EXECUTION COPY
ASSET PURCHASE AGREEMENT
between
DRY BRANCH KAOLIN COMPANY
"Purchaser"
and
NORD KAOLIN COMPANY
"Seller"
DATED AS OF MARCH 5, 1997
TABLE OF CONTENTS
PAGE
ARTICLE 1 PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . . 1
1.1 Purchase and Sale of Assets. . . . . . . . . . . . . . 1
1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 ASSUMPTION OF LIABILITIES. . . . . . . . . . . . . . . 5
2.1 Assumption . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Excluded Liabilities . . . . . . . . . . . . . . . . . 5
ARTICLE 3 CALCULATION AND PAYMENT OF PURCHASE PRICE. . . . . . . 7
3.1 Purchase Price . . . . . . . . . . . . . . . . . . . . 7
3.2 Transfer Expenses. . . . . . . . . . . . . . . . . . . 9
3.3 Allocation of Purchase Price . . . . . . . . . . . . . 9
ARTICLE 4 PROCEDURE FOR CLOSING. . . . . . . . . . . . . . . . . 9
4.1 Time and Place of Closing. . . . . . . . . . . . . . . 9
4.2 Transactions at the Closing. . . . . . . . . . . . . . 9
4.3 Conveyance of Title to Real Property and Assignment
of Real Property Leases. . . . . . . . . . . . . . . . 12
4.4 Survey and Inspection of Property. . . . . . . . . . . 13
4.5 Environmental Liabilities. . . . . . . . . . . . . . . 14
4.6 Certain Consents . . . . . . . . . . . . . . . . . . . 14
4.7 Eminent Domain . . . . . . . . . . . . . . . . . . . . 15
4.8 Further Assurances . . . . . . . . . . . . . . . . . . 15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . 15
5.1 Organization and Qualification . . . . . . . . . . . . 15
5.2 Authority. . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Subsidiaries; Joint Ventures . . . . . . . . . . . . . 17
5.4 Balance Sheets . . . . . . . . . . . . . . . . . . . . 17
5.5 Inventory. . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Personal Property. . . . . . . . . . . . . . . . . . . 18
5.7 Real Property; Leased Real Property. . . . . . . . . . 18
5.8 Contracts. . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Intellectual Property. . . . . . . . . . . . . . . . . 23
5.10 Insurance. . . . . . . . . . . . . . . . . . . . . . . 24
5.11 Environmental Matters and Employee Safety and Health . 24
5.12 Litigation . . . . . . . . . . . . . . . . . . . . . . 26
5.13 Absence of Changes . . . . . . . . . . . . . . . . . . 26
5.14 Brokers and Finders. . . . . . . . . . . . . . . . . . 28
5.15 Labor Matters. . . . . . . . . . . . . . . . . . . . . 28
5.16 Governmental Approval and Consents . . . . . . . . . . 29
5.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 29
5.18 Employee Benefit Plans . . . . . . . . . . . . . . . . 30
5.19 Compliance with Laws . . . . . . . . . . . . . . . . . 32
5.20 Transaction Approval and Consents. . . . . . . . . . . 33
5.21 Adequacy of Acquired Assets. . . . . . . . . . . . . . 33
5.22 Compliance with the Immigration Reform and Control
Act. . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.23 Mineral Reserves . . . . . . . . . . . . . . . . . . . 33
5.24 Correctness of Representations . . . . . . . . . . . . 34
5.25 Definition of "knowledge". . . . . . . . . . . . . . . 34
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . 34
6.1 Organization and Qualification . . . . . . . . . . . . 34
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . 34
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PAGE
6.3 Litigation . . . . . . . . . . . . . . . . . . . . . . 35
6.4 Correctness of Representations . . . . . . . . . . . . 35
6.5 Brokers and Finders. . . . . . . . . . . . . . . . . . 35
6.6 Governmental Approval and Consents . . . . . . . . . . 35
6.7 Financing. . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 7 COVENANTS OF SELLER. . . . . . . . . . . . . . . . . . 36
7.1 Conduct of Business Prior to Closing . . . . . . . . . 36
7.2 Access and Information . . . . . . . . . . . . . . . . 36
7.3 Notification of Changes. . . . . . . . . . . . . . . . 37
7.4 Certain Acts Prohibited. . . . . . . . . . . . . . . . 37
7.5 Other Transactions . . . . . . . . . . . . . . . . . . 37
7.6 Consents . . . . . . . . . . . . . . . . . . . . . . . 37
7.7 Supplemental Disclosure. . . . . . . . . . . . . . . . 38
7.8 Additional Reports . . . . . . . . . . . . . . . . . . 38
7.9 Conditions Precedent . . . . . . . . . . . . . . . . . 38
7.10 Environmental Permits. . . . . . . . . . . . . . . . . 38
7.11 Capital Expenditures . . . . . . . . . . . . . . . . . 38
7.12 Discharge of Liens and Encumbrances. . . . . . . . . . 39
7.13 Environmental Fines. . . . . . . . . . . . . . . . . . 39
7.14 Renegotiation of Equipment Leases. . . . . . . . . . . 39
7.15 Transferred Benefit Plans/Plan Information . . . . . . 39
7.16 Payoff of Debts. . . . . . . . . . . . . . . . . . . . 40
7.17 Funding of Plans . . . . . . . . . . . . . . . . . . . 40
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER 41
8.1 Certificate Regarding Schedules and Representations
and Warranties . . . . . . . . . . . . . . . . . . . . 41
8.2 Compliance by Seller . . . . . . . . . . . . . . . . . 41
8.3 No Injunction. . . . . . . . . . . . . . . . . . . . . 41
8.4 Operation in the Ordinary Course . . . . . . . . . . . 42
8.5 Consents; Authorizations; Approval of Legal Matters 42
8.6 Transfer of Environmental Permits. . . . . . . . . . . 42
8.7 Incumbency . . . . . . . . . . . . . . . . . . . . . . 42
8.8 Certified Resolutions. . . . . . . . . . . . . . . . . 42
8.9 Basic Corporate Documents. . . . . . . . . . . . . . . 43
8.10 Satisfaction of Title Objections and Release of Certain
Liens. . . . . . . . . . . . . . . . . . . . . . . . . 43
8.11 Accuracy of Schedules. . . . . . . . . . . . . . . . . 43
8.12 No Adverse Change. . . . . . . . . . . . . . . . . . . 43
8.13 Instruments of Transfer. . . . . . . . . . . . . . . . 43
8.14 Acquisition Documents. . . . . . . . . . . . . . . . . 43
8.15 Opinion of Seller's Counsel. . . . . . . . . . . . . . 43
8.16 Proceedings. . . . . . . . . . . . . . . . . . . . . . 43
8.17 Names. . . . . . . . . . . . . . . . . . . . . . . . . 44
8.18 Condition of Acquired Assets . . . . . . . . . . . . . 44
8.19 Antitrust. . . . . . . . . . . . . . . . . . . . . . . 44
8.20 Guaranty . . . . . . . . . . . . . . . . . . . . . . . 44
8.21 Royalty Agreement. . . . . . . . . . . . . . . . . . . 44
8.22 Noncompetition Agreement . . . . . . . . . . . . . . . 44
8.23 Norplex Name . . . . . . . . . . . . . . . . . . . . . 45
8.24 License Agreement. . . . . . . . . . . . . . . . . . . 45
8.25 Sales/Resale Exemption Certificates. . . . . . . . . . 45
8.26 Releases . . . . . . . . . . . . . . . . . . . . . . . 45
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PAGE
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. . . . . 45
9.1 Certificate Regarding Representations and Warranties . 45
9.2 Compliance by Purchaser. . . . . . . . . . . . . . . . 45
9.3 Certified Resolutions. . . . . . . . . . . . . . . . . 46
9.4 Basic Corporate Documents. . . . . . . . . . . . . . . 46
9.5 No Injunction; Etc.. . . . . . . . . . . . . . . . . . 46
9.6 Incumbency . . . . . . . . . . . . . . . . . . . . . . 46
9.7 Certificates . . . . . . . . . . . . . . . . . . . . . 46
9.8 Acquisition Documents. . . . . . . . . . . . . . . . . 46
9.9 Opinion of Purchaser's Counsel . . . . . . . . . . . . 46
9.10 Xxxx-Xxxxx-Xxxxxx. . . . . . . . . . . . . . . . . . . 46
9.11 Proceedings. . . . . . . . . . . . . . . . . . . . . . 47
9.12 Release from Guarantees. . . . . . . . . . . . . . . . 47
9.13 Royalty Agreement. . . . . . . . . . . . . . . . . . . 47
ARTICLE 10 MUTUAL COVENANTS . . . . . . . . . . . . . . . . . . . 47
10.1 Governmental Filings . . . . . . . . . . . . . . . . . 47
10.2 Further Mutual Covenants . . . . . . . . . . . . . . . 47
10.3 Prorations . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 11 POST CLOSING MATTERS . . . . . . . . . . . . . . . . . 49
11.1 Employment of Employees. . . . . . . . . . . . . . . . 49
11.2 Seller Benefit Plans . . . . . . . . . . . . . . . . . 50
11.3 Use of Name. . . . . . . . . . . . . . . . . . . . . . 51
11.4 Employee Files . . . . . . . . . . . . . . . . . . . . 51
11.5 Non-Solicitation . . . . . . . . . . . . . . . . . . . 51
11.6 Maintenance of Books and Records . . . . . . . . . . . 51
11.7 Payments Received. . . . . . . . . . . . . . . . . . . 52
11.8 UCC Matters. . . . . . . . . . . . . . . . . . . . . . 52
11.9 Cooperation. . . . . . . . . . . . . . . . . . . . . . 52
11.10 Titanium Dioxide Supply Agreement. . . . . . . . . . . 52
ARTICLE 12 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS. . . . . . . . . 52
12.1 Confidentiality. . . . . . . . . . . . . . . . . . . . 52
12.2 Public Announcements . . . . . . . . . . . . . . . . . 53
ARTICLE 13 TERMINATION. . . . . . . . . . . . . . . . . . . . . . 54
13.1 Termination. . . . . . . . . . . . . . . . . . . . . . 54
13.2 Effect of Termination. . . . . . . . . . . . . . . . . 54
ARTICLE 14 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . 54
14.1 Agreement of Seller to Indemnify . . . . . . . . . . . 54
14.2 Agreement of Purchaser to Indemnify Seller . . . . . . 55
14.3 Procedures for Indemnification . . . . . . . . . . . . 56
14.4 Defense of Third Party Claims. . . . . . . . . . . . . 56
14.5 Settlement of Third Party Claims . . . . . . . . . . . 57
14.6 Duration; Limitations. . . . . . . . . . . . . . . . . 58
ARTICLE 15 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . 58
15.1 Fees and Expenses. . . . . . . . . . . . . . . . . . . 58
15.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . 58
15.3 Assignment; Binding Effect . . . . . . . . . . . . . . 60
15.4 No Benefit to Others . . . . . . . . . . . . . . . . . 60
15.5 Headings, Gender, and Person . . . . . . . . . . . . . 60
15.6 Counterparts . . . . . . . . . . . . . . . . . . . . . 60
15.7 Integration of Agreement . . . . . . . . . . . . . . . 60
15.8 Time of Essence. . . . . . . . . . . . . . . . . . . . 60
15.9 Governing Law. . . . . . . . . . . . . . . . . . . . . 60
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PAGE
15.10 Partial Invalidity . . . . . . . . . . . . . . . . . . 61
15.11 Investigation. . . . . . . . . . . . . . . . . . . . . 61
15.12 Arbitration. . . . . . . . . . . . . . . . . . . . . . 61
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TABLE OF EXHIBITS
Exhibit A Seller Opinion
Exhibit B Purchaser Opinion
Exhibit C Guaranty
Exhibit D Royalty Agreement
Exhibit E Noncompetition Agreement
Exhibit F Titanium Dioxide Supply Agreement
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SCHEDULES
Schedule 1.1(a) Noncurrent Assets
Schedule 1.1(b) Timber Harvesting Contracts
Schedule 1.2(k) Capital Credits
Schedule 1.2 Additional Excluded Assets
Schedule 3.3 Allocation of Purchase Price
Schedule 4.3(b) Key Properties
Schedule 4.3(b)(ii) Valuation of Nord Properties
Schedule 4.5 Environmental Liabilities
Schedule 5.1.1 Jurisdictions Where Qualified
Schedule 5.1.2 Locations of the Acquired Assets and Trade Names
Schedule 5.4 Balance Sheets
Schedule 5.5 Inventories
Schedule 5.6.1 Owned Personal Property
Schedule 5.6.2 Encumbrances on Owned Personal Property
Schedule 5.6.3 Leased Personal Property
Schedule 5.6.4 Leased Personal Property Defaults
Schedule 5.7.1 Real Property
Schedule 5.7.2 Leased Real Property
Schedule 5.7.3 Tenants
Schedule 5.8.1 Contracts
Schedule 5.8.2 Excluded Contracts
Schedule 5.8.3 Commitments for Capital Expenditures
Schedule 5.8.4 Customer List
Schedule 5.9 Intellectual Property
Schedule 5.11.1 Environmental Matters
Schedule 5.11.2 Environmental Permits and Licenses
Schedule 5.11.3 Storage Tanks
Schedule 5.11.4 Employee Health and Safety Matters
Schedule 5.12 Litigation Matters
Schedule 5.15 Employees
Schedule 5.16 Governmental Approvals and Consents
Schedule 5.17.1 Tax Bills
Schedule 5.17.2 Federal and State Tax Disputes
Schedule 5.18 Company Benefit Plans
Schedule 5.23 Mineral Reserves
Schedule 7.14 Equipment Leases Subject to Renegotiation
Schedule 11.1 Salaried Employees
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CROSS REFERENCES TO DEFINED TERMS
TERM SECTION IN WHICH DEFINED
Acceptance Notice Section 3.1(b)
Accounts Receivable Section 1.1(i)
Acquired Assets Section 1.1(b)
Acquisition Documents Section 5.2
Acquisition Proposal Section 7.5
Aggregate Value Section 3.1(b)(i)
Agreement Preamble
Assumed Liabilities Section 2.1
Balance Sheets Section 5.4
Beneficiary Section 10.3(d)
Bonds Section 2.2(k)
Books and Records Section 1.1(b)(vii)
Business Recital A
Closing Section 4.1
Closing Date Section 4.1
Closing Statement Section 3.1(b)
Code Section 2.2(j)
Contract(s) Section 1.1(b)(iii)
CPA Firm Section 3.1(b)
Deductible Amount Section 14.6
Due Diligence Book Section 4.5(a)
Effective Time Section 4.1
Electric Service Agreement Section 1.2(j)
Employees Section 5.18(a)
Environmental Consultants Section 4.5(a)
Environmental Liabilities Section 4.5(a)
Environmental Permits Section 5.11(a)(v)
Environmental Site Assessment Section 4.5(a)
Equipment Section 1.1(b)(ii)
Equipment Charges Section 10.3(b)(iii)
ERISA Section 5.18(a)(i)
Escrow Amount Section 3.1(a)
Estimated Purchase Price Section 3.1(a)
Excluded Assets Section 1.2
Excluded Contracts Section 5.8(a)(vi)
Excluded Liabilities Section 2.2
Furniture and Fixtures Section 1.1(b)(ix)
GAAP Section 3.1(b)
General Partner Section 5.1
Hired Employee(s) Section 11.1(a)
Immigration Laws Section 5.22
Indemnification Claim Section 14.3(a)
Indemnitee Section 14.3
Indemnitor Section 14.3
Information Section 12.1
Intellectual Property Section 1.1(b)(vi)
Inventory Section 1.1(b)(iv)
IRS Section 5.18(b)(i)
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Kemira Section 2.2(k)
Knowledge Section 5.25
Labor Claims Section 5.15
Latest Balance Sheet Section 3.1(b)
Leased Real Property Section 1.1(b)(i)
License Agreement Section 5.9
Losses Article 14
Material Changes Section 3.1(b)(ii)
Negotiation Period Section 14.3(c)
Not Actively Employed Section 11.1(a)
Notice Period Section 14.4(a)
Payor Section 10.3(d)
Payee Section 10.3(d)
Permits Section 1.1(b)(viii)
Permitted Encumbrances Section 1.1
Person Section 15.5
Personal Property Taxes Section 10.3(b)(v)
Proration Items Section 10.3(a)
Purchase Price Section 3.1(a)
Purchaser Preamble
Purchaser Indemnitees Section 14.1
Purchaser Opinion Section 4.2(b)(v)
Real Property Section 1.1(b)(i)
Real Property Leases Section 5.7(b)
Real Property Taxes Section 10.3(b)(iv)
Recipient Section 10.3(d)
Rental Charges Section 10.3(b)(ii)
Resources Section 2.2(k)
Review Period Section 3.1(b)
Royalty Payments Section 10.3(b)(vi)
Seller Preamble
Seller Benefit Plans Section 5.18(a)
Seller Indemnitees Section 14.2
Seller Opinion Section 4.2(a)(iv)
Seller USTs Section 14.1(e)
Settlement Period Section 3.1(b)
Taxes Section 2.2(j)
Third Party Claim Section 14.4
Transferred Benefit Plans Section 5.18(b)
Utility Charges Section 10.3(b)(i)
Valuation Report Section 3.1(b)
Vehicles Section 1.1(b)(v)
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of this 5th day of March, 1997, between DRY BRANCH KAOLIN COMPANY, a
Delaware corporation ("Purchaser"), and NORD KAOLIN COMPANY, a Georgia
limited partnership ("Seller").
