to Consummate
.
Subject
to the terms and conditions of this Agreement, each of the parties hereto
shall
use commercially reasonable efforts to take or cause to be taken all action
and
to do or cause to be done all things necessary, proper or advisable under
applicable Laws to consummate and make effective, as soon as reasonably
practicable, the Transactions, including without limitation the obtaining
of all
consents, authorizations, Orders and approvals of any third party, whether
private or governmental, required in connection with such party’s performance of
such Transactions, and each of the parties hereto shall cooperate with the
others with respect to the foregoing; provided,
however,
that no
party shall be required to compensate any third party, commence or participate
in litigation or offer or grant any accommodation (financial or otherwise)
to
any third party to obtain any such consent or approval of such third
party.
5.14 Further
Assurances
.
The
parties shall execute and deliver, or shall cause to be executed and delivered,
such documents and other papers and shall take, or shall cause to be taken,
such
further actions as may be reasonably required to carry out the provisions
of
this Agreement and give effect to the Transactions, provided,
however,
that
any
such additional documents must be reasonably satisfactory to each of the
parties
and not impose upon any party any material liability, risk, obligation, loss,
cost or expense not contemplated by this Agreement.
5.15 Non-Solicitation;
Non-Hire
.
(a) For
a
period of two years after the Closing Date, Hercules, WSP and SPG, and any
of
their Affiliates shall not, directly or indirectly, on their own behalf or
on
behalf of any other Person, solicit the employment of, or hire, any employee
of
the FiberVisions Group whose names appear on Schedule
5.16,
except
that nothing in this Section 5.15 shall prohibit Hercules, WSP or SPG, or
any of
their Affiliates, from hiring or soliciting the employment of any Person
(other
than the employees of the FiberVisions Group listed on Schedule
5.15
hereto
(the “Executive
Officers”))
who
responds to a general solicitation not directed solely at such employees
so long
as such solicitation occurs at least three months after the
Closing.
(b) Hercules,
WSP and SPG acknowledge that the remedy at law for breach of the provisions
of
this Section 5.15 shall be inadequate and that, in addition to any other
remedy
a party may have, it shall be entitled to an injunction restraining any breach
or threatened breach, without any bond or other security being required and
without the necessity of showing actual damages. If any court construes the
covenant in this Section 5.15, or any part of this Section 5.15, to be
unenforceable in any respect, the court may reduce the duration or area to
the
extent necessary so that the provision is enforceable, and the provision,
as
reduced, shall then be enforced.
5.16 Employee
Matters
.
(a) Commencing
as of the Closing Date and continuing through June 30, 2006, the Company
agrees
to continue to provide, or cause one of its Affiliates to continue to provide,
the active employees of the FiberVisions Group who are employed as of the
Closing Date (other than any such employees who are on long-term disability
and
are not expected to return to employment within six months of the Closing
Date)
and listed in Schedule
5.16
(the
“Transferred
Employees”)
with
base salaries or wage levels and employee welfare benefits that are comparable,
in the aggregate, to the base salaries, wage levels and employee welfare
benefits (other than with respect to equity awards or incentives, bonuses,
severance, retiree medical benefits or benefits under a defined benefit pension
plan) that were provided to the Transferred Employees as of the date hereof;
provided, that, each Transferred Employee who is on short-term disability
or on
any other leave will continue to be an active employee of the FiberVisions
Group
and will continue to receive and be provided with welfare benefits under
the
Plans maintained by Hercules or any of its Affiliates (other than any member
of
the FiberVisions Group) until such time as the Transferred Employee recommences
active employment with the Company or any other member of the FiberVisions
Group
and that if, and only if, any such Transferred Employee recommences active
employment with the Company or any other member of the FiberVisions Group
within
six months following the Closing Date then the
Company
or any of its designated Affiliates shall be responsible for reimbursing
Hercules or its designated Affiliates for the cost of coverage under such
Plans
(so long as such costs are not otherwise already paid by or are the liability
of
the Company or of any one of its Affiliates pursuant to the Transition Services
Agreement, or otherwise); provided, further, that neither the Company nor
any of
its Affiliates shall be obligated or required to continue to employ any
Transferred Employee for any specific time following the Closing Date. Prior
to
the Closing Date, Hercules shall, or shall cause one of its Affiliates (other
than any member of the FiberVisions Group) to, assume the terms and conditions
of the employment of the employees of the FiberVisions Group (i) who are
Transferred Employees and do not recommence active employment with the Company
or any other member of the FiberVisions Group within six months following
the
Closing Date, and (ii) who are on long-term disability leave and are not
expected to return to employment within six months of the Closing Date (the
“Retained
Employees”).
Notwithstanding anything to the contrary herein, Hercules and WSP shall retain
or assume all liabilities, obligations and responsibilities to or in respect
of
(i) any individual who is not a Transferred Employee (including, without
limitation, any and all liabilities, obligations and responsibilities relating
to the continuation of any benefits or other rights of any Retained Employee),
regardless of when incurred, and (ii) each Transferred Employee to the extent
such liability, obligation and responsibility was incurred or arose on or
prior
to the Closing Date, whether or not arising under any employee benefit plan
or
compensation agreement, and (iii) each Plan and Title IV Plan, regardless
of when occurred.
(b) The
Company, as of the Closing Date, agrees to enter into an employee lease
agreement between the Company and Hercules GmbH and Hercules Italia SpA for
the
services of Xxxx Xxxxxxx and Xxxxxxxx Xxxxxx in the form of Employee Lease
Agreement as attached hereto as Exhibit
F.
(c) Except
as
otherwise provided in the Transitions Services Agreement or this Section
5.16,
as of the Closing Date, each Transferred Employee shall (except as otherwise
provided by Law) cease participating in the Plans and each shall be eligible
to
participate in those employee benefit plans established by the Company or
one of
its Affiliates, from time to time, for the benefit of similarly situated
employees. Hercules (in its capacity as Plan Sponsor) shall cause the Plan
Administrator of the Pension Plan of Hercules (the “Pension
Plan”)
to
implement the following provisions as it applies to the Pension Plan effective
on the Closing Date and expiring five (5) years after the Closing
Date:
(i) For
participants in the Pension Plan on the date immediately prior to the Closing
Date who become Transferred Employees, Hercules shall continue to credit
service
equal to Company continuous service thereafter for purposes of vesting of
benefits accrued as of the Closing Date and for purposes of eligibility to
receive such benefits.
(ii) Such
crediting of service shall cease for any Transferred Employee the earlier
of (1)
5 years from the Closing Date, (2) full vesting is achieved, (3) service
for
eligibility no longer has an impact on the benefit entitlement or (4) the
date
such Transferred Employee experiences a break in continuous service with
the
Company or one of its Affiliates prior to 5 years following
Closing.
(iii) The
Transferred Employees who at Closing are eligible to retire under Normal
Retirement, Early Retirement, Reduced Early Retirement or Delayed Pension
provisions of the Pension Plan, and the Transferred Employees who become
eligible under any of these types of pensions as a result of Section 5.16(c)
shall retain the same rights for post retirement healthcare and group life
benefits as any similarly situated active employee of Hercules as of the
date
hereof with such eligibility determination based on Plan provisions in effect
at
the date pension benefits become effective.
This
provision shall have no impact on benefit accrual other than eligibility
requirements to receive a benefit. Hercules agrees that with respect to any
obligations or responsibilities under the Pension Plan or this Section 5.16(c),
Hercules and its Affiliates (other than the Company or any member of the
FiberVisions Group) shall retain or assume all liabilities and
obligations.
(d) Without
limiting the generality of Section 5.16(c), each Transferred Employee who
is a
participant in the Hercules Incorporated Savings and Investment Plan (the
“Hercules
Savings Plan”)
shall
cease to be an active participant under such plan effective as of the Closing
Date and Hercules, or one of its Affiliates (other than any member of the
FiberVisions Group), shall cause each such participant to become fully vested
in
his or her account balances in the Hercules Savings Plan effective as of
the
Closing. As soon as practicable after the Closing Date, the Company shall
establish, or shall cause one of its Affiliates to establish, a defined
contribution plan that is intended to be qualified under Section 401(a) of
the
Code (the “Company
Savings Plan”)
in
which the Transferred Employees shall be eligible to participate. As soon
as
practicable, and in no event later than 60 days following the Closing Date
or,
if later, the date on which the Company Savings Plan is established, Hercules,
or one of its Affiliates (other than any member of the FiberVisions Group),
shall cause the Hercules Savings Plan to transfer to the Company Savings
Plan,
and the Company agrees to cause the Company Savings Plan to accept, the account
balance (including promissory notes evidencing all outstanding loans, any
materials relating to any qualified domestic relations orders pursuant to
Section 414(p) of the Code, and all Hercules common stock accounts) of each
Transferred Employee under the Hercules Savings Plans as of the date next
preceding the date of transfer.
(e) No
provision of this Section 5 shall create any third party beneficiary rights
in
any Transferred Employee or Group Employee (including any beneficiary or
dependent of any Transferred Employee or Group Employee) or any other current
or
former director, officer, employee or independent contractor (or beneficiary
thereof) of Hercules, WSP or any of their Affiliates in respect of continued
employment (or resumed employment) or any other matter.
(f) To
the
extent these provisions may be inconsistent with Danish and Chinese employment
rules, laws, practices and policies, such local rules, laws, practices and
policies will apply without giving rise to additional obligations, liabilities
or indemnifications applicable to any parties to this Agreement.
5.17 Tax
Matters
.
(a) For
any
Pre-Closing Tax Period of any member of the FiberVisions Group, Hercules
and WSP
shall prepare or cause to be prepared, and file or cause to be filed (in
a
manner consistent with past practices) with the appropriate taxing authorities
all Tax Returns required to be filed, and shall pay all Taxes due with respect
to such Tax Returns; provided, however, that SPG shall be entitled to review
and
comment on any such Tax Returns and no such Tax Returns shall be filed without
the prior written consent of SPG, which shall not be unreasonably
withheld.
(b) SPG
shall
prepare (or cause to be prepared) and file or cause to be filed when due
all Tax
Returns relating to Straddle Periods and all Tax Returns that are required
to be
filed by or with respect to the FiberVisions Group for taxable years or periods
beginning after the Closing Date. Hercules shall pay the Taxes attributable
to
the portion of a Straddle Period ending on the Closing Date (as determined
under
Section 5.17(c)) to the Company on or prior to the due date for the applicable
Tax Return; provided, however, that Hercules and WSP shall be entitled to
review
and comment on any such Tax Returns and no such Tax Returns shall be filed
without the prior written consent of Hercules and WSP, which shall not be
unreasonably withheld.
(c) In
the
case of any Straddle Period, the amount of Taxes allocable to the portion
of the
Straddle Period ending on the Closing Date shall be deemed to be the total
amount of Taxes (other than transfer Taxes) imposed for the Straddle Period
multiplied by a fraction the numerator of which is the number of months or
portion thereof in the Straddle Period ending on and including the Closing
Date
and the denominator of which is twelve (12). Notwithstanding the foregoing,
any
item that is unusual or nonrecurring shall be allocated to the day on which
it
occurs.
(d) The
parties shall provide each other with such cooperation and information
as may be reasonably requested of the other in filing any Tax Return, amended
Tax
Return
or claim for refund, determining a liability for Taxes or a right to a refund
of
Taxes or participating in or conducting any audit or other proceeding in
respect
of Taxes. Each of the parties shall make themselves (and their respective
employees) reasonably available on a mutually convenient basis to provide
explanations of any documents or information provided hereunder. The Company
Indemnifying Parties shall control (at their own expense) the defense of
any
claims for a Loss relating to Tax for which they have an obligation to indemnify
the SPG Indemnified Parties under Section 8.1(a) using counsel of their own
choosing; provided, however, the SPG Indemnifying Parties shall have the
right
to participate fully in all aspects of the prosecution or defense of any
such
claim; provided, further, that the Company Indemnifying Parties shall not
settle
or compromise any claims for a Loss relating to Tax, which settlement or
compromise could subject the SPG Indemnified Parties to liability for Tax
not
covered by the indemnification under Section 8.1(a), without the consent
of the
SPG Indemnified Parties, which consent shall not be unreasonably withheld.
The
Company agrees that it shall not settle or compromise any claim referred
to in
the first sentence of this paragraph, which settlement or compromise may
affect
the Company Indemnifying Parties liability for a Loss relating to Tax, without
the consent of the Company Indemnifying Parties, which consent shall not
be
unreasonably withheld.
(e) Hercules
shall be entitled to receive any refund (other than the SPG Refund) attributable
to a Pre-Closing Tax Period; provided, however, the benefit of any refunds
arising as a result of a carryback of tax attributes generated after the
Closing
to a Pre-Closing Tax Period shall be for the account of the Company; provided,
further, that to the extent permitted by law, the Company shall not carry
back
tax attributes to the consolidated group for which Hercules is the common
parent
without Hercules’ prior written consent, which shall not be unreasonably
withheld. Refunds for a Straddle Period shall be allocated in the same manner
as
the relevant Taxes as provided under Section 5.17(c).
5.18 Debt/Cash
of Company.
(a) Before
the Closing, the Company, Hercules and WSP shall cause all of the third party
debt of the Company and its Subsidiaries and all Intercompany Balances among
Hercules and its Affiliates (other than the Company and its Subsidiaries),
on
the one hand, and the Company and its Subsidiaries, on the other hand, to
be
paid in full or otherwise fully satisfied. The Intercompany Balances among
members of the FiberVisions Group shall continue through Closing in accordance
with their respective terms.
(b) As
of the
Closing, the Company shall have cash (i) in the amount of Three Hundred Thousand
Dollars ($300,000) plus an amount equal to any tax refund received by the
Company or Hercules or any Affiliate thereof in respect of 2005 losses at
FiberVisions Products, Inc.and (ii) in a restricted deposit account for letters
of credit outstanding as of the Closing Date with respect to polymer purchases
from Daelim in Korea. As of the Closing, if the cash in the Company exceeds
$300,000, SPG shall remit the amount over $300,000 to Hercules.
5.19 Exclusive
Dealing
.
During
the period from the date of this Agreement through the Closing or the earlier
termination of this Agreement pursuant to Section 9.1 hereof, Hercules and
WSP
shall not take or permit any other Person on its behalf to take, and it shall
cause the FiberVisions Group not to take, any action to encourage, initiate
or
engage in discussions or negotiations with, or provide any information to,
any
Person (other than SPG or its representatives) concerning any purchase of
the
Stock, any merger involving the FiberVisions Group, any sale of all or
substantially all of the assets of the FiberVisions Business or similar
transaction involving the FiberVisions Group or the FiberVisions Business
(other
than assets sold in the Ordinary Course of Business).
5.20 Intellectual
Property Rights
.
(a) Hercules
and WSP, and their Affiliates, shall execute and deliver, or shall cause
to be
executed and delivered, such documents and other papers and shall take, or
shall
cause to be taken, such further actions as may be reasonably required to
assign
to the FiberVisions Group all Intellectual Property Rights that Hercules
and
WSP, and their Affiliates, own (or license, to the fullest extent contractually
permissible) for use in, or the benefit of, the FiberVisions Group.
(b) For
a
period of one (1) year from the Closing Date, if the FiberVisions Group in
its
Ordinary Course of Business determines that it requires a license from Hercules
or WSP or their Affiliates to practice the Intellectual Property Rights of
Hercules or WSP or their Affiliates used on a frequent and regular basis
in
the
FiberVisions Business as of the date of this Agreement, to the extent that
Hercules or WSP or their Affiliates are able to grant such a license, Hercules
or WSP or their Affiliates shall grant to the FiberVisions Group a royalty
free,
non-exclusive license with no right to sublicense for the benefit of third
parties to practice such Intellectual Property Rights solely to the extent
and
in the substantially the same manner and degree such Intellectual Property
Rights were used by the FiberVisions Group in the FiberVisions Business as
of
the date of this Agreement.
(c) From
and
after the Closing Date, Hercules and WSP and their Affiliates grant to the
FiberVisions Group, on a non-exclusive basis and with no right to extend
the
protections afforded by this grant to third parties, a covenant not to assert
against the FiberVisions Group any Intellectual Property Rights used by the
FiberVisions Group in its Ordinary Course of Business to the extent and in
substantially the same manner and degree such Intellectual Property Rights
were
used by the FiberVisions Group in the FiberVisions Business as of the date
of
this Agreement. The suppliers, distributors and customers of the FiberVisions
Group shall enjoy the benefit of this covenant solely to the extent it flows
to
the FiberVisions Group and their transactions with the FiberVisions Group
in the
Ordinary Course of Business to the extent and in substantially the same manner
and degree such transactions were conducted in the FiberVisions Business
as of
the date of this Agreement and for no other purposes.
5.21 Transition
Services Planning
.
(a) For
purposes of transition services planning, Hercules and WSP shall cause the
FiberVisions Group, its officers, directors, representatives, and agents,
and
employees to afford, from the date of this Agreement to the Closing Date,
the
officers, employees, accountants, attorneys, and other representatives and
agents of SPG (collectively, the “SPG
Representatives”)
reasonable access, upon reasonable prior written notice,
during regular business hours, to the premises and designated officers,
employees and agents, of the FiberVisions Group.
(b) Unless
otherwise agreed by the parties to this Agreement, no investigation or
communication pursuant to this Section 5.21 shall affect or add to any
representations or warranties of the parties or the conditions to the
obligations of the parties to consummate the Transactions.
5.22 Consents
and Approvals
.
Hercules and WSP shall use commercially reasonable efforts to obtain, or
to
cause the Company to obtain, any third-party consents or approvals required
in
connection with the consummation of the transactions described in this
Agreement, and Hercules and WSP shall cooperate with the Company in connection
with obtaining such consents and approvals. The Company, Hercules and WSP
shall
use commercially reasonable efforts to obtain promptly any approvals of
Governmental Entities to the consummation of the transactions described in
this
Agreement.
5.23 Insurance
.
Any
outstanding claims asserted by any member of the FiberVisions Group prior
to
Closing against insurance policies maintained by Hercules shall continue
to be
covered by such policies. In addition and upon terms reasonably acceptable
to
Hercules, Hercules shall continue to provide the members of the FiberVisions
Group with access to any “occurrence” policies under which any member of the
FiberVisions Group is covered and will reasonably assist the members of the
FiberVisions Group in tendering and filing any such claims with the appropriate
insurance carriers.
5.24 Additional
Payment
.
Notwithstanding anything to the contrary in this Agreement, at the Closing,
SPG
shall pay to WSP the sum of Seven Hundred Thousand Dollars ($700,000).
5.25 General
Cooperation
.
Each of
the parties shall provide the other with reasonable access to such books
and
records and personnel as may be reasonably requested by the other party in
furtherance of, arising from or related to any of the matters contemplated
by
this Agreement, including, without limitation, with respect to any litigation
of
the Company.
In
addition, each of the parties shall make its personnel available to provide
assistance in legal proceedings, including, but not limited to, for depositions
and for testifying in such proceedings. The requesting party shall pay all
such
reasonable costs in connection with the foregoing.
SECTION
6. Conditions
Precedent to Closing
.
6.1 Conditions
to Each Party’s Obligation to Close
.
The
respective obligations of each party hereto to proceed with the Closing is
expressly conditioned upon the satisfaction of each of the following conditions
on or before the Closing Date; provided,
that a
party whose failure to fulfill or cause to be fulfilled any such condition
shall
be required to proceed with the Closing if the other party waives such
condition:
(a) No
preliminary or permanent injunction or other order, decree, or ruling issued
by
any court of competent jurisdiction nor any statute, rule, regulation, or
order
entered, promulgated or enacted by any Governmental Entity shall be in effect
that would prevent the consummation of the Closing;
(b) There
shall not be pending nor shall there have been threatened, any complaint,
claim,
prosecution, indictment, action, suit, arbitration, or proceeding by or before
any Governmental Entity or arbitrator challenging the lawfulness of or seeking
to prevent or delay the Closing or seeking monetary or other relief by reason
of
the consummation of the Closing.
(c) All
actions by or in respect of or filings with any governmental body, agency,
official or authority required to permit the consummation of the Closing
shall
have been taken, made or obtained.
(d) Hercules
and Agent shall have entered into an amendment in form and substance as
described in Section 5.12 which shall be reasonably acceptable to
Hercules.
6.2 Conditions
to the Obligations of Hercules and WSP
.
The
obligation of Hercules and WSP to proceed with the Closing is expressly
conditioned upon the satisfaction of each of the following additional conditions
on or before the Closing Date:
(a) The
Debt
Financing shall have been consummated, provided, however, that in the event
that
the parties fail to consummate the Debt Financing as a direct result of a
breach
by Hercules, WSP or the Company of Section 5.3, then neither Hercules, WSP
or
the Company shall be entitled to exercise its rights under Section 9 hereof
solely as a result of this subsection.
(b) (i)
On
and as of the Closing Date: (A) those representations and warranties of SPG
set
forth in this Agreement which contain any qualification or limitation as
to
materiality or Material Adverse Effect shall be true and accurate and (B)
those
representations and warranties of SPG set forth in this Agreement which do
not
contain any such qualification or limitation as to materiality or Material
Adverse Effect shall be true and accurate in all material respects, except
that
with respect to (A) and (B), those representations and warranties of SPG
that
address matters only as of a particular date or only with respect to a specific
period of time, need only be true and accurate or true and accurate in all
material respects, as the case may be, as of such date or with respect to
such
period; (ii) the covenants contained in this Agreement to be complied with
by
SPG at or before the Closing shall have been complied with in all material
respects; and (iii) SPG shall have delivered to the Company a certificate
of SPG
to such effect signed by a duly authorized representative thereof.
(c) Hercules
and WSP shall receive a Certificate of the Secretary of SPG to the effect
that
(i) the necessary resolutions approving the purchase by SPG of the Hercules
Shares and authorizing execution of this Agreement and the Stockholders
Agreement, attached to such certificate were duly adopted and continue in
force
and effect; and (ii) the officers of SPG executing this Agreement and such
other documents executed and delivered pursuant to or in connection with
this
Agreement are incumbent officers of SPG and that the specimen signatures
on such
certificate or certificates are their genuine signatures.
6.3 Conditions
to the Obligations of SPG
.
The
obligation of SPG to proceed with the Closing is expressly conditioned upon
the
satisfaction of each of the following additional conditions on or before
the
Closing Date:
(a) (i)
On
and as of the Closing Date: (A) those representations and warranties of Hercules
and WSP set forth in this Agreement which contain any qualification or
limitation as to materiality or Material Adverse Effect shall be true and
accurate and (B) those representations and warranties of Hercules and WSP
set
forth in this Agreement which do not contain any such qualification or
limitation as to materiality or Material Adverse Effect shall be true and
accurate in all material respects, except that with respect to (A) and (B),
those representations and warranties of Hercules and WSP that address matters
only as of a particular date or only with respect to a specific period of
time,
need only be true and accurate or true and accurate in all material respects,
as
the case may be, as of such date or with respect to such period; (ii) the
covenants contained in this Agreement to be complied with by each of Hercules
and WSP at or before the Closing shall have been complied with in all material
respects; and (iii) each of Hercules and WSP shall have delivered to SPG
a
certificate to such effect signed by duly authorized representatives
thereof.