A. Seller is engaged in the mining and processing of kaolin in the
state of Georgia and in the production of kaolin-based pigments (the
"Business"). The Business has been conducted under the names "Nord Kaolin
Company" and "Norplex".
B. Subject only to the limitations and exclusions contained in this
Agreement and on the terms and conditions hereinafter set forth, Seller
desires to sell and Purchaser desires to purchase substantially all of the
assets of Seller used in the Business.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS.
(a) At the Closing (as hereinafter defined), on and subject to the
terms and conditions of this Agreement, Seller shall sell, assign, transfer,
convey, and deliver to Purchaser, and Purchaser shall purchase, acquire, and
accept from Seller, all of the right, title, and interest of Seller in and to
the Acquired Assets (as hereinafter defined).
(b) Except as provided in Section 1.2, "Acquired Assets" shall mean all
of the right, title and interest of Seller in and to all of the following
assets, properties, contracts and rights of Seller, as the same shall exist
on the Closing Date (as hereinafter defined), which shall be delivered free
and clear of any and all liens, encumbrances, security interests, options and
other adverse claims:
(i) All real property owned by Seller, and all of Seller's right,
title, and interest in the buildings, fixtures, improvements, timber and
mineral rights and reserves (including but not limited to kaolin) located
thereon or thereunder, together with all water lines, rights of way, uses,
licenses, easements, hereditaments, tenements, and appurtenances belonging or
appertaining thereto and any and all assignable warranties of third parties
with respect thereto (the "Real Property") and, by assignment of leases, all
of Seller's rights in, to, and under all real estate leases (including,
without limitation, any assignment of a real estate lease or sublease) to
which Seller is a party, together with all of Seller's right, title, and
interest in the buildings, fixtures, improvements and mineral reserves
(including but not limited to kaolin), including construction-in-progress,
and appurtenances thereto, located on or under the real property subject to
such real estate leases, and any and all assignable warranties of third
parties with respect thereto (the "Leased Real Property");
(ii) All machinery, equipment, tools, computers, terminals,
computer equipment, office equipment, business machines, telephones and
telephone systems, parts, accessories, and the like, wherever located, and
any and all assignable warranties of third parties with respect thereto (the
"Equipment");
(iii) To the extent permitted by applicable law and the terms of
such instruments, and except for the Excluded Contracts (as hereinafter
defined), all of the contracts, collective bargaining agreements, leases,
warranties, commitments, agreements, arrangements, and purchase and sales
orders, whether oral or written, together with the right to receive income in
respect of such contracts, leases, warranties, commitments, agreements,
arrangements, and purchase and sales orders on and after the Closing
Date (individually, a "Contract" and collectively, the "Contracts");
(iv) All raw materials, in-process kaolin and finished kaolin
products (including without limitation products in transit or on
consignment), goods held for resale, samples, promotional literature,
supplies, chemicals, in-ground clay, spare parts, bags and pallets, wherever
located (the "Inventory"), together with all rights of Seller against
suppliers of the Inventory including, without limitation, Seller's rights to
receive refunds or rebates in connection with its purchase of such Inventory;
(v) All motor vehicles, trucks, forklifts, rail cars and other
rolling stock and all assignable warranties of third parties related thereto
(the "Vehicles");
(vi) All patents, designs, art work, designs-in progress,
formulations, know-how, prototypes, inventions, trademarks, trade names,
trade styles, service marks, and copyrights; all registrations and
applications therefor, both registered and unregistered, foreign and
domestic; all trade secrets, technology or processes; all computer software
(including documentation and related object and, if applicable, source
codes); and all confidential or proprietary information that are either (A)
owned by or negotiated in the name of Seller or (B) as to which Seller has
rights as licensee, constituting all of the intellectual property of Seller
used or contemplated for use in the Business (the "Intellectual Property");
(vii) All existing data, data bases, books, records,
correspondence, business plans and projections, records of sales, customer
and vendor lists, files, papers, and, to the extent permitted under
applicable law or regulation, copies of historical personnel payroll and
medical records of each of the Hired Employees (as defined in Section 11.1
hereof) in the possession of Seller, including without limitation, employment
applications, corrective action reports, disciplinary reports, notices of
transfer, notices of rate changes, other similar documents, and any summaries
of such documents regularly prepared by Seller; all reported medical claims
made for each Hired Employee; and all manuals and printed instructions of
Seller relating to the Acquired Assets and to the business operations of
Seller (the "Books and Records");
(viii) To the extent permitted under applicable law or regulation,
all licenses, permits, certificates, and other governmental or
quasi-governmental authorizations of Seller (the "Permits");
(ix) All furniture, fixtures, and leasehold improvements,
wherever located, and any and all assignable warranties covering such
furniture, fixtures, and leasehold improvements owned by Seller or in which
Seller has an interest ("Furniture and Fixtures");
(x) All credits, utility rebates or rate adjustments, or prepaid
expenses; all causes of action (except for those causes of action which are
not related to the Acquired Assets), claims, and demands of Seller; all
security deposits and utility deposits; and all other assets (other than
Excluded Assets as defined in Section 1.2 hereof) used by Seller and
necessary to operate the Business, wherever located, tangible or intangible,
provided, however, that the Acquired Assets shall not include, and Purchaser
shall not acquire, any right, title, or interest of Seller in or to the
Excluded Assets;
(xi) All noncurrent assets identified on SCHEDULE 1.1(a);
(xii) The assets of the Transferred Benefit Plans; and
(xiii) Any rights to any condemnation proceeds and any proceeds
from Seller's insurance coverages relating to the Acquired Assets.
For purposes of this Agreement, "Permitted Encumbrances" shall mean, as
to all or any portion of the Real Property and the Leased Real Property: (A)
ad valorem real property taxes for 1997 and subsequent years which are a lien
but not yet due and payable; (B) such matters as are or would be revealed by
a current and accurate survey and inspection and which are not objected to by
Purchaser; provided, however, that Purchaser shall not have the right to
object to any such matter if the same will not (i) materially adversely
affect the ability of Purchaser to mine or operate the facility or run the
Business as currently operated or otherwise use
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for its intended use the tract or parcel encumbered thereby or (ii) otherwise
materially adversely affect the marketability of such tract or parcel; (C)
such matters as are ultimately listed in Schedule B-Section 2 of Purchaser's
Title Commitments and which are not objected to by Purchaser; provided,
however, that Purchaser shall not have the right to object to any such matter
if the same will not (i) materially adversely affect the ability of Purchaser
to mine or operate the facility or the Business as currently operated or
otherwise use for its intended use the tract or parcel encumbered thereby, or
(ii) otherwise materially adversely affect the marketability of such tract or
parcel; and (D) the timber harvesting contracts set forth on SCHEDULE 1.1(b).
1.2 EXCLUDED ASSETS. Seller shall not sell and Purchaser shall not
purchase or acquire and the Acquired Assets shall not include:
(a) All cash and cash equivalents;
(b) Subject to Section 11.3 hereof, any right, title, or interest
of Seller in or to any right to use the name "Nord";
(c) The assets of any employee benefit plan other than the
Transferred Benefit Plans maintained by Seller for the benefit of the
employees of the Seller or to which Seller has made any contribution;
(d) The assets and properties used by Seller which have been
disposed of since the date of this Agreement, provided such disposition has
been made in accordance with the terms hereof;
(e) Seller's partnership record books, tax returns and records,
books of account and ledgers, and such other records having to do with
Seller's organization or capitalization;
(f) Any rights which accrue or will accrue to Seller under this
Agreement;
(g) Subject to Section 1.1(b)(xiii), any rights to any of Seller's
insurance policies or premiums (except as provided in Section 8.19 hereof);
(h) Any rights to any of Seller's claims for any federal, state,
local, or foreign tax refund;
(i) The assets, properties, and rights (including rights to
insurance proceeds) specifically listed and described on SCHEDULE 1.2;
(j) All accounts, notes and other receivables of Seller (including
without limitation the excess mileage credits receivable) (the "Accounts
Receivable"); and
(k) All rights to receive payments of capital credits for the
years through 1996, which capital credits are listed on SCHEDULE 1.2(k),
pursuant to the Agreement for Electric Service dated May 24, 1989 between
Oconee Electric Membership Corporation and Seller (the "Electric Service
Agreement").
The assets described in this Section 1.2 are hereinafter collectively
referred to as the "Excluded Assets".
ARTICLE 2
ASSUMPTION OF LIABILITIES
2.1 ASSUMPTION. Subject to Section 2.2 hereof, as of the Effective
Time, Purchaser shall assume responsibility for the performance and
satisfaction of the following, and only the following, liabilities of Seller
relating to the Business (collectively, the "Assumed Liabilities"):
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Except as described in Section 2.2(c), all of the executory obligations
and liabilities of Seller arising from and after the Closing Date, pursuant
to (i) the terms of the Real Property Leases (as defined in Section 5.7(b))
identified in SCHEDULE 5.7.2, (ii) the Contracts identified in SCHEDULES
5.6.3, 5.8.1, 5.9 OR 5.15, (iii) the Transferred Benefit Plans (as defined in
Section 5.18(b)), and (iv) all reclamation expenses for the Real Property and
Leased Real Property.
2.2 EXCLUDED LIABILITIES. Purchaser shall not assume or become liable
for any obligations, commitments, or liabilities of Seller, whether known or
unknown, absolute, contingent, or otherwise, and whether or not related to
the Acquired Assets, except for the Assumed Liabilities (the obligations and
liabilities of Seller not assumed by Purchaser are hereinafter referred to as
the "Excluded Liabilities"). Without limiting the generality of the
preceding sentence, the Excluded Liabilities include all obligations and
liabilities of Seller (i) whether or not reflected in, reserved, or accrued
against in the Latest Balance Sheet, and (ii) not specifically described in
Section 2.1 hereof, including without limitation, the following:
(a) Any liability or obligation arising out of any Seller Benefit
Plans (as defined in Section 5.18) which are not Transferred Benefit Plans;
(b) Any losses, costs, expenses, damages, claims, demands and
judgments of every kind and nature (including the defenses thereof and
reasonable attorneys' and other professional fees) related to, arising out
of, or in connection with Seller's failure to comply with the Bulk Transfer
Act or any similar statute as enacted in any jurisdiction, domestic or
foreign;
(c) Any liability or obligation arising or accruing under any
Contract, Transferred Benefit Plan or Real Property Lease prior to the
Effective Time (as hereinafter defined), and any liability or obligation
arising from or related to any breach or violation by Seller of or default by
Seller under any provision of any Contract, Transferred Benefit Plan or Real
Property Lease and any facilities abandonment charge which may become due or
payable after the Effective Time relating to any termination of the Electric
Service Agreement under the terms of the Electric Service Agreement;
provided, however, that the parties agree that the capital credits of Seller
thereunder shall be used to the extent permitted under that agreement to pay
any such charge;
(d) Any liability of Seller with respect to any claim or cause of
action, regardless of when made or asserted, which arises (i) out of or in
connection with the operation of the Business by Seller prior to the
Effective Time, (ii) with respect to any product purchased, produced or
manufactured or any service provided by Seller on or prior to the Effective
Time, including without limitation, any liability or obligation (A) pursuant
to any express or implied representation, warranty, agreement, or guarantee
made by Seller or (B) imposed or asserted to be imposed by operation of law,
in connection with any service performed or product produced, manufactured,
sold, or leased by or on behalf of Seller prior to the Effective Time,
including without limitation, any claim related to any product delivered in
connection with the performance of such service or product produced,
manufactured, sold or leased, and any claims seeking to recover for
consequential or punitive damages, lost revenue, or income, including
pursuant to any doctrine of product liability, or (iii) out of or in
connection with the operations of the Business prior to the Effective Time
under any federal, state, or local law, rule, or regulation or under any
contractual obligation relating to (A) environmental protection or clean-up,
(B) taxation, or (C) employment or termination of employment;
(e) Any liability of Seller for any actual or alleged breach of or
noncompliance with any federal, state, or local law, rule, regulation, order
or decree applicable to any Contract, Real Property Lease, Transferred
Benefit Plan or otherwise applicable to the Seller prior to the Effective
Time;
(f) Any liabilities or obligations of Seller relating to the
Excluded Assets;
(g) Any liabilities or obligations of Seller relating to sales and
use, transfer, documentary, income or other taxes levied on the transfer of
the Acquired Assets;
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(h) Any liability or obligation, arising prior to or as a result
of the Closing, to any employee, agent, or independent contractor of Seller,
whether or not employed by Purchaser after the Closing, or under any benefit
arrangement with respect thereto;
(i) Any Environmental Liabilities (as hereinafter defined);
(j) Any liability or obligation for all taxes, charges, fees,
levies or other assessments, net income, gross income, gross receipts, sales,
use, ad valorem, franchise, profits, license, withholding, payroll,
employment, social security, unemployment, excise, estimated, severance,
property or other taxes, duties, fees, assessments or charges of any kind
whatsoever (including without limitation the Michigan Single Business Tax),
including any interest, penalties or additional amounts attributable thereto
imposed by any federal, state, local or foreign governmental authority
("Taxes") payable by Seller or any member of any Affiliated group (within the
meaning of Section 1504(e) of the Internal Revenue Code of 1986, as amended
(the "Code")) or any combined or consolidated group for state or other tax
purposes of which the Seller is or has been a member, whenever incurred, for
all periods through and including the period ending immediately prior to the
Effective Time, including, without limitation, income Taxes arising as a
result of the transactions contemplated herein; and
(k) Any (i) trade accounts payable of the Business as of the
Closing Date, (ii) the wages, commissions, vacation for the calendar year in
which the Closing Date occurs, holiday, and sick pay obligations with respect
to the Hired Employees accrued through the Closing Date, (iii) long-term
debt, (iv) the current portion of and accrued interest on any long-term
indebtedness (excluding the Contracts which constitute capital equipment
leases) and loans payable, (v) obligations under the $1,900,000
Jeffersonville-Xxxxxx County Georgia Variable Rate Demand Pollution Control
Revenue Refunding Bonds Dated 6/21/94 Due 7/1/2004 (Nord Kaolin Company
Project) (the "Bonds"), (vi) amounts payable by Seller to Nord Resources
Corporation ("Resources"), Kemira Holdings, Inc. ("Kemira") or any of their
respective Affiliates and (vii) all other liabilities reflected on the Latest
Balance Sheet (as hereinafter defined).
ARTICLE 3
CALCULATION AND PAYMENT OF PURCHASE PRICE
3.1 PURCHASE PRICE.
(a) Subject to adjustment pursuant to this Section 3.1 and to the
conditions of this Agreement, the cash consideration to be paid to Seller for
the sale, transfer, and conveyance of the Acquired Assets and the assumption
of the Assumed Liabilities shall be an amount equal to Twenty Million and
No/100 Dollars ($20,000,000.00), less $735,000 in consideration for
Purchaser's obligation to assume all reclamation expenses of Seller as
described in Section 2.1(iv) (the "Estimated Purchase Price"). At Closing,
Purchaser shall pay to Seller in immediately available funds an amount equal
to $17,338,500 and shall pay into escrow $1,926,500 (the "Escrow Amount")
pursuant to the terms of an escrow agreement to be agreed upon by the
parties. The Estimated Purchase Price after any adjustments have been made
pursuant to this Section 3.1 plus the aggregate amount of the Assumed
Liabilities is referred to herein as the "Purchase Price."
(b) No later than five (5) days after the Closing Date, the Seller
will prepare and deliver to the Purchaser a statement (the "Closing
Statement") setting forth (i) Seller's best estimation of the aggregate value
(the "Aggregate Value") as of the Closing Date of the Inventory, and (ii)
Seller's quantified best estimation of any material adverse change in the
value or condition of any of the other Acquired Assets from the date of the
Latest Balance Sheet through the Closing Date (collectively, "Material
Changes"). The calculation of the Aggregate Value set forth in the Closing
Statement shall be prepared in accordance with generally accepted accounting
principles ("GAAP") applied in a manner consistent with the preparation of
the unaudited balance sheet of Norplex, Inc. as of October 31, 1996 (the
"Latest Balance Sheet") and shall include the supporting schedules and backup
for the calculation of the Aggregate Value.
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Purchaser shall have fifteen (15) days from receipt of the
Closing Statement (the "Review Period") to review the Closing Statement and
to agree or disagree as to the Aggregate Value and Material Changes reflected
thereon. Purchaser may accept Seller's computation of the Aggregate Value
and Material Changes reflected on the Closing Statement by giving Seller
written notice of such acceptance ("Acceptance Notice") at any time during
the Review Period. If Purchaser does not so accept such computation,
representatives of Seller and Purchaser shall meet as often as necessary
during the ten (10) day period immediately following the Review Period (the
"Settlement Period") in an attempt to agree upon a final computation of the
Aggregate Value and Material Changes. During the Settlement Period, each of
Purchaser and Seller shall give the other reasonable access to their
respective premises, systems, and books and records with respect to the
Acquired Assets as is reasonably necessary to make such computation.
If Purchaser and Seller are unable to agree on such
computation during the Settlement Period, all matters in dispute shall be
referred to a nationally recognized public accounting firm (other than the
respective independent auditors of Purchaser and Seller) upon which Purchaser
and Seller mutually agree in writing (the "CPA Firm"), within five (5)
business days after the expiration of the Settlement Period. The CPA Firm
shall, acting as experts and not as arbitrators, determine all matters in
dispute related to the calculation of the Aggregate Value and Material
Changes (to the extent such changes can be valued by the CPA Firm) and report
thereon (the "Valuation Report") to Purchaser and Seller within ten (10)
business days from the date such matters are referred to it, or such other
period of time (not to exceed twenty (20) calendar days) as the CPA Firm
shall determine that it needs to render such Valuation Report, and such
Valuation Report shall be final and binding on the parties hereto. If the
CPA Firm is unable to assess the value of the Material Changes, the amount of
Purchaser's estimated value of the Material Changes in dispute shall be held
back in the escrow, the remainder of the adjustments and payments will be
made as set forth in subsection (c) below, and the parties shall resolve the
dispute related to the held back amount in accordance with the arbitration
provisions of Section 15.12.
Purchaser and Seller each shall permit the CPA Firm and each
other such access to their respective premises and books and records relating
to the Acquired Assets as the CPA Firm or Purchaser or Seller may reasonably
request and shall render to the CPA Firm and each other all such reasonable
assistance as the CPA Firm or Purchaser or Seller may deem necessary or
advisable in connection with making its determinations. The fees and
expenses of the CPA Firm shall be shared equally by Purchaser and Seller.
(c) If (X) the Aggregate Value as of the Closing Date less (Y) the
Material Changes, is greater than the Aggregate Value reflected in the Latest
Balance Sheet, the escrow agent shall pay the Escrow Amount to Seller and the
Purchaser shall pay to Seller an amount equal to the difference between such
amounts. If (X) the Aggregate Value as of the Closing Date less (Y) the
Material Changes, is less than the Aggregate Value reflected in the Latest
Balance Sheet, the escrow agent shall pay to Seller the Escrow Amount minus
the difference between such amounts and the escrow agent shall pay the
remaining Escrow Amount to Purchaser. If the amount of the difference
exceeds the Escrow Amount, Seller shall pay Purchaser such excess. Any
payment required by this subsection shall be made by wire transfer to an
account designated in writing by the recipient on the third day (or the next
succeeding business day if such day is not a business day) following (i)
Seller's receipt of the Acceptance Notice, (ii) agreement by Purchaser and
Seller as to the final computation of the Aggregate Value as of the Closing
Date and the Material Changes , (iii) the delivery of the Valuation Report to
Purchaser and Seller; or (iv) the date upon which the arbitration is
concluded.
3.2 TRANSFER EXPENSES. Seller shall pay any sales and use, transfer,
documentary, or other taxes levied on the transfer of the Acquired Assets.
All Acquired Assets shall be claimed as exempt from sales or use tax by both
parties and Purchaser shall furnish Seller at Closing with appropriate sales
tax exemption certificates as reasonably requested by Seller for the
Inventory. Seller shall timely report and remit any such taxes to the
appropriate revenue authorities.
3.3 ALLOCATION OF PURCHASE PRICE. The consideration paid for the
Acquired Assets and the assumption of the Assumed Liabilities that are taken
into account in determining the amount realized for tax
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purposes (which shall equal the Purchase Price) shall be allocated among the
Acquired Assets as set forth on SCHEDULE 3.3. The parties agree to be bound
by such allocation and to report the transaction contemplated herein for
federal income tax purposes in accordance with such allocation; provided,
however, that if adjustments are made to the Estimated Purchase Price in
calculating the Purchase Price, then corresponding adjustments shall be made
to the allocation. In furtherance of the foregoing, the parties hereto agree
to execute and deliver Internal Revenue Service Form 8594 reflecting such
allocation.
ARTICLE 4
PROCEDURE FOR CLOSING
4.1 TIME AND PLACE OF CLOSING. The closing for the purchase and sale
contemplated by this Agreement (the "Closing") shall be held at the offices
of Xxxxxx & Bird, One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, within three (3) days after the conditions precedent to the
obligations of the parties set forth in Articles 8 and 9 herein are
satisfied, or at such other time and place as the parties hereto may agree in
writing (the date on which the Closing actually occurs is hereinafter
referred to as the "Closing Date"). Subject to the consummation of the
Closing on the Closing Date, the sale, assignment, transfer, and conveyance
to Purchaser of the Acquired Assets will be effective as of 12:01 AM local
time on the Closing Date (the "Effective Time").
4.2 TRANSACTIONS AT THE CLOSING. At the Closing, each of the following
items shall be delivered:
(a) Seller shall deliver to Purchaser the following:
(i) such bills of sale, motor vehicle titles, warranty deeds,
quitclaim deeds, assignments, endorsements, and other good and sufficient
instruments and documents of conveyance and transfer, in form reasonably
satisfactory to Purchaser and its counsel, as shall be necessary and
effective to sell, transfer and assign to and vest in Purchaser all of
Seller's right, title, and interests in and to the Acquired Assets, including
without limitation, good, marketable (insurable, subject to Permitted
Encumbrances, as to the Real Property), and valid title in and to all of the
Acquired Assets owned by Seller free and clear of all liens, and good,
insurable (as to the Real Property Leases) and valid leasehold interests in
and to all of the Acquired Assets leased by Seller as lessee, and all of
Seller's rights under all Contracts;
(ii) a certificate of Seller with respect to the matters
described in Sections 8.1, 8.2, 8.5, 8.6, 8.12, and 8.18 hereof;
(iii) a certificate of the Secretary or Assistant Secretary
of the General Partner of Seller with respect to the matters described in
Sections 8.7 and 8.8 hereof;
(iv) the opinion of counsel in substantially the form of
EXHIBIT A hereto (the "Seller Opinion");
(v) copies of the consents and waivers described in Section
8.5 hereof;
(vi) satisfactory evidence of the approvals described in
Section 8.5 hereof;
(vii) certificates of existence of Seller, as of a date within
twenty (20) days prior to the Closing Date, from the State of Georgia and
each jurisdiction listed in SCHEDULE 5.1.1 hereto;
(viii) affidavit(s) of title stating that (a) there are no
parties in possession of any of the Real Property or Leased Real Property
other than Seller (or otherwise specifically setting forth any such other
parties' rights and the source and extent of such parties' rights), and (b)
Seller has not caused any work to be performed on any of the Real Property or
Leased Real Property within one hundred (100) days of the date of such
affidavit(s), or if Seller has caused any such work to be performed within
one hundred (100) days of
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such date(s) that all such work has been completed and fully paid for, and
such other indemnities, lien waivers and other documentation as Purchaser's
title insurance company may reasonably request in order to permit Purchaser's
title insurance policy to be issued without exceptions as to matters arising
in the "gap", mechanic's or materialman's liens, third parties in possession
(other than specifically enumerated third parties as set forth above that are
reasonably acceptable to Purchaser pursuant to the terms of this Agreement),
and rights or claims of real estate brokers;
(ix) a 1099 certificate to the extent applicable;
(x) a duly executed certificate stating that Seller is a
Georgia resident, or that Seller is otherwise exempt from withholding under
O.C.G.A. Section 48-7-128, as applicable;
(xi) a duly executed certificate stating that Seller is not
a "foreign person" for United States income tax purposes, in accordance with
Section 1445 and Section 897 of the Internal Revenue Code of 1986, as amended;
(xii) recordable originals of any Real Property Leases, or
recordable short forms thereof, which have not previously been recorded in
the appropriate real property records; and
(xiii) such other evidence of the performance of all covenants
and the satisfaction of all conditions required of Seller by this Agreement
at or prior to the Closing Date as Purchaser or its counsel may reasonably
require.
The documents and certificates to be delivered hereunder by or on behalf
of Seller on the Closing Date shall be in form and substance reasonably
satisfactory to Purchaser and its counsel.
(b) Purchaser shall deliver to Seller the following:
(i) wire transfer(s) in immediately available funds in
amounts aggregating $17,338,500 to Seller or as directed by Seller, and
$1,926,500 representing the Escrow Amount to the designated escrow agent;
(ii) an instrument or instruments of assumption of the
Assumed Liabilities, duly executed by Purchaser, and reasonably satisfactory
in form and substance to Seller and its counsel;
(iii) a certificate of Purchaser with respect to the matters
described in Sections 9.1 and 9.2 hereof;
(iv) a certificate of the Secretary or Assistant Secretary
of Purchaser with respect to the matters described in Sections 9.3 and 9.6
hereof;
(v) the opinion of counsel in substantially the form of
EXHIBIT B hereto (the "Purchaser Opinion");
(vi) a certificate of existence of Purchaser, as of a date
within twenty (20) days prior to the Closing Date, from the States of
Delaware and Georgia;
(vii) such other evidence of the performance of all covenants
and satisfaction of all of the conditions required of Purchaser by this
Agreement, at or before the Closing Date, as Seller or its counsel may
reasonably require; and
(viii) a 1099 certificate to the extent applicable.
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The documents and certificates to be delivered hereunder by or on behalf
of the Purchaser on the Closing Date shall be in form and substance
reasonably satisfactory to the Seller and its counsel.
4.3 CONVEYANCE OF TITLE TO REAL PROPERTY AND ASSIGNMENT OF REAL PROPERTY
LEASES.
(a) Seller shall convey title to the Real Property to Purchaser by
warranty deed in a form customarily used in the State of Georgia for all Real
Property located in Georgia. Each such deed shall be executed in accordance
with the requirements of the laws of the State of Georgia and shall be in
such form as will permit the deed to be recorded. Seller shall transfer and
assign to Purchaser its rights under the Real Property Leases (and its rights
in and to all deposits thereunder and all buildings, other structures,
improvements and mineral reserves permitted to be retained or removed by the
lessee thereunder) by transfer and assignment in form reasonably acceptable
to Purchaser and its counsel. Regardless of whether Purchaser objects to the
same as provided hereinbelow, the Real Property and the Leased Real Property
shall not be subject to (i) any mortgage, deed of trust, security deed,
security agreement, judgment, lien or claim of lien, or any other title
exception or defect created, caused, suffered or incurred by Seller that is
monetary in nature, Seller hereby agreeing to pay and satisfy of record any
such monetary title defects or encumbrances prior to or at Closing at
Seller's expense, or (ii) any leases, rental agreements or other rights of
occupancy of any kind (other than the Real Property Leases), whether oral or
written, except as disclosed to and accepted by Purchaser as provided
elsewhere herein.
(b) Prior to the Closing Date, Purchaser shall have examined the
title and, at Purchaser's option, the survey, to each parcel of Real Property
and Leased Real Property and notified Seller in writing of any objections to,
defects in or encumbrances upon Seller's title to or interest in such Real
Property or Leased Real Property other than Permitted Encumbrances. If
Seller satisfies all such objections to title defects and encumbrances, then
the transaction contemplated hereby shall be closed in accordance with the
terms and conditions set forth herein. If Seller does not satisfy all such
objections to title defects and encumbrances prior to the Closing Date, then
Purchaser shall elect either: (i) if the Real Property or Leased Real
Property is a key property listed on SCHEDULE 4.3(b), not to close the
transaction contemplated hereby, in which event all parties shall be released
from any further obligations or liability, except as expressly set forth in
Article 13 or otherwise; (ii) to close the transaction contemplated hereby
without regard to such unsatisfied defects and encumbrances, in which event
the transaction contemplated hereby shall be closed in accordance with its
terms, without a reduction in Purchase Price, and all such unsatisfied title
defects and encumbrances shall be exceptions to Seller's warranty of title;
or (iii) to close the transaction contemplated hereby, excluding, however,
the portion of the Real Property (or the applicable Real Property Lease to
the extent of an unsatisfied objection with respect to the Leased Real
Property) having such title defects and encumbrances with a corresponding
reduction in the Purchase Price applicable to such Real Property or Real
Property Lease so excluded for the value set forth on SCHEDULE 4.3(b)(ii).
(c) Seller shall not transfer, assign, sublease or encumber the
Real Property or any part thereof, or its interest in the Leased Real
Property or any part thereof from the date hereof until the first to occur of
the Closing Date or the termination of this Agreement pursuant to Article 13
hereof. Notwithstanding anything in Section 4.3(b) hereof to the contrary,
Purchaser shall have the right to object to any title matters other than
Permitted Encumbrances which come into existence after the date of
Purchaser's title examination but prior to Closing.
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4.4 SURVEY AND INSPECTION OF PROPERTY.
(a) Purchaser and Purchaser's agents, employees and independent
contractors shall have the right and privilege on reasonable notice to enter
upon the Real Property and the Leased Real Property prior to the Closing Date
to inspect the Real Property and the Leased Real Property and to conduct soil
borings and other environmental, geological, engineering, percolation,
hydrologic, feasibility, or landscaping tests or studies, all at Purchaser's
sole cost and expense, provided such testing does not unreasonably interfere
with the operation of the Business at that location. Purchaser indemnifies
Seller from and against any liability or obligation arising out of such entry
or testing by Purchaser or Purchaser's agents, employees, or independent
contractors.
(b) Each parcel of Real Property shall be described in the deed
conveying such parcel and other closing documents either by (i) the metes and
bounds description set forth for such parcel (if any) on EXHIBIT A attached
to and incorporated into said SCHEDULE 5.7.1 by reference, or (ii) the metes
and bounds description of such parcel set forth in the deed vesting title to
such parcel in Seller, as said metes and bounds descriptions in item (i) or
(ii) may be modified by mutual agreement of the parties acting in good faith
with respect thereto; provided, however, in the event Purchaser causes a new
survey of a parcel of Real Property to be made by a land surveyor registered
or licensed in Georgia, and the resulting plat of survey accurately depicts
the boundaries of such Real Property and those characteristics of such Real
Property that would be revealed by a careful inspection of such Real Property
and is otherwise reasonably acceptable to Seller, then Seller shall also
execute and deliver to Purchaser at Closing a quitclaim deed for such parcel
using the metes and bounds legal description therefor depicted on such new
survey.
4.5 ENVIRONMENTAL LIABILITIES.
(a) Purchaser has furnished Seller with a copy of the Xxxxxx
Associates (the "Environmental Consultants") Environmental Site Assessment of
Nord Kaolin, Jeffersonville, Georgia (the "Environmental Site Assessment")
conducted at the Purchaser's expense. Seller has furnished Purchaser with a
notebook containing environmental due diligence documents (the "Due Diligence
Book") received with the December 19, 1996 letter from Xxxxx X. Xxxxx, which
describes the environmental condition of the Jeffersonville, Georgia plant.
Purchaser has determined that certain Environmental Liabilities described in
the Due Diligence Book must be resolved by Seller pursuant to Section 4.5(b)
below. The environmental liabilities to be resolved are listed on SCHEDULE
4.5 hereto ("Environmental Liabilities").
(b) As soon as practicable following the date hereof, Seller
shall, for each Environmental Liability at Seller's sole cost and expense,
begin the action shown on SCHEDULE 4.5 hereto with respect to all
Environmental Liabilities listed on that Schedule utilizing the services of
such firm as Seller selects, subject to Purchaser's consent, which shall not
be unreasonably withheld, and indemnify and hold harmless Purchaser as
provided in Section 14.1(f) hereof, for all costs and expenses incurred by
Purchaser in effecting any other action required by any governmental agency
or instrumentality or any court or arbitration panel having jurisdiction over
the parcel. Purchaser hereby grants Seller, its employees and
representatives the non-exclusive and unrestricted right of access to such
parcels requiring action, as necessary to allow Seller to perform and
complete such action, and Purchaser agrees that it shall not, and shall cause
its employees and representatives not to, interfere with such actions. All
such actions shall be completed in a manner so as not to unreasonably
interfere with Purchaser's use of the parcels being remediated. Seller
hereby covenants and agrees to indemnify and hold harmless Purchaser from any
and all loss, liability, costs, claims, demands, damages, actions, causes of
action and suits arising out of or in any manner related to the actions taken
under this subsection.