(b) SPG
shall
receive a Certificate of the Secretary of each of Hercules and WSP to the
effect
that (1) the necessary resolutions approving the sale of the Hercules
Shares to SPG and the execution of the Stockholders Agreement by WSP, attached
to such certificate were duly adopted and continue in force and effect, and
(2) the officers of each of Hercules and WSP executing this Agreement and
such other documents executed and delivered pursuant to or in connection
with
this Agreement are incumbent officers of Hercules and WSP, respectively,
and
that the specimen signatures on such certificate or certificates are their
genuine signatures.
(c) A
Certificate of the Secretary of the Company to the effect that (1) the
resolutions of the Board of Directors authorizing the execution of the
Stockholders Agreement by the Company, authorizing the Debt Financing and
the
dividends to Hercules and WSP, attached to such certificate were duly adopted
and continue in force and effect, and (2) the officers of the Company
executing this Agreement and such other documents executed and delivered
pursuant to or in connection with this Agreement are incumbent officers of
the
Company and that the specimen signatures on such certificate or certificates
are
their genuine signatures.
(d) The
Debt
Financing shall have been consummated, provided, however, that in the event
that
the parties fail to consummate the Debt Financing as a direct result of a
breach
by SPG of Section 5.13, then SPG shall not be entitled to exercise its rights
under Section 9 hereof solely as a result of this subsection.
(e) The
Company shall provide a notice in writing that it acknowledges that due to
this
transaction being consummated on the Closing Date, the Company will no longer
participate in the Pension Plan of Hercules Incorporated, the Hercules
Incorporated Savings and Investment Plan, the Hercules Long Term Incentive
Compensation Plan and the Hercules Incorporated Management Incentive
Compensation Plan. The Company shall notify Hercules prior to Closing Date
of
its intent to continue to participate in the Hercules Flexible Employee Benefits
Plan for a period not to extend beyond July 1, 2006.
(f) There
shall not have occurred a Material Adverse Effect and there shall not have
been
any change or effect that is reasonably likely to have a Material Adverse
Effect.
(g) All
contractual and other third party consents and notices required to be obtained
or made by parties other than SPG prior to the Closing Date shall have been
obtained.
SECTION
7. Closing
Deliveries
.
7.1 Company
Closing Deliveries
.
At the
Closing, in addition to the deliveries required under Section 6.3, the Company
shall deliver to SPG, Hercules and WSP the documents set forth
below:
(i) The
Stockholders Agreement executed by the Company;
(ii) A
certificate of good standing for the Company certified by the Secretary of
State
of the State of Delaware as of a date not more than fifteen (15) days prior
to
the date hereof;
(iii) A
date-stamped copy of the Company’s Certificate of Incorporation, as filed with
the Secretary of State of the State of Delaware on or prior to the Closing
Date;
(iv) The
certificate described in Section 6.3(c) hereof; and
(v) The
Transition Services Agreement executed by the Company.
7.2 Hercules
and WSP Closing Deliveries
.
At the
Closing, in addition to the deliveries required under Section 6.3, Hercules
and
WSP shall deliver to SPG the documents set forth below:
(i) The
Transition Services Agreement executed by Hercules;
(ii) The
Option Agreement executed by WSP;
(iii) Each
of
the certificates described in Section 6.3(b) and (c) hereof;
(iv) All
assignments or licenses of Intellectual Property Rights required under this
Agreement;
(v) The
Stockholders Agreement executed by WSP;
1. A
duly
executed and acknowledged certificate, in form and substance acceptable to
SPG
and in compliance with the Code and Treasury Regulations, certifying such
facts
as to establish that the sale of the Hercules Shares and any other transactions
contemplated hereby are exempt from withholding pursuant to Section 1445
of the
Code; and
(vi) A
letter
from the Agent to the effect that the security interests related to the
FiberVisions Group assets under the Credit Agreement have been fully satisfied
and released.
7.3 SPG
Closing Deliveries
.
(a) At
the
Closing, in addition to the deliveries required under Section 6.2, SPG shall
deliver to the Company, Hercules and WSP the following:
(i) A
certificate of good standing for SPG certified by the Secretary of State
of the
jurisdiction of its organization as of a date not more than fifteen (15)
days
prior to the date hereof;
(ii) Each
of
the certificates described in Sections 6.2(b) and (c) hereof;
(iii) A
date-stamped copy of SPG’s certificate of formation, as filed with the Secretary
of State of the jurisdiction of organization on or prior to the Closing Date
and
as in effect on the Closing Date;
(iv) This
Agreement signed by SPG;
and
(v) The
Option Agreement executed by SPG.
(b) On
the
Closing Date, the Company shall pay to Hercules the Redemption Price by wire
transfer of immediately available funds as directed by Hercules.
(c) On
the
Closing Date, SPG shall pay to WSP the payment described in Section 5.24
hereof
by wire transfer of immediately available funds as directed by WSP.
SECTION
8. Indemnification
.
8.1 Indemnification
by Parties
.
(a) The
Stockholders (the “Company
Indemnifying Parties”)
agree
to jointly and severally indemnify and hold the Company and its Affiliates
(including SPG), officers, directors, members, heirs, successors, permitted
assigns, executors, employees and agents (the “SPG
Indemnified Parties”)
harmless from and against any and all claims, actions, damages, losses, taxes,
liabilities, costs and expenses (including reasonable attorneys’ fees)
(collectively, “Losses”)
resulting from (i) any one or more breaches of the representations and
warranties contained in Section 3 hereof, (ii) any breach of a covenant or
other
agreement by Hercules, WSP or the Company (for Company breaches resulting
from
actions taken or not taken by Hercules or WSP) made in this Agreement, (iii)
any
and
all liability for Taxes of the FiberVisions Group with respect to any taxable
period of the FiberVisions Group (or any predecessors) for all taxable periods
ending on or before the Closing Date (“Pre-Closing
Tax Period”)
and
with respect to any taxable period that begins on or before and ends after
the
Closing Date (“Straddle
Period”),
for
the portion thereof ending on the Closing Date, (iv) any and all liability
(as a
result of Treasury Regulation Section 1.1502-6 or otherwise) for Taxes of
Hercules or WSP, or any other person (other than the FiberVisions Group)
which
is or has ever been affiliated with any member of the FiberVisions Group
or with
whom any member of the FiberVisions Group otherwise joins or has ever joined
(or
is or has ever been required to join) in filing any consolidated, combined,
unitary or aggregate Tax Return, prior to the Closing Date, (v) any payments
required to be made after the Closing Date under any Tax sharing, Tax indemnity,
Tax allocation or similar binding contracts (whether or not written) to which
any member of the FiberVisions Group was obligated, or was a party, on or
prior
to the Closing Date, (vi) any and all liabilities for Taxes of the SPG or
the
FiberVisions Group resulting from income of SPG or the FiberVisions Group
included under Section 951(a) of the Code that is realized in a transaction
that
occurs on or before the Closing, (vii) any and all liability for Taxes resulting
from the cancellation or settlement of any debt as set forth in Section 5.18,
(viii) any and all liability for all Taxes arising in connection with the
Restructuring, and (ix) the portion of any liability to the extent related
to
exposure to asbestos occurring, or alleged to have occurred, prior to the
Closing from a product manufactured or sold by any member of the FiberVisions
Group or any Affiliate, including Hercules, or related to an asset owned
or
operated by any member of the FiberVisions Group or any Affiliate, including
Hercules, prior to the Closing.
(b) The
Company Indemnifying Parties agree to jointly and severally indemnify and
hold
the SPG Indemnified Parties harmless from and against any and all Losses
arising
under or in connection with any defined benefit, defined contribution or
welfare
plan maintained by Hercules, WSP or any of their Affiliates, including any
such
plan listed on Schedule
3.20(a)
or
Schedule
3.20(d)
(other
than for Losses arising after and attributable to any events occurring after
the
Closing Date with respect to any plan contributed to or maintained by any
member
of the FiberVisions Group after the Closing Date; provided that for the purposes
hereof, the participation in or contribution to any plan pursuant to the
Transition Services Agreement, or Section 5.16(a) or Section 5.16(c) of this
Agreement, shall not be considered a plan that is contributed to or maintained
by any member of the FiberVisions Group).
(c) The
Company Indemnifying Parties agree to jointly and severally indemnify and
hold
the SPG Indemnified Parties harmless from and against any and all Losses
resulting from (i) the lawsuit of Xxxxxxxxxxx
Spunweb Company v. FiberVisions, L.P.,
Civil
Action No. 04C-03-073 FSS, in the Superior Court of the State of Delaware
in and
for New Castle County, pursuant to which Xxxxxxxxxxx Spunweb alleges breach
of
contract and breach of warranty in connection with the sale of fiber under
the
Supply Agreement on Polypropylene Polymer Fibers between Xxxxxxxxxxx Spunweb
Co.
Ltd. and FiberVisions, L.P. dated March 15, 2000; and (ii) the former business
transactions not in the ordinary course of business consummated since January
1,
1997 by any member of the FiberVisions Group involving sales of businesses
or
dispositions of capital assets (having a net book value of more than $250,000
at
the time of the transaction).
(d) SPG
(the
“SPG
Indemnifying Party”),
agrees to indemnify and hold the Company, Hercules and WSP and their respective
Affiliates, officers, directors, partners, members, successors, permitted
assigns, employees and agents (in such capacity, the “Company
Indemnified Parties”;
together with the SPG Indemnified Parties, the “Indemnified
Parties”)
harmless from and against all Losses, resulting from (i) any one or more
breaches of the representations contained in Section 4 hereof and (ii) any
breach of a covenant or other agreement by SPG made in this Agreement, including
Section 5.1(b).
8.2 Limitations
on Indemnity
.
Notwithstanding the foregoing provisions of Section 8.1 and any other provision
of this Agreement:
(a) Any
claim
that has been timely asserted by an Indemnified Party (as hereinafter defined)
in accordance with Section 8.5 hereof within the applicable time period
specified in Section 8 shall survive past the applicable time limits set
forth
in Section 3.29 and Section 4.9 until the final resolution of the
claim.
(b) Notwithstanding
anything in this Section 8 to the contrary, the Company Indemnifying Parties
shall not have liability to the SPG Indemnified Parties under Section 8.1(a)(i)
for any individual Loss or series of related Losses arising from a breach
of the
representations and warranties in Section 3 (other than the representations
and
warranties in Sections 3.1, 3.2, 3.3, 3.4, 3.9, 3.12, 3.26, 3.27 and 3.28)
in an
amount less than $25,000 and until the sum of the aggregate amount of the
Losses
exceeds $1,000,000 (the “Basket
Amount”)
in
which case the SPG Indemnified Parties shall be entitled to losses in an
amount
up to $10,000,000 (the “Cap
Amount”),
provided, however, that the Company Indemnifying Parties shall be liable
only
for the amount by which all Losses (up to the Cap Amount) exceed the Basket
Amount up to the Cap Amount. Notwithstanding anything in this Section 8 to
the
contrary, the SPG Indemnifying Parties shall not have liability to the Company
Indemnified Parties under Section 8.1 for any individual Loss arising from
a
breach of the representations and warranties in Section 4 (other than the
representations and warranties in Sections 4.1, 4.2, 4.3 and 4.7 ) in an
amount
less than $25,000 and until the sum of the aggregate amount of the Losses
exceeds the Basket Amount in which case the Company Indemnified Parties shall
be
entitled to losses in an amount up to the Cap Amount, provided, however,
that
the SPG Indemnifying Parties shall be liable only for the amount by which
all
Losses (up to the Cap Amount) exceed the Basket Amount. For purposes of this
Section 8.2, all Losses arising from the same facts, circumstances or event
shall be deemed to constitute a single individual Loss. The Basket Amount
and
the Cap Amount shall not be applicable to (i) any Losses resulting from any
representation and warranty specifically related to ownership or title of
the
Company’s assets and properties, (ii) to any Losses arising under or in
connection with any defined benefit, defined contribution or welfare plan
maintained by Hercules, WSP or any of their Affiliates, including any such
plan
listed on Schedule 3.20(a) or Schedule 3.20(d), regardless of when occurred,
(iii) to any Losses arising under Section 8.1(a)(ii) through (ix), Section
8.1(b) or Section 8.1(c), (iv) to any extent that the particular Company
Indemnifying Party has engaged in fraud or willful misrepresentation or (v)
to
any extent that the SPG Indemnifying Party has engaged in fraud or willful
misrepresentation.
The
Basket Amount and Cap Amount shall not be applicable to any Losses resulting
from any breach of a covenant or other agreement by SPG made in this Agreement
(whether for actions taken or not taken).
(c) For
purposes of determining whether any representation or warranty subject to
indemnification has been breached and in calculating the amount of Losses
relating thereto, such representations and warranties alleged to have been
breached shall be construed as if any qualification or limitation with respect
to Material Adverse Effect were omitted from the text of such representations
(other than the reference to Material Adverse Effect in the first sentence
of
Section 3.6).
ii. If,
after
the Closing Date, any member of the FiberVisions Group voluntarily amends
or
otherwise restates any Tax Return for a period prior to the Closing Date
(except
to the extent required by law) in such a manner as to increase the Tax liability
thereon, no Loss shall arise and the Company Indemnifying Parties shall have
no
obligation to indemnify the SPG Indemnified Parties for such amount.
8.3 Effect
of Insurance
.
With
respect to any indemnifiable claim hereunder, the amount recoverable by the
party seeking indemnification shall take into account any reimbursements,
net of
taxes, realized by such party from insurance policies or other indemnification
sources arising from the same incident or set of facts or circumstances giving
rise to the claim for indemnification. Upon the payment of the indemnified
claim
from the Indemnifying Party to the Indemnified Party, the Indemnifying Party
shall have a right of subrogation with respect to any insurance proceeds
or
other rights to third party reimbursement for such claims held by the
Indemnifying Party. Nothing in this Section 8.3 shall create an obligation
on
the part of any party to carry any specific types or amounts of
insurance.
8.4 Exclusive
Remedy
.
With
the exception of any claims for fraud or willful misrepresentation, the
indemnification obligations of the Stockholders under this Section 8 shall
constitute the sole and exclusive remedy of SPG with respect to any breach
of
any representation, warranty or covenant by the Company or any Stockholder
hereunder. In furtherance of the foregoing, SPG hereby waives and releases,
to
the fullest extent permitted by applicable law and, except for claims of
fraud,
any and all other rights, claims and causes of action (including rights of
contributions, if any) known or unknown, foreseen or unforeseen, which exist
or
may arise in the future, that it may have against any of the Stockholders,
arising under or based upon any federal, state or local statute, law, ordinance,
rule, regulation or judicial decision (including any such statute, law,
ordinance, rule, regulation or judicial decision relating to environmental
matters or arising under or based upon any securities law, common law or
otherwise) in respect of the representations, warranties and covenants of
the
Stockholders and the Company set forth herein. SPG shall be entitled to such
remedies as shall be available at law or in equity with respect to any willful
breach of the representations, warranties and covenants of the Stockholders
and
the Company set forth herein. This Section 8.4 shall survive
Closing.
8.5 Notice
of Claim
.
In the
event that a SPG Indemnified Party or a Company Indemnified Party (an
“Indemnified
Party”)
seeks
indemnification, the Indemnified Party shall give reasonably prompt written
notice to the Company Indemnifying Party or SPG Indemnifying Party, as the
case
may be (the “Indemnifying
Party”),
specifying the facts in reasonable detail constituting the basis for such
claim
and the amount, to the extent known, of the claim asserted; provided, however,
that any failure to provide such prompt notice shall not affect the right
to
assert a claim to the extent the Indemnifying Party is not materially prejudiced
by such delay. The parties shall attempt for not less than thirty (30) days
to
negotiate a mutually satisfactory resolution of such matter. In the event
the
parties are not able to agree on a mutually satisfactory resolution, either
party may seek to resolve the dispute by litigation.
8.6 Third
Person Claims
.
If an
Indemnified Party is entitled to indemnification hereunder because of a claim
asserted by any claimant other than an Indemnified Party (a “Third
Person”),
the
Indemnified Party shall give the Indemnifying Party reasonably prompt written
notice thereof. The Indemnifying Party shall have the right, upon written
notice
to the Indemnified Party, and using counsel reasonably satisfactory to the
Indemnified Party, to investigate, contest, control the defense of or settle
the
claim alleged by such Third Person (a “Third-Person
Claim”);
the
Indemnified Party may thereafter participate in (but not control) the defense
of
any such Third-Person Claim with its own counsel at its own expense. Any
settlement must be consented to by the Indemnified Party unless such settlement
provides for a full release and satisfaction of all outstanding claims against
the Indemnified Party and only involves the payment of money in satisfaction
of
such claim. Upon the reasonable request of the Indemnifying Party, the
Indemnified Party shall promptly provide such information as may be reasonably
needed by the Indemnifying Party to make a determination of whether or not
to
assume defense of such claim. If after the receipt of such information the
Indemnifying Party shall fail to assume the defense of any such Third-Person
Claim within twenty (20) days of receiving written notification of such claim
and such requested information:
(a) the
Indemnified Party, in good faith, may defend against such claim, in such
manner
as it may deem appropriate, including, but not limited to, settling such
claim,
after giving at least twenty (20) days’ advance notice of any proposed
settlement to the Indemnifying Party and receiving the Indemnifying Party’s
prior written consent, which may not be unreasonably withheld, on such terms
as
the Indemnified Party, in good faith, may deem appropriate; and
(b) the
Indemnifying Party may participate in (but not control) the defense of such
action, with its own counsel at its own expense. The Parties shall make
available to each other all relevant information in their possession relating
to
any such Third-Person Claim and shall cooperate in the defense
thereof.
8.7 Set
Off
.
SPG
shall not be permitted to set off any amount to which it may be entitled
under
this Agreement.
8.8 Purchase
Price Adjustment
.
Any
indemnification payment made by Hercules pursuant to this Agreement shall
be
treated as an adjustment to the Redemption Price for Tax purposes, unless
otherwise required by applicable law.
SECTION
9. Termination
and Waiver
.
9.1 Termination
.
This
Agreement may be terminated prior to the Closing:
(a) by
the
mutual written consent of Hercules, WSP and SPG;
(b) by
Hercules and WSP, if SPG shall (i) fail to comply in any material respect
with
any covenant or agreement contained herein with which it is required to comply,
or (ii) materially breach any of its representations or warranties contained
herein so as to cause a condition to closing to be incapable of satisfaction,
which failure or breach is not cured within ten (10) days after Hercules
has
notified SPG in writing of its intent to terminate this Agreement pursuant
to
this subsection (b) of Section 9.1;
(c) by
SPG if
Hercules or WSP shall (i) fail to comply in any material respect with any
covenant or agreement contained herein with which they are required to comply,
or (ii) breach any of their representations or warranties contained herein
so as
to cause a condition to closing to be incapable of satisfaction, which failure
or breach is not cured within ten (10) days after SPG has notified Hercules
and
WSP of its intent to terminate this Agreement pursuant to this subsection
(c) of
Section 9.1; or
(d) by
either
Hercules and WSP, or SPG in the event of the issuance of a final, nonappealable
governmental order restraining or prohibiting any of the transactions
contemplated herein.
(e) by
either
Hercules and WSP, or SPG if the Closing shall not have been consummated on
or
before 5:00 p.m. (EST) on April 30, 2006; provided
that the
right to terminate this Agreement pursuant to this clause (e) shall not be
available to the party (if any) whose failure to fulfill or cause to be
fulfilled any obligation under this Agreement has been the primary cause
of the
failure of the Closing to occur on or before such date.
9.2 Notice
of
Termination
.
Any
party desiring to terminate this Agreement pursuant to Section 9.1 shall
give
written notice of such termination to the other parties to this
Agreement.
9.3 Effect
of Termination
.
In the
event of the termination of this Agreement as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability on
the
part of any party to this Agreement, except as set forth in Section 9.4 and
Section 10, provided,
however,
that
nothing in this Agreement shall relieve any party from liability for any
(i)
any
intentional, knowing and material misrepresentation or breach of warranty
by
such party or (ii) a willful and material breach by the such party of any
covenant or agreement contained herein.
9.4 Return
of Documents
.
Upon
termination of this Agreement prior to the Closing, SPG shall deliver to
Hercules the originals and all copies made available to SPG, its advisers
and
representatives of information concerning Hercules, WSP and the Company,
and
neither SPG nor its advisers and representatives shall retain or furnish
to any
third party any copies, extracts, or other reproductions in whole or in part
of
such information.
SECTION
10. Miscellaneous
.
10.1 Binding
Agreement
.
This
Agreement and each provision herein shall be binding upon and applicable
to, and
shall inure to the benefit of, the parties hereto, their heirs, executors,
successors and permitted assigns.
10.2 Notices
.
All
notices, requests, demands and other communications required or permitted
under
this Agreement shall be in writing and shall be deemed to have been duly
made
and received when personally delivered, five (5) days after deposit with
the
United States Post Office, by registered or certified mail, postage prepaid,
return receipt requested or one (1) business day after being sent via facsimile
(with answer back receipt and hard copy sent by mail as provided above) or
nationally-recognized overnight courier service, addressed as set forth below
or
at such other address as such party may designate in the manner set forth
in
this Section 10.2:
If
to
Hercules and WSP, then to:
Hercules
Incorporated
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
Xxxxx Xxxxxx
With
a
copy to:
Hercules
Incorporated Hercules
Incorporated
Hercules
Plaza Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx 0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000 Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000 Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000 Facsimile
No.: (000) 000-0000
Attention:
Xxxxxx Xxxxx Attention:
Xxxxxxx XxXxx
Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000-0000
Telephone
No: (000) 000-0000
Facsimile
No: (000) 000-0000
Attention:
Xxxxxx X. Xxxxx
If
to the
Company, then to:
FiberVisions
Delaware Corporation
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
President of FiberVisions Delaware Corporation
With
a
copy to:
Hercules
Incorporated Hercules
Incorporated
Hercules
Plaza Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx 0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000 Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000 Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000 Facsimile
No.: (000) 000-0000
Attention:
Xxxxx Xxxxxx Attention:
Xxxxxxx XxXxx
If
to
SPG, then to the address indicated on Schedule 4.6
hereto.
With
a
copy to:
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
Xxxx X. Xxxxxxxx
10.3 Consents
and Waivers
.
No
consent or waiver, express or implied, by any party hereto of the breach,
default or violation by any other party hereto of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of any other
breach, default or violation of the same or any other obligations of such
party
hereunder. Failure on the part of any party hereto to complain of any act
of any
of the other parties or to declare any of the other parties hereto in default,
irrespective or how long such failure continues, shall not constitute a waiver
by such party of his rights hereunder.
10.4 Assignments,
Successors, and No Third-Party Rights
.
No
party may assign any of its rights or obligations under this Agreement without
the prior written consent of the other parties hereto, and any attempted
prohibited assignment shall be void; provided that any party shall be entitled
to assign its rights under the Agreement to a controlled Affiliate of such
party
(or in the case of SPG, a controlled Affiliate of Snow, Xxxxxx & Guggenheim,
L.P.) that agrees to be bound by all of the terms and conditions of this
Agreement. Subject to the preceding sentence, this Agreement will apply to,
be
binding in all respects upon, and inure to the benefit of the successors
and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to
this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and
all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors
and permitted assigns.
10.5 Amendments
and Termination
.
No
change, modification or termination of this Agreement shall be valid unless
the
same is in writing and signed by the Company, Hercules, WSP and
SPG.