4.6 CERTAIN CONSENTS. To the extent that Seller's rights under any
agreement, Contract, commitment, lease, Permit, Real Property Lease or other
Acquired Asset to be assigned to Purchaser hereunder may not be assigned without
the consent of another person which has not been obtained prior to the Closing
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Date, and which is important to the ownership, use or disposition by
Purchaser of an Acquired Asset, this Agreement shall not constitute an
agreement to assign the same if an attempted assignment would constitute a
breach thereof or be unlawful, and Seller, at its expense, shall use its
reasonable best efforts to obtain any such required consent(s) as promptly as
possible. If any such consent shall not be obtained or if any attempted
assignment would be ineffective or would impair Purchaser's rights under the
Acquired Asset in question so that Purchaser would not in effect acquire the
benefit of all such rights, Seller, to the maximum extent permitted by law
and the specific Acquired Asset and at Seller's expense, shall act after the
Closing as Purchaser's agent in order to obtain for the Purchaser the
benefits thereunder, and Seller shall cooperate, to the maximum extent
permitted by law and the specific Acquired Assets with Purchaser in any other
reasonable arrangement designed to provide such benefits to Purchaser,
including any sublease or subcontract or similar arrangement. Purchaser
shall continue to have the right to terminate this Agreement as provided in
Section 13.1(b) hereof if any condition in Article 8 becomes impossible of
performance, or has not been satisfied in full or previously waived by
Purchaser in writing at or prior to the Closing Date.
4.7 EMINENT DOMAIN. If, after the date hereof and prior to the
Closing, Seller receives notice of the commencement or threatened
commencement of eminent domain or other like proceedings against the Real
Property or the Leased Real Property or any portion thereof, Seller shall
immediately notify Purchaser, and Purchaser shall elect within fourteen (14)
days from and after such notice, by written notice to Seller, either (a) only
with respect to any property listed on SCHEDULE 4.3(b), not to close the
transaction contemplated hereby, in which event except as expressly set forth
in Article 13 or otherwise, this Agreement shall be void and of no further
force and effect; (b) to close the transaction contemplated hereby in
accordance with its terms but subject to such proceedings, in which event the
Purchase Price shall not be reduced, and Seller shall assign to Purchaser
Seller's rights in any condemnation award or proceeds or (c) to close the
transaction contemplated hereby, excluding, however, the portion of the Real
Property or Leased Real Property subject to such proceedings with a
corresponding reduction in the Purchase Price applicable to such Real
Property or Leased Real Property so excluded. If Purchaser does not make
such election within the aforesaid fourteen (14) day period, Purchaser shall
be deemed to have elected to close the transaction contemplated hereby in
accordance with clause (b) of this Section 4.7.
4.8 FURTHER ASSURANCES. Seller from time to time after the Closing
Date, at Purchaser's request, will execute, acknowledge, and deliver to
Purchaser such other instruments of conveyance and transfer and will take
such other actions and execute and deliver such other documents,
certifications, and further assurances as Purchaser may reasonably require in
order to vest more effectively in Purchaser, or to put Purchaser more fully
in possession of, any of the Acquired Assets, or to better enable Purchaser
to complete, perform, or discharge any of the Assumed Liabilities. Each of
the Parties hereto will cooperate with the other and execute and deliver to
the other parties hereto such other instruments and documents and take such
other actions as may be reasonably requested from time to time by any other
party hereto as necessary to carry out, evidence, and confirm the intended
purposes of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that:
5.1 ORGANIZATION AND QUALIFICATION. Seller is a limited partnership
duly organized and validly existing under the laws of the State of Georgia.
Norplex, Inc., a Georgia corporation (the "General Partner") is the sole
general partner of Seller. Seller is duly qualified and is in good standing
in each of the jurisdictions set forth on SCHEDULE 5.1.1, which constitute
all of the jurisdictions where Seller owns or leases property or where Seller
conducts business operations. SCHEDULE 5.1.2 hereto contains the address
(including city, county, state, or other jurisdiction and zip code) of each
location where any of the Acquired Assets are located and each trade name
under which Seller operates at each such address and any additional business
and trade names under which the Seller has conducted business at each such
address in the five (5) years preceding the date of this Agreement.
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5.2 AUTHORITY. Seller has full power and authority to enter into this
Agreement and the agreements to which it is a party contemplated hereby, or
executed in connection herewith (collectively, this Agreement and such other
agreements shall be referred to hereinafter as the "Acquisition Documents"),
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Seller of each of the Acquisition
Documents to which Seller is a party has been duly and validly authorized and
approved by any necessary action on the part of Seller, Resources and the
General Partner, including without limitation the actions required by Section
3 of that certain Shareholder Agreement dated March 11, 1993 among the
General Partner, Kemira, Resources and Nord Kaolin Corporation. Each of the
Acquisition Documents to which Seller is a party is the legal, valid, and
binding obligation of Seller enforceable against Seller in accordance with
its terms, except as enforceability may be limited by applicable equitable
principles (whether applied in a proceeding at law or in equity) or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, to the exercise of judicial discretion in
accordance with general equitable principles, and to equitable defenses that
may be applied to the remedy of specific performance. Neither the execution
and delivery by Seller of any of the Acquisition Documents to which Seller is
a party nor, subject to obtaining the consents and approvals described in
SCHEDULES 5.6.3, 5.7.2, and 5.8.1, and the transfer of the Permits described
in SCHEDULE 5.16, the consummation by Seller of the transactions contemplated
thereby will (i) violate Seller's partnership documents or the General
Partner's Certificate of Incorporation or Bylaws, (ii) violate any provisions
of law or any order of any court or any governmental entity to which Seller
or the General Partner is subject, or by which the Acquired Assets may be
bound, (iii) conflict with, result in a breach of, or constitute a default
under any indenture, mortgage, lease, agreement, or other instrument to which
either the Seller or the General Partner is a party or by which it or any of
the Acquired Assets may be bound, or (iv) result in the creation of any lien,
charge, or encumbrance upon any of the Acquired Assets, or result in the
acceleration of the maturity of any payment date of any of the Assumed
Liabilities, or increase or adversely affect the obligations of Purchaser
under any of the Assumed Liabilities. Seller has complied with any and all
options, repurchase agreements, and rights of first refusal relating to the
consummation of the transactions contemplated by the Acquisition Documents
such that all applicable rights of third parties thereunder have either
expired, lapsed or been terminated.
5.3 SUBSIDIARIES; JOINT VENTURES. No shares of any corporation or any
ownership or other investment interest, either of record, beneficially or
equitably, in any association, partnership, joint venture or other legal
entity are included in the Acquired Assets.
5.4 BALANCE SHEETS. Attached as SCHEDULE 5.4 are true, correct, and
complete copies of the Latest Balance Sheet with supporting schedules and
backup for the period then ended, and the balance sheet of the Seller as of
the end of December of 1996, together with any monthly balance sheets
prepared since the December balance sheet prior to the date hereof
(collectively, the "Balance Sheets"). The Balance Sheets have been prepared
from the books and records of Seller. The Latest Balance Sheet presents
fairly in accordance with GAAP the financial position of the Seller at the
date indicated. The monthly Balance Sheets of the Seller have been prepared
in accordance with Seller's historic practice, consistently applied
throughout the periods involved. Seller has no material liabilities or
obligations (secured or unsecured, whether accrued, absolute, direct,
indirect, contingent or otherwise, and whether due or to become due) which
are not fully accrued or reserved against in the Balance Sheets in accordance
with GAAP. Seller has not received any advice or notification from its
independent certified public accountants that Seller has used any improper
accounting practice that would have the effect of not reflecting or
incorrectly reflecting properties, assets or liabilities in the Balance
Sheets. The books, records, and accounts of Seller accurately and fairly
reflect, in reasonable detail, the transactions and the assets and
liabilities of Seller. Seller has not engaged in any transaction, maintained
any bank account, or used any of the funds of Seller except for transactions,
bank accounts, and funds which have been and are reflected in the normally
maintained books and records of the Seller.
5.5 INVENTORY. Subject to sales in the ordinary course of business,
all Inventory, whether reflected on the Balance Sheets or subsequently
acquired, is now and at the Closing Date will be located (i) on the Real
Property described on SCHEDULE 5.7.1, (ii) on the Leased Real Property
described on SCHEDULE 5.7.2 or (iii) in transit or on consignment as
described in SCHEDULE 5.5 consistent with past practices. The Inventory
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consists of items of a quality, quantity and condition usable and salable in
the ordinary course of business without discount or reduction, conforms to
GAAP, is valued at a reasonable amount in accordance with GAAP and based on
the ordinary course of business consistent with the historical valuation
policy of the Seller, is not subject to any write-down or write-off in excess
of the reserves stated on the Latest Balance Sheet, and has been or will be
acquired by Seller only in bona fide transactions entered into in the
ordinary course of business. Subject to sales in the ordinary course of
business, except as described in SCHEDULE 5.5 or SCHEDULE 5.6.2, Seller has
now and on the Closing Date will have valid legal title to its Inventory free
and clear of any consignments, liens, claims, charges, and encumbrances.
Seller is not under any liability or obligation with respect to the return of
Inventory in the possession of wholesalers, retailers, or other customers,
except for the Inventory described on SCHEDULE 5.5 as being on consignment.
5.6 PERSONAL PROPERTY.
(a) SCHEDULE 5.6.1 contains a true and correct list and a
description (including serial number, vehicle registration, and tag number)
of all Vehicles, Equipment and all Furniture and Fixtures and all other items
of personal property owned by Seller and valued in excess of Two Thousand
Five Hundred Dollars ($2,500.00). Seller has good and marketable title to
all of its owned Furniture and Fixtures, Equipment, Vehicles, and other items
of personal property included among the Acquired Assets (whether or not
disclosed in SCHEDULE 5.6.1), free and clear of all liens, claims, charges,
security interests, and other encumbrances of any kind and of any nature,
except as disclosed on SCHEDULE 5.6.2.
(b) SCHEDULE 5.6.3 contains a list of all leases for Vehicles,
Equipment, Furniture and Fixtures, or other items of personal property, which
leases are included among the Acquired Assets. True and correct copies of
each lease listed on SCHEDULE 5.6.3 and any amendments, extensions, and
renewals thereof have been delivered to Purchaser. Each of the leases
described on SCHEDULE 5.6.3 is in full force and effect and, except as set
forth on SCHEDULE 5.6.4, there are no existing defaults or events of default,
real or claimed, or events which with notice or lapse of time or both would
constitute defaults, the consequences of which, severally or in the
aggregate, would have an adverse effect on the operations of Seller. No
rights of Seller under such leases have been assigned or otherwise
transferred as security for any obligation of Seller. Except as described on
SCHEDULE 5.6.3, all such leases are fully assignable without the consent of
any third party.
(c) The Equipment currently used by Seller and included among the
Acquired Assets (i) is in working order and is usable in a manner consistent
with past use, reasonable wear and tear excepted, (ii) has been regularly and
properly maintained substantially in accordance with reasonable and customary
industry standards and applicable regulations, and (iii) contain no defects
or malfunctions which alone or in the aggregate are reasonably likely to
result in any disruption or interruption in the business operations of Seller.
5.7 REAL PROPERTY; LEASED REAL PROPERTY.
(a) SCHEDULE 5.7.1 contains a true and correct list of each parcel
of Real Property and a summary description of all plants and structures
located thereon. For ease of reference, metes and bounds descriptions have
been provided in Exhibit A to SCHEDULE 5.7.1, but Seller does not represent
the accuracy of such metes and bounds descriptions herein. Except as
reflected in the original or amended title insurance binders obtained by
Purchaser or otherwise revealed by Seller in SCHEDULE 5.7.1 or SCHEDULE
5.6.2, Seller has good and marketable fee simple title to the Real Property,
free and clear of all mortgages, liens, charges, encumbrances, and purchase
options and other rights to or against such property. The conveyance of the
Real Property to Purchaser shall not cause a breach, default, or event of
default under any of the protective covenants or any other document or
instrument encumbering the Real Property.
(b) SCHEDULE 5.7.2 contains a true and correct list of each parcel
of Leased Real Property and a summary description of all plants and permanent
structures located on each parcel of Leased Real Property. True and correct
copies of each Lease pursuant to which Seller leases the Leased Real Property
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and any amendments, extensions, assignments, and renewals thereof (the "Real
Property Leases"), as reflected on SCHEDULE 5.7.2, have been delivered to
Purchaser. Seller hereby represents that it is the lessee under each of the
Real Property Leases. Each Real Property Lease is in full force and effect
and there is no existing default or event of default, real or claimed, or
event which with notice or lapse of time or both would constitute a default
thereunder by Seller or, to the knowledge of Seller, any other party to such
Real Property Leases. Except as described in SCHEDULE 5.7.2 or SCHEDULE
5.6.2, Seller's interest in the Real Property Leases is free and clear of any
mortgages and liens, and is not subject to any deeds of trust, assignments,
subleases, or rights of any third parties known to or created or permitted by
Seller other than the lessor thereof or any mortgagees of such lessors. The
assignment of any of the Real Property Leases to Purchaser shall not cause a
breach, default, or event of default under any of the Real Property Leases or
any other lease or mortgage relating to such parcel or Real Property Lease
except for those leases or mortgages identified on SCHEDULE 5.7.2 or SCHEDULE
5.6.2 as requiring consents. Seller shall use its best efforts to obtain the
necessary consents or estoppels pursuant to Section 7.6.
(c) All improvements on the Real Property and the Leased Real
Property constructed by Seller conform to all applicable state and local
laws, use restrictions, building ordinances, and health and safety ordinances
the noncompliance of which would have an adverse effect on Seller's current
ownership or use of such property by Seller, and the property is zoned for
the various purposes for which the Real Property and the Leased Real Property
and improvements thereon are presently being used by Seller.
(d) Seller has received no written notice of any pending or
threatened litigation, condemnations, planned public improvements,
annexation, special assessments, zoning or subdivision changes, or other
adverse claims affecting the Real Property or the Leased Real Property.
(e) There is no private restrictive covenant or governmental use
restriction (including zoning) known to Seller, on all or any portion of the
Real Property or the Leased Real Property which prohibits the current or
intended use of the Real Property and the Leased Real Property.
(f) All licenses, permits and approvals required for the occupancy
and operation of the Real Property and the Leased Real Property (with
appurtenant parking uses) as presently being or intended to be used have been
obtained and are in full force and effect and Seller has received no notices
of violations in connection with such items.
(g) Seller does not have in its possession any studies or reports
which indicate any defects in the design or construction of any of the
improvements on the Real Property or the Leased Real Property.
(h) Seller has not failed to pay any taxes, assessments, or other
charges so as to adversely affect the present or intended use of the Real
Property or Leased Real Property.
(i) There is no pending litigation or dispute, and Seller has
received no notice of any disputes, concerning the location of the lines and
corners of the Real Property, and Seller has not been served with any legal
action concerning the location of the lines and corners of the Real Property.
(j) No person or entity, other than Purchaser, has any right,
agreement, commitment, option, right of first refusal or any other agreement,
whether oral or written, with respect to the purchase, assignment or transfer
of all or any portion of the Real Property.
(k) The Real Property is not subject to or affected by any special
assessment for public improvements or otherwise, whether or not presently a
lien upon the Real Property. Seller has made no commitment to any
governmental authority, utility company, school board, church or other
religious body, homeowner or homeowner's association or any other
organization, group or individual relating to the Real Property which would
impose an obligation upon Seller or its successors or assigns to make any
contributions
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or dedications of money or land, or to construct, install or maintain any
improvements of a public or private nature as part of the Real Property or
upon separate lands. No governmental authority has imposed any requirement
that Seller pay, directly or indirectly, any special fees or contributions or
incur any expenses or obligations in connection with the development of the
Real Property or any portion thereof, other than any regular and
nondiscriminatory local real estate or school taxes assessed against the Real
Property. The parcels comprising the Real Property are separately assessed
for real property tax assessment purposes and are not combined with any other
real property for tax assessment purposes. Seller has received no notice of
any contemplated or actual reassessment of the Real Property or any portion
thereof for general real estate tax purposes. As of the date hereof, all due
and payable taxes, assessments, water charges and sewer charges affecting the
Real Property and, to Seller's knowledge, the Leased Real Property, or any
portion thereof have been paid.
(l) The parcels comprising the Real Property constitute separately
subdivided, legally distinct parcels of land. Seller has complied with all
applicable laws, ordinances, regulations, statutes, rules and restrictions
pertaining to and affecting the Real Property which relate to such
subdivision.
(m) There is no default or breach by Seller nor, to the best of
Seller's knowledge, any other party thereto, under any covenants, conditions,
restrictions or easements which may affect the Real Property or the Leased
Real Property or any portion or portions thereof which are to be performed or
complied with by the owner of the Real Property or the Leased Real Property,
and no condition or circumstance exists which, with the giving of notice or
the passage of time, or both, would constitute a default or breach by Seller
nor, to the best of Seller's knowledge, any other party thereto, under any
such covenants, conditions, restrictions, rights-of-way or easements.
(n) There are no tenants of the Real Property or, except as set
forth on SCHEDULE 5.7.3, the Leased Real Property or any portion or portions
thereof and no person or entity now has, or at the time of Closing will have,
any possessory interest in the Real Property or, except as set forth on
SCHEDULE 5.7.3, the Leased Real Property, under a lease or otherwise, except
for Seller whose total interest in the Real Property and the Leased Real
Property will be transferred to Purchaser at Closing, and except as otherwise
disclosed to Purchaser as provided elsewhere herein.
5.8 CONTRACTS.
(a) SCHEDULE 5.8.1 contains a true and correct list of all
Contracts not otherwise listed on SCHEDULES 5.6.3, 5.7.2, 5.9 or 5.15 that
(i) has a duration of six (6) months or more, (ii) requires any party thereto
to pay $25,000 or more, or (iii) is between Seller and any officer,
stockholder, director, employee, or affiliate and all modifications,
amendments, renewals, or extensions thereof. Each of the Contracts (other
than the Requirements Contract between Seller and Kemira, Inc. dated March
11, 1993) was entered into prior to the Closing Date in the ordinary course
of business on terms substantially consistent with Seller's practice prior
thereto. A true and complete copy of each contract has been provided to
Purchaser. Except as listed on SCHEDULES 5.6.3, 5.7.2, 5.8.1, 5.9 or 5.15,
Seller is not a party to any written or legally binding oral:
(i) agreement, contract, or commitment with any present or
former employee or consultant or for the employment of any person, including
any consultant;
(ii) agreement, contract, or commitment for the future
purchase of, or payment for, supplies or products, or for the performance of
services by a third party which supplies, products or services involve in any
one case $25,000 or more;
(iii) agreement, contract or commitment to sell or supply
products or to perform maintenance, services or similar duties involving in
any one case $25,000 or more;
(iv) distribution, dealer, representative, or sales agency
agreement, contract,
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or commitment;
(v) lease under which Seller is lessor relating to the
Acquired Assets or any property at which the Acquired Assets are located;
(vi) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement, or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of
credit or guarantee, pledge, or undertaking of the indebtedness of any other
person which will not be terminated at or prior to the Closing Date and is
currently listed on SCHEDULE 5.8.2 as an excluded contract (the "Excluded
Contracts");
(vii) agreement, contract, or commitment for any charitable or
political contribution;
(viii) agreement, contract, or commitment limiting or
restraining the business operations or Purchaser from engaging or competing
in any manner or in any business, nor, to Seller's knowledge, is any employee
of Seller subject to any such agreement, contract, or commitment;
(ix) material agreement, contract, or commitment not made in
the ordinary course of business; or
(x) agreement, contract or transaction with any Affiliate
of the Seller or the General Partner.
(b) SCHEDULE 5.8.3 contains a true and correct list of all
commitments for capital expenditures or repairs that have been approved or
made prior to the date of this Agreement in excess of $25,000 by Seller and
that remain outstanding as of the date hereof.
(c) Each of the Contracts is in full force and effect and there
exists no material breach or violation of or default under any of such
Contracts by Seller or, to the knowledge of Seller, any other party to such
Contracts or any event which, with notice or the lapse of time, or both, will
create a material breach or violation thereof or default thereunder by Seller
or, to the knowledge of Seller, any other party to such Contracts. Except as
set forth on SCHEDULES 5.6.3, 5.7.2, 5.8.1, 5.9 or 5.15, each such Contract
listed therein is fully assignable without the consent of any third party.
(d) Except as indicated on SCHEDULE 5.13, there exists no actual
or, to the best knowledge of Seller, any threatened termination,
cancellation, or limitation of, or any amendment, modification, or change to
any Contract, which would have a material adverse effect on the business or
condition, financial or otherwise, of Seller, including without limitation,
(i) the business relationship of Seller with any customer, distributor, or
related group of customers or distributors whose purchases individually or in
the aggregate are material to the operations and financial condition of
Seller, (ii) the requirements of any customer or related group of customers
of Seller whose purchases individually or in the aggregate are material to
the operations and financial condition of Seller, or (iii) the business
relationship of Seller with any material supplier.
(e) Seller has not granted any power of attorney affecting or with
respect to the Acquired Assets that will remain outstanding as of the Closing
Date.
(f) SCHEDULE 5.8.4 contains a true and correct list of customers
which collectively accounted for eighty percent (80%) of Seller's revenues
during the fiscal year ended December 31, 1996, and for the period commencing
January 1, 1997 through the last day of the month preceding the date hereof,
together with the dollar amount of sales made to each customer for each such
period.
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5.9 INTELLECTUAL PROPERTY. SCHEDULE 5.9 contains a true and correct
list of the Intellectual Property used or contemplated for use by Seller,
containing a brief description of each item of Intellectual Property and the
nature of Seller's interest therein. The Acquired Assets include and, upon
the purchase of those assets, Purchaser will own or have the uncontested
right to use all, patents, designs, art work, designs-in-progress,
formulations, know-how, inventions, trademarks, trade names, trade styles,
service marks, copyrights, manufacturing processes, and confidential or
proprietary information necessary for the conduct of the Business as
presently conducted. No claim is pending or, to the best of Seller's
knowledge threatened, and Seller has received no notice that the conduct of
the Business (including without limitation, Seller's use of any Intellectual
Property) infringes upon or conflicts with any rights claimed therein by any
third party, nor is Seller aware of any unasserted claim the assertion of
which is probable. No use by Seller of any Intellectual Property licensed to
it violates the terms of any agreement pursuant to which it is licensed. No
claim is pending, or to the best of Seller's knowledge threatened, which
alleges that any Intellectual Property owned or licensed by Seller or which
Seller otherwise has the right to use is invalid or unenforceable by Seller,
nor is Seller aware of any such claim that is unasserted, but the assertion
of which is probable. Except as set forth on SCHEDULE 5.9, Seller does not
manufacture products which are the subject of patents, patent applications,
copyrights, copyright applications, trademarks, trademark applications, trade
styles, service marks, or trade secrets owned by or licensed from third
parties. Except as shown on SCHEDULE 5.9, no royalties or fees are payable
by Seller to anyone for use of the Intellectual Property. True, correct, and
complete copies of all agreements (including without limitation the License
for Proprietary Pigment Technologies dated September 1, 1986 between Seller
and Industrial Progress, Inc., including any and all addenda, amendments,
supplements and modifications thereto (the "License Agreement")) pursuant to
which Seller has any license or right to use any Intellectual Property, are
attached to SCHEDULE 5.9. All such agreements are in full force and effect
and there are no existing defaults or events of default, real or claimed, or
events which with or without notice or lapse of time or both would constitute
defaults under such agreements that would give the non-defaulting party a
right to terminate such agreement or a right to receive any payment pursuant
to such agreement. Except for the obligation to pay future royalties on the
sale of licensed products and minimum royalties under the License Agreement,
all other financial obligations or obligations to issue stock options or
equity under the terms of the License Agreement have been satisfied and no
other such obligations of either kind of Seller remain outstanding. Seller
has not received any notice that the manufacture, use, or sale by Seller of
its products, or any component or part thereof, nor any manufacturing
operation or machinery employed by Seller, violates or infringes upon any
claims of any United States or foreign patent or patent application owned or
held by any third party, nor is Seller aware of any unasserted claim the
assertion of which is probable. All Seller's Intellectual Property and
registrations, applications, and agreements related thereto are fully
assignable to Purchaser without the consent of any third party except as
shown on SCHEDULE 5.9.
5.10 INSURANCE. The Acquired Assets are insured under various policies
of general liability and other forms of insurance, which policies are in
amounts adequate in the reasonable judgment of Seller. Seller has not been
refused any insurance by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the past five (5)
years. There are no outstanding requirements or recommendations by any
current insurer or underwriter with respect to the Acquired Assets which
require or recommend changes in the conduct of the Business, or require any
repairs or other work to be done with respect to any of the Acquired Assets
or operations of the Business.
5.11 ENVIRONMENTAL MATTERS AND EMPLOYEE SAFETY AND HEALTH.
(a) Except as set forth in SCHEDULE 5.11.1 hereto, Seller,
(i) is in material compliance with all laws, rules, and
regulations relating to environmental protection. Seller has not (A) been
notified that it is potentially liable under or (B) received any requests for
information or other correspondence concerning any site or facility under,
nor has Seller any reason to believe that it is considered potentially liable
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or any similar federal or state law;
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(ii) has accurately prepared and timely filed with the
appropriate jurisdictions all reports and filings required pursuant to any
federal, state, or local law, regulation, statute, or order applicable to or
affecting the Seller or the Acquired Assets except where the failure to
prepare and file such reports and filings if not so performed and filed,
would cause an adverse effect on the ownership, operation or disposal of the
Acquired Assets, taken as a whole;
(iii) has not entered into or received any consent decree,
compliance order, or administrative order relating to environmental
protection;
(iv) has not entered into or received nor is Seller in
default under any judgment, order, writ, injunction or decree of any federal,
state, or municipal court or other governmental authority relating to
environmental protection;
(v) has obtained all permits, licenses, approvals, consents,
orders, and authorizations relating to environmental protection
("Environmental Permits") which are required under federal, state, or local
laws, rules, and regulations in connection with Seller's business operations
or the ownership, use, or lease of the Acquired Assets, and which, if not so
obtained, would cause an adverse effect on the ownership, operation or
disposal of the Acquired Assets, taken as a whole, and SCHEDULE 5.11.2
contains a complete list and description of each such Environmental Permit.
Except as described in SCHEDULE 5.11.2, Seller is in compliance with each
such Environmental Permit (including any information provided on the
applications therefor) and no Environmental Permit prohibits or materially
restricts Seller from operating any Equipment covered by such Environmental
Permit as currently being conducted; and
(vi) has not been, and currently is not, a "generator" of
"hazardous waste" (as those terms are defined by the Resource Conservation
and Recovery Act of 1976 and the regulations promulgated thereunder), for the
purposes of obtaining an EPA identification number under 40 C.F.R. Section
262.12(a) or complying with the manifest system under Subpart 8 of 40 C.F.R.
Part 262.
(b) With respect to the Real Property or the Leased Real Property,
(i) there are no actions, suits, claims, arbitration
proceedings, or complaints pending or, to the best of Seller's knowledge,
threatened by any governmental authority, municipality, community, citizen,
or other entity, against Seller relating to environmental protection,
compliance with environmental laws, or the condition of the Real Property or
Leased Real Property, nor is Seller aware of any unasserted action, suit,
claim, proceeding, or complaint the assertion of which is probable;
(ii) except as set forth on SCHEDULE 5.11.1, there has been
no disposal, release, burial, or placement of hazardous or toxic substances,
pollutants, contaminants, petroleum, gas products, or asbestos-containing
materials (as any of such terms may be defined under federal, state, or local
law) or other Hazardous Materials by Seller or, to the best of Seller's
knowledge, by any other party on, in, at, or about any of the Real Property
or Leased Real Property or any facilities used for or in connection with the
business operations of Seller that could subject Purchaser to damages, costs,
penalties or expenses, or recovery or remediation requirements under any
federal, state or local law, rule or regulation;
(iii) all above-ground and, to Seller's knowledge, all
underground storage tanks located on the Real Property and the Leased Real
Property have been identified in SCHEDULE 5.11.3;
(iv) no lien has arisen on any of the Acquired Assets under
or as a result of any federal, state, or local law, rule, or regulation
relating to environmental protection; and
(v) except for the Environmental Assessment Reports, no
assessment or other investigation has been conducted as to environmental matters
at any of Seller's properties by any private party during or, to the best of
Seller's knowledge, prior to the period during which Seller owned, leased or
operated
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such properties.
(c) Except as set forth in SCHEDULE 5.11.4, Seller is in material
compliance with all applicable laws relating to employee health and safety
including the Mine Safety and Health Act and the Occupational Safety and
Health Act; and Seller has not received any notice that past or present
conditions of the Acquired Assets violate any applicable legal requirements
or otherwise can be made the basis of any claim, citations, proceeding, or
investigation, based on or related to violations of employee health and
safety requirements.
5.12 LITIGATION. Except as listed and briefly described on SCHEDULE
5.12, there are no claims, charges, arbitrations, grievances, actions, suits,
proceedings, or investigations pending or to Seller's knowledge threatened
against, or adversely affecting the Acquired Assets, at law or in equity or
admiralty, or before or by any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, nor is Seller aware of any unasserted
claim, charge, arbitration, grievance, action, suit, proceeding or
investigation, the assertion of which is probable. Seller is not in default
under or in violation of any order, writ, injunction, or decree of any
federal, state, municipal court, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
affecting the Acquired Assets or the business operations of Seller as
currently conducted.
5.13 ABSENCE OF CHANGES. Since the date of the Latest Balance Sheet,
there has not been any transaction or occurrence in which Seller has:
(a) suffered any material adverse change in the business,
operations, condition (financial or otherwise), liabilities, assets, or
earnings of Seller nor, to Seller's knowledge, has there been any event which
has had or may reasonably be expected to have a material adverse effect on
any of the foregoing, except for any impairments recorded as a result of the
consummation of the transactions contemplated hereunder;
(b) incurred any obligations or liabilities of any nature other
than items incurred in the regular and ordinary course of business,
consistent with past practice, or increased (or experienced any change in the
assumptions underlying or the methods of calculating) any bad debt,
contingency, or other reserve, other than in the ordinary course of business
consistent with past practice;
(c) paid, discharged, or satisfied any claim, lien, encumbrance,
obligation, or liability (whether absolute, accrued, contingent, and whether
due or to become due), other than the payment, discharge, or satisfaction in
the ordinary course of business consistent with past practice of claims,
liens, encumbrances, obligations, or liabilities of the type reflected or
reserved against in the Latest Balance Sheet or which were incurred since the
date of the Latest Balance Sheet in the ordinary course of business
consistent with past practice;
(d) permitted, allowed, or suffered any of the Acquired Assets
(real, personal or mixed, tangible, or intangible) to be subjected to any
mortgage, pledge, lien, encumbrance, restriction, or charge of any kind;
(e) written down or written up the value of any Inventory
(including write-downs by reason of shrinkage or markdowns), except for
write-downs and write-ups in the ordinary course of business consistent with
past practice, none of which is material in amount;
(f) canceled any debts or waived any claims or rights in excess of
$5,000.00 individually or $10,000.00 in the aggregate;
(g) disposed of or permitted to lapse any right to the use of any
patent, trademark, assumed name, service xxxx, trade name, copyright,
license, or application therefor or disposed of or disclosed
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to any person not authorized to have such information any trade secret,
proprietary information, formula, process, or know-how not previously a
matter of public knowledge or existing in the public domain;
(h) except for the capital expenditure commitments described on
SCHEDULE 5.8.3, made any significant capital expenditure, repair or
commitment for additions to property, plant, equipment, intangible, or
capital assets or for any other purpose, other than for emergency repairs or
replacement;
(i) sold, transferred, or leased any Acquired Assets (real,
personal or mixed, tangible or intangible) to, purchased, leased, licensed,
or otherwise acquired any properties or assets which are included as Acquired
Assets from (i) any partner, officer, employee, or director of Seller or any
stockholder of the General Partner, (ii) any corporation or partnership in
which any affiliate is an officer, director, or holder directly or indirectly
of five percent (5%) or more of the outstanding equity or debt securities, or
(iii) any person controlling, controlled by, or under common control with any
such partner, stockholder, officer, director, or affiliate;
(j) except as identified on SCHEDULE 5.8.1, entered into any
collective bargaining or labor agreement (oral and legally binding or
written), or experienced any organized slowdown, work interruption, strike,
or work stoppage;
(k) sold, transferred, or otherwise disposed of any of the
Acquired Assets except in the ordinary course of business consistent with
past practice;
(l) granted or incurred any obligation for any increase in the
compensation of any officer or employee of Seller (including, without
limitation, any increase pursuant to any bonus, pension, profit-sharing,
retirement, or other plan or commitment) except for raises to employees in
the ordinary course of business consistent with past practice;
(m) made any material change in any method of accounting or
accounting principle, practice, or policy;
(n) suffered any casualty loss or damage to the Acquired Assets in
excess of $25,000 in the aggregate (whether or not insured against);
(o) taken any other action other than in the ordinary course of
business and consistent with past practice except as provided for in this
Agreement; or
(p) agreed, so as to legally bind Seller whether in writing or
otherwise, to take any of the actions set forth in this Section 5.13 and not
otherwise permitted by this Agreement.