10.6 Governing
Law; Consent to Jurisdiction
.
This
Agreement and all questions relating to its validity, interpretation and
performance shall be governed by and construed in accordance with the laws
of
the State of Delaware without regard to its conflict of law principles or
rules.
Each party hereto consents and agrees that the state or federal courts located
in the State of Delaware shall have exclusive jurisdiction to hear and determine
any claims or disputes pertaining to this Agreement or any of the other
Definitive Agreements, and each party hereto expressly submits and consents
in
advance to such jurisdiction in any action or suit commenced in such court,
waives any objection that it may have based upon lack of personal jurisdiction,
improper venue or forum
non conveniens,
and
hereby waives its right to jury trial.
10.7 Prior
Agreements
.
This
Agreement, including the Exhibits and Schedules hereto, supersede any prior
or
contemporaneous understanding or agreement among the parties respecting the
subject matter hereof or thereof. There are no arrangements, understandings
or
agreements, oral or written, among the parties hereto relating to the subject
matter of this Agreement, except those fully expressed herein or in documents
executed contemporaneously herewith. No change or modification of this Agreement
shall be valid or binding upon the parties hereto unless such change or
modification or waiver shall be in writing and
signed
by the parties hereto.
10.8 Confidential
and Embedded Information
.
(a) “Confidential
Information” means and includes valuable and proprietary information of a party
whether through electronic media or through any media whatsoever, including,
information relating to: (a) the operations and financial condition of such
party, (b) trademarks, patents and patent applications, copyrights, business
processes, trade secrets, algorithms, software programs, contracts or any
other
agreements pertaining to such party, (c) all Intellectual Property Rights,
and
(d) any other information of a confidential and/or proprietary nature.
Confidential Information does not include information which (i) was in the
public domain at the time it was disclosed or has entered the public domain
through no fault of the receiving party, (ii) was known to the receiving
party,
without restriction, at the time of disclosure, (iii) is disclosed with the
prior written approval of the disclosing party or one of its Affiliates,
(iv)
was independently developed by the disclosing party without any use of the
Confidential Information, (v) becomes known to the receiving party, without
restriction, from a source other than the disclosing party or its Affiliates,
(vi) is disclosed generally to third parties by the disclosing party and
its
Affiliates without restrictions similar to those contained in this Section,
(vii) is required to be disclosed in order for the receiving party to fulfill
its obligations under this Agreement or to enforce its rights under this
Agreement, or (viii) is disclosed pursuant to law, the order or requirement
of a
court, administrative agency, or other governmental body; provided that the
receiving party shall provide prompt notice thereof to the disclosing
party.
(b) The
parties acknowledge that Hercules, WSP and certain Affiliates of Hercules
and
WSP have provided SPG, its advisers and representatives, with access to certain
Confidential Information of Hercules and WSP. The parties acknowledge that
SPG
and certain Affiliates of SPG have provided Hercules and WSP, their advisers
and
representatives with access to certain Confidential Information of
SPG.
(c) Accordingly,
SPG, its advisers and representatives, shall be obligated to maintain the
confidentiality of all Confidential Information of Hercules, WSP and/or any
Affiliate of Hercules or WSP that has been provided by Hercules or WSP to
SPG,
its advisers and representatives, and that does not relate primarily to the
FiberVisions Business for a term of four (4) years from the date of this
Agreement, in the case of commercial business information, and seven (7)
years
from the date of this Agreement, in the case of Intellectual Property
Rights.
(d) Accordingly,
Hercules and WSP, their advisers and representatives, shall be obligated
to
maintain the confidentiality of all Confidential Information of SPG and/or
any
Affiliate of SPG that has been provided by SPG to Hercules and WSP, their
advisers and representatives, and that does not relate primarily to the
FiberVisions Business for a term of four (4) years from the date of this
Agreement, in the case of commercial business information, and seven (7)
years
from the date of this Agreement, in the case of Intellectual Property
Rights.
(e) Notwithstanding
anything to the contrary herein, the parties acknowledge that there is certain
information with respect to the Company, Hercules, WSP and SPG, which is
embedded in the Confidential Information and no party shall be obligated
to
extract or deliver such embedded information.
10.9 Public
Announcements
.
Except
as
may be required by Law or stock exchange rules, no party to this Agreement
or
any Affiliate or representative of such party shall make any public
announcements or otherwise communicate with any news media in respect of
this
Agreement or the transactions contemplated by this Agreement without the
prior
written consent of Hercules or SPG, as the case may be (which consent shall
not
be unreasonably withheld), and prior to any announcement or communication
the
parties shall cooperate as to the timing and contents of any such announcement
or communication.
10.10 Severability
.
In case
any of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way
be
affected
or impaired thereby.
10.11 Counterparts
.
This
Agreement may be signed in any number of counterparts and/or by facsimile,
each
of which shall be an original for all purposes, but all of which taken together
shall constitute
only one agreement.
10.12 Captions
.
The
captions and headings in this Agreement are included for ease of reference
only
and will be disregarded in interpreting or construing this
Agreement.
10.13 Exhibits,
Schedules and Other References
.
References in this Agreement to any “Exhibit” or “Schedule”, unless otherwise
specified, refer to one of the Exhibits or Schedules attached to this Agreement,
and references made to an “Article” or a “Section” unless otherwise specified,
refer to one of the Articles or Sections of this Agreement.
10.14 Rules
of Construction
.
The
plural form of any noun shall include the singular and the singular shall
include the plural, unless the context requires otherwise. Each of the
masculine, neuter and feminine forms of any pronoun shall include all such
forms
unless context requires otherwise. The terms “include”, “includes”, “including”
and all other forms and derivations of such term shall mean including without
limitation. The terms “herein”, “hereof”, “hereunder”, “hereby”, “hereto”,
“herewith” and words of similar import shall refer to this Agreement as a whole
and not to any particular article, section or paragraph of this Agreement.
The
“(s)” shall mean any one or more.
[SIGNATURES
ARE ON THE FOLLOWING PAGE]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
HERCULES
INCORPORATED
By:
Name:
Title:
WSP,
INC.
By:
Name:
Title:
SPG/FV
INVESTOR LLC
By:
Name:
Title:
FIBERVISIONS
DELAWARE CORPORATION
By:
Name:
Title:
EXHIBIT
A
COMPANY’S
CERTIFICATE OF INCORPORATION
[SEE
ATTACHED]
EXHIBIT
B
STOCKHOLDERS
AGREEMENT
[SEE
ATTACHED]
EXHIBIT
C
OPTION
AGREEMENT
[SEE
ATTACHED]
EXHIBIT
D
TRANSITION
SERVICES AGREEMENT
[SEE
ATTACHED]
EXHIBIT
E
COMMITMENT
LETTERS
[SEE
ATTACHED]
EXHIBIT
F
FORM
OF EMPLOYEE LEASE AGREEMENT
[SEE
ATTACHED]
STOCKHOLDERS
AGREEMENT
BY
AND AMONG
FIBERVISIONS
DELAWARE CORPORATION
WSP,
INC.
AND
SPG/FV
INVESTOR LLC
|
TABLE
OF CONTENTS
|
Page
|
|
|
ARTICLE
I
DEFINITIONS
|
||
|
SECTION
1.1.
|
Definitions
|
1
|
|
ARTICLE
II
GENERAL
PROVISIONS
|
||
|
SECTION
2.1.
|
Contract
|
5
|
|
ARTICLE
III
STOCKHOLDERS
|
||
|
SECTION
3.1.
|
Voting
|
5
|
|
SECTION
3.2.
|
Non-Compete
|
5
|
|
SECTION
3.3.
|
Loans
and Guarantees by Stockholders
|
5
|
|
ARTICLE
IV
ELECTION
OF DIRECTORS
|
||
|
SECTION
4.1.
|
Election
of Directors
|
6
|
|
ARTICLE
V
SPECIAL
ACTIONS
|
||
|
SECTION
5.1.
|
Special
Actions
|
7
|
|
SECTION
5.2.
|
Expenses
|
9
|
|
ARTICLE
VI
ADDITIONAL
ISSUANCES; PREEMPTIVE RIGHTS
|
||
|
SECTION
6.1.
|
Additional
Issuances
|
9
|
|
SECTION
6.2.
|
Preemptive
Rights
|
9
|
|
ARTICLE
VII
TRANSFERS
OF STOCK
|
||
|
SECTION
7.1.
|
General
Restriction
|
10
|
|
SECTION
7.2.
|
Right
of First Refusal
|
10
|
|
SECTION
7.3.
|
Tag-Along
Rights
|
11
|
|
SECTION
7.4.
|
Drag-Along
Rights
|
12
|
|
ARTICLE
VIII
TERMINATION
|
||
|
SECTION
8.1.
|
Termination
|
14
|
|
ARTICLE
IX
MISCELLANEOUS
|
||
|
SECTION
9.1.
|
Amendment
to the Agreement
|
15
|
|
SECTION
9.2.
|
Copy
of Agreement to Be Kept on File
|
15
|
|
SECTION
9.3.
|
Stock
Certificates to Be Marked with Legend
|
15
|
|
SECTION
9.4.
|
Successors;
Counterparts
|
15
|
|
SECTION
9.5.
|
Governing
Law; Severability
|
15
|
|
SECTION
9.6.
|
Headings
|
16
|
|
SECTION
9.7.
|
Additional
Documents
|
16
|
|
SECTION
9.8.
|
Notices
|
16
|
|
SECTION
9.9.
|
Interpretation
|
16
|
|
SCHEDULED
|
||
|
Schedule
A
|
Stockholders,
Number of Shares, Ownership Percentage
|
A
|
|
Schedule
B
|
Designees
|
B
|
|
Schedule
C
|
Pre-Approved
Affiliate Fees
|
C
|
|
EXHIBITS
|
||
|
Exhibit
A
|
Form
of Agreement to be Bound
|
THIS
STOCKHOLDERS AGREEMENT dated as of _______, 2006 (this “Agreement”)
by and
among FiberVisions Delaware Corporation, a Delaware corporation (the
“Company”),
WSP,
INC., a Delaware corporation (“WSP”),
and
SPG/FV Investor LLC, a Delaware limited liability company (“SPG,”
and,
together with WSP, the “Stockholders”
and
each, a “Stockholder”).
RECITALS
WHEREAS,
the
Stockholders are the owners of all of the issued and outstanding shares of
the
Stock (as such term is defined below) of the Company.
WHEREAS,
the
Stockholders, the Company and Hercules Incorporated, a Delaware corporation,
and
the sole stockholder of WSP (“Hercules”)
are
parties to that certain Contribution Agreement, dated as of January 31, 2006
(“Contribution
Agreement”).
WHEREAS,
the
Stockholders have entered into that certain Option Agreement, dated as of
even
date herewith (the “Option
Agreement”),
pursuant to which WSP grants SPG the option to acquire 14% of the Stock of
the
Company from WSP (the “Option”)
on the
terms set forth in the Option Agreement.
WHEREAS,
the
Stockholders believe that it is in their best interest to set forth certain
agreements regarding fundamental decisions to be made involving the Company.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual promises and agreements made
herein, the parties, intending to be legally bound, hereto hereby covenant
and
agree for themselves and their successors and assigns as follows and agree
to
execute an Agreement to be Bound in the form attached as Exhibit A:
ARTICLE
I
Definitions
SECTION
1.1 Definitions.
The
following defined terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified in this Section
1.1.
“Affiliate”
shall
mean a Person Controlling, Controlled by or under common Control with such
Person.
“Affiliate
Transferee”
shall
have the meaning set forth in Section
7.1
of this
Agreement.
“Board”
shall
have the meaning set forth in Section
4.1(a)
of this
Agreement.
“Bylaws”
shall
mean the Bylaws of the Company dated as of January 30, 2006.
“Certificate
of Incorporation”
shall
mean the Certificate of Incorporation of the Company filed on January 30,
2006
with the Secretary of State of the State of Delaware.
“CEO
Nominee”
shall
have the meaning set forth in Section
4.1(a)
of this
Agreement.
“Closing
Date”
shall
mean March 31, 2006, or such other date as mutually agreed upon by the
parties.
“Company
Notice”
shall
have the meaning set forth in Section
7.2(b)
of this
Agreement.
“Company
Option Period”
shall
have the meaning set forth in Section
7.2(b)
of this
Agreement.
“Company
Purchase Option”
shall
have the meaning set forth in Section
7.2(a)
of this
Agreement.
“Company
Transfer Notice”
shall
have the meaning set forth in Section
7.2(a)
of this
Agreement.
“Competing
Business”
shall
mean the development, manufacture, marketing, sale and distribution of viscose,
polypropylene, polyethylene, polyester, bi-component (defined as but not
limited
to staple fibers and continuous filaments made of two or more thermoplastic
polymers having different melting points) staple fibers and filament yarns
with
and without additives to impart properties to the staple fibers and/or the
filament yarns such as, but not limited to, color (solution dyed), dyeability,
wettability and antimicrobial, and used in applications such as, but not
limited
to the production of nonwoven fabrics using a carded thermal bonded process,
spunlace process, needlepunch process, airlaid process and combination thereof,
the production of woven and knitted fabrics and the use in industrial
applications such as, but not limited to, concrete reinforcement, concrete
cracking prevention, automotive nonwoven, tea bags, wet laid applications,
and
binder fibers.
“Contribution
Agreement”
shall
have the meaning set forth in the Recitals to this Agreement.
“Control”
and
each derivative thereof shall mean the possession, directly or indirectly,
of
the power to direct or cause to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities
or
otherwise.
“Debt
Financing”
shall
mean the $90,000,000 in debt that the Company and Fibervisions A/S shall
incur
on the terms provided in the Contribution Agreement.
“Dividends”
shall
mean the Hercules Dividend and the WSP Dividend.
“Drag
Along Rights”
shall
have the meaning set forth in Section
7.4(a)
of this
Agreement.
“Drag
Along Sale”
shall
have the meaning set forth in Section
7.4(a)
of this
Agreement.
“Drag
Along Sale Notice”
shall
have the meaning set forth in Section
7.4(b)
of this
Agreement.
“Drag
Along Sale Notice Period”
shall
have the meaning set forth in Section
7.4(b)
of this
Agreement.
“Drag
Along Sellers”
shall
have the meaning set forth in Section
7.4(a)
of this
Agreement.
“Drag
Along Transferee”
shall
have the meaning set forth in Section
7.4(a)
of this
Agreement.
“Earnout
Payment”
shall
have the meaning set forth in Section
5.2
of the
Contribution Agreement.
“Fiscal
Period”
means
the fiscal year of the Company. Each Fiscal Period shall end on December
31 or
such other date as may be required by law.
“Free
Transfer Period”
shall
have the meaning set forth in Section
7.2(e).
“Hercules
Dividend”
means
an amount equal to $41,800,000 which shall be payable by the Company to Hercules
upon the consummation of the Debt Financing.
“Nominees”
shall
have the meaning set forth in Section
4.1(a)
of this
Agreement.
“Non-Selling
Stockholders”
shall
have the meaning set forth in Section
7.3(a)
of this
Agreement.
“Offer”
shall
have the meaning set forth in Section
7.2(a)
of this
Agreement.
“Offered
Shares”
shall
have the meaning set forth in Section
7.2(a)
of this
Agreement.
“Option”
shall
have the meaning set forth in the Recitals to this Agreement.
“Option
Agreement”
shall
have the meaning set forth in the Recitals to this Agreement.
“Other
Stockholders”
shall
have the meaning set forth in Section
7.4(a)
of this
Agreement.
“Participation
Notice”
shall
have the meaning set forth in Section
7.3(b)
of this
Agreement.
“Person”
shall
mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, any other
form
of business organization, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision
thereof).
“Proposed
Purchaser”
shall
have the meaning set forth in Section
7.3(a)
of this
Agreement.
“Proposed
Transfer”
shall
have the meaning set forth in Section
7.3(a)
of this
Agreement.
“Selling
Stockholders”
shall
have the meaning set forth in Section
7.3(a)
of this
Agreement.
“SPG
Nominees”
shall
have the meaning set forth in Section
4.1(a)
of this
Agreement.
“SPG
Shares”
the
number of shares of Stock of the Company held by SPG and/or its Affiliates
from
time to time.
“Stock”
shall
include all currently or hereafter issued capital stock of the Company, as
well
as any securities which may be distributed with respect thereto or issued
in
which may be distributed with respect thereto or issued in exchange therefor
or
in lieu thereof in connection with any stock dividend or stock split,
combination of shares, recapitalization, merger, consolidation or other
reorganization of the Company.
“Stockholder”
or
“Stockholders”
shall
have the meaning set forth in the Recitals to this Agreement.
“Stockholder
Option Period”
shall
have the meaning set forth in Section
7.2(d)
of this
Agreement.
“Stockholder
Purchase Option”
shall
have the meaning set forth in Section
7.2(c)
of this
Agreement.
“Stockholder
Transfer Notice”
shall
have the meaning set forth in Section
7.2(c)
of this
Agreement.
“Subsidiary”
shall
have the meaning set forth in Section
5.1(a)
of this
Agreement.
“Tag-Along
Exercise Notice”
shall
have the meaning set forth in Section
7.3(c)
of this
Agreement.
“Tag-Along
Scheduled Closing”
shall
have the meaning set forth in Section
7.3(b)
of this
Agreement.
“Term
Note”
shall
mean any term note issued pursuant to Section
5.2 (c)(v)
of the
Contribution Agreement.
“Transactions”
shall
mean the Debt Financing, the Dividends and all transactions contemplated
in this
Agreement, the Contribution Agreement and the Option Agreement.
“Transferred
Stock”
shall
have the meaning set forth in Section
7.3(a)
of this
Agreement.
“WSP
Dividend”
means
an amount equal to $40,200,000 which shall be payable by the Company to WSP
upon
consummation of the Debt Financing.
“WSP
Nominees”
shall
have the meaning set forth in Section
4.1(a)
of this
Agreement.
“WSP
Shares”
shall
mean the number of shares of Stock held by WSP and/or its Affiliates from
time
to time.
ARTICLE
II
General
Provisions
SECTION
2.1. Contract
This
Agreement is a contract between the Stockholders and the Company, and is
enforceable by the Company or by any Stockholder against the Company or any
Stockholder who violates its terms. All Stockholders must agree to be bound
by
the terms of this Agreement prior to holding shares of Stock of the
Company.
ARTICLE
III
Stockholders
SECTION
0.0.Xxxxxx
Each
Stockholder shall be entitled to vote upon all matters upon which Stockholders
have the right to vote pursuant to the Certificate of Incorporation, Bylaws
and
applicable law, in proportion to the number of shares of Stock held by such
Stockholder as set forth on Schedule A.
SECTION
3.2.Non-Compete
WSP
and
SPG are subject to the non-compete provision set forth in Section 5.10 of
the
Contribution Agreement. The Parties hereby agree that any Person who becomes
a
Stockholder of the Company following the date hereof shall be bound by a
non-competition agreement that is at least as restrictive as the non-compete
provision set forth in Section 5.10 of the Contribution Agreement.
SECTION
3.3. Loans
and Guarantees by Stockholders
No
Stockholder shall be required to lend any funds to, guarantee payment of
any
debt or obligation of, or purchase additional stock or other securities,
debt or
equity of the Company, except as otherwise required by applicable law or
by this
Agreement. Any Stockholder or any Affiliate of a Stockholder may, with the
consent of the Board, subject to Section
5.1(a)(iii),
make
loans to the Company or a Subsidiary or guarantee payment of any debt or
obligation of the Company or a Subsidiary (including any interest thereon).
ARTICLE
IV
Election
of Directors
SECTION
4.1.Election
of Directors
(a) As
of the
Closing, the total issued and outstanding capital Stock of the Company consists
of 1000 shares of Stock of which SPG holds 510 shares and WSP holds 490 shares.
The Stockholders shall vote their Stock in such a manner as to cause the
nominees to be elected to the Board of Directors of the Company (the
“Board”)
as
follows, and except as indicated otherwise, each nominee after such election
shall be a voting member of the Board:
(i) SPG
Nominees: (x) three (3) nominees so long as SPG holds 255 or more shares
of
Stock; (y) two (2) nominees so long as SPG holds 170 or more but less than
255
shares of Stock; and (z) one (1) nominee so long as SPG holds 85 or more
but
less than 170 shares of Stock. In the event that SPG holds less than 85 shares
of Stock, SPG shall have the right to designate one (1) non-voting observer
to
the Board.
(ii) WSP
Nominees. (x) two (2) nominees so long as WSP holds 245 or more shares of
Stock;
and (y) one (1) nominee so long as WSP holds 200 or more shares of Stock
but
less than 245 shares of Stock. In the event that WSP holds less than 200
shares
of Stock, WSP shall have the right to designate one (1) non-voting observer
to
the Board.
(iii) CEO
Nominee. The chief executive officer shall be a non-voting member of the
Board
unless also nominated as a voting director by either party.
(iv) The
SPG
Nominees, the WSP Nominees and the CEO Nominee are collectively referred
to
herein as, the “Nominees”.
The
Nominees as of the date of this Agreement shall be the individuals listed
on
Schedule B
hereto.
Notwithstanding anything in this Agreement to the contrary, at any time that
(i)
any Earnout Payment is due and payable to Hercules pursuant to Section 5.2
of
the Contribution Agreement and/or (ii) any amount is due and payable to Hercules
pursuant to any Term Note issued pursuant to Section 5.2(c)(v) of the
Contribution Agreement, WSP shall retain the right to nominate at least two
(2)
Nominees and the Stockholders shall vote their Stock in such a manner as
to
cause such Nominees to be elected to the Board.
(b) Subject
to Section 4.1(a) above, the Stockholders hereby agree to vote their Stock
in
such a manner that no SPG Nominee may be removed except upon (i) the affirmative
vote of a majority of the SPG Shares and (ii) no WSP Nominee may be removed
except upon the affirmative vote of a majority of the WSP Shares.
(c) The
rights of WSP under subsection (a) hereof, shall not be assignable, except
as
otherwise agreed to by SPG.
ARTICLE
V
Special
Actions
SECTION
5.1.Special
Actions
(d) The
following actions or types of transactions taken by the Company or any
corporations, partnerships, limited liability companies or other entities
owned
51% or more by the Company (“Subsidiaries”)
shall
require the affirmative vote of at least 66-⅔% of the Board and the holders of
66-⅔% of the Stock:
(i) The
amendment or modification of this Agreement which is disproportionately
disadvantageous or advantageous to one Stockholder;
(ii) The
declaration or payment, directly or indirectly, of any dividend or distribution,
whether in cash, property or securities or a combination thereof, with respect
to any shares of Stock which is being paid or distributed to holder(s) of
such
shares on a non pro-rata basis; provided, however, that the payment by the
Company (i) to WSP of the WSP Dividend and (ii) to Hercules of the Hercules
Dividend and any Earnout Payment(s) is hereby approved, authorized and ratified
in all respects and no further action shall be required by the Stockholders
with
respect thereto; and
(iii) Any
single transaction, or any one or more related transactions, with a Stockholder
or any of its Affiliates that involves payment in excess of $100,000 per
year,
other than the fees set forth on Schedule
C.
(iv) The
adoption of any compensation or benefit plan, which exceeds 10% of the then
outstanding equity of the Company, that may result in awarding or transferring
any equity or equity equivalents of the Company.