5.14 BROKERS AND FINDERS. Neither Seller nor any Affiliate of Seller
has incurred any obligation or liability to any party for any brokerage fees,
agent's commissions, or finder's fees in connection with the transactions
contemplated by the Acquisition Documents.
5.15 LABOR MATTERS. SCHEDULE 5.15 contains a true and correct and
complete list of all present employees and sales representatives employed or
engaged by Seller, their total remuneration for the year ended December 31,
1996, their current remuneration, and a description of all perquisites and
fringe benefits they receive or are eligible to receive. Seller, within the
last three (3) years, has not experienced any organized slowdown, work
interruption, strike, or work stoppage by employees of Seller. Except as set
forth on SCHEDULE 5.8.1, Seller is not a party to nor does Seller have any
obligation pursuant to any oral and legally binding or written agreement,
collective bargaining or otherwise, with any party regarding the rates of pay
or working conditions of any of the employees of Seller engaged in the
Business, nor is Seller obligated under any agreement to recognize or bargain
with any labor organization or union on behalf of such employees. Neither
Seller nor any of its officers, directors, or employees has been charged or,
to Seller's knowledge,
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threatened with the charge of any unfair labor practice within the last two
(2) years. Seller is in material compliance with all applicable federal,
state, local and foreign laws and regulations concerning the
employer-employee relationship and with all agreements relating to the
employment of Seller's employees, including applicable wage and hour laws,
fair employment laws, safety laws, worker compensation statutes, unemployment
laws, and social security laws. Except as described on SCHEDULE 5.15, there
are no pending or, to Seller's knowledge, threatened claims, investigations,
charges, citations, hearings, consent decrees, or litigation concerning:
wages, compensation, bonuses, commissions, awards, or payroll deductions;
equal employment or human rights violations regarding race, color, religion,
sex, national origin, age, disability, veteran's status, marital status, or
any other recognized class, status, or attribute under any federal, state,
local or foreign equal employment law prohibiting discrimination;
representation petitions or unfair labor practices; grievances or
arbitrations pursuant to current or expired collective bargaining agreements;
occupational safety and health; workers' compensation; wrongful termination,
negligent hiring, invasion of privacy or defamation; immigration or any other
claim based on the employment relationship or termination of the employment
relationship (collectively, "Labor Claims"). Seller is not liable for any
unpaid wages, bonuses, or commissions (other than those not yet due) or any
tax, penalty, assessment, or forfeiture for failure to comply with any of the
foregoing. Except as described on SCHEDULE 5.15, there is no outstanding
agreement or arrangement with respect to severance payments with respect to
any Employee.
5.16 GOVERNMENTAL APPROVAL AND CONSENTS. Except as described on
SCHEDULE 5.16, Seller has obtained all governmental approvals,
authorizations, permits, licenses, and orders required for the lawful
operation of the Business as presently conducted, the absence of which would
materially adversely affect Purchaser's use or ownership of the Acquired
Assets. SCHEDULE 5.16 contains a true and correct copy of each such
approval, authorization, permit, license, and order.
5.17 TAXES.
(a) Except as set forth on SCHEDULE 5.17.1, Seller has timely
filed, and as of the Closing Date will have timely filed, all federal and
foreign income tax returns, and all state, county, and local income,
franchise, property, sales, use, unemployment, and other tax returns in the
State of Georgia and in each other state and jurisdiction where such returns
are required to be filed on or prior to the Closing Date, taking into account
any extensions of the filing deadlines which have been validly granted to
Seller, and such returns are and will be true and correct in all material
respects. Seller has paid, or by the Closing Date will have paid, all
federal, state, county, and local income, franchise, property, sales, use,
and all other taxes and assessments (including penalties and interest in
respect of such taxes and assessments, if any) that have become or are due
with respect to any period ended on or prior to the Closing Date whether
shown as due on such returns or not, or is contesting in good faith such
taxes and assessments, in which event Seller has disclosed the details of
such contests on SCHEDULE 5.17.2. Attached to SCHEDULE 5.17.1 are true and
correct copies of all real estate, personal property , ad valorem, and
property tax bills of Seller for the years 1996 and 1997 which have been
received by the Seller prior to the date hereof, relating to the Acquired
Assets, including the Real Property and Vehicles.
(b) SCHEDULE 5.17.2 provides a brief description of any pending
federal and state tax disputes in which Seller is alleged to be liable or in
which Seller is claiming a refund, including the nature and amount of the
controversy, the respective positions of the parties as to any amounts
claimed to be due thereunder, and the current status thereof.
(c) All taxes required to be withheld prior to the Closing Date
from employees of Seller for income taxes and social security taxes will have
been properly withheld and, if required prior to the Closing Date, will have
been deposited with the appropriate governmental agency.
(d) No claim or investigation is pending, or to the best of
Seller's knowledge, threatened, by any state, local, or other jurisdiction
alleging that Seller has a duty to file tax returns and pay taxes or is
otherwise subject to the taxing authority of any jurisdiction not included in
SCHEDULES 5.17.1 or
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5.17.2 with respect to any taxes covered by Section 10.3, nor has Seller
received any notice or questionnaire from any such jurisdiction which
suggests or asserts that Seller may have a duty to file such returns and pay
such taxes, or otherwise is subject to the taxing authority of such
jurisdiction.
5.18 EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 5.18 contains a true and complete list of all the
following agreements, plans, policies (written or unwritten) or programs
which are presently in effect or which have previously been in effect and
which cover employees of Seller ("Employees"):
(i) Any "employee benefit plan" as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA") or under which
Seller, with respect to Employees, has any outstanding, present, or future
obligation or liability, or under which any Employee has any present or
future right to benefits which are covered by ERISA; or
(ii) Any other pension, profit sharing, retirement, deferred
compensation, stock purchase, stock option, stock appreciation, phantom stock
or other equity-based, incentive, bonus, performance, vacation, termination,
retention, change of control, severance, "golden parachute," disability,
hospitalization, medical, life insurance, or other employee benefit plan,
program, policy, agreement or arrangement, which Seller maintains or to which
Seller has any outstanding, present, or future obligations to contribute or
make payments under, whether voluntary, contingent, or otherwise.
The plans, programs, policies, or arrangements described in subparagraph (i)
or (ii) are hereinafter collectively referred to as the "Seller Benefit
Plans."
(b) With respect to all Seller Benefit Plans to be assumed by or
spun off in whole or in part to Purchaser pursuant to Section 7.15 (the
"Transferred Benefit Plans"), Seller makes the following representations and
warranties:
(i) The Transferred Benefit Plans have been made available to
Purchaser for review, including correct and complete copies of: (A) all trust
agreements or other funding arrangements for such Transferred Benefit Plans
(including insurance contracts), and all amendments thereto, (B) with respect
to any such Transferred Benefit Plans or amendments, all current
determination letters and, if any, rulings, opinion letters, information
letters, or advisory opinions issued by the United States Internal Revenue
Service ("IRS"), the United States Department of Labor, or the Pension
Benefit Guaranty Corporation, (C) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any Transferred Benefit Plan with respect to the
most recent three (3) plan years, and (d) the most recent summary plan
descriptions and any modifications thereto.
(ii) All the Transferred Benefit Plans and the related trusts
subject to ERISA comply with and have been administered in compliance with,
(A) the applicable provisions of ERISA, (B) all applicable provisions of the
Code relating to qualification and tax exemption under Code Sections 401(a)
and 501(a) or otherwise applicable to secure intended tax consequences, (C)
all applicable state or federal securities laws, and (D) all other applicable
laws and collective bargaining agreements, and the Seller has not received
any notice from any governmental authority questioning or challenging such
compliance. All available determination letters and required registrations
under federal and state securities laws for the Transferred Benefit Plans
have been obtained, including, but not limited to, timely determination
letters on the qualification of the ERISA Plans and tax exemption of related
trusts, as applicable under the Code, and all such registrations continue in
full force and effect. No event has occurred which will or could give rise
to disqualification of any such plan or loss of intended Tax consequences
under the Code or to any Tax under Section 511 of the Code.
(iii) No oral or written representation or communication with
respect to any aspect of the Transferred Benefit Plans has been made to
Employees prior to the date hereof that is not in
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accordance with the written or otherwise preexisting terms and provisions of
such plans. Neither the Seller, Resources nor any administrator or fiduciary
of any Transferred Benefit Plan (or any agent of any of the foregoing) has
engaged in any transaction, or acted or failed to act in any manner that
could subject the Purchaser to any direct or indirect liability (by indemnity
or otherwise) for breach of any fiduciary, co-fiduciary or other duty under
ERISA. There are no unresolved claims or disputes under the terms of, or in
connection with, the Transferred Benefit Plans other than claims for benefits
which are payable in the ordinary course and no litigation has been commenced
with respect to any Transferred Benefit Plans.
(iv) All Transferred Benefit Plan documents and annual
reports or returns, audited or unaudited financial statements, actuarial
valuations, summary annual reports, and summary plan descriptions issued with
respect to the Transferred Benefit Plans are correct and complete, have been
timely filed with the IRS and the United States Department of Labor, have
been timely distributed to participants in the Transferred Benefit Plans, and
there have been no changes in the information set forth therein.
(v) No "party in interest" (as defined in Section 3(14) of
ERISA) or "disqualified person" (as defined in Code Section 4975) of any
Transferred Benefit Plan has engaged in any nonexempt "prohibited
transaction" (described in Code Section 4975 or ERISA Section 406). There
has been no (i) "reportable event" (as defined in Section 4043 of ERISA), or
event described in Sections 4041, 4042, 4062 (including ERISA Section
4062(e)), 4064, 4069 or 4063 of ERISA, or (ii) termination or partial
termination, withdrawal or partial withdrawal with respect to any of the
Transferred Benefit Plans. Neither Seller nor Resources has incurred any
liability under Title IV of ERISA with respect to the Transferred Benefit
Plans.
(vi) For any Transferred Benefit Plan that is an employee
pension benefit plan as defined in ERISA Section 3(2), the fair market value
of such Plan's assets equals or exceeds the present value of all benefits
(whether vested or not) accrued to date by all present or former participants
in such Transferred Benefit Plan. For this purpose the assumptions utilized
to value the accumulated benefit obligation in the January 1, 1996 actuarial
report shall be applied and the term "benefits" shall include the value of
all benefits, rights and features protected under Code Section 411(d)(6) or
its successors and any ancillary benefits (including disability, shutdown,
early retirement and welfare benefits) provided under any such employee
pension benefit plan and all "benefit liabilities" as defined in ERISA
Section 4001(a)(16). Since the date of the most recent actuarial valuation,
there has been (i) no material change in the financial position of any
Transferred Benefit Plan, (ii) no change in the actuarial assumptions with
respect to any Transferred Benefit Plan, and (iii) no increase in benefits
under any Transferred Benefit Plan as a result of Transferred Benefit Plan
amendments or changes in any applicable regulation which is reasonably likely
to have, individually or in the aggregate, a material adverse effect on the
funding status of such Transferred Benefit Plan. All contributions with
respect to an Transferred Benefit Plans of Seller or of an ERISA Affiliate
that is subject to Code Section 412 or ERISA Section 302 have been, or will
be, timely made and there is no lien or expected to be a lien under Code
Section 412(n) or ERISA Section 302(f) or Tax under Code Section 4971. No
Transferred Benefit Plan of the Company or of an ERISA Affiliate has a
"liquidity shortfall" as defined in Code Section 412(m)(5). No event
described in Code Section 401(a)(29) has occurred or can reasonably be
expected to occur with respect to the Transferred Benefit Plans. All
premiums required to be paid under ERISA Section 4006 for the Transferred
Benefit Plans have been paid by the Seller.
(vii) All individuals participating in (or eligible to
participate in) any Transferred Benefit Plans are common law employees.
(c) Seller has complied in all material respects with the
continuation coverage requirements of Section 1001 of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and ERISA Sections 601
through 608. Seller shall be responsible for complying with the requirements
of Code Section 4980 B and Part 6 of Title 1 of ERISA for its employees
(including the Hired Employees, as hereinafter defined) and their "qualified
beneficiaries" whose "qualifying event" (as such terms are defined in Code
Section 4980 B) occurs on or prior to the Closing Date.
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5.19 COMPLIANCE WITH LAWS. Seller is not engaging in any activity or
omitting to take any action with respect to the Acquired Assets that is or
creates a material violation of any law, statute, ordinance, or regulation
applicable to the Acquired Assets. The Acquired Assets are not subject to
any judgment, order, writ, injunction, or decree issued by any court or any
governmental or administrative body or agency which has a material effect.
Seller possesses all permits and licenses material to the operation of the
Business as presently conducted and is in compliance with all applicable
laws, regulations, and orders issued by any court or governmental or
administrative body or agency where a failure so to comply would have a
material adverse effect on the use or ownership of the Acquired Assets.
Seller has not at any time during the last five (5) years (i) made any
unlawful contribution to any political candidate, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any
federal, state or local governmental, regulatory or administrative officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
5.20 TRANSACTION APPROVAL AND CONSENTS. Except for the filing of the
appropriate documents pertaining to the Xxxx-Xxxxx-Xxxxxx Act with the United
States Federal Trade Commission and the United States Department of Justice,
and, if applicable, the receipt of an order of termination of the waiting
period therefrom, no consent, approval, or authorization of or declaration,
filing, or registration with any governmental or regulatory authority is
required in connection with the execution, delivery, and performance of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated hereby.
5.21 ADEQUACY OF ACQUIRED ASSETS. The Acquired Assets include all
rights, properties, interests in properties, and assets necessary to permit
Purchaser to carry on business operations similar to the Business as
presently conducted by Seller.
5.22 COMPLIANCE WITH THE IMMIGRATION REFORM AND CONTROL ACT. To the
best of Seller's Knowledge, Seller is in full compliance with and has not
violated the terms and provisions of the Immigration Reform and Control Act
of 1986, and all related regulations promulgated thereunder (the "Immigration
Laws"). With respect to each employee (as defined in Section 274a.1(f) of
Title 8, Code of Federal Regulations) of the Seller for whom compliance with
the Immigration Laws by an employer (as defined in Section 274a.1(g) of Title
8, Code of Federal Regulations) is required, the Seller, upon request of
Purchaser, will make available to Purchaser prior to the Closing Date, such
employee's Form I-9 (Employment Eligibility Verification Form) and all other
records, documents or other papers which are retained with the Form I-9 by
the employer pursuant to the Immigration Laws. The Seller has never been the
subject of any inspection or investigation relating to its compliance with or
violation of the Immigration Laws, nor has it been warned, fined or otherwise
penalized by reason of any failure to comply with the Immigration Laws, nor
is any such proceeding pending or, to the best of Seller's Knowledge,
threatened.
5.23 MINERAL RESERVES. Other than as described in SCHEDULE 5.23, no
mineral reserves owned by or leased to Seller and included among the Acquired
Assets are subject to any agreement, contract or arrangement which imposes
any obligation on Seller, and all rentals, royalties, and taxes thereon or
other royalties or payments due with respect to such mineral reserves or
under such agreements and payable by Seller in respect of periods prior to
the Closing Date have been or will be timely, properly and fully paid.
5.24 CORRECTNESS OF REPRESENTATIONS. No representation or warranty of
Seller in this Agreement or in any Exhibit, certificate, or Schedule attached
hereto or furnished pursuant hereto, contains, or on the Closing Date will
contain, any untrue statement of material fact or omits, or on the Closing
Date will omit, to state any fact necessary in order to make the statements
contained therein not misleading in any material respect, and all such
statements, representations, warranties, Exhibits, certificates, and
Schedules shall be true and complete in all material respects on and as of
the Closing Date as though made on that date. True copies of all mortgages,
indentures, notes, leases, agreements, plans (including Seller Benefit
Plans), Contracts, and other instruments listed on the Schedules delivered or
furnished to Purchaser pursuant to this Agreement have been delivered to
Purchaser.
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5.25 DEFINITION OF "KNOWLEDGE". The phrases "to the knowledge of
Seller", "Seller has not received notice", "to Seller's knowledge", "Seller
has not been notified" and any other similar phrases as used in this Article
5 refer to the knowledge of executive officers of Seller, General Partner and
Resources and, as to specific areas which are the subject of the
representations and warranties, those employees of Seller, General Partner,
or Resources having management or operational responsibilities related to
such specific areas.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
6.1 ORGANIZATION AND QUALIFICATION. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has all corporate power and authority to conduct its
business, to own, lease, or operate its properties in the places where such
business is conducted and such properties are owned, leased, or operated.