(v) Any
agreement or commitment to take any of the actions set forth in this
Section
5.1(a).
(vi) Any
amendment, modification or restatement of the Certificate of Incorporation
or
the Bylaws.
(e) In
addition to the approvals required in Section
5.1(a)
above,
in the event that SPG shall at any time hold more than 20% but less than
40% of
the Stock, the following actions shall require the affirmative vote of at
least
66-⅔% of the Board and the holders of 66-⅔% of the Stock:
(i) The
annual approval of a 3-year strategic/business plan of the Company and its
Subsidiaries on a consolidated basis (the first year of which will be the
basis
of the annual operating budgets of the Company and its Subsidiaries) or any
material amendment to such business plans and/or operating budget;
(ii) Any
single or related capital expenditure of the Company or any of its Subsidiaries
in excess of $1,000,000;
(iii) The
acquisition or leasing of any asset or equity securities by the Company or
any
of its Subsidiaries for consideration in excess of $1,000,000;
(iv) The
incurrence of indebtedness or obligation or otherwise raising capital on
behalf
of the Company or any of its Subsidiaries in excess of $1,000,000, provided,
however, that nothing herein shall prevent the Company from pursuing and
executing the Debt Financing;
(v) The
disposition of any assets of the Company or any of its Subsidiaries with
a fair
market value in excess of $1,000,000;
(vi) The
issuance of any Stock or any securities exercisable for or exchangeable or
convertible into, any Stock or the declaration of dividends or redemption
of any
Stock;
(vii) The
making of any investment by the Company or any of its Subsidiaries in excess
of
$1,000,000;
(viii) Entering
into a new business or line of business by the Company or any of its
Subsidiaries or the acquisition or disposition of any business or line of
business by the Company or any of its Subsidiaries;
(ix) The
early
redemption or retirement of indebtedness for borrowed money by the Company
or
any of its Subsidiaries, in excess of $1,000,000;
(x) The
adoption of any employee benefit plan or agreement that provides for the
awarding of compensation or benefits payable following termination of
employment;
(xi) Entering
into any fixed term employment agreement with an employee of the Company
or a
consultant of the Company for a period which exceeds one year or includes
a
change in control provision; or
(xii) any
agreement or commitment to take any of the actions set forth in this
Section
5.1(b).
SECTION
5.2.Expenses
Except
as
otherwise provided in this Agreement or in Section 8 of the Contribution
Agreement (with respect to any Losses (as defined in the Contribution Agreement)
for which Hercules and WSP shall be responsible), the Company shall be
responsible for all expenses, including, without limitation:
| (a) |
all
expenses related to the business of the Company and all routine
administrative expenses of the Company, including the maintenance
of books
and records of the Company, the preparation and dispatch to the
Stockholders of checks, financial reports, tax returns and notices
required pursuant to this Agreement or in connection with the holding
of
any meetings of the Stockholders;
|
| (b) |
all
expenses incurred in connection with any indebtedness or guarantees
of the
Company or any proposed or definitive credit facility or other credit
arrangement;
|
| (c) |
all
expenses incurred in connection with any litigation or arbitration
involving the Company (including the cost of any investigation and
preparation) and the amount of any judgment or settlement paid in
connection therewith;
provided, however, that the Company shall not pay any expenses incurred
in
connection with any litigation or arbitration between the
Stockholders;
|
| (d) |
all
expenses for indemnity or contribution payable by the Company to
any
Person with respect to certain indemnification obligations of the
Company
set forth in the Bylaws;
|
| (e) |
all
expenses incurred in connection with the collection of amounts due
to the
Company from any Person; and
|
| (f) |
all
expenses incurred in connection with the preparation of amendments
to this
Agreement.
|
ARTICLE
VI
Additional
Issuances; Preemptive Rights
SECTION
6.1.Additional
Issuances
Subject
to the terms of this Agreement and upon approval of the Board, the Company
is
authorized to issue Stock in the Company. Other than as specifically set
forth
in this Agreement, each share of Stock shall be identical in all respects
with
each other share of Stock.
SECTION
6.2.Preemptive
Rights
If
the
Company shall (other than in connection with (i) the issuance of Stock to
employees, officers and directors of the Company or any of its direct or
indirect Subsidiaries with respect to any Board-approved employee benefit
plan,
incentive award program or other compensation arrangement, (ii) any business
combination or acquisition by the Company or any of its Subsidiaries or (iii)
a
public offering of equity securities (each an “Excluded
Issuance”)),
issue any Stock or enter into any contracts, commitments, agreements,
understandings or
arrangements
of any kind relating to any issuance of any Stock, each Stockholder shall
have
the right (exercisable for 30 days) to purchase that number of shares of
Stock
at the same purchase price as the price for the additional shares of Stock
to be
issued so that, after the issuance of the additional Stock to such other
party,
the Stockholder would, after exercising its rights hereunder in the aggregate,
hold the same proportion of the outstanding Stock as was held by such
Stockholder prior to the issuance of such additional shares of Stock.
ARTICLE
VII
Transfers
of Stock
SECTION
7.1.General
Restriction
Except
for the Transactions, which are hereby authorized, approved and ratified
in all
respects, or as otherwise provided in this Article
VII
or as
otherwise agreed to by SPG or as otherwise provided in Section 5.10 of the
Contribution Agreement, no Stockholder (other than SPG and its Affiliates
and
successors), Affiliate or successor transferee shall have the right to sell,
convey, assign, transfer, pledge, grant a security interest in or otherwise
dispose of all or any part of its Stock, other than, (i) upon thirty (30)
days
prior written notice to the Company and the other Stockholders, to an Affiliate
of such Stockholder, Affiliate or successor transferee that agrees to be
bound
by all of the provisions hereof, (such Person, an “Affiliate
Transferee”)
or
(ii) after the fifth anniversary of the Closing Date; provided that SPG consents
in writing to any such transfer in the case of transfers to any strategic
investor, including but not limited to, any investor otherwise involved in
a
Competing Business and provided further that nothing in this Section 7.1
shall
restrict SPG’s (or its Affiliates or sucessors’) ability to sell, convey,
assign, transfer, pledge, grant a security interest in or otherwise dispose
of
its Stock, subject to its compliance with Section 7.3).
SECTION
7.2. Right
of First Refusal
(a) After
the
fifth anniversary of the Closing Date, in the event that WSP shall receive
a
bona fide offer to purchase (which it is willing to accept) from, any party
capable of consummating a sale ( an “Offer”),
all,
or any portion of, the WSP Shares (the “Offered
Shares”),
subject to compliance with Section
7.1,
prior
to accepting an Offer, WSP shall first offer in writing to sell the WSP Shares
to the Company at the price and on the terms on which WSP proposes to transfer
the Offered Shares pursuant to the Offer to the proposed transferee (the
“Company
Transfer Notice”).
The
Company Transfer Notice shall include a copy of the Offer from the proposed
transferee and shall set forth the (i) number of WSP Shares represented by
the
Offered Shares, (ii) the name and address of the proposed transferee, (iii)
the
amount of consideration to be received by WSP, and (iv) the method of the
proposed payment. A copy of the Company Transfer Notice shall be sent to
all
Stockholders. The Company shall have the option (the “Company
Purchase Option”)
to
purchase all of the Offered Shares, at the price and on the terms provided
in
the Company Transfer Notice.
(b) The
Company Purchase Option shall be and remain irrevocable for a period of twenty
(20) days (the “Company
Option Period”)
following the date the Company Transfer Notice is given to the Company. At
any
time
during the Company Option Period, the Company may exercise the Company Purchase
Option by giving written notice to WSP of its acceptance (the “Company
Notice”).
If
the Company exercises the Company Purchase Option, the parties shall fix
a
closing date for the purchase, which shall not be less than ten (10) nor
more
than ninety (90) days after the expiration of the Company Option
Period.
(c) If
the
Company does not elect to exercise the Company Purchase Option within the
Company Option Period, then WSP shall immediately offer in writing to sell
the
Offered Shares to the other Stockholders at the price and on the terms on
which
WSP proposes to transfer the Offered Stock pursuant to the Offer to the proposed
transferee (the “Stockholder
Transfer Notice”).
The
Stockholder Transfer Notice shall include a copy of the Offer from the proposed
transferee and shall set forth the (i) number of shares represented by the
Offered Shares, (ii) the name and address of the proposed transferee, (iii)
the
amount of consideration to be received by WSP, and (iv) the method of the
proposed payment. The other Stockholders shall have the option (the
“Stockholder
Purchase Option”)
to
purchase all of the Offered Shares, at the price and on the terms provided
in
the Stockholder Transfer Notice.
(d) The
Stockholder Purchase Option shall be and remain irrevocable for a period
of
twenty (20) days (the “Stockholder
Option Period”)
following the date the Stockholder Transfer Notice is given to the other
Stockholders. At any time during the Stockholder Option Period, any other
Stockholder may exercise the Stockholder Purchase Option by giving written
notice to WSP of its acceptance (the “Stockholder
Notice”).
In
the event that two (2) or more other Stockholders exercise the Stockholder
Purchase Option, each such other Stockholder shall purchase the Offered Shares
in the proportion that the number of shares of Stock it holds bears to the
total
shares of Stock of all the other Stockholders who desire to exercise the
Stockholder Purchase Option. If one or more other Stockholders exercises
the
Stockholder Purchase Option, the parties shall fix a closing date for the
purchase, which shall not be less than ten (10) nor more than ninety (90)
days
after the expiration of the Stockholder Option Period.
(e) If
no
other Stockholders exercise the Stockholder Purchase Option within the
Stockholder Option Period, then WSP shall be permitted to offer and sell
the
Offered Shares to the proposed transferee named in the Offer for a period
of
ninety (90) days (the “Free
Transfer Period”)
after
the expiration of the Stockholder Option Period at a price not less than
the
price set forth in the Offer, subject to the terms and conditions set forth
in
the Offer. If WSP does not Transfer the Offered Shares within the Free Transfer
Period, WSP’s right to Transfer the Offered Shares pursuant to this Section
7.2
shall
cease and terminate and WSP Stockholder will be required to comply with this
Section
7.2
again
before making or accepting an Offer for the Offered Shares.
SECTION
7.3.Tag-Along
Rights
(a) In
the
event that after complying the terms of Section
7.1
and
Section
7.2,
one or
more Stockholders desire to sell, in one transaction or a series of related
transactions (collectively, the “Selling
Stockholders”),
shares of Stock representing 10% or more of the outstanding Stock of the
Company
to a third party (other than an Affiliate of such Person) (such third party,
the
“Proposed
Purchaser”),
such
transfer, the “Proposed
Transfer”,
and
such shares of Stock to be purchased, the “Transferred
Stock”),
then
such Selling Stockholders’ right
to
accept
any offer shall be conditioned upon the other Stockholders (collectively,
the
“Non-Selling
Stockholders”)
being
offered the right to sell the Proposed Purchaser their “proportionate number” of
the Transferred Stock. Each Non-Selling Stockholder’s “proportionate number” of
the Transferred Stock shall be determined by multiplying the number of shares
of
Stock represented by the Transferred Stock by a fraction, (x) the numerator
of
which is the number of shares of Stock held by such Non-Selling Stockholders
and
(y) the denominator of which is the total number of shares of Stock outstanding.
The Transferred Stock to be sold by the Non-Selling Stockholders pursuant
to
this Section
7.3
shall be
paid and contracted for at the same price per share of Stock, with the same
form
of consideration and otherwise upon the same terms and conditions as the
sale by
the Selling Stockholder(s) of shares of its Stock to the Proposed
Purchaser.
(b) The
Selling Stockholders shall, not less than twenty (20) days prior to each
Proposed Transfer that such Selling Stockholders intend to effect, notify
all
Non-Selling Stockholders in writing of such Proposed Transfer (the “Participation
Notice”).
Such
Participation Notice shall set forth: (i) the number and type of Transferred
Stock; (ii) the name(s) and address(es) of the Proposed Purchaser(s); (iii)
the
proposed amount and all forms of consideration and terms and conditions of
payment offered by such Proposed Purchaser, including the proposed date for
the
closing of the Proposed Transfer (the “Tag-Along
Scheduled Closing”);
and
(iv) that the Proposed Purchaser has been informed of the tag-along rights
of
the Non-Selling Stockholders provided for in this Section
7.3
and has
agreed to purchase the Transferred Stock in accordance with the terms
hereof.
(c) The
tag-along rights described in this Section
7.3
may be
exercised by a Non-Selling Stockholders’ delivery of a written notice to the
Selling Stockholders (the “Tag-Along
Exercise Notice”)
at
least fifteen (15) days prior to the Scheduled Closing. Such Tag-Along Exercise
Notice shall state the number of shares of Stock such Non-Selling Stockholder
elects to include in such sale to the Proposed Purchaser. If any Non-Selling
Stockholder fails to timely provide a Tag-Along Exercise Notice, such failure
shall be regarded as an election by such Non-Selling Stockholder not to
participate in the Proposed Transfer. In addition, if a Non-Selling Stockholder
fails to elect to sell its full “proportionate amount”, the amount any such
Non-Selling Stockholder fails to sell may be sold by the Selling Stockholders
to
the Proposed Purchaser.
(d) In
the
event that any Non-Selling Stockholder exercises its tag-along rights pursuant
to this Section
7.3
and the
Proposed Purchaser is not willing to purchase shares of Stock from the
Non-Selling Stockholders on the same terms and conditions as specified in
the
Participation Notice, then the Selling Stockholders shall not be permitted
to
sell any shares of Stock to the Proposed Purchaser pursuant to the Proposed
Transfer.
SECTION
7.4.Drag-Along
Rights
(a) If
SPG
and/or any of its Affiliate Transferee(s) (the “Drag-Along
Sellers”)
propose to transfer to a Person that is not an Affiliate of the Drag-Along
Sellers (the “Drag-Along
Transferee”)
either
the lesser of (i) all of the Drag-Along Sellers Stock or (ii) a majority
of the
Stock then outstanding (a “Drag-Along
Sale”)
the
Drag-Along Sellers may, at their option, require each other Stockholder (the
“Other
Stockholders”)
to
transfer all of the Stock (“Drag-Along
Rights”)
then
held by such Other Stockholders.
(b) The
Drag-Along Sellers shall provide written notice of such Drag-Along Sale to
the
Other Stockholders (a “Drag-Along
Sale Notice”)
not
later than twenty (20) days prior to the proposed Drag-Along Sale. The
Drag-Along Sale Notice shall identify the transferee, the consideration for
which a transfer is proposed to be made (the “Drag-Along
Sale Price”)
and
all other material terms and conditions of the Drag-Along Sale. Each Other
Stockholder shall be required to participate in the Drag-Along Sale on the
terms
and conditions set forth in the Drag-Along Notice and to tender all of its
shares of Stock as set forth below. The price payable in such transfer shall
be
the Drag-Along Sale Price. Not later than twenty (20) days after the date
of the
Drag-Along Sale Notice (the “Drag-Along
Sale Notice Period”),
each
of the Other Stockholders shall deliver to a representative of the Drag-Along
Stockholders designated in the Drag-Along Sale Notice a limited
power-of-attorney or such other documents as may be reasonably required to
authorize the Drag-Along Sellers or such representative to transfer such
Stock
on the terms set forth in the Drag-Along Notice together with wire transfer
instructions for payment of the cash portion of the consideration to be received
in such Drag-Along Sale.
(c) The
Drag
Along Sellers shall have a period of one hundred twenty (120) days from the
date
of receipt of the Drag Along Sale Notice to consummate the Drag Along Sale
on
the terms and conditions set forth in such Drag Along Sale Notice. If the
Drag
Along Sale shall not have been consummated during such period, the Drag Along
Sellers shall return to each of the Other Stockholders the limited powers
of
attorney and all other applicable instruments representing the Stock that
such
Other Stockholders delivered for transfer pursuant hereto, together with
any
other documents in the possession of the Drag Along Sellers executed by the
Other Stockholders in connection with such proposed transfer, and all the
restrictions on transfer contained in this Agreement or otherwise applicable
at
such time with respect to such Stock owned by the Other Stockholders shall
again
be in effect.
(d) Concurrently
with the consummation of the transfer of shares of Stock pursuant to this
Section
7.4,
the
Drag-Along Sellers shall give written notice thereof to the Other Stockholders,
shall remit to each of the Other Stockholders that have surrendered the
applicable instruments the total consideration (the cash portion of which
is to
be paid by wire transfer in accordance with such Other Stockholder’s wire
transfer instructions) for the shares of Stock transferred pursuant hereto
and
shall furnish such other evidence of the completion and time of completion
of
such transfer and the terms thereof as may be reasonably requested by such
Other
Stockholders; provided,
however,
that,
notwithstanding the foregoing and anything in this Agreement to the contrary,
it
is agreed and understood that the aggregate proceeds from a Drag-Along Sale
shall be distributed to the Stockholders participating in such sale on a
pro
rata basis.
(e) Notwithstanding
anything contained in this Section
7.4
to the
contrary, there shall be no liability on the part of the Drag-Along Sellers
to
the Other Stockholders (other than the obligation to return the limited
powers-of-attorney and other applicable instruments representing the shares
of
Stock received by the Drag-Along Sellers) if the transfer of the shares of
Stock
is not consummated for whatever reason, regardless of whether the Drag-Along
Sellers have delivered a Drag-Along Sale Notice. Whether to effect a transfer
of
the shares of Stock by the Drag-Along Sellers is in the sole and absolute
discretion of the Drag-Along Sellers.
(f) Notwithstanding
anything contained in this Section
7.4
to the
contrary, the rights and obligations of Stockholders to participate in a
Drag-Along Sale are subject to the following conditions:
| (i) |
each
Stockholder shall be obligated to pay only its pro rata share of
expenses
incurred in connection with a consummated Drag-Along Sale to the
extent
such expenses are incurred for the benefit of all Stockholders and
are not
otherwise paid by the Company or another Person;
|
| (ii) |
each
Stockholder shall (1) make such representations, warranties and covenants
and enter into such definitive agreements as are reasonably required
in
the proposed transfer and as are customary for transactions of the
nature
of the proposed transfer, provided that if the Stockholders are required
to provide any representations or indemnities in connection with
such
transfer (other than representations or indemnities concerning each
Stockholder’s title to the shares of Stock and authority, power and right
to enter into and consummate the transfer without contravention of
any law
or agreement), liability for misrepresentation or indemnity shall
(as to
such Stockholders) be several but not joint and each Stockholder
shall not
be liable for more than its pro rata share of any liability for
misrepresentation or indemnity, and (2) be required to bear their
proportionate share of any escrows, holdbacks or adjustments in purchase
price.
|
ARTICLE
VIII
Termination
SECTION
8.1.Termination
This
Agreement shall terminate upon the occurrence of any of the following events:
(a) The
liquidation of, filing for bankruptcy protection by or dissolution of the
Company; provided, however, that any administrative dissolution of the Company
shall not, by itself, terminate this Agreement;
(b) The
voluntary agreement, in writing of all parties bound by the terms hereof;
or
(c) The
effective date of a public offering of any shares of Stock pursuant to a
registration statement under the Securities Act of 1933, as
amended.
ARTICLE
IX
Miscellaneous
SECTION
9.1.Amendment
to the Agreement
Except
as
otherwise provided in this Agreement, this Agreement may be amended by, and
only
by, a written instrument executed by the holders of 66-⅔% of the outstanding
shares of Stock. Notwithstanding the foregoing, this Agreement may not be
amended in any way which impacts on the prohibition on assignability or
transferability of any Stock unless such amendment is unanimously approved
by
all Stockholders.
SECTION
9.2. Copy
of Agreement to Be Kept on File.
The
Company shall keep on file at its principal executive offices, and will exhibit
to any Stockholder or his duly authorized representative at any and all
reasonable times, an executed copy of this Agreement and all amendments
thereto.
SECTION
9.3. Stock
Certificates to Be Marked with Legend.
All
certificates representing Stock now outstanding or hereafter issued by the
Company shall be marked with the following legend:
“THIS
CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE HELD SUBJECT TO THE TERMS,
COVENANTS AND CONDITIONS OF AN AGREEMENT DATED ________, 2006 BY AND AMONG
THIS
COMPANY AND ITS THEN STOCKHOLDERS, AS IT MAY BE AMENDED FROM TIME TO TIME,
AND
MAY NOT BE TRANSFERRED OR DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS
AND
PROVISIONS THEREOF. A COPY OF SAID AGREEMENT AND ALL AMENDMENTS THERETO IS
ON
FILE AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY.”
SECTION
9.4.Successors;
Counterparts
Subject
to Article
VII,
this
Agreement (a) shall be binding as to the executors, administrators, estates,
heirs, legal successors and assigns, or nominees or representatives, of the
Stockholders and (b) may be executed in several counterparts with the same
effect as if the parties executing the several counterparts had all executed
one
counterpart.
SECTION
9.5.Governing
Law; Severability
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware without giving effect to the principles of conflicts of
law.
In particular, this Agreement shall be construed in a manner that is consistent
with all the terms and conditions of the Act. If it shall be determined by
a
court of competent jurisdiction that any term or provision of this Agreement
shall be invalid or unenforceable under the Act or other applicable law,
such
invalidity or unenforceability shall not invalidate the entire Agreement.
In
that case, this Agreement shall be construed so as to limit any such term
or
provision so as to make it enforceable or valid
within
the requirements of applicable law, and, in the event such term or provision
cannot be so limited, this Agreement shall be construed to omit such invalid
or
unenforceable term or provision. If it shall be determined by a court of
competent jurisdiction that any provision relating to the dividends and
allocations of the Company pursuant hereto or to any expenses payable by
the
Company is invalid or unenforceable, this Agreement shall be construed or
interpreted so as (a)
to make
it enforceable or valid and (b)
to make
the dividends and allocations as closely equivalent to those set forth in
this
Agreement as is permissible under applicable law.
SECTION
9.6.Headings
Section
and other headings contained in this Agreement are for reference purposes
only
and are not intended to describe, interpret, define or limit the scope or
intent
of this Agreement or any provisions thereof.
SECTION
9.7.Additional
Documents
Each
Stockholder agrees to perform all further acts and execute, acknowledge and
deliver any documents that may be reasonable necessary to carry out the
provisions of this Agreement.
SECTION
9.8.Notices
All
notices, requests and other communications to any Stockholder shall be in
writing and shall be deemed to have been given if personally delivered or
sent
by telex, telegram, air courier or registered or certified mail, return receipt
requested, to the Company, at the address of the Company set forth below,
or
such other addresses of the Company as to which the Stockholders have been
given
notice, and to any Stockholder at the address set forth in Schedule
A
hereto.
Notice shall be deemed to have been given upon delivery, in the case of personal
delivery, telex and telegram; as of the day after being sent by air courier
within the United States or as of the third day after being sent by
international mail courier; and as of the fifth day after being mailed, in
the
case of delivery by mail. If to the Company, to:
FiberVisions
Delaware Corporation
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxx Xxxxxx
SECTION
9.9.Interpretation
Wherever
from the context it appears appropriate, each term stated in either the singular
or the plural shall include the singular and the plural, and pronouns stated
in
either the masculine, the feminine, or the neuter gender shall include the
masculine, feminine and neuter.
2
IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the
date first above written.
FIBERVISIONS
DELAWARE CORPORATION
By:
Name:
Title:
STOCKHOLDERS:
SPG/FV
INVESTOR LLC
By:
Name:
Title:
WSP,
INC.
By:
Name:
Title:
SCHEDULE
A
FiberVisions
Delaware Corporation
|
Stockholders
|
Number
of Shares
|
Ownership
Percentage
|
|
SPG/FV
Investor LLC
c/o
SPG Partners, LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
|
51%
|
|
|
WSP,
INC.
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
|
49%
|
|
If
SPG
exercises its Option to acquire 14% of the Stock of the Company from WSP,
this
Schedule
A
shall be
amended and restated as follows:
|
Stockholders
|
Number
of Shares
|
Ownership
Percentage
|
|
SPG/FV
Investor LLC
c/o
SPG Partners, LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
|
65%
|
|
|
WSP,
INC.
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
|
35%
|
SCHEDULE
B
Nominees
[TBD]
SCHEDULE
C
Pre-Approved
Affiliate Fees
[TBD]
EXHIBIT
A
FORM
OF AGREEMENT TO BE BOUND
[DATE]
To
the
Parties to the
Stockholders
Agreement
dated
as
of ________, 2006
Dear
Sirs:
Reference
is made to the Stockholders Agreement dated as of _________, 2006, (the
“Stockholders
Agreement”),
among
FiberVisions Delaware Corporation, WSP, Inc. and SPG/FV Investor LLC and
each
other Stockholder who or which shall become parties to the Stockholders
Agreement as provided therein. Capitalized terms used herein and not defined
have the meanings ascribed to them in the Stockholders Agreement.
In
consideration of the representations, covenants and agreements contained
in the
Stockholders Agreement, the undersigned hereby confirms and agrees that it
shall
be bound by all of the provisions thereof.
This
letter shall be construed and enforced in accordance with the laws of the
State
of Delaware.
Very
truly yours,
[Permitted
Transferee]
OPTION
AGREEMENT
DATED
AS OF FEBRUARY __, 2006
between
WSP,
INC.
and
SPG/FV
INVESTOR LLC
DMEAST
#9317156 v10
Table
of Contents
|
Page
|
||
|
SECTION
1.
|
Definitions
|
1
|
|
SECTION
2.
|
Grant
of Option
|
3
|
|
2.1
|
Grant
of Option; Option Closing.
|
3
|
|
SECTION
3.
|
Representations
and Warranties of WSP
|
4
|
|
3.1
|
Organization;
Good Standing; Corporate Power.
|
4
|
|
3.2
|
Non
Contravention.
|
5
|
|
3.3
|
Brokers
|
5
|
|
3.4
|
Required
Consents; Approvals
|
5
|
|
3.5
|
Title
|
5
|
|
3.6
|
Survival
of Representations
|
5
|
|
SECTION
4.
|
Representations,
and Warranties of SPG
|
6
|
|
4.1
|
Organization;
Good Standing, Corporate Power.
|
6
|
|
4.2
|
Noncontravention
|
6
|
|
4.3
|
Investment
|
6
|
|
4.4
|
Knowledge.
|
7
|
|
4.5
|
Accredited
Investor
|
7
|
|
4.6
|
Accuracy
of Certain Information
|
7
|
|
4.7
|
Brokers
|
7
|
|
4.8
|
Required
Consents; Approvals
|
7
|
|
4.9
|
Survival
of Representations.
|
7
|
|
SECTION
5.
|
Covenants
|
7
|
|
5.1
|
Efforts
to Consummate
|
7
|
|
5.2
|
Further
Assurances
|
8
|
|
SECTION
6.
|
Conditions
Precedent to Option Closing
|
8
|
|
SECTION
7.
|
Closing
Deliveries.
|
9
|
|
7.1
|
WSP
Option Closing Deliveries.
|
9
|
|
7.2
|
SPG
Option Closing Deliveries.
|
9
|
|
SECTION
8.
|
Indemnification.
|
10
|
|
8.1
|
Indemnification
by Parties.
|
10
|
|
8.2
|
Limitations
on Indemnity
|
10
|
|
8.3
|
Effect
of Insurance
|
10
|
|
8.4
|
Exclusive
Remedy
|
10
|
|
8.5
|
Notice
of Claim
|
10
|
|
8.6
|
Third
Person Claims
|
11
|
|
SECTION
9.
|
Termination
and Waiver.
|
11
|
|
9.1
|
Termination
|
11
|
|
9.2
|
Notice
of Termination
|
12
|
|
9.3
|
Effect
of Termination
|
12
|
|
9.4
|
Return
of Documents
|
12
|
|
SECTION
10.
|
Miscellaneous.
|
12
|
|
10.1
|
Binding
Agreement
|
12
|
|
10.2
|
Notices
|
12
|
|
10.3
|
Consents
and Waivers
|
13
|
|
10.4
|
Assignments,
Successors, and No Third-Party Rights
|
13
|
|
10.5
|
Amendments
and Termination
|
13
|
|
10.6
|
Governing
Law; Consent to Jurisdiction
|
13
|
|
10.7
|
Prior
Agreements
|
14
|
|
10.8
|
Public
Announcements
|
14
|
|
10.9
|
Severability
|
14
|
|
10.10
|
Counterparts
|
14
|
|
10.11
|
Captions
|
14
|
Schedules
|
Schedule
1.1
|
Subsidiaries
|
|
Schedule
3.2
|
Non-Contravention
|
|
Schedule
3.3
|
WSP
Broker Fees and Expenses
|
|
Schedule
4.1
|
Organization;
Good Standing; Corporate Power
|
|
Schedule
4.6
|
Accuracy
of Certain Information
|
|
Schedule
4.7
|
SPG
Broker Fees and Expenses
|
DMEAST
#9317156 v10
OPTION
AGREEMENT
THIS
OPTION AGREEMENT
dated as
of February ____, 2006 (this “Agreement”)
is
made by and between WSP, Inc., a Delaware corporation (“WSP”)
and
SPG/FV INVESTOR LLC, a Delaware limited liability company (“SPG”).
Background
WHEREAS,
Hercules Incorporated (“Hercules”)
and
WSP currently hold all of the issued and outstanding shares of capital stock
(“Stock”)
of
FiberVisions Corporation (the “Company”).
WHEREAS,
WSP, Hercules, SPG and the Company are parties to that certain Contribution
Agreement, dated as of January 31, 2006 (“Contribution
Agreement”)
pursuant to which, among other things, SPG shall contribute the Contribution
Amount (as defined below) to the Company in exchange for 37.78% of the Stock
and
the Company shall redeem all 510 shares of Stock owned by Hercules, which
represents, in the aggregate, 51% of the Stock.
WHEREAS,
WSP, SPG and the Company are parties to that certain Stockholders Agreement,
dated as of January 31, 2006 (“Stockholders
Agreement”)
which
sets forth certain rights and obligations of the holders of the
Stock.
WHEREAS,
WSP desires to grant to SPG an option to acquire 140 shares of Stock, which
represents, in the aggregate, 14% of the Stock; and
WHEREAS,
this Agreement provides that, among other things, WSP shall grant SPG an
option
to acquire the Optioned Shares, which option shall be exercisable during
the
Exercise Period (as defined below) on the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the mutual covenants and promises set forth
herein, the parties hereto, intending to be legally bound, agree as
follows:
SECTION
1. Definitions.
For
purposes of this Agreement, the following terms when appearing with initial
capital letters will have the following meanings:
“Affiliate”
of
a
Person shall mean a Person Controlling, Controlled by or under common Control
with such Person.
“Agreement”
shall
have the meaning set forth in the preamble hereto.
“Contribution
Agreement”
shall
have the meaning set forth in the Background.
“Contribution
Amount”
shall
have the meaning set forth in the Contribution Agreement.
“Closing”
shall
mean the consummation of the transactions contemplated by the Contribution
Agreement.
DMEAST
#9317156 v10
“Closing
Date”
shall
mean the date on which the Closing occurs.
“Company”
shall
have the meaning set forth in the Background.
“Control”
and
each derivative thereof shall mean the possession, directly or indirectly,
of
the power to direct or cause the direction of the management and policies
of a
Person, whether through ownership of voting securities, by contract or
otherwise.
“Debt
Financing”
shall
mean the bank financing described in Section 5.3 of the Contribution
Agreement.
“Definitive
Agreements”
shall
mean this Agreement, the Amendment and all other documents and certificates
delivered by any party at the Option Closing.
“Encumbrance”
shall
mean any encumbrance, security interest, mortgage, lien, pledge, claim, lease,
agreement, right of first refusal, option, limitation on transfer or use
or
assignment or licensing, restrictive easement, charge or any other restriction
or third party rights of any kind with respect to any property or assets
(tangible or intangible), including any restriction on the ownership, use,
voting, transfer, possession, receipt of income or other exercise of any
attributes of ownership of such property or assets (whether tangible,
intangible, real or personal).
“Exercise
Period”
shall
have the meaning set forth in Section 2.1(a).
“Hercules”
shall
have the meaning set forth in the Background.
“HSR
Act”
shall
mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and
the rules and regulations thereunder.
“Indemnified
Party”
shall
have the meaning set forth in Section 8.5.
“Indemnifying
Party”
shall
have the meaning set forth in Section 8.5.
“Liens”
shall
mean any claims, liens, charges, restrictions, options, preemptive rights,
mortgages, hypothecations, assessments, pledges, encumbrances or security
interests of any kind or nature whatsoever.
“Losses”
shall
have the meaning set forth in Section 8.1(a).
“Option”
shall
have the meaning set forth in Section 2.1(a).
“Option
Closing”
shall
have the meaning set forth in Section 2.1(c).
“Option
Closing Consideration”
shall
have the meaning set forth in Section 2.1(b).
“Option
Closing Date”
shall
have the meaning set forth in Section 2.1(c).
“Optioned
Shares”
shall
have the meaning set forth in the preamble hereto.
DMEAST
#9317156 v10
“Order”
shall
mean any judgment, order, writ, decree, injunction or other determination
of any
authority or arbitrator or similar body whose finding, ruling or holding
is
legally binding or is enforceable as a matter of right (in any case, whether
preliminary or final).
“Person”
shall
mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, any other
form
of business organization, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision
thereof).
“Schedules”
shall
mean the disclosure schedules delivered by each of the parties hereto, and
which
form a part of this Agreement.
“Securities
Act”
shall
have the meaning set forth in Section 3.4.
“SPG
Indemnified Parties”
shall
have the meaning set forth in Section 8.1(a).
“SPG
Indemnifying Parties”
shall
have the meaning set forth in Section 8.1(b).
“Stock”
shall
have the meaning set forth in the Background.
“Stockholders
Agreement”
shall
have the meaning set forth in the Background.
“Subsidiaries”
shall
mean any corporation, partnership, limited liability company or other entity
owned 51% or more by the Company as listed on Schedule
1.1
hereto.
“Third
Person”
shall
have the meaning set forth in Section 8.6.
“Third-Person
Claim”
shall
have the meaning set forth in Section 8.6.
“Transaction”
shall
mean all of the transactions contemplated in this Agreement collectively,
including, but not limited to, each of the transactions contemplated in Section
2 hereof, and all actions in furtherance thereof.
“WSP
Indemnified Parties”
shall
have the meaning set forth in Section 8.1(b).
“WSP
Indemnifying Party”
shall
have the meaning set forth in Section 8.1(a).
SECTION
2. Grant
of
Option
2.1 Grant
of
Option; Option Closing.
(a) Grant
of Option.
WSP
hereby grants to SPG an option (the “Option”)
to
purchase, on the Option Closing Date, all of the Optioned Shares from WSP
for
the Option Closing Consideration and on the terms set forth herein. The Option
may be exercised by SPG at any time during the period beginning on January
1,
2007 and expiring on January 31, 2007 (the “Exercise
Period”).
Notwithstanding anything herein to the contrary, if the Option is not exercised
during the Exercise Period, the Option will immediately terminate and shall
be
of no further force or effect.
DMEAST
#9317156 v10
(b) Exercise
of Option;
Sale
of Optioned Shares.
In the
event that SPG exercises the Option during the Exercise Period, on the Option
Closing Date each of the following shall occur simultaneously and are expressly
conditioned upon each other: (i) WSP shall sell, assign and transfer the
Optioned Shares to SPG and SPG shall purchase from WSP the Optioned Shares
for a
purchase price in an amount in cash equal to Seven Million Four Hundred Thousand
Dollars ($7,400,000) (the “Option
Closing Consideration”),
and
(ii) the Company’s stock ledger shall be amended to reflect (x) SPG as the
holder of 650 shares of Stock, which represents, in the aggregate, sixty-five
percent (65%) of the Stock and
(y)
WSP as the holder of 350 shares of Stock, which represents, in the aggregate,
thirty-five percent (35%) of the Stock.
(c) Option
Closing.
The
Option Closing shall take place within five (5) business days after SPG has
notified the Company and WSP in writing of its intent to exercise the Option
and
the conditions precedent to the Option Closing shall have been satisfied
or
waived by the appropriate party. The consummation of the Transaction shall
be
referred to herein as the “Option
Closing”
and
the
date on which the Option Closing occurs shall be herein referred to as the
“Option
Closing Date.”
(d) Option
Closing Procedures.
At the
Option Closing, the parties shall deliver to each other the instruments,
documents and consideration and shall take the actions specified in Sections
5
and 6, as applicable.
(e) Option
Non-Exercise Fee.
In the
event that SPG does not exercise the Option during the Exercise Period, then
the
Option shall expire pursuant to the terms of this Agreement and SPG shall
pay a
non-exercise fee to WSP equal to 14% of (i) any 2006 Earnout Payment plus
(ii)
any 2007 Earnout Payment due to Hercules pursuant to Section 5.2 of the
Contribution Agreement. SPG shall make any payment in cash within thirty
(30)
days after the respective Earnout Payment becomes payable.
SECTION
3. Representations
and Warranties of XXX.
XXX
hereby makes the representations and warranties set forth in this Section
3 as
of the Option Closing Date. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
SPECIFICALLY PROVIDED IN THIS SECTION 3, NO REPRESENTATION OR WARRANTY OF
ANY
KIND OR NATURE, WHETHER EXPRESS OR IMPLIED IS MADE TO SPG. In addition, WSP
makes no representation or warranty of any kind or nature, whether express
or
implied , that the FiberVisions Business or SPG’s ownership, possession,
operation or use of the FiberVisions Business will yield any given or stated
economic, financial, profit or business result to SPG or will result in SPG
having any given standing or position in any business, market or
product.
3.1 Organization;
Good Standing; Corporate Power.
(a) WSP
is a
Delaware corporation duly formed, validly existing and in good standing under
the laws of the State of Delaware and has the requisite power and authority
to
execute and deliver this Agreement and to consummate the Transaction.
DMEAST
#9317156 v10
(b) This
Agreement and the Transaction have been duly authorized by all corporate
action
required to be taken on the part of WSP. This Agreement, when executed and
delivered by SPG, will constitute a valid and legally binding obligation
of WSP,
enforceable in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting the enforcement of
creditors’ rights generally, (ii) applicable federal or state securities
law limiting rights of indemnification, and (iii) the effect of rules of
law governing the availability of equitable remedies.
3.2 Non
Contravention.
Except
as set forth on Schedule 3.2, neither the execution, delivery and performance
of
this Agreement nor the consummation of the Transaction by WSP will: (a) conflict
with or result in a violation by WSP of its organizational documents; (b)
result
in a breach of the terms, conditions or provisions of, or constitute a default
under, or result in a violation of, or give rise to the acceleration of the
time
for performance or payment under, in any case, whether with or without the
passage of time or the giving of notice or both, any agreement, contract,
instrument, or evidence of indebtedness to which WSP is a party or by which
WSP
is bound, except for possible defaults, actions or omissions as would not
reasonably be expected to have a material adverse effect on the financial
condition or business of WSP, taken as a whole; or (c) except for the applicable
requirements of such consents, approvals, Orders, authorizations or notices
as
set forth on Schedule 3.2, violate any provision of any existing law, statute,
rule or regulation of any jurisdiction or any Order to which WSP or any of
its
assets or properties is subject.
3.3 Brokers.
Except
as set forth on Schedule 3.3, WSP has not employed or retained any broker,
finder or other intermediary in connection with the Transaction. The fees
and
expenses of any broker, finder or other intermediary set forth on Schedule
3.3
shall be paid in accordance with Section 5.2 hereof.
3.4 Required
Consents; Approvals.
Except
for filings under the HSR Act or as otherwise specifically contemplated by
this
Agreement or the Stockholders Agreement and as required under the Securities
Act
of 1933, as amended (the “Securities Act”), and any applicable state securities
laws, WSP is not required to obtain any consent, authorization or order of,
or
make any filing or registration with, any court, governmental agency, regulatory
agency or stock market or any third party in order for it to execute, deliver
or
perform any of its obligations under this Agreement and the Stockholders
Agreement in accordance with the terms hereof or thereof or to transfer the
Optioned Shares.
3.5 Title.
WSP is
the beneficial and record owner of all of the Optioned Shares. WSP has good
and
marketable title to the Optioned Shares, free and clear of any Liens, except
with respect to liens granted in connection with the Debt Financing. Upon
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof, SPG will acquire good and marketable title to all
of the
Optioned Shares, free and clear of any Liens, other than transfer restrictions
under federal and state securities laws and any Liens granted by
SPG.
3.6 Survival
of Representations.
All
representations and warranties contained in this Section 3 shall survive
the
Option Closing Date.
DMEAST
#9317156 v10
SECTION
4. Representations,
and Warranties of SPG.
SPG
represents and warrants to WSP as follows:
4.1 Organization;
Good Standing, Corporate Power.
SPG is a
limited liability company duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation, as set forth in Schedule
4.1, and has full legal power and authority to enter into this Agreement,
and to
acquire the Optioned Shares. All limited liability company action on the
part of
SPG’s members and managers, necessary for (a) the authorization, execution
and delivery by SPG of, and the performance of all obligations of SPG under,
this Agreement, and (b) the purchase by SPG of the Optioned Shares from WSP
pursuant to this Agreement, has been taken. This Agreement, when executed
and
delivered by WSP will constitute a valid and legally binding obligation of
SPG,
enforceable in accordance with its terms, except as may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of
general application relating to or affecting the enforcement of creditors’
rights generally, (b) applicable federal or state securities law limiting
rights
of indemnification, and (c) the effect of rules of law governing the
availability of equitable remedies.
4.2 Noncontravention.
The
execution, delivery and performance of this Agreement by SPG and the
consummation by SPG of the Transaction will not (a) conflict with or result
in a violation of SPG’s Certificate of Formation, Operating Agreement or similar
governing documents or (b) violate or conflict with, or result in a breach
of, or constitute a default (or an event which with notice or lapse of time
or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, contract,
indenture, patent, patent license or instrument to which SPG is a party,
or
(c) violate any provision of any existing law, statute, rule or regulation
of any jurisdiction or any Order to which SPG or any of its assets or properties
is subject. SPG is not in violation of its Certificate of Formation or Operating
Agreement (or similar governing instruments) and SPG is not in default (and
no
event has occurred which with notice or lapse of time or both would put SPG
in
default) under, and SPG has not taken any action or failed to take any action
that would give to others any rights of termination, amendment, acceleration
or
cancellation of, any material agreement, indenture or instrument to which
SPG is
a party or by which any property or assets of SPG is bound or
affected.
4.3 Investment.
SPG is
acquiring the Optioned Shares for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof,
nor with any present intention of distributing or selling the same, and it
has
no obligation, indebtedness or commitment providing for the disposition thereof.
SPG represents that it will not distribute or transfer any of the Optioned
Shares, in the United States except in compliance with applicable federal
and
state securities laws, and only in compliance with the applicable provisions
and
restrictions set forth in the Stockholders Agreement, as amended. SPG further
represents that it understands that: (a) the Optioned Shares have not been
registered under the Securities Act or the securities laws of any state by
reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof predicated
upon SPG’s warranties contained in this Section 4; and (b) the Optioned Shares
cannot be sold unless a subsequent disposition thereof is registered under
the
Securities Act and under any applicable state securities law or is exempt
from
such registration.
DMEAST
#9317156 v10
4.4 Knowledge.
SPG
represents and warrants to WSP that under all applicable securities laws
and
otherwise, it has (a) has such knowledge and experience in financial and
business matters as is necessary to enable it to evaluate the merits and
risks
of an investment in the Company; and (b) has such liquidity and capacity
to
sustain a complete loss of its investment in the Company. SPG acknowledges
that
it has been afforded: (a) the opportunity to ask such questions as it has
deemed
necessary of, and to receive answers from, representatives of the Company
concerning the merits and risks of investing in the Company; (b) access to
information about the Subsidiaries, their respective results of operations,
financial condition and cash flow, and business, in each case sufficient
to
enable SPG to evaluate whether to proceed with the execution and delivery
of
this Agreement and the acquisition of the Optioned Shares; and (c) the
opportunity to obtain such additional information that the Company or the
Subsidiaries possess, or can acquire without unreasonable effort or expense,
that is necessary to make an informed investment decision with respect to
the
acquisition of the Optioned Shares. SPG understands and acknowledges that
no
foreign, federal or state authority has made any finding or determination
as to
the fairness for investment of the Optioned Shares or has recommended or
endorsed the Optioned Shares.
4.5 Accredited
Investor.
SPG is
an “accredited investor” within the meaning of Regulation D promulgated under
the Securities Act and was not organized for the specific purpose of acquiring
the Optioned Shares.
4.6 Accuracy
of Certain Information.
The
state or country of SPG’s principal office and its exact legal name are
accurately set forth on Schedule 4.6 hereto.
4.7 Brokers.
Except
as set forth on Schedule 4.7, SPG has not employed or retained any broker,
finder, or intermediary in connection with the Transaction. The fees and
expenses of any broker, finder, or intermediary set forth on Schedule 4.7
shall
be paid in accordance with Section 5.2 hereof.
4.8 Required
Consents; Approvals.
Except
for filings under the HSR Act or as specifically contemplated by this Agreement,
the Stockholders Agreement and as required under the Securities Act, and
any
applicable state securities laws, SPG is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency or stock market or any third party
in
order for it to execute, deliver or perform any of its obligations under
this
Agreement and the Stockholders Agreement in accordance with the terms hereof
or
thereof or to transfer the Membership Interests.
4.9 Survival
of Representations.
All
representations and warranties contained in this Section 4 shall survive
the
Option Closing Date.
SECTION
5. Covenants
DMEAST
#9317156 v10
5.1 Efforts
to Consummate.
Subject
to the terms and conditions of this Agreement, each of the parties hereto
shall
use its reasonable best efforts to take or cause to be taken all action and
to
do or cause to be done all things necessary, proper or advisable under
applicable laws to consummate and make effective, as soon as reasonably
practicable, the Transaction, including without limitation the obtaining
of all
consents, authorizations, Orders and approvals of any third party, whether
private or governmental, required in connection with such party's performance
of
such Transaction, and each of the parties hereto shall cooperate with the
others
with respect to the foregoing; provided, however, that no party shall be
required to compensate any third party, commence or participate in litigation
or
offer or grant any accommodation (financial or otherwise) to any third party
to
obtain any such consent or approval of such third party.
5.2 Further
Assurances.