6.2 AUTHORITY. Purchaser has full power and authority to enter into
this Agreement and each of the other Acquisition Documents to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Purchaser of this Agreement and each
of the other Acquisition Documents to which Purchaser is a party have been
duly and validly authorized and approved by all necessary action on the part
of Purchaser. This Agreement and each of the other Acquisition Documents to
which Purchaser is a party are the legal, valid, and binding obligations of
Purchaser enforceable against Purchaser in accordance with their terms,
except as enforceability may be limited by applicable equitable principles or
by bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally, and by the exercise of judicial
discretion in accordance with equitable principles, and to equitable defenses
that may be applied to the remedy of specific performance. Neither the
execution and delivery by Purchaser of this Agreement or any of the other
Acquisition Documents to which Purchaser is a party nor the consummation by
Purchaser of the transactions contemplated hereby or thereby will (i) violate
Purchaser's Certificate of Incorporation or Bylaws, (ii) violate any
provisions of law or any order of any court or any governmental unit to which
Purchaser is subject, or by which its assets are bound, or (iii) conflict
with, result in a breach of, or constitute a default under any indenture,
mortgage, lease, agreement, or other instrument which would prevent Purchaser
from consummating the transactions contemplated hereunder.
6.3 LITIGATION. There is no suit, action, proceeding, claim or
investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser which could adversely affect Purchaser's ability to consummate the
transactions contemplated hereunder.
6.4 CORRECTNESS OF REPRESENTATIONS. No representation or warranty of
Purchaser in this Agreement or in any Exhibit, certificate, or Schedule
attached hereto or furnished pursuant hereto contains, or on the Closing Date
will contain, any untrue statement of material fact or omits or, on the
Closing Date, will omit, to state any fact necessary in order to make the
statements contained therein not misleading in any material respect, and all
such statements, representations, Exhibits, and certificates shall be true
and complete on and as of the Closing Date as though made on that date.
6.5 BROKERS AND FINDERS. Neither Purchaser nor any affiliate of
Purchaser has incurred any obligation or liability to any party for any
brokerage fees, agent's commissions, or finder's fees in connection with the
transactions contemplated by the Acquisition Documents.
6.6 GOVERNMENTAL APPROVAL AND CONSENTS. Except for the filing of the
appropriate documents pertaining to the Xxxx-Xxxxx-Xxxxxx Act with the United
States Federal Trade Commission and the United States Department of Justice,
and, if applicable, the receipt of an order of termination of the waiting
period therefrom, no consent, approval, or authorization of or declaration,
filing, or registration with any governmental or regulatory authority is
required in connection with the execution, delivery, and performance
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by Purchaser of this Agreement or the consummation of the transactions
contemplated hereby.
6.7 FINANCING. Purchaser represents that on the Closing Date it will
have the funds necessary to pay the Estimated Purchase Price.
ARTICLE 7
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
7.1 CONDUCT OF BUSINESS PRIOR TO CLOSING. From the date hereof to the
Closing Date, and except to the extent that Purchaser shall otherwise consent
in writing, Seller shall:
(a) operate the Business substantially as previously operated and
only in the regular and ordinary course;
(b) not purchase or acquire any assets or properties, whether real
or personal, tangible or intangible, that if acquired would be an Acquired
Asset hereunder, and not sell or otherwise dispose of any real or personal
property or asset that would have been an Acquired Asset hereunder, except in
the ordinary course of business and consistent with past practices;
(c) subject to casualty and normal wear and tear, maintain the
Acquired Assets in current operating condition and state of repair and
deliver the Acquired Assets to Purchaser on the Closing Date in such
condition, and maintain all policies of insurance covering the Acquired
Assets in amounts and on terms substantially equivalent to those in effect on
the date hereof;
(d) take all steps reasonably necessary to maintain the
Intellectual Property and other intangible assets of Seller;
(e) pay all accounts payable in accordance with past practice and
collect all accounts receivable in accordance with past practice;
(f) comply with all laws applicable to the conduct of the Business
of Seller where the failure to comply would have a material adverse effect on
the conduct of the Business by Purchaser after Closing;
(g) maintain the Books and Records in the usual, regular, and
ordinary manner, on a basis consistent with past practices and prepare and
file all foreign, federal, state, and local tax returns and amendments
thereto required to be filed by Seller after taking into account any
extensions of time granted by such taxing authorities; and
(h) use reasonable best efforts to preserve the goodwill and
patronage of its customers, Employees, suppliers and others having a business
relationship with Seller.
7.2 ACCESS AND INFORMATION. Subject to the confidentiality restrictions
set forth in Section 12.1 hereof, from the date hereof to the Closing Date and
during normal business hours, Seller shall afford to Purchaser, its lenders,
counsel, accountants, and other representatives, reasonable access to the
offices, properties, books, contracts, commitments, records, vendors, and
customers of Seller, insofar as the same relate to the Acquired Assets, and
shall furnish such persons with all information (including financial and
operating data) concerning the Acquired Assets as they reasonably may request.
Requests for such information shall be coordinated with Seller's designated
representatives, and Seller shall use its best efforts to assist Purchaser, its
lenders, counsel, accountants, and other representatives in their examination.
Purchaser shall, and shall use its best efforts to cause its lenders, counsel,
accountants, and representatives to, hold in strict confidence all
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information so obtained from Seller.
7.3 NOTIFICATION OF CHANGES. Between the date hereof and the Closing
Date, Seller shall immediately notify Purchaser in writing of any material
adverse change in the affairs, condition (financial or otherwise) or
prospects of the Business or in its relationships with any material customer,
supplier or any employee listed on SCHEDULE 11.1, any material damage to or
loss of any of the Acquired Assets, or the institution of or, if known by
Seller, the threat of institution of legal, administrative, or other
proceedings against Seller, related to the Business, or the occurrence or
existence of any unasserted proceedings known to Seller that are probable of
assertion.
7.4 CERTAIN ACTS PROHIBITED. Except as may be necessary to discharge
or deal with the Excluded Liabilities (subject to the limitations of Section
15.1 hereof ), from the date hereof to the Closing Date, Seller shall not,
without the prior written consent of Purchaser, take any of the actions
described in Section 5.13 hereof.
7.5 OTHER TRANSACTIONS. Seller shall deal exclusively and in good
faith with Purchaser with regard to the sale of the Acquired Assets to
Purchaser and will not, and will direct its officers, directors, financial
advisors, accountants, agents, and counsel not to (i) solicit submission of
proposals or offers from any person other than Purchaser relating to any
acquisition of all or any material part of the Acquired Assets (an
"Acquisition Proposal"), (ii) participate in any discussions or negotiations
regarding, or furnish any non-public information to any other person
regarding the Business other than Purchaser and its representatives or
otherwise cooperate in any way or assist, facilitate, or encourage any
Acquisition Proposal by any person other than the Purchaser or, (iii) enter
into any agreement or understanding, whether in writing or, if legally
binding, oral, that would have the effect of preventing the consummation of
the transactions contemplated by this Agreement. If, notwithstanding the
foregoing, Seller, or its representatives or agents should receive any
Acquisition Proposal or any inquiry regarding such proposal from a third
party, such persons shall promptly inform Purchaser and its counsel thereof.
7.6 CONSENTS. Seller shall use its best efforts to obtain, at its sole
cost and expense, prior to the Closing all consents which, in the reasonable
judgment of Purchaser, are necessary or appropriate for the transfer or
assignment of each of the Acquired Assets to Purchaser and the consummation
of the transactions contemplated hereby. All such consents shall be in
writing and in form and substance reasonably satisfactory to Purchaser, and
executed counterparts thereof will be delivered to Purchaser promptly after
receipt thereof but in no event later than the Closing. In any case where a
necessary consent or approval has not been obtained at or prior to the
Closing, Seller shall assist Purchaser, at Purchaser's request, after Closing
in every reasonable effort to obtain such consent or approval.
7.7 SUPPLEMENTAL DISCLOSURE. Seller shall have the continuing
obligation up to and including the Closing Date to supplement promptly or
amend the Schedules with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would
have been required to be set forth or listed in the Schedule; provided,
however, that for the purpose of the rights and obligations of the parties
hereunder, any such supplemental disclosure shall not be deemed to have been
disclosed as of the date of this Agreement unless so agreed to in writing by
Purchaser which Purchaser agrees not to unreasonably withhold.
7.8 ADDITIONAL REPORTS. Subject to the confidentiality restrictions
set forth in Section 12.1 hereof, promptly after they become available,
Seller will make available to Purchaser true and correct copies of all
internal management and control reports (including inventory control reports)
and financial statements related to the Acquired Assets and furnished to
management of the Seller or the General Partner. Each such report shall be
in accordance with the books and records of Seller, and, in the case of
financial statements shall be prepared in accordance with the past practices
of the Seller as set forth in Section 5.4.
7.9 CONDITIONS PRECEDENT. Seller shall use its best efforts to satisfy
the conditions enumerated
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in Article 8 hereof.
7.10 ENVIRONMENTAL PERMITS. Seller shall, at its cost and expense, use
its reasonable best efforts to cause the Environmental Permits, if any, to be
assigned or transferred and reissued at the Closing to Purchaser to the
extent permitted by law or the terms of such Environmental Permits.
Purchaser shall reasonably cooperate with Seller with respect to Seller's
obligations under the preceding sentence.
7.11 CAPITAL EXPENDITURES. Other than those matters listed on SCHEDULE
5.8.3, Seller shall cause its management to discuss with Purchaser any
proposed significant capital expenditure or repair in excess of twenty five
thousand dollars ($25,000) or for a period in excess of six (6) months to be
made prior to the Closing Date prior to entering into any contract or
commitment for such capital expenditure or repair, other than emergency
capital expenditures or repairs. No such capital expenditure or repair
(other than emergency capital expenditures for repairs and maintenance of the
Acquired Assets) shall be made by Seller prior to the Closing Date without
the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed. Seller will promptly notify Purchaser of
the nature and extent of emergency capital expenditures made by Seller
without the prior written consent of Purchaser.
7.12 DISCHARGE OF LIENS AND ENCUMBRANCES. All liens, claims, charges,
security interests, pledges, assignments, or encumbrances relating to the
Acquired Assets (including those described in Section 4.3(a)) shall be
satisfied, terminated, and discharged by Seller on or prior to the Closing
Date and evidence reasonably satisfactory to Purchaser and its counsel of
such satisfaction, termination, and discharge shall be delivered to Purchaser
at or prior to the Closing.
7.13 ENVIRONMENTAL FINES. Seller shall upon demand, promptly pay all
fines and assessments that Seller is not disputing in good faith and by
appropriate proceedings, and that are attributable to (a) Seller's operation
of Equipment which was not in compliance with applicable federal, state, and
local laws or regulations relating to environmental protection or (b)
Seller's failure to possess all required Environmental Permits; such fine or
assessment shall be payable to any agency enforcing compliance with such laws
and regulations or payable to the Purchaser if the Purchaser has previously
paid such fines or assessments.
7.14 RENEGOTIATION OF EQUIPMENT LEASES. Seller shall provide
reasonable assistance to Purchaser as reasonably requested in connection with
the renegotiation of the equipment leases listed on SCHEDULE 7.14. The
Purchaser covenants that, in the event the payment obligations under any of
the leases listed on SCHEDULE 7.14 are successfully renegotiated at any time
before Closing or within six (6) months after Closing such that the
Purchaser's total financial obligations are reduced below an amount
calculated as of the date of renegotiation equal to the net present value of
all future lease payments, purchase options and sales taxes, if any, using a
discount rate of eight percent (8%) per annum (the "Current Value"), then
Purchaser shall promptly pay to Seller one-half (1/2) of the difference
between the amount paid by Purchaser to buy out an equipment lease or an
interest therein and the Current Value of such lease or interest.
7.15 TRANSFERRED BENEFIT PLANS/PLAN INFORMATION.
(a) Seller shall, within ninety (90) days of the Closing, take
such action as is reasonably necessary to transfer sponsorship, together with
all assets and liabilities, including but not limited to insurance contracts,
of the following Seller Benefit Plans to Purchaser:
(i) Nord Kaolin Company Pension Plan
for Hourly Rated and Collective Bargaining
Employees
Jeffersonville, Georgia; and
(ii) Nord Kaolin Company Union Employee 401(k) Plan; and
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(iii) Nord Kaolin Company Hourly Long Term Disability
Income Plan.
On or before the effective date of such transfer, Seller will provide to
Purchaser all records, data, and information maintained by Seller or its
affiliates relating to the foregoing Transferred Benefit Plans. Thereafter,
Seller will make its personnel available to Purchaser on reasonable terms to
answer questions regarding the administration or operation of the Transferred
Benefit Plans.
(b) To the extent such actions would not materially adversely
affect such Plan, Seller shall, within one hundred eighty (180) days of the
Closing, cause to be transferred to the Dry Branch Kaolin Company 401(k)
Savings and Investment Plan all assets and liabilities associated with the
accounts of Employees Under the Nord Resources Corporation Nord Salaried
Employees' 401(k) Plan (also referred to herein as a Transferred Benefit
Plan) who are employed by Purchaser ninety (90) days following the date of
the Closing.
(c) Prior to the Closing, Seller shall contribute to the
Transferred Benefit Plans identified above an amount equal to the employer
contribution accrued under such Transferred Benefit Plans through the
Closing, assuming such contribution accrued ratably over the Transferred
Benefit Plan year and without regard to requirements relating to minimum
hours or employment on the last day of such Transferred Benefit Plan year.
(d) Seller shall provide, or shall cause its agents to provide,
such information as Purchaser reasonably requests, regarding the Seller
Benefit Plans covering the Hired Employees, including but not limited to the
claims experience of such Hired Employees under the Seller Benefit Plans.
7.16 PAYOFF OF DEBTS. On or prior to Closing, Seller shall pay and
otherwise satisfy in full (a) all obligations under the Bonds or deposit with
the trustee of the Bonds funds sufficient to pay off the Bonds, and (b) all
obligations owed to Kemira as a supplier of products to Seller on bills
received at or before Closing. All other known financial obligations of
Seller (both secured and unsecured, including without limitation all
indebtedness owed to trade creditors) except for intercompany indebtedness
owed to Resources shall be paid or reserved against at Closing by Seller
placing the full amount of the financial obligations owed into a separate
escrowed account pursuant to the terms of an escrow agreement to be agreed
upon by the parties and paying all such obligations first out of such
escrowed funds. Seller shall provide at Closing to Purchaser a list of the
payees or creditors to be paid and amounts estimated to be owed thereunder.
Seller shall pay all obligations owed in a manner to avoid any disruption of
the business operated by Purchaser after Closing.
7.17 FUNDING OF PLANS. At Closing, Seller shall fully fund the Nord
Kaolin Company Pension Plan for Hourly Rated and Collective Bargaining
Employees Jeffersonville, Georgia, for all benefit liabilities as defined in
ERISA Section 4001(a)(16) accrued as of January 1, 1997. Seller covenants
that it will fully fund for all such benefit liabilities from January 1, 1997
through the Closing Date within five (5) days from receipt of the actuarial
valuation performed as of the Closing Date. In any event, Seller shall fully
fund all such liabilities within thirty (30) days from the Closing Date. The
value of such benefit liabilities shall be determined by utilizing the
actuarial assumptions applied in the January 1, 1996 actuarial report to
determine the present value of accumulated plan benefits under such Plan. If
the actuarial valuation performed by Seller (utilizing the actuarial
assumptions described in the preceding sentence) as of the Closing Date shows
that plan assets as of the Closing Date exceed the benefit liabilities
determined as of the Closing Date, Purchaser shall remit to Seller the
difference within five (5) days of the determination of such excess amount.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each of the following conditions all or any of which may be
waived in writing, in whole or in part, by Purchaser:
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8.1 CERTIFICATE REGARDING SCHEDULES AND REPRESENTATIONS AND WARRANTIES.
All information required to be furnished or delivered by Seller pursuant to
this Agreement shall have been furnished or delivered as of the date hereof
and as of the Closing Date, as required hereunder; the representations and
warranties made by Seller in Article 5 shall be true and correct in all
material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as
of the Closing Date (except that such representations and warranties may be
untrue or incorrect as a result of actions or transactions expressly
permitted by this Agreement or actions or transactions of Seller made with
the prior written consent of Purchaser or based upon updates of the Schedules
approved by Purchaser pursuant to Section 7.7 hereunder); and Purchaser shall
have received a certificate dated as of the Closing Date executed by an
authorized officer of Seller to such effect.