The
parties shall execute and deliver, or shall cause to be executed and delivered,
such documents and other papers and shall take, or shall cause to be taken,
such
further actions as may be reasonably required to carry out the provisions
of
this Agreement and give effect to the Transaction, provided, however,
that
any
such additional documents must be reasonably satisfactory to each of the
parties
and not impose upon any party any material liability, risk, obligation, loss,
cost or expense not contemplated by this Agreement.
SECTION
6. Conditions
Precedent to Option Closing.
The
obligations of each party hereto to proceed with the Option Closing is expressly
conditioned upon the satisfaction of each of the following
conditions:
(a) The
Company and WSP shall have received a notice of SPG’s intent to exercise the
Option within the Exercise Period.
(b) SPG
shall
not be in material breach of this Agreement.
(c) SPG
shall
have purchased the Optioned Shares from WSP in exchange for the Option Closing
Consideration in accordance with Section 2.1(b) hereof.
(d) The
Company’s stock ledger shall have been amended to reflect SPG as the holder of
650 shares of Stock, which represents, in the aggregate, 65% of the Stock
and
WSP as the holder of 350 shares of Stock, which represents, in the aggregate,
35% of the Stock.
(e) The
parties shall have complied with all of their respective obligations in this
Agreement that are to be performed at or prior to the Option Closing, including
but not limited to those set forth in Sections 5 and 7.
(f) All
actions by or in respect of or filings with any governmental body, agency,
official or authority required to permit the consummation of the Option Closing
shall have been taken, made or obtained, including, without limitation, any
filings required under the HSR Act.
(g) In
respect of the notification of SPG on the one hand and WSP on the other hand
pursuant to the HSR Act, the applicable waiting period and any extensions
thereof shall have expired or been terminated.
(h) All
contractual and other third party consents and notices required to be obtained
or made prior to the Option Closing Date shall have been obtained.
DMEAST
#9317156 v10
SECTION
7. Closing
Deliveries.
7.1 WSP
Option Closing Deliveries.
(a) At
the
Option Closing, WSP shall deliver to SPG the documents set forth
below:
(i) A
Certificate of the Secretary of WSP to the effect that (1) the resolutions
of
the Board of Directors approving the sale by WSP to SPG of the Optioned Shares
and the execution of this Agreement by WSP, attached to such certificate
were
duly adopted and continue in force and effect, and (2) the officers of WSP
executing this Agreement and such other documents executed and delivered
pursuant to or in connection with this Agreement are incumbent officers of
WSP,
and that the specimen signatures on such certificate or certificates are
their
genuine signatures; and
(ii) The
representations and warranties of WSP contained in this Agreement and in
any
certificate or other document delivered in connection herewith shall be true
in
all material respects at and as of the Option Closing Date, as if made at
and as
of such date, (2) the covenants contained in this Agreement to be complied
with
by WSP at or before the Option Closing shall have been complied with in all
material respects; and (3) WSP shall have delivered to SPG a certificate
to such
effect signed by a duly authorized representative thereof.
7.2 SPG
Option Closing Deliveries.
At the
Option Closing, SPG shall deliver to the Company the following:
(i) A
Certificate of the Secretary of SPG to the effect that (1) the resolutions
of
the Board of Directors approving the exercise of the option by SPG and the
execution of this Agreement by SPG, attached to such certificate were duly
adopted and continue in force and effect, and (2) the officers of SPG executing
this Agreement and such other documents executed and delivered pursuant to
or in
connection with this Agreement are incumbent officers of SPG, and that the
specimen signatures on such certificate or certificates are their genuine
signatures;
(ii) Payment
of the Option Closing Consideration to WSP by wire transfer of immediately
available funds as directed by WSP; and
(iii) (1)
The
representations and warranties of SPG contained in this Agreement and in
any
certificate or other document delivered in connection herewith shall be true
in
all material respects at and as of the Option Closing Date, as if made at
and as
of such date, (2) the covenants contained in this Agreement to be complied
with
by SPG at or before the Option Closing shall have been complied with in all
material respects; and (3) SPG shall have delivered a certificate to the
Company
to such effect signed by a duly authorized representative thereof.
DMEAST
#9317156 v10
SECTION
8. Indemnification.
8.1 Indemnification
by Parties.
(a) WSP
(the
“WSP
Indemnifying Party”)
agrees
to indemnify and hold SPG and its Affiliates, officers, directors, members,
heirs, successors, permitted assigns, executors, employees and agents (the
“SPG
Indemnified Parties”)
harmless from and against any and all claims, actions, damages, losses,
liabilities, costs and expenses (including reasonable attorneys’ fees)
(collectively, “Losses”)
resulting from any material misrepresentation or material breach of a
representation or warranty or covenant by WSP made in this Agreement.
(b) SPG
(the
“SPG
Indemnifying Party”),
agrees to indemnify and hold WSP and its Affiliates, officers, directors,
partners, members, successors, permitted assigns, employees and agents (in
such
capacity, the “WSP
Indemnified Parties”)
harmless from and against all Losses, resulting from any material
misrepresentation or material breach of a representation or warranty or a
covenant made by SPG in this Agreement.
8.2 Limitations
on Indemnity.
Notwithstanding the foregoing provisions of Section 8.1 and any other provision
of this Agreement: The WSP Indemnifying Party shall not have any obligation
or
liability to make indemnification payments under this Agreement except in
respect of matters as to which the Indemnified Parties shall have asserted
a
claim in the manner set forth in Section 8.3 hereof. Notwithstanding the
expiration of claims as set forth in Section 8, any claim that has been timely
asserted by an Indemnified Party (as hereinafter defined) in accordance with
Section 8.5 hereof within the applicable time period specified in Section
8
shall survive the applicable time limit set forth in Section 3.6 until the
final
resolution of the claim.
8.3 Effect
of
Insurance.
With
respect to any indemnifiable claim hereunder, the amount recoverable by the
party seeking indemnification shall take into account any reimbursements,
net of
taxes, realized by such party from insurance policies or other indemnification
sources arising from the same incident or set of facts or circumstances giving
rise to the claim for indemnification. Upon the payment of the indemnified
claim
from the Indemnifying Party to the Indemnified Party, the Indemnifying Party
shall have a right of subrogation with respect to any insurance proceeds
or
other rights to third party reimbursement for such claims held by the
Indemnifying Party. Nothing in this Section 8.3 shall create an obligation
on
the part of any party to carry any specific types or amounts of
insurance.
8.4 Exclusive
Remedy.
With
the exception of any claims for fraud, willful misrepresentation, the
indemnification obligations of WSP under this Section 8 shall constitute
the
sole and exclusive remedy of SPG with respect to any breach of any
representation, warranty or covenant by WSP hereunder.
8.5 Notice
of
Claim.
In the
event that a SPG Indemnified Party or a WSP Indemnified Party (an “Indemnified
Party”) seeks indemnification, the Indemnified Party shall give reasonably
prompt written notice to the WSP Indemnifying Party or SPG Indemnifying Party,
as the case may be (the “Indemnifying Party”), specifying the facts in
reasonable detail constituting the basis for such claim and the amount, to
the
extent known, of the claim asserted. The parties shall attempt for not less
than
thirty (30) days to negotiate a mutually satisfactory resolution of such
matter.
In the event the parties are not able to agree on a mutually satisfactory
resolution, either party may seek to resolve the dispute by
litigation.
DMEAST
#9317156 v10
8.6 Third
Person Claims.
If an
Indemnified Party is entitled to indemnification hereunder because of a claim
asserted by any claimant other than an Indemnified Party (a “Third Person”), the
Indemnified Party shall give the Indemnifying Party reasonably prompt written
notice thereof. The Indemnifying Party shall have the right, upon written
notice
to the Indemnified Party, and using counsel reasonably satisfactory to the
Indemnified Party, to investigate, contest, control the defense of or settle
the
claim alleged by such Third Person (a “Third-Person Claim”); the Indemnified
Party may thereafter participate in (but not control) the defense of any
such
Third-Person Claim with its own counsel at its own expense. Any settlement
must
be consented to by the Indemnified Party unless such settlement provides
for a
full release and satisfaction of all outstanding claims against the Indemnified
Party and only involves the payment of money in satisfaction of such claim.
Upon
the reasonable request of the Indemnifying Party, the Indemnified Party shall
promptly provide such information as may be reasonably needed by the
Indemnifying Party to make a determination of whether or not to assume defense
of such claim. If after the receipt of such information the Indemnifying
Party
shall fail to assume the defense of any such Third-Person Claim within twenty
(20) days of receiving written notification of such claim and such requested
information:
(a) the
Indemnified Party, in good faith, may defend against such claim, in such
manner
as it may deem appropriate, including, but not limited to, settling such
claim,
after giving at least thirty (30) days’ advance notice of any proposed
settlement to the Indemnifying Party and receiving the Indemnifying Party’s
prior written consent, which may not be unreasonably withheld, on such terms
as
the Indemnified Party, in good faith, may deem appropriate; and
(b) the
Indemnifying Party may participate in (but not control) the defense of such
action, with its own counsel at its own expense. The Parties shall make
available to each other all relevant information in their possession relating
to
any such Third-Person Claim and shall cooperate in the defense
thereof.
SECTION
9. Termination
and Waiver.
9.1 Termination.
This
Agreement may be terminated prior to the Option Closing:
(a) by
the
mutual written consent of WSP and SPG;
(b) by
either
WSP or SPG in the event of the issuance of a final, nonappealable governmental
order restraining or prohibiting the consummation of the Transaction;
or
(c) automatically
at 5:00 p.m. (EST) on January 31, 2007.
DMEAST
#9317156 v10
9.2 Notice
of
Termination.
Any
party desiring to terminate this Agreement pursuant to Section 9.1 shall
give
written notice of such termination to the other parties to this
Agreement.
9.3 Effect
of
Termination.
In the
event of the termination of this Agreement as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability on
the
part of any party to this Agreement, except as set forth in Section 9.4 and
Section 10, provided, however, that nothing in this Agreement shall relieve
any
party from liability for any (i)
any
intentional, knowing and material misrepresentation or breach of warranty
by
such party or (ii) a willful and material breach by the such party of any
covenant or agreement contained herein.
9.4 Return
of
Documents.
Upon
termination of this Agreement prior to the Option Closing, SPG shall deliver
to
WSP the originals and all copies made available to SPG of information concerning
WSP, and SPG shall not retain or furnish to any third party any copies,
extracts, or other reproductions in whole or in part of such information.
SECTION
10. Miscellaneous.
10.1 Binding
Agreement.
This
Agreement and each provision herein shall be binding upon and applicable
to, and
shall inure to the benefit of, the parties hereto, their heirs, executors,
successors and permitted assigns.
10.2 Notices.
All
notices, requests, demands and other communications required or permitted
under
this Agreement shall be in writing and shall be deemed to have been duly
made
and received when personally delivered, five (5) days after deposit with
the
United States Post Office, by registered or certified mail, postage prepaid,
return receipt requested or one (1) business day after being sent via facsimile
(with answer back receipt and hard copy sent by mail as provided above) or
nationally-recognized overnight courier service, addressed as set forth below
or
at such other address as such party may designate in the manner set forth
in
this Section 10.2:
If
to
WSP, then to:
c/o
Hercules Incorporated
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
Xxxxx Xxxxxx
With
a
copy to:
Hercules
Incorporated Hercules
Incorporated
Hercules
Plaza Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx 0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000 Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000 Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000 Facsimile
No.: (000) 000-0000
Attention:
Xxxxxx Xxxxx Attention:
Xxxxxxx XxXxx
DMEAST
#9317156 v10
Xxxxxxx
Xxxxx Xxxxxxx & Ingersoll, LLP
0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000-0000
Telephone
No: (000) 000-0000
Facsimile
No: (000) 000-0000
Attention:
Xxxxxx X. Xxxxx
If
to
SPG, then to the address indicated on Schedule 4.6
hereto.
With
a
copy to:
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxx
Xxx
Xxxx,
XX
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
Xxxx X. Xxxxxxxx
10.3 Consents
and Waivers.
No
consent or waiver, express or implied, by any party hereto of the breach,
default or violation by any other party hereto of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of any other
breach, default or violation of the same or any other obligations of such
party
hereunder. Failure on the part of any party hereto to complain of any act
of any
of the other parties or to declare any of the other parties hereto in default,
irrespective or how long such failure continues, shall not constitute a waiver
by such party of his rights hereunder.
10.4 Assignments,
Successors, and No Third-Party Rights.
No
party may assign any of its rights or obligations under this Agreement without
the prior written consent of the other party hereto, and any attempted
prohibited assignment shall be void. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any
Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for
the
sole and exclusive benefit of the parties to this Agreement and their successors
and permitted assigns.
10.5 Amendments
and Termination.
No
change, modification or termination of this Agreement shall be valid unless
the
same is in writing and signed by WSP and SPG.
DMEAST
#9317156 v10
10.6 Governing
Law; Consent to Jurisdiction.
This
Agreement and all questions relating to its validity, interpretation and
performance shall be governed by and construed in accordance with the laws
of
the State of Delaware without regard to its conflict of law principles or
rules.
Each party hereto consents and agrees that the state or federal courts located
in the State of Delaware shall have exclusive jurisdiction to hear and determine
any claims or disputes pertaining to this Agreement or any of the other
Definitive Agreements, and each party hereto expressly submits and consents
in
advance to such jurisdiction in any action or suit commenced in such court,
and
such party hereby waives any objection that it may have based upon lack of
personal jurisdiction, improper venue or forum
non conveniens.
10.7 Prior
Agreements.
This
Agreement, including the Exhibits and Schedules hereto, supersede any prior
or
contemporaneous understanding or agreement among the parties respecting the
subject matter hereof or thereof. There are no arrangements, understandings
or
agreements, oral or written, among the parties hereto relating to the subject
matter of this Agreement, except those fully expressed herein or in documents
executed contemporaneously herewith. No change or modification of this Agreement
shall be valid or binding upon the parties hereto unless such change or
modification or waiver shall be in writing and signed by the parties hereto.
10.8 Public
Announcements.
Except
as may be required by Law or stock exchange rules, no party to this Agreement
or
any Affiliate or representative of such party shall make any public
announcements or otherwise communicate with any news media in respect of
this
Agreement or the Transaction contemplated by this Agreement without the prior
written consent of WSP or SPG, as the case may be (which consent shall not
be
unreasonably withheld), and prior to any announcement or communication the
parties shall cooperate as to the timing and contents of any such announcement
or communication.
10.9 Severability.
In case
any of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be
affected or impaired thereby.
10.10 Counterparts.
This
Agreement may be signed in any number of counterparts and/or by facsimile,
each
of which shall be an original for all purposes, but all of which taken together
shall constitute only one agreement.
10.11 Captions.
The
captions and headings in this Agreement are included for ease of reference
only
and will be disregarded in interpreting or construing this
Agreement.
[SIGNATURES
ARE ON THE FOLLOWING PAGE]
DMEAST
#9317156 v10
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
|
WSP,
INC.
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
SPG/FV
INVESTOR LLC
|
|||
|
By:
|
|
||
|
Name:
|
|||
|
Title:
|
|||
DMEAST
#9317156 v10
Schedule
1.1
Subsidiaries
DMEAST
#9317156 v10
Schedule
3.2
Non
Contravention
DMEAST
#9317156 v10
Schedule
3.3
WSP
Broker Fees and Expenses
DMEAST
#9317156 v10
Schedule
4.1
Organization;
Good Standing; Corporate Power
DMEAST
#9317156 v10
Schedule
4.6
Accuracy
of Certain Information
DMEAST
#9317156 v10
Schedule
4.7
SPG
Broker Fees and Expenses
DMEAST
#9317156 v10
TRANSITION
SERVICES AND FACILITIES USE LICENSE AGREEMENT
This
Transition Services and Facilities Use License Agreement (“Agreement”)
is
dated as of the ____ day of ___________, 2005, by and between Hercules
Incorporated, a Delaware corporation with offices at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx ("Hercules"),
and
FiberVisions, Delaware Corporation, a Delaware corporation with offices at
[_________________]
including its subsidiaries ("FV”).
Hercules and FV may be referred to herein individually as a “Party”
and
together as the "Parties."
As
used herein, FV shall include FV's affiliated companies receiving Services
pursuant to this Agreement, and Hercules shall include Hercules’ affiliated
companies providing Services pursuant to this Agreement. Additionally,
country-specific counterparts of this Agreement may be used with regard to
affiliates of the Parties, in which case this Agreement shall govern the
provision of Services as to such affiliates only to the extent not expressly
superseded by the country-specific counterpart.
WHEREAS,
FV is a 51% owned subsidiary of Hercules and a 49% owned subsidiary of WSP,
Inc., a wholly owned subsidiary of Hercules (“WSP”).
WHEREAS,
Hercules has sold its 51% ownership in FV to SPG/FV Investor LLC, a Delaware
limited liability company (“SPG”) in accordance with that certain Contribution
Agreement dated January 31, 2006 among Hercules, WSP, SPG and FV (“Contribution
Agreement”) and whereby following the transaction SPG intends to operate FV
independently of Hercules (the “Acquired Business”).
WHEREAS,
FV has been receiving certain services in support of its operations from
Hercules or from entities affiliated with Hercules, and FV desires to continue
to receive certain of such services in connection with the Acquired Business
for
the time periods set forth herein;
WHEREAS,
FV has been using space in facilities of Hercules and FV desires to continue
to
use certain of such space for the Acquired Business for the time periods
set
forth herein;
WHEREAS,
Hercules agrees, upon the terms and conditions set forth in this Agreement,
to
make available for use by and/or to provide or cause to be provided to FV
certain space and support services for the time periods set forth herein;
and
WHEREAS,
the Parties desire this Agreement to become automatically effective on [date
hereof] (the "Effective
Date").
NOW
THEREFORE, the Parties hereby agree as follows:
SECTION
8. ARTICLE
1. SCOPE OF SERVICES
8.1 X.Xxxxxxxx.
During the term of this Agreement, FV hereby engages Hercules to provide,
and
Hercules hereby agrees to provide or cause to be provided to FV for the Acquired
Business the services identified in Exhibit A hereof (as from time to time
added
to or deleted from such Exhibit A pursuant to this Agreement, collectively
referred to hereinafter as the “Services”). Except where Services are currently
outsourced by Hercules or as provided in Article 1B, below, Hercules shall
provide the Services by and through the Hercules employees. Certain Services
are
currently provided to Hercules and its affiliated companies (for FV as well
as
other businesses of Hercules) by other companies which are affiliated with
Hercules, or by third-Parties, or pursuant to certain shared service or cost
agreements by and between Hercules and various companies affiliated with
Hercules. Hercules shall take such steps as are necessary and appropriate
to
cause the various Hercules-affiliated entities to provide Services to FV
for the
Acquired Business. Hercules shall use its best efforts to obtain the consent
of
others and third parties to provide the Services (and FV shall provide
reasonable cooperation to assist in connection with obtaining such consent)
hereunder. Hercules shall use reasonable efforts to cause any third parties
to
provide Services to the Acquired Business, but in each case, only in accordance
with the terms and conditions of this Agreement. In the event Hercules is
not
able to secure the agreement of any third parties to provide Services to
the
Acquired Business, the Parties will mutually cooperate (at FV’s expenses) to
obtain like services from another source. Hercules shall obtain any required
licenses or license modifications for software used to provide transition
services to FV if such licenses are required by the software owner; FV agrees
to
pay the license fees for services provided under Exhibit A. If a third party
supplier or vendor will not provide the same contract terms to FV, Hercules
shall pass any additional cost to FV. Hercules shall bear the cost associated
with loss of favorable terms and conditions on the business retained by
Hercules.
8.2 B.Service
Standard. Hercules shall provide or cause to be provided the personnel,
facilities, equipment, systems and management to perform the Services (but
only
to the extent the same have been provided by Hercules to FV during the six
(6)
month period immediately preceding the Effective Date) and Hercules shall
provide the Services consistent with Hercules’ practices and policies in effect
during the six months period preceding the Effective Date. The foregoing
standard shall be referred to herein and in the Exhibits hereto as the "Hercules
Standards" or "Services Standard." Exhibit A, attached hereto, shall take
precedence in defining the Services to be provided to FV by Hercules.
8.3 To
the
extent reasonably practicable, Hercules shall give FV at least fifteen (15)
days
prior notice of Hercules’ inability to provide Services. If despite using its
commercially reasonable efforts, Hercules is unable to provide a specific
Service, Hercules will permit a mutually acceptable FV employee or third
party
to provide such Services at FV's sole cost and expense, provided such employee
or third party will pose no unreasonable risk of material interruption or
diminished functionality to the existing Hercules systems or business
operations. In the event a third party is to provide such Services or assist
in
connection therewith, such third party shall be required to execute a
confidentiality agreement reasonably acceptable to Hercules and FV prior
to
initiating such Services. Such third party shall operate under the direct
supervision of Hercules personnel. In the event that Services cannot be provided
through the above mentioned employee or third party, then Hercules and FV
shall
use commercially reasonable efforts to cooperate with each other to find
a
mutually acceptable means of having the affected Services provided to FV
for the
reminder of the relevant Term thereof.
8.4 Neither
Hercules nor or any of its affiliated companies will be required to stay
in
business, replace employees who voluntarily terminate their employment with
Hercules or the provider of the Services or take other extraordinary measures
solely to provide the Services to FV for the Acquired Business. Notwithstanding
the foregoing, without the prior written consent of FV, (a) Hercules shall
not
be entitled to terminate a Service to FV if Hercules otherwise provides a
comparable service to one or more other businesses of Hercules that would
not be
terminated, and (b) in the event a Service is reduced, such reduction shall
not
disproportionately affect the Service provided to FV as compared to a similar
service otherwise provided to Hercules.
8.5 C.Special
Services and Projects. During the term of this Agreement, FV may from time
to
time request that Hercules provide special services or projects in addition
to
the Services, and Hercules shall make commercially reasonable efforts to
provide
such additional services or projects. If Hercules provides such additional
services or projects, the Parties shall negotiate in good faith the terms
(including, without limitation, price) for providing such additional services
or
projects and, following agreement on such terms, Exhibit A hereof shall be
amended to include such additions. If despite using commercially reasonable
efforts, Hercules is unable to provide such additional services or projects,
Hercules will permit a mutually acceptable FV employee or third party to
Hercules and FV to provide such additional services or projects at FV's sole
cost and expense, provided such employee or third party reasonably concludes
that provision of such additional services or projects will pose no risk
of
material interruption or diminished functionality to the existing Hercules
systems or business operations. In the event a third party is to provide
such
additional services or projects or assist in connection therewith, such third
party shall be required to execute a confidentiality agreement reasonably
acceptable to Hercules and FV prior to initiating such additional services
or
projects. Such third party shall operate under the direct supervision of
Hercules personnel.
8.6 D.Agreement
Contacts. In order to monitor, coordinate and facilitate implementation of
the
terms and conditions of this Agreement, the Parties shall designate a single
contact person. The initial contact person for a party shall be the person
listed below each party’s signature hereto. A party may change its contact
person by giving the other party notice thereof.
SECTION
9. ARTICLE
2. FACILITIES USE LICENSE
9.1 A.License
Grant. During the term of this Agreement, FV hereby engages Hercules to provide,
and Hercules hereby agrees to provide and license to FV, as set forth below,
the
right to use space as set forth on Exhibit B, at the end of Exhibit B, for
the
benefit of the Acquired Business (the “License”). To the extent building
services are required of any landlord of Hercules for a Licensed Premises,
this
License shall be deemed a sublease.
9.2 B.The
Licensed Premises. In consideration of the covenants and agreements hereinafter
contained, to be kept and performed by FV (including but not limited to,
the
fees to be paid hereunder), Hercules grants to FV the license and privilege
of
using the premises set forth on Exhibit B (the “Licensed Premises”). The License
shall include the right to use the driveways, parking lots, washroom facilities,
office equipment, furniture and fixtures, and other similar amenities at
the
Licensed Premises. The Licensed Premises shall be used solely by FV for
operating the Acquired Business, and shall include offices (furnished by
Hercules in accordance with Hercules’ normal standards) and work space for FV's
employees, contractors and invitees . It is agreed that nothing herein shall
be
construed to prevent Hercules, its employees, representatives and/or agents
from
entering upon and working in the Licensed Premises to provide the Services;
provided that (i) the provision of the Services does not unreasonably disturb
the operations of FV, and (ii) Hercules and its affiliates will not be denied,
delayed or impeded from using the Licensed Premises for Hercules’ other
businesses operating at the Licensed Premises, provided that such use is
in a
manner consistent with and to the extent of the Hercules’ practices as of the
Effective Date. FV's use of space in any Licensed Premises shall at all times
during the Term be in compliance with the applicable lease for such Licensed
Premises (subject to Hercules providing FV with notice of the applicable
terms
on or before the Effective Date), and in compliance with all applicable laws,
rules, regulations, codes, and ordinances, and Hercules’ safety
procedures.
9.3 C.Quiet
Possession. Subject to the terms of this Agreement, Hercules covenants and
agrees that FV shall, and may at all times during the Term, peaceably possess
and quietly have, hold and enjoy the Licensed Premises without unreasonable
disturbance of FV by Hercules or any person claiming through or under
Hercules.
9.4 D.Ancillary
Services. In connection with the specific Services and level of Services
set
forth on Exhibit A, and the use of the Licensed Premises by the Acquired
Business, Hercules shall, consistent with its past practices, furnish to
the
Acquired Business, free of any cost in addition to the amounts paid hereunder,
as part of the services rendered by Hercules to the Acquired Business, the
following ancillary services: adequate light, heat, gas, hot and cold water,
air
conditioning, janitorial maintenance services, electricity, mailroom services,
and telephone switching services (hereinafter the “Ancillary Services”). FV
shall pay (where possible, directly to the third party service provider)
for all
local, toll and long distance calls, parcel post, special and other shipping
of
packages, products and the like (including, but not limited to, by private
overnight delivery services such as Federal Express, United Parcel Service
and
DHL). Hercules shall provide the Ancillary Services in compliance with all
applicable laws, statutes and ordinances. Unless caused by its negligence
or
willful misconduct, Hercules shall not be responsible for any interruption
or
failure of the Ancillary Services.
9.5 E.Deliveries.
Hercules shall accept at its receiving docks all deliveries consigned to
FV or
the Acquired Business and notify FV thereof, whereupon FV shall promptly
remove
same from the receiving dock.
9.6 F.Fixtures.
Unless otherwise agreed to by the Parties in writing or as provided in the
following sentence, all additional fixtures (other than those facilities
and
items included in the Licensed Premises) which shall be required by FV in
the
operation of the Acquired Business shall be provided by FV, provided, however,
that with respect to fixtures to be affixed to the Licensed Premises, use
by FV
shall be subject to the approval of Hercules with respect to style, design,
construction, color, and finish prior to installation (such approval not
to be
unreasonably withheld, conditioned or delayed). FV may use fixtures at the
Licensed Premises during the Term so long as: (a) such fixtures were used
regularly in the ordinary course of the Business prior to the Effective Date;
(b) such fixtures are located within the space licensed to FV; (c) FV's use
of
such fixtures is not reasonably likely to result in the disclosure of
confidential information of Hercules or its affiliates to FV or its employees,
contractors or invitees; and (d) FV has not discontinued use of such Licensed
Premises. Any fixtures, equipment and accessories provided by FV (or sold
by
Hercules to FV under the Contribution Agreement) shall remain the property
of FV
and shall be removed at FV's expense from the Licensed Premises within a
reasonable time after the cessation of operations at the Licensed Premises
by
FV. FV shall repair any damage occasioned by all such removals at its own
expense, and in default thereof, and without affecting in any way any remedies
Hercules may have in law or in equity as a result of such default, Hercules
may,
following notice to FV, effect such repairs and FV shall reimburse Hercules
for
the reasonable cost thereof.
9.7 G.Casualty
Loss and Condemnation. In the event of damage to any of the Licensed Premises,
by fire or any other casualty loss occasioned by natural or human force,
by
which the Licensed Premises shall be destroyed to the extent that, for the
remainder of the Term, it is impracticable for FV to carry on the Acquired
Business therein, or in the event of the loss of use of the Licensed Premises
due to condemnation by a governmental or quasi-governmental agency, this
License
shall ipso facto terminate and be of no further force and effect with respect
to
the Licensed Premises at issue; provided, however, that if the Licensed Premises
at issue is only partially destroyed so that it may be restored within a
reasonable time to a suitable condition for the continuation of the Acquired
Business, or only partially taken through condemnation such that the Acquired
Business can continue to operate without a material adverse impact, this
License
shall remain in full force and effect.
9.8 X.Xxxxxxxxx.
FV, at its own cost and expense, shall be responsible for insuring or
self-insuring its owned or leased personal property (including trade fixtures,
and equipment,), located on or about the Licensed Premises, it being understood
that the same is not the responsibility of Hercules nor shall Hercules be
liable
therefore, except where caused by the gross negligence or willful misconduct
of
Hercules. Further, FV, at its own cost and expense, shall be responsible
for
insuring or self-insuring any liability it may have for damage to Hercules
property. All insurance policies carried by FV pursuant to this Article 2H
shall
expressly waive any insurer’s right of subrogation against Hercules. Hercules,
at its own cost and expense, shall be responsible for insuring or self-insuring
its owned or leased personal property (including trade fixtures, machinery,
equipment, stocks, inventories and contents), located on or about the Licensed
Premises, it being understood that the same is not the responsibility of
FV nor
shall FV be liable therefore, except where caused by the negligence or willful
misconduct of FV. Further, Hercules, at its own cost and expense, shall be
responsible for insuring or self-insuring any liability it may have for damage
to FV property. All insurance policies carried by Hercules pursuant to this
Article 2H shall expressly waive any insurer’s right of subrogation against FV.
9.9 I.Alterations.
FV may not make alterations, changes, additions and improvements to the Licensed
Premises without the prior written approval of Hercules, which shall not
be
unreasonably withheld, conditioned or delayed.
SECTION
10. ARTICLE
3. TERM AND TERMINATION
10.1 A.Term.
Except as set forth in Article 3B, below, this Agreement shall be effective
as
of the Effective Date, and shall continue for twelve months, unless a different
period is provided therefore on Exhibit A and Exhibit B, respectively, or
the
Parties mutually agree in writing to an extended period (the “Term”), or unless
earlier terminated pursuant to Article 3B, below. During the Term, FV shall
endeavor to not need Services beyond six (6) months after the Effective Date;
however, if there are Services which FV desires to have beyond six months
then
FV shall notify Hercules as soon as practicable (but in no event later than
30
days prior to the date six months after the Effective Date). Also, FV and
Hercules shall endeavor to meet 30 days before the expiration of this Agreement
to discuss (with no obligation to agree) whether this Agreement will be extended
for any period.
10.2 B.Termination.
Except as otherwise provided herein, FV may terminate this Agreement or one
or
more of the Services or one or more of the Facility Licenses provided pursuant
to this Agreement as of the end of any calendar month upon at least thirty
(30)
days advance written notice to Hercules. Upon termination of this Agreement,
or
upon termination of one or more of the Services or one or more of the Facility
Licenses provided pursuant to this Agreement, Hercules shall cease and shall
cause its affiliates to cease providing the terminated Service(s), and FV
shall
vacate the facility where the Facility License has been terminated, leaving
such
facility in broom clean condition and otherwise in compliance with the terms
and
conditions of this Agreement. FV's obligation to pay monies owed to Hercules
for
Services provided prior to the effective date of such termination notice(s)
shall survive the termination or expiration of this Agreement.
SECTION
11. ARTICLE
4. USE LICENSE FEE AND SERVICES FEE
11.1 A.FV
agrees to pay to Hercules on a monthly basis during the Term of this Agreement,
in consideration for the Services rendered to FV and the Acquired Business
as
herein provided (“Service Fees”), and for the License for the Licensed Premises
(“License Fees”) the amounts set forth opposite each such Service and Licensed
Premises on Exhibit A and Exhibit B, respectively.
11.2 X.Xx
the
extent that during the Term the Parties mutually agree to modify, amend,
delete
or add to the Licensed Premises and/or the Services, the Parties shall cooperate
to determine in good faith an equitable adjustment to the amounts paid by
FV to
Hercules.
SECTION
12. ARTICLE
5. COMPENSATION, BILLING AND PAYMENT
12.1 A.SERVICE
FEES UNDER EXHIBIT A and LICENSE FEES UNDER EXHIBIT B
12.2 (1)Each
month, Hercules shall submit to FV for payment an invoice reasonably detailing
the amounts due for Service Fees and License Fees for the immediately preceding
month. Such invoice shall be payable by FV within thirty (30) days from the
date
of such invoice unless FV contests in good faith the amounts set forth in
such
invoice by giving written notice to Hercules of such dispute within the payment
period, in which case FV shall pay all amounts not in dispute within such
30 day
period. Any properly due amounts not in dispute set forth in an invoice not
timely paid by FV shall bear interest at the rate of LIBOR plus 200 basis
points
per annum until paid. In the event that the Parties mutually agree, the amounts
due under this provision may be paid as a lump sum combined with the net
payments due under Article 5B of this Agreement.
12.3 (2)In
the
event that a review of invoices for amounts paid by FV indicates an overpayment
by FV for Service Fees or License Fees, Hercules will, within ten (10) days
after completion of such review, reimburse FV for the full amount of any
such
overpayment, plus the costs of such review and interest accrued from the
date of
overpayment at the rate of LIBOR plus 200 basis points per annum, not to
exceed
the maximum rate permitted under applicable law.
12.4 (3)If
either
Party believes that there has been a material change in the quantity or quality
of Services being delivered, they may request a review by the Steering Committee
of the monthly Service Fee or License Fee to adapt Article 4 A and/or Exhibit
A
in accordance with such change.
12.5 B.SETTLEMENT
OF ACCOUNTS FOR ACQUIRED BUSINESS
12.6 (1)Not
later
than thirty (30) days after the last business day of each month during the
Term,
Hercules shall provide to FV an accounting of all amounts due under this
Agreement, all collections, receipts and other remittances to Hercules on
account of the Acquired Business and all expenses for the Acquired Business
paid
by Hercules on behalf of the Acquired Business since the last accounting
in
accordance with Schedule A hereto. With such accounting, Hercules shall identify
the net amount due Hercules or remit to FV by wire transfer the net amount
due
FV. If there is a net amount due Hercules, FV shall remit to Hercules via
wire
transfer the net amount due Hercules within seven (7) days following receipt
of
the cash flow statement. Any properly due amounts due either Party not timely
paid to shall bear interest at the rate of LIBOR plus 200 basis points per
annum
until paid.
12.7 C.SURVIVAL
OF OBLIGATIONS
12.8 Notwithstanding
the expiration or earlier termination of this Agreement, the Parties obligations
to each other under this Article 5 regarding events or obligations occurring
or
arising during the Term shall survive such expiration or earlier termination
until fulfilled.
12.9 ARTICLE
6. NOTICES.
12.10 Any
notice, request, instruction or other document to be given hereunder by any
Party to any other Party shall be in writing and delivered personally, by
facsimile (with electronic confirmation of receipt and with a confirmed copy
sent by first class mail or by overnight courier), or sent by registered
or
certified mail, postage prepaid, or sent by a recognized overnight courier
(e.g., Federal Express, Airborne or UPS) (a “Notice”) as follows:
If
to
Hercules to:
Hercules
Incorporated
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Phone
Number: (000) 000-0000
Attention:
Xxxxxxx X. XxXxx
With
a
copy to:
Hercules
Incorporated
Hercules
Plaza
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Phone
Number: (000) 000-0000
Facsimile
Number: (000) 000-0000
Attention:
Xxxxxx Xxxxx
If
to FV
to:
SPG/FV
Investor LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Phone
Number: (000) 000-0000
Facsimile
Number: (000) 000-0000
Attention:
Xxx Xxxx
With
a
copy to:
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Phone
Number: (000) 000-0000
Facsimile
Number: (000) 000-0000
Attention:
Xxxx Xxxxxxxx
or
at
such other address or to such other person for a Party as shall be specified
by
like Notice. Any Notice which is delivered in the manner provided herein
shall
be deemed to have been duly given to the Party to whom it is directed upon
actual receipt by such Party.
12.11 ARTICLE
7. DELEGATION AND ASSIGNMENT.
12.12 Except
to
the extent permitted by Article 1A of this Agreement, Hercules shall not
delegate any of its duties to perform Services hereunder. FV shall not assign
or
subcontract its rights, duties or obligations under this Agreement, except
(a)
to its subsidiaries, affiliates, contractors or agents (with reasonable prior
notice to Hercules and subject to Hercules’ ability to provide Services to such
persons) or (b) with the prior written consent of Hercules. This Agreement
shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the Parties.
12.13 ARTICLE
8. LIMITED WARRANTY.
12.14 In
performing the Services, Hercules shall employ methods, procedures and utilities
of a quality at least equal to those employed by it with respect to its own
business and affairs. Except as otherwise provided in this Agreement, HERCULES
EXPRESSLY DISCLAIMS (i) ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, THOSE OF WORKMANSHIP, DESIGN, MERCHANTABILITY, FITNESS
FOR A
PARTICULAR PURPOSE AND INFRINGEMENT; AND (ii) THAT THE SERVICES PROVIDED
HEREUNDER WILL YIELD ANY GIVEN OR STATED ECONOMIC, FINANCIAL, PROFIT OR BUSINESS
RESULT TO FV OR WILL RESULT IN FV HAVING ANY GIVEN STANDING OR POSITION IN
ANY
BUSINESS, MARKET OR PRODUCT. NEITHER PARTY SHALL HAVE LIABILITY TO THE OTHER
FOR
ANY PUNITIVE DAMAGES OF ANY TYPE OR KIND.
12.15 ARTICLE
9. BOOKS AND RECORDS.
12.16 A.Hercules
shall keep, and make available to FV and its representatives, complete and
accurate records and accounts, in accordance with the Hercules’ normal
practices, of all transactions pertaining to the Services, Licenses and payroll
records, receipts and payments hereunder, and shall preserve them for a period
of eight (8) years following the end of the fiscal year to which they pertain.
After the expiration of the eight (8) year period referred to in this Article
9A, Hercules shall have no further duty to retain any of such books and records
or to notify FV before the disposition or destruction thereof. FV may review
these books and records upon reasonable advance notice during normal business
hours.
12.17 B.Notwithstanding
the expiration or earlier termination of this Agreement, the Parties obligations
to each other under this Article 9 regarding events or obligations occurring
or
arising during the Term shall survive such expiration or earlier termination
until fulfilled.
SECTION
13. ARTICLE
10. CONFIDENTIAL INFORMATION
13.1 A.For
purposes hereof, “Confidential Information” means any and all information of
either Party that might reasonably be considered confidential, secret,
sensitive, proprietary or private. To the extent practicable, Confidential
Information shall be marked “proprietary” or “confidential.” Confidential
Information shall include the following:
(a) (1)data,
know-how, formulae, processes, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, lists, financial information, studies,
findings, inventions and ideas, or proprietary information relating to either
Party or the methods or techniques used by either Party;
(b) (2)data,
documents or proprietary information employed in connection with the marketing
and implementation of each Party’s products, including cost information,
business policies and procedures, revenues and markets, distributor and customer
lists, and similar items of information;
(c) (3)any
other
data or information obtained by either Party during the term of this Agreement
which is not generally known to and not readily ascertainable by proper means
by
third persons who could obtain economic value from its use or
disclosure;
(d) (4)
as
to
FV's confidentiality obligations hereunder, any data obtained from the use
of
Hercules’ computer systems by FV’s employees or agents, including but not
limited to SAP and Lotus Notes, except data pertaining solely to the Acquired
Business; and
(e) (5)as
to
Hercules' confidentiality obligations hereunder, any data, information, or
documents pertaining to the assets sold to FV or the Acquired Business.
13.2 B.The
receiving Party shall treat as confidential all Confidential Information
of the
other Party, or of any subsidiaries or affiliates of such other Party, that
comes to the receiving Party’s knowledge through this Agreement. The receiving
Party shall take such steps to prevent disclosure of such Confidential
Information to any third person as it would take in protecting its own
proprietary or confidential information, and shall not use any portion of
such
Confidential Information for any purpose not authorized herein.
13.3 X.Xx
person receiving Confidential Information shall be under any obligations
with
respect to any Confidential Information:
(a) (1)which
is,
at the time of disclosure, available to the general public;
(b) (2)which
becomes at a later date available to the general public through no fault
on its
part and then only after said later date;
(c) (3)which
it
can demonstrate was in its possession before receipt from the discloser
(excluding Confidential Information possessed by Hercules prior to Closing
that
relates to the assets sold to FV or the Acquired Business);
(d) (4)which
is
disclosed to it without restriction on disclosure by a third party who has
the
lawful right to disclose such information;
(e) (5)which
it
can demonstrate was independently developed by it (excluding Confidential
Information possessed by Hercules prior to Closing that relates to the assets
sold to FV or the Acquired Business); or
(f) (6)after
five (5) years from the date of disclosure.
13.4 X.Xx
the
event that any Party is requested or required (by oral questions,
interrogatories, requests for information or documents, or other similar
process
utilized in connection with legal proceedings, or in connection with compliance
with a subpoena, civil investigative demand or other similar process) to
disclose any such Confidential Information, such Party shall provide the
other
Party with prompt written notice of any such requests or requirement so that
the
other Party may seek a protective order or other appropriate remedy and/or
waive
compliance with the provisions of Article 10 of this Agreement.
13.5 X.Xx
order to protect the interests of both Parties with respect to Confidential
Information contained within the information technology systems (both hardware
and software) which will be utilized by the Parties during the Term, both
Parties shall use reasonable best efforts to implement and effect security
procedures intended to protect such Confidential Information.
13.6 F.SUBJECT
TO THE ABOVE ARTICLE 10C., THE CONFIDENTIALITY AND NON-DISCLOSURE OBLIGATIONS
OF
THIS ARTICLE SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.
SECTION
14. ARTICLE
11 INDEPENDENT CONTRACTOR
SECTION
15. Hercules
is and shall remain at all times an independent contractor of FV in the
performance of all Services hereunder; and all persons employed by Hercules
or
under contract or agreement with Hercules to perform such Services shall
be and
remain employees or contractors solely of Hercules and subject only to the
supervision and control of Hercules supervisory personnel.
SECTION
16. ARTICLE
12 COMPLIANCE WITH LAWS AND REGULATIONS
16.1 A.Each
Party shall give all notices and obtain all licenses and permits required
by
applicable laws, rules, ordinances, codes or regulations and shall comply
with
all applicable laws, rules, ordinances, codes and regulations of any
governmental entity or regulatory agency governing the Services to be provided
hereunder.
16.2 B.If
it
is found that a service or report results in either Party being given notice
that it is violation of a law or regulation by a third-Party regulatory or
governmental agency, the Parties will mutually cooperate to provide the service
in a way that is not in violation. Failing such best efforts, Hercules may
cancel such service.
SECTION
17. ARTICLE
13 DEFAULT.
SECTION
18. Notwithstanding
anything to the contrary contained herein, if either Party fails to fulfill
any
of its material obligations hereunder, unless such failure is otherwise excused
by or subject to other provisions of this Agreement, the other Party may
give
notice to the defaulting Party of such default. If the defaulting Party does
not
cure the default within thirty (30) days of the date of this notice, or if
the
default is curable but the default is of such a nature that it cannot be
cured
within thirty (30) days, the defaulting Party has not taken reasonable steps
to
commence to cure the default (and proceeds with due diligence to complete
the
cure), the Party not in default upon written notice may terminate its further
obligations hereunder directly related to the subject matter of the default
effective on expiration of such thirty (30) day period; provided, however,
that
if the Party claimed to be in default disputes such claim, the dispute
resolution procedures contained herein shall apply.
SECTION
19. ARTICLE
14. INDEMNITY AND LIMITED LIABILITY
19.1 A.For
purposes of Articles 14 and 16 of this Agreement, the following defined terms
shall apply:
“Applicable
Law” means
any
law, ordinance, regulation or other requirement applicable to the subject
matter
hereof, in effect and as interpreted from time to time.
“DOEA”
means
the
directors, officers, employees and agents of the relevant entity.
“Liabilities
and Damages” means
any
and all claims, liabilities, actions, suits, proceedings, judgments, orders,
fines, penalties, assessments, deficiencies, demands, debts, obligations,
losses, injuries, damages (including, without limitation, direct, actual,
special, liquidated, incidental, consequential or punitive damages), costs
and
expenses (including, without limitation, costs of defense, settlements and
reasonable investigatory and attorneys' fees and expenses) of whatever kind
or
character (whether absolute, accrued, contingent or other), and regardless
of
the legal basis of liability or legal or equitable principle involved
(including, without limitation, contract, warranty, indemnification, negligence,
strict liability, statutory liability, liability without fault, other tort,
personal injury, death, damage to or loss of property, business interruption,
lost profits, violation of Applicable Laws or otherwise).
19.2 B.
In
no
event shall any Party, its affiliate(s) and/or its or their respective
directors, officers, employees, representatives or agents be liable for punitive
damages under or in connection with this Agreement.
C.
FV
is
obligated to release, discharge, defend, indemnify, save and hold harmless
Hercules, its DOEA, its affiliates and their respective DOEA, from and against
any and all Liabilities and Damages arising out of any gross negligence or
willful misconduct of FV, its DOEA, its affiliates and their respective DOEA,
arising from or related to the performance of this Agreement and/or the
Management Services Contract by FV, except to the extent caused by the negligent
act or omission or willful misconduct of Hercules, its DOEA, its affiliates
or
their respective DOEA. Hercules is obligated to release, discharge, defend,
indemnify, save and hold harmless FV, its DOEA, its affiliates and their
respective DOEA, from and against any and all Liabilities and Damages arising
out of any gross negligence or willful misconduct of Hercules, its DOEA,
its
affiliates and their respective DOEA, arising from or related to the performance
of this Agreement and/or the Management Services Contract by Hercules, except
to
the extent caused by the negligent act or mission or willful misconduct of
FV,
its DOEA, its affiliates and their respective DOEA.
D.
Any
claim
for indemnification or defense under this Agreement shall be made in accordance
with the procedures set forth in this Article 16 of this Agreement. This
provision will survive any expiration or termination of this
Agreement.
SECTION
20. ARTICLE
15. FORCE MAJEURE
20.1 A.Neither
Party shall be liable to the other Party for any loss, cost or damage for
delay
or non-performance of any of its obligations hereunder resulting from any
requirement or intervention of civil, naval or military authorities or other
agencies of the government, or by reason of any other causes whatsoever not
reasonably within the control of such Party, including, but not limited to,
acts
of God, war, riot, insurrection, civil violence or disobedience, blockages,
embargoes, sabotage, epidemics, fire, strikes, lock-outs or other industrial
or
labor disturbances, lightning, hurricanes, explosions and delay of carriers
(all
of the foregoing referred to hereinafter as a “Force Majeure”). Upon the
occurrence of a Force Majeure, the Party whose performance is so prevented
(the
"Declaring Party") shall notify the other Party promptly of the cause of
the
Force Majeure, and the estimated time that such Force Majeure shall continue.
The Declaring Party shall thereafter use its reasonable efforts to overcome
the
Force Majeure; provided, however, that the settlement of strikes, lock-outs
and
other industrial or labor disturbances shall be entirely within the discretion
of the Declaring Party, and the Declaring Party shall not be required to
make
settlement of strikes, lock-outs and other industrial or labor disturbances
by
acceding to the demands of any opposing third party or Parties when such
course
is unfavorable in the Declaring Party's judgment. FV shall not be required
to
pay for any disrupted Services or Licensed Premises during the period in
which
they are not being provided to FV.
20.2 B.If
Hercules’ performance under this Agreement is suspended or rendered impractical
by reason of Force Majeure for a period in excess of thirty (30) days during
the
Term, FV (i) shall have the right to terminate this Agreement with respect
to
the disrupted Services or Licensed Premises immediately upon written notice
to
Hercules. An event of Force Majeure shall not operate to extend the Term
or to
limit amounts payable for Services or Licensed Premises rendered on or prior
to
the actual date of the event of Force Majeure.
SECTION
21. ARTICLE
16. DISPUTES
21.1 A.Resolution
Procedure
.
Each
Party agrees to use its reasonable efforts to resolve disputes under this
Agreement by a negotiated resolution between the Parties or as provided for
in
this Article 16.
B. Resolution
Panel
.
The
resolution panel shall consist of two members, i.e.,
a
corporate officer of Hercules and a corporate officer of FV, each appointed
by
the chief executive officer of the respective company (the "Resolution
Panel").
The
Resolution Panel may act only by the affirmative vote of both its
members.
C. Exchange
Of Written Statements
.
In the
event of a dispute under this Agreement, either Party may give a Notice to
the
other Party requesting that the Resolution Panel in good faith try to resolve
(but without any obligation to resolve) such dispute. Not later than fifteen
(15) days after said Notice, each Party shall submit to the other Party a
written statement setting forth such Party's description of the dispute and
of
the respective positions of the Parties on such dispute and such Party's
recommended resolution and the reasons why such Party feels its recommended
resolution is fair and equitable in light of the terms and spirit of this
Agreement. Such statements represent part of a good-faith effort to resolve
a
dispute and as such, neither statement may be introduced as evidence or used
as
an admission against interest in any arbitral or judicial resolution of such
dispute.
21.2 D.Good
Faith Negotiations
.
If the
dispute continues unresolved for a period of seven (7) days (or such longer
period as the Resolution Panel may otherwise agree upon) after the simultaneous
exchange of such written statements, then the Resolution Panel shall promptly
commence good-faith negotiations to resolve such dispute but without any
obligation to resolve it. The initial negotiating meeting may be conducted
by
teleconference.
21.3 E.Determination
Of Resolution Panel
.
Not
later than thirty (30) days after the commencement of good-faith negotiations:
(i) if the Resolution Panel renders an agreed resolution on the matter in
dispute, then both Parties shall be bound thereby; and (ii) if the Resolution
Panel does not render an agreed resolution, then either Party may submit
the
dispute to arbitration in accordance with Article 16F hereof.
21.4 F.Arbitration
.
A matter
in dispute hereunder submitted for resolution by arbitration shall be arbitrated
in accordance with the then existing commercial arbitration rules of the
American Arbitration Association, and judgment upon the award rendered by
the
arbitrator(s) may be entered in any court having jurisdiction thereof, subject
to (1) through (8) below.
(a) (1)
Upon
the request of either Party, the Arbitration shall be conducted under the
expedited rules of the American Arbitration Association for commercial
arbitrations.
(b) (2)
The
Arbitrators shall be three (3) independent arbitrators, with one appointed
by
each Party, and the two appointees selecting the third arbitrator in accordance
with the said Rules. If either Party fails to select an arbitrator within
ten
(10) days after Notice of such failure from the other Party or the American
Arbitration Association, then the American Arbitration Association shall
appoint
such arbitrator. If the two appointees are unable to agree on the third
arbitrator, then the American Arbitration Association shall select the same
using the foregoing qualification. Each arbitrator shall be a competent and
reputable individual with experience as a judge, a chief executive officer
or
chief financial officer.
(c) (3)
The
arbitration hearing shall be held in Philadelphia, Pennsylvania, at such
date,
time and place as established by the Arbitrators.
(d) (4)
The
Arbitrators shall have power to rule on their own competency and on the validity
of this Agreement to make reference to arbitration.
(e) (5)
Not
later than fifteen (15) days after the conclusion of the arbitration hearing,
but prior to the rendering of any arbitral decision and award, each Party
may
submit to the Arbitrators a written statement of such Party's (i) understanding
and view of the Parties' respective positions on the dispute, and (ii)
recommendation as to an appropriate resolution of the dispute and the reasons
why it believes such resolution is appropriate. In reaching a decision on
any
dispute hereunder, the Arbitrators may take into account such
statement.
(f) (6)
The
Arbitrators must render their arbitral decision and award and give a written
opinion setting forth the basis of their decision, all not later than forty-five
(45) days after the conclusion of the Arbitration.
(g) (7)
Each
Party shall take or cause to be taken all reasonable action to facilitate
the
conduct of the arbitration and the rendering of the arbitral award at the
earliest possible date.
(h) (8)
The
costs of the Arbitration shall be borne and paid equally by the
Parties.
(i) G.
Injunctive
Relief
.
The
Parties recognize and acknowledge that in the event of a potential, anticipatory
or actual breach of this Agreement, it may be necessary or appropriate for
the
non-breaching Party to seek injunctive relief, if and to the extent legally
available, in order to avoid harm or further harm to the non-breaching Party.
If
a Party desires injunctive relief, it may pursue the same in any court of
competent jurisdiction; provided, however, that, if granted, such injunctive
relief shall apply only to prevent a breach or further breaches and shall
remain
in effect only so long as the court deems necessary or appropriate to permit
resolution of the underlying disputes in accordance with this Article 16.
Neither the seeking of injunctive relief nor the granting thereof is intended
or
shall result in the application of a substantive or procedural law other
than
the applicable governing law pursuant to this Article 16.
21.5 H.
Notwithstanding the expiration or earlier termination of this Agreement,
the
Parties obligations to each other under this Article 16 regarding events
or
obligations occurring or arising during the Term shall survive such expiration
or earlier termination until fulfilled.
SECTION
22. ARTICLE
17. MISCELLANEOUS
22.1 A.If
any
provision of this Agreement or the application of any such provision to any
person(s) or circumstance(s) shall be held invalid, illegal or unenforceable
in
any respect by a court of competent jurisdiction, such invalidity, illegality
or
unenforceability shall not affect any other provision hereof, and the Agreement
shall remain in full force and be effectuated as if such illegal, invalid
or
unenforceable provision is not part hereof; provided, however, that (i) if
the
deletion of any provision of this Agreement frustrates an essential purpose(s)
of the Agreement or material right(s) of a Party, then such Party may terminate
this Agreement without further liability or obligation, and (ii) absent such
frustration and to the extent legally possible, the Parties shall seek in
good
faith agree upon alternate provisions or arrangements to achieve the same
purposes as the invalid, illegal or unenforceable provision.
22.2 B.This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original and all of which shall constitute one and the same
instrument.
22.3 C.The
headings for the articles, sections and paragraphs in this Agreement are
for
convenience and reference only and shall not limit in any way or otherwise
affect any of the terms or provisions hereof.
22.4 D.
This
Agreement may not be changed, altered, modified or amended except in writing
signed by the Parties.
22.5 E.The
failure of either Party to demand strict performance of the terms hereof,
or to
exercise any right conferred herein shall not be construed as a waiver or
relinquishment of its right to assert or rely on any such term or right in
the
future. Waiver by either Party of any term, provision or condition of this
Agreement shall not be construed to be a waiver of any other term, provision
or
condition nor shall such waiver be deemed to be a waiver of a subsequent
breach
of the same term, provision or condition. Failure or delay by either Party
to
require performance of any provision of this Agreement will not affect or
impair
such Party’s right to require full performance with such provision at any time
thereafter. Any review or approval by a Party required or permitted pursuant
to
this Agreement shall not be deemed to be a waiver of any provision of this
Agreement nor shall it excuse any non-conforming performance by the other
Party.
22.6 F.The
validity, interpretation and performance of this Agreement and any dispute
connected with this Agreement will be governed by and determined in accordance
with the statutory, regulatory and decisional law of the State of Delaware
(exclusive of such state's choice or conflicts of laws rules).
22.7
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day
and year first above written.
|
FIBERVISIONS,
Delaware Corporation
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
HERCULES
INCORPORATED
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
EXHIBIT
A
DESCRIPTION
OF SERVICES
A-0
Charge
and Term Schedule
A-1
Finance
A-2 Human
Resources
A-3 Shared
Services
A-4
Office
Services
A-5 Information
Management
A-6 Procurement
A-7 Supply
Chain and Transportation
A-8 Safety,
Health and Environment
A-9 Corporate
Engineering
A-10 Legal
EXHIBIT
B
LICENSED
PREMISES
B-0
Charge
Schedule
B-1 Hercules
Plaza- Wilmington
EMPLOYEE
LEASE AGREEMENT
Employee
Working in Italy
This
Employee Lease Agreement (the "Agreement"), is made effective as of January
___,
2006 (the “Effective Date”), by and between Hercules
Italia SpA,
an
entity organized and existing under the laws of Italy ("Employer"), and
[FiberVisions
entity to be identified], a
Delaware limited liability company ("FiberVisions"). Sometimes herein, Employer
or FiberVisions is referred to individually as a “Party” and collectively as the
“Parties.”
BACKGROUND
Both
FiberVisions and Employer are members of the Hercules Incorporated family
and
believe that this Agreement is in their mutual best interest. FiberVisions
desires to lease employees from Employer and Employer is willing to provide
FiberVisions with the use of such employees. The said employees shall remain
employees of Employer, unless this Agreement is terminated, FiberVisions
recognizes that it will receive significant advantages from such an arrangement.
Accordingly, in consideration of the mutual covenants and agreements contained
in this Agreement, the Parties hereby agree as follows:
1.
Term.
1.1 This
Agreement shall become effective on the Effective Date and remain in force
for
the term of _______ (__) months thereafter (the "Initial Term"). Following
the
Initial Term, this Agreement shall remain in force from month to month until
either Party gives written notice to the other Party as specified herein,
at
least seven (7) days prior to the expiration of any monthly extension of
the
Initial Term. Either Party may terminate this Agreement upon seven (7) days
prior written notice should the other party breach any of the provisions
of this
Agreement.
1.2 Employer
shall have the right to terminate this Agreement immediately in the event
of (i)
non-payment or late payment by FiberVisions, or (ii) a breach of this Agreement
by FiberVisions (other than non-payment or late payment) which is not fully
cured or remedied to the satisfaction of Employer within three (3) days after
notice of such breach from Employer to FiberVisions occurring at any time
after
the date of this Agreement.
2.
The
Employees.
Employer
will provide to FiberVisions the services of the employees listed on
Exhibit
A
attached
hereto and made a part hereof (individually and collectively the “Employees”),
all subject to the obtainment of applicable and valid German work permits
for
the Employees. If a work permit cannot be obtained for given Employee(s),
then
the affected employee(s) shall be deleted from Exhibit
A
and this
Agreement. Employer shall be fully responsible for notifying all Employees
of
their leased employee status. Each Employee shall be identified on Exhibit
A
according to proper code and pay status under applicable employment and labor
laws. Employer will immediately notify FiberVisions of any change in such
code
and/or status for any Employee. No other employees shall become leased to
FiberVisions hereunder unless specifically agreed by Employer.
4. Services
Provided To FiberVisions.
4.1 Employer
shall be fully responsible for payment of all payroll, payroll taxes, collection
of taxes, unemployment insurance, and other administrative functions customarily
performed by an Employer for its employees with regard to Employees while
they
are performing work for FiberVisions; provided, however, that FiberVisions
shall
fully and reasonably cooperate with Provider and/or Employees to ensure
compliance with applicable German legal requirements (e.g.
German
source withholding tax, etc.). Employer shall, without regard to payments
by
FiberVisions, assume such responsibilities as are required by applicable
law for
payment of wages to Employees' until such employees are terminated from
employment with Employer.
4.2 Subject
to Employer’s reservation of rights under Section 5 hereof, the services of all
Employees shall be directed and supervised by, and performed in accordance
with,
the directives of FiberVisions’ representatives or such persons, including
officers of FiberVisions to whom FiberVisions has delegated responsibility
for
such supervision and direction. Without limiting the generality of the
foregoing, the Parties agree that on behalf of FiberVisions, Employer (through
its employees or agents) shall supervise and coordinate Employees in their
performance of [describe primary area(s) of each Employer’s activities]. Until
further directives are received by Employer, each Employee shall continue
to
perform the services which such employee was performing immediately prior
to the
Effective Date.
4.3 Each
Party shall designate one or two persons to act as its primary point(s) of
contact on the implementation and administration of this Agreement; provided,
however, such persons are not authorized to modify the terms of this
Agreement.
4.4 Employer
shall (A) cause Employees to follow the instructions of FiberVisions,
(B) not incur any expenses (whether capital expenditures or otherwise) on
behalf of FiberVisions without FiberVisions’ prior written consent, but upon
such consent Employer shall be reimbursed for all such costs, and (B) shall
provide the services of Employees exclusively to FiberVisions during the
Initial
Term.
5. Reservation
of Rights.
In
compliance with applicable guidelines, Employer shall, after consultation
with
FiberVisions:
A.
Have
a
right to recruit, hire, direct and control Employees.
B.
Have
a
right to discipline, replace, and terminate the employment of Employees and
designate the date of separation from employment.
C.
Have
a
right to reward, promote, reassign, evaluate and determine the wages, hours,
terms and conditions of employment.
D.
Have
the
right to resolve and decide Employee grievances and disputes.
E.
Supervise
and direct Employees in a reasonable manner consistent with the practices
of
similar businesses and enterprises.
F.
Have
such
sufficient direction and control over the Employees as is necessary to conduct
the Employer's business and without which Employer would be unable to conduct
its business, discharge any fiduciary responsibility that it may have, or
comply
with any applicable licensure, regulatory, or statutory requirement of
Employer.
6. Compensation
of Employer; Payment.
6.1 FiberVisions
shall reimburse the Employer for the following costs incurred in connection
with
Employees: (i) wages, salaries and benefits (including Employer’s pension
service cost) consistent with Employer’s current personnel policies, procedures
and plans or as may be otherwise agreed in writing by Employer and FiberVisions;
(ii) statutory benefits such as workers’ compensation, social security, and
unemployment compensation; (iii) costs incurred in hiring any additional
employees hired at the request of FiberVisions and whose services are provided
to FiberVisions under this Agreement; (iv) severance costs for employees
to whom
FiberVisions has offered employment, and (v) applicable value added
taxes.
6.2 Employer
provided benefit expenses attributable to Employees supplied under this
Agreement shall be invoiced in accordance with Employer’s actual premium costs
(less employee contribution) for Life and Long Term Disability insurance,
its
accrual rate for Health and Dental coverages, its per capita charges for
the
employee assistance plans, its vacation accrual for the month(s) services
are
provided hereunder, its actual costs for short-term disability and severance
or
dismissal costs incurred during the period of providing services hereunder,
its
Company contribution expense under its savings, investment and pension
plans.
6.3 Employer
shall invoice FiberVisions for any amounts FiberVisions owes Employer under
this
Agreement and may at its option: 1) reduce any amounts Employer owes
FiberVisions by the amount so invoiced hereunder, or 2) render invoices monthly
for the amount to be reimbursed hereunder, in which case payment shall be
due by
FiberVisions within thirty (30) days of receipt of invoice. Invoices not
paid
when due shall bear interest at the prime bank rate in effect from time to
time
as listed in the then most recent edition of The
Wall Street Journal
newspaper.
7. Indemnification.
7.1
FiberVisions
agrees to indemnify, defend and hold harmless Employer, its officers, non-leased
employees, directors and agents from and against any and all losses,
liabilities, expenses (including court costs and attorneys' fees) and claims
for
damage of any nature whatsoever, whether known or unknown as though expressly
set forth and described herein, which Employer may incur, suffer, become
liable
for, or which may be asserted or claimed against Employer as a result of
the
actual or alleged acts, errors or omissions of FiberVisions, or any claims
whatsoever arising out of actual or alleged violations of applicable employment
and labor laws, all to the extent that such acts, errors, omissions or claims
related to Employees, and/or FiberVisions’ lease or direction
thereof.
7.2 In
the
event that Employer is required to defend against any claim to which Employer
reasonably believes it is entitled to indemnification under this
Section,
FiberVisions shall advance to Employer any attorneys' fees and litigation
expenses related to the defense of such action that have not yet been
previously
reimbursed
by FiberVisions.
7.3 In
the
event that a Party is required to defend against any claim or
prosecute
any claim occasioned by the breach or default in any provision of
this
Agreement
to enforce the terms of this Agreement, such Party shall be awarded all
reasonable cost pertaining thereto, including reasonable attorneys' fees
and
costs in addition to any other relief to which such Party may be
entitled.
7.4 In
no
event will a Party be liable for any direct or consequential damages to the
other Party as a result of a breach of this Agreement, nor for any loss of
profits, business, or goodwill.
8. Invalidity
of a Provision.
If
any
provision of this Agreement (or any portion thereof) shall be held to be
invalid, illegal, or unenforceable, the validity, legality or enforceability
of
the remainder of this Agreement shall not in any way be affected or impaired
thereby.
9. No
Waiver.
The
failure by either Employer or FiberVisions to insist upon strict performance
of
any of the provisions contained in this Agreement shall in no way constitute
a
waiver of any of its rights as set forth herein, at law or equity.
10. Termination.
This
Agreement may be terminated by either Party if, at any time, (A) the other
party
breaches any material term of this Agreement, (B) such Party, in its reasonable
discretion, determines that a material adverse change has occurred in the
financial condition, the business, or the business prospects of the other
Party,
or that the other Party is unable to pay its debts as they become due in
the
ordinary course of business, or (C) in the event of any federal or state
legislation, regulatory action, or judicial decision which, in the reasonable
discretion of such Party, materially adversely affects its ability to perform
under this Agreement. This section is cumulative to all other incidents of
termination recited in this Agreement. Upon termination by either Party of
this
Agreement only standard information in standard form and format will be supplied
to FiberVisions by Employer. FiberVisions agrees that Employer has no obligation
to supply information outside of its standard services as set forth in this
Agreement.
11. Venue
and Jurisdiction.
Any
action or counterclaim arising out of or related to this Agreement must be
brought in [Switzerland]. Each Party hereby irrevocably consents to be subject
to the jurisdiction of the courts of Switzerland concerning any case or
controversy arising out of or related to the Agreement.
This
Agreement shall be governed by and construed under the laws of [Switzerland],
regardless of any choice of law provisions of any jurisdiction to the
contrary.
12. Disputes
Resolution.
12.1 In
the
event of a dispute, claim or controversy arising out of or relating to this
Agreement, the Parties shall attempt to resolve such matter through good
faith,
friendly discussions and negotiations for a reasonable period of time. If,
after
such reasonable period of time of no more than three (3) months after written
notice by one Party to the other Party regarding the dispute, claim or
controversy, no resolution has been agreed upon, then either Party may require
that the dispute, controversy or claim shall be referred to and finally
determined by arbitration in accordance with the UNCITRAL Arbitration Rules,
and
administrated by the Zurich Chamber of Commerce. The arbitration tribunal
shall
consist of three arbitrators. The place of arbitration shall be Zurich,
Switzerland. The language to be used in the arbitration proceedings shall
be
English if permitted under local law.
12.2 Absent
a
decision by the Swiss Federal Court that the arbitral award has “formal
mistakes” or contradicts the “ordre public,” the arbitral award, which shall not
include punitive damages, injunctive relief or specific performance, shall
be
final and binding upon all Parties and shall be enforceable in accordance
with
its terms in all jurisdictions and may be entered in any court having
jurisdiction. The cost of the arbitration shall be borne by the Parties equally,
and no allowance for attorneys’ fees shall be awarded. The Parties agree that
the award is to be considered as a settlement of the dispute between them
and
shall accept it as the true expression of their own determination in connection
therewith.
13. Miscellaneous.
13.1 In
the
event that this Agreement is executed in more than one language, the English
language version shall control.
13.2 If
any
Article, section, term, provision, or clause thereof in this Agreement is
found
or held to be invalid or unenforceable in any jurisdiction in which this
Agreement is being performed, the remainder of this Agreement shall be valid
and
enforceable and the Parties shall negotiate in good faith, a substitute,
valid
and enforceable provision which most nearly effects the Parties’ intent in
entering into this Agreement.
14. Notices.
To
be
effective, any notice given under this Agreement must be in writing, shall
be
effective when received, and shall be sent by either (i) certified or registered
air mail, postage prepaid, (ii) by fax and confirmed by certified mail,
registered mail or overnight courier, (iii) by overnight courier (e.g. FedEx,
UPS, Airborne, DHL and others) or (iv) by electronic mail and confirmed by
certified mail, registered mail or overnight courier, to the following
addresses:
If
to
FIBERVISIONS:
[Insert
Address]
Attention:
[Name or Title]
Telephone
Fax
E-mail
With
a
copy to:
[Insert
name and contact information]
If
to
Employer:
Hercules
Italia SpA
[Insert
Address]
Attention:
[Name or Title]
Telephone
Fax
E-mail
With
a
copy to:
[Insert
name and contact information]
or
to
such other address as either Party may, in writing, from time to time, give
notice to the other Party.
15. Headings.
The
headings in the Agreement are intended for convenience or reference and shall
not affect its interpretation.
16. Amendments.
This
Agreement constitutes the entire Agreement between the Parties with regard
to
the subject matter and no other agreement, statement, promise or practice
between the Parties relating to the subject matter shall be binding on the
Parties. This Agreement may be changed pursuant to the terms hereof or by
written amendment signed by both parties.
17. No
Third Party Beneficiaries.
No
rights
of any third party are created by this Agreement and no person not a party
to
this Agreement may rely on any aspect of this Agreement notwithstanding any
representation, written or oral, to the contrary.
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement as of the Effective Date.
[FIBERVISIONS
ENTITY] HERCULES
ITALIA SpA
By: By:
____________________________
Name Name
Printed:_______________________ Printed:__________________________
Title:
Title:
___________________________
Date:
Date:
___________________________
EXHIBIT
A
[Provide
appropriate identifying information (e.g.
pay
status)
Xxxxxxxx
Xxxxxxx Xxxxxx