8.2 COMPLIANCE BY SELLER. Seller shall have duly performed in all
material respects all of the covenants, agreements, and conditions contained
in this Agreement to be performed by Seller on or prior to the Closing Date,
and Purchaser shall have received a certificate, dated as of the Closing
Date, executed by an authorized officer of Seller, to such effect.
8.3 NO INJUNCTION; ETC. No action, proceeding, investigation,
regulation, or legislation shall be pending or threatened which seeks to
enjoin, restrain, or prohibit Purchaser, or to obtain substantial damages
from Purchaser, in respect of the consummation of the transactions
contemplated hereby, or which seeks to enjoin the operation of all or a
material portion of the Acquired Assets, which, in the reasonable judgment of
Purchaser, would make it inadvisable to consummate the transactions
contemplated by this Agreement.
8.4 OPERATION IN THE ORDINARY COURSE. Since the date of the Latest
Balance Sheet, Seller shall have operated the Business of Seller in the
ordinary course (except as otherwise permitted by this Agreement or as agreed
to by Purchaser as evidenced by Purchaser's prior written consent).
8.5 CONSENTS; AUTHORIZATIONS; APPROVAL OF LEGAL MATTERS. Purchaser
shall have received a true and correct copy of each consent and waiver
identified on any Schedule hereto as being requested by Purchaser that is (a)
required for the assignment of the Contracts, the Transferred Benefit Plans,
or the Real Property Leases (including, without limitation, all documents
evidencing Seller's interest in the Leased Real Property, and all sidetrack
and industrial track agreements benefiting the Leased Real Property or the
Real Property with respect to tracks presently being used by Seller),
Permits, Intellectual Property, and other agreements and assets and (b)
otherwise required for the execution, delivery, and performance of this
Agreement by Seller. All authorizations, orders, or approvals of any
governmental commission, board, or other regulatory body, shall have been
obtained. Purchaser shall have received a certificate dated as of the
Closing Date, executed by an authorized officer of Seller to the foregoing
effect, and Purchaser shall be satisfied with the terms, conditions, and
restrictions of and obligations under each such authorization, order, or
approval.
8.6 TRANSFER OF ENVIRONMENTAL PERMITS. The Environmental Permits shall
have been assigned to or transferred and reissued to Purchaser to the extent
permitted by law or the terms of the Environmental Permits in accordance with
Section 7.10, and Purchaser shall have received a certificate dated as of the
Closing Date, executed by an authorized officer of Seller to the foregoing
effect.
8.7 INCUMBENCY. Purchaser shall have received a certificate of
incumbency of Seller executed by a Vice President and Secretary or Assistant
Secretary of the General Partner listing the officers of the General Partner
authorized to execute the agreement and the instruments of transfer on behalf
of Seller, certifying the authority of each such officer to execute the
agreements, documents, and instruments on behalf of Seller in connection with
the consummation of the transactions contemplated herein.
8.8 CERTIFIED RESOLUTIONS. Purchaser shall have received a certificate
of the Secretary or Assistant Secretary of the General Partner and Resources,
respectively, containing a true and correct copy of the resolutions duly
adopted by the boards of directors of the General Partner and Resources, and
a certificate of the General Partner individually in its capacity as the
general partner of the Seller, containing a true and
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correct copy of the resolutions duly adopted by the Seller, each set of
resolutions approving and authorizing each Acquisition Document and the
transactions contemplated hereby and thereby. The Secretary or Assistant
Secretary of the General Partner shall also certify that such resolutions
have not been rescinded, revoked, modified, or otherwise affected and remain
in full force and effect.
8.9 BASIC CORPORATE DOCUMENTS. Seller shall have delivered to
Purchaser on the Closing Date copies of certificates from the Secretaries of
State in Georgia and Connecticut and in each jurisdiction listed on SCHEDULE
5.1.1, indicating that, as of a date within twenty (20) days prior to the
Closing Date, Seller was in good standing and had paid all taxes required to
have been paid as of such date.
8.10 SATISFACTION OF TITLE OBJECTIONS AND RELEASE OF CERTAIN LIENS.
Seller shall have satisfied Purchaser's title objections to the extent
required under Section 4.3 and, in addition, Purchaser at its discretion
shall have received Uniform Commercial Code searches (which searches shall be
made or caused to be made by and at the expense of Purchaser) of filings made
pursuant to Article 9 thereof in all jurisdictions where any of the Acquired
Assets are located, in form, scope, and substance reasonably satisfactory to
Purchaser and its counsel, which searches shall reflect the release or
termination of liens, claims, security interests, or encumbrances against any
of the Acquired Assets disclosed thereby, and to the extent any such release
or termination is not reflected of record, Purchaser shall have received
evidence satisfactory to it, that all such liens and encumbrances against the
Acquired Assets have been released or terminated prior to or at the Closing.
8.11 ACCURACY OF SCHEDULES. Examination by Purchaser shall not have
disclosed any material inaccuracy in the representations and warranties of
Seller, set forth in this Agreement or in the Schedules delivered to
Purchaser pursuant hereto.
8.12 NO ADVERSE CHANGE. There shall not have been any material adverse
change in the Acquired Assets or Seller's operation of the Business since the
date of the Latest Balance Sheet, and Purchaser shall have received a
certificate dated as of the Closing Date, executed by an authorized officer
of Seller to such effect.
8.13 INSTRUMENTS OF TRANSFER. Seller shall have delivered to Purchaser
such warranty deeds, quitclaim deeds, bills of sale, motor vehicle titles,
endorsements, assignments, licenses, and other good and sufficient
instruments of conveyance and transfer and any other instruments reasonably
deemed appropriate by counsel to Purchaser all in form and substance
reasonably satisfactory to counsel to Purchaser to vest in Purchaser all of
Seller's rights, title, and interest with respect to the Acquired Assets,
free and clear of all liens, charges, encumbrances, pledges, or claims of any
nature.
8.14 ACQUISITION DOCUMENTS. Purchaser shall have received the
Acquisition Documents to which Seller is a party, duly executed by Seller.
8.15 OPINION OF SELLER'S COUNSEL. Purchaser shall have received the
Seller Opinion, executed by Xxxxxxx & Xxxxxxx, P.C.
8.16 PROCEEDINGS. The form and substance of all opinions, certificates,
assignments, orders, and other documents and instruments, hereunder shall be
satisfactory in all reasonable respects to Purchaser and its counsel.
8.17 NAMES. Seller and General Partner shall have ceased to use in any
manner whatsoever the trade names included among the Acquired Assets and
described on SCHEDULE 5.9, except in connection with tax returns, filings
with other governmental authorities, and similar purposes.
8.18 CONDITION OF ACQUIRED ASSETS. On the Closing Date, all of the
Acquired Assets shall be in substantially the same condition as at the close
of business on the date hereof, except for ordinary use and wear thereof and
changes occurring in the ordinary course of business or expressly permitted
by this Agreement between the date hereof and the Closing Date, and Purchaser
shall have received a certificate dated as of the
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Closing Date, executed by an authorized officer of Seller to such effect;
provided, however, if on or prior to the Closing Date any of the Acquired
Assets shall have suffered loss or damage on account of fire, flood,
accident, act of war, civil commotion, or any other cause or event beyond the
reasonable power and control of Seller (whether or not similar to the
foregoing) to an extent which, in the reasonable opinion of Purchaser,
affects the value of the Acquired Assets in excess of $100,000, Purchaser
shall have the right either (a) to terminate this Agreement and all of
Purchaser's obligations hereunder without incurring any liability to Seller
as a result of such termination or (b) to consummate the transactions
provided for herein and be paid the full amount of all insurance proceeds, if
any, paid or payable to Seller, in respect of such loss plus an amount equal
to any deductible or co-insurance reserve applicable to such loss. If under
the circumstances described in the foregoing sentence, Purchaser shall elect
to consummate the transactions provided for herein, Seller shall, on demand,
pay to Purchaser the full amount of any insurance proceeds received by Seller
in respect of any such loss, together with any deductible or co-insurance
reserve applicable to such loss.
8.19 ANTITRUST. All applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Act shall have expired or been terminated and no action,
proceeding or investigation under any antitrust law shall be pending or
threatened which seeks to enjoin, restrain, or prohibit Purchaser, or to
obtain damages from Purchaser, in respect of the consummation of the
transactions contemplated hereby, or which seeks to enjoin, limit or impose
conditions unacceptable to the Purchaser on the ownership or the operation of
all or any portion of the Acquired Assets, which, in the sole judgment of
Purchaser, would make it inadvisable to consummate the transactions
contemplated by this Agreement.
8.20 GUARANTY. Resources shall have executed and delivered the Guaranty
substantially in the form attached hereto as EXHIBIT C.
8.21 ROYALTY AGREEMENT. Seller shall have executed and delivered the
Royalty Agreement substantially in the form attached hereto as EXHIBIT D.
8.22 NONCOMPETITION AGREEMENT. Resources shall have executed and
delivered a Noncompetition Agreement substantially in the form attached
hereto as EXHIBIT E.
8.23 NORPLEX NAME. On or prior to Closing, General Partner shall have
delivered to Purchaser for filing with the Secretary of State of Georgia an
appropriate amendment to General Partner's Articles of Incorporation to
change its corporate name to a name which does not include "Norplex" or any
derivation thereof, and the General Partner shall have conveyed to Purchaser
all of its rights in and to the "Norplex" name.
8.24 LICENSE AGREEMENT. Purchaser shall have received the consent of
Industrial Progress, Inc. to the assignment of the License Agreement on terms
and conditions reasonably satisfactory to Purchaser.
8.25 SALES/RESALE EXEMPTION CERTIFICATES. Purchaser shall have received
copies of executed sales or resale exemption certificates executed by
Seller's current customers and former customers representing at least eighty
percent (80%) of Seller's sales since January 1, 1996.
8.26 RELEASES. Resources shall have executed a release which releases
Purchaser from all claims of Resources as a creditor of Seller. Seller shall
have used its reasonable best efforts (the parties agreeing that best efforts
shall not include any consideration) to cause a release to be executed by
Kemira on terms and conditions satisfactory to Purchaser.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date hereunder, of each of the following conditions, all or any of which may
be waived, in whole or in part, by Seller.
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9.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES. All
information required to be furnished or delivered by Purchaser pursuant to
this Agreement shall have been furnished or delivered as of the date hereof
and the Closing Date as required hereunder; the representations and
warranties made by Purchaser in Article 6 hereof shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as
of the Closing Date; and Seller shall have received a certificate dated the
Closing Date, executed by an authorized officer of Purchaser to such effect.
9.2 COMPLIANCE BY PURCHASER. Purchaser shall have duly performed in
all material respects all of the covenants, agreements, and conditions
contained in this Agreement to be performed by Purchaser on or before the
Closing Date, and Seller shall have received a certificate dated the Closing
Date, executed by an authorized officer of Purchaser, to such effect.
9.3 CERTIFIED RESOLUTIONS. Seller shall have received from Purchaser a
certificate executed by the Secretary or Assistant Secretary of Purchaser
containing a true and correct copy of resolutions duly adopted by Purchaser's
Board of Directors approving and authorizing this Agreement and each of the
other Acquisition Documents to which Purchaser is a party and each of the
transactions contemplated thereby. The Secretary or Assistant Secretary of
Purchaser shall also certify that such resolutions have not been rescinded,
revoked, modified, or otherwise affected and remain in full force and effect.
9.4 BASIC CORPORATE DOCUMENTS. Purchaser shall have delivered to
Seller on the Closing Date copies of certificates from the Secretary of State
in Georgia and Delaware, indicating that, as of a date within twenty (20)
days prior to the Closing Date, Purchaser was in good standing, and had paid
all taxes required to have been paid as of such date.
9.5 NO INJUNCTION; ETC. No action, proceeding, investigation,
regulation, or legislation shall be pending or overtly threatened which seeks
to enjoin, restrain, or prohibit Seller, or to obtain substantial damages
from Seller, in respect of the consummation of the transactions contemplated
hereby, which, in the reasonable judgment of Seller, would make it
inadvisable to consummate such transactions.
9.6 INCUMBENCY. Seller shall have received a certificate of incumbency
of Purchaser executed by the Chairman or President and attested by the
Secretary or Assistant Secretary of Purchaser listing the officers of
Purchaser authorized to execute this Agreement and the other Acquisition
Documents to which Purchaser is a party and the instruments of assumption on
behalf of Purchaser and certifying the authority of each such officer to
execute the agreements, documents, and instruments on behalf of Purchaser in
connection with the consummation of the transactions contemplated herein.
9.7 CERTIFICATES. Seller shall have received from Purchaser all such
certificates, dated as of the Closing Date, as Seller shall reasonably
request to evidence the fulfillment by Purchaser, or such other satisfaction
as the Closing Date, of the terms and conditions of this Agreement.
9.8 ACQUISITION DOCUMENTS. Seller shall have received the Acquisition
Documents to which Purchaser is a party, executed by Purchaser.
9.9 OPINION OF PURCHASER'S COUNSEL. Seller shall have received the
Purchaser Opinion, executed by Xxxxxx & Bird, counsel for Purchaser, which
opinion may be based upon and incorporate the 1992 edition of the
Interpretive Standards applicable to Legal Opinions to Third Parties in
Corporate Transactions adopted by the Legal Opinion Committee of the
Corporate and Banking Law Section of the State Bar of Georgia, which
Interpretive Standards shall be attached to the Opinion.
9.10 XXXX-XXXXX-XXXXXX. All applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Act shall have expired or been terminated.
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9.11 PROCEEDINGS. The form and substance of all opinions, certificates,
assignments, orders and other documents and instruments hereunder shall be
satisfactory in all reasonable respects to Seller and its counsel.
9.12 RELEASE FROM GUARANTEES. Purchaser shall have caused Resources and
its affiliates to be released from any guarantees of Seller's obligations
under equipment leases included among the Acquired Assets. Purchaser
covenants to use reasonable efforts (which shall, if requested by an
equipment lessor, include substituting Purchaser as the guarantor in place of
Resources) to cause Resources to be so released. Purchaser shall provide to
the equipment lessors upon request financial and such other information
regarding Purchaser as reasonably requested by the equipment lessors.
9.13 ROYALTY AGREEMENT. Purchaser shall have executed and delivered the
Royalty Agreement substantially in the form attached hereto as EXHIBIT D.
ARTICLE 10
MUTUAL COVENANTS
10.1 GOVERNMENTAL FILINGS. Purchaser and Seller, to the extent legally
required, shall promptly prepare, file, and diligently prosecute within five
(5) business days from the date hereof all applications and filings required
by federal or state law in order to effect the transactions contemplated by
this Agreement. The parties agree to request acceleration under
Xxxx-Xxxxx-Xxxxxx.
10.2 FURTHER MUTUAL COVENANTS. Purchaser and Seller shall each take all
actions contemplated by this Agreement, and, subject to Purchaser's and
Seller's right to terminate this Agreement pursuant to Article 13 hereof, do
all things reasonably necessary to effect the consummation of the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that nothing
in this Agreement shall require the Purchaser in order to consummate the
transactions contemplated hereby to sell or otherwise dispose of, license,
hold separate or otherwise divest itself of any portion of the Acquired
Assets. Except as otherwise provided in this Agreement, Purchaser and Seller
shall each refrain from knowingly taking or failing to take any action which
would render any of the representations or warranties made by such party as
contained in Articles 5 or 6 of this Agreement, as applicable, in any
material respect inaccurate as of the Closing Date. Each party shall
promptly notify the other party of any action, suit, or proceeding that shall
be instituted or threatened against such party to restrain, prohibit, or
otherwise challenge the legality of any transaction contemplated by this
Agreement.
10.3 PRORATIONS.
(a) Royalty Payments, Utility Charges, Rental Charges, Equipment
Charges, Real Property Taxes, Personal Property Taxes, and Service Contracts
including, without limitation, prepayments thereof (all as individually
defined below and collectively called the "Proration Items"), shall be
prorated directly between the Seller and the Purchaser as provided in this
Section 10.3.
(b) For purposes of this Section 10.3, the capitalized terms set
forth below shall have the following meanings:
(i) "Utility Charges" shall mean water, sewer, electricity,
gas and other utility charges, if any, applicable to the Real Property and
the Leased Real Property;
(ii) "Rental Charges" shall mean common area maintenance
charges, merchant association dues, insurance reimbursement and rental
charges payable or receivable and other payments, or receipts (other than
Real Property Taxes and royalties or like payments) applicable to the Real
Property and the Leased Real Property;
(iii) "Equipment Charges" shall mean rental charges payable
or receivable and
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other payments or receipts applicable to the Equipment;
(iv) "Real Property Taxes" shall mean ad valorem taxes
imposed upon the Real Property and any portion of the Leased Real Property
owned by or for which Seller, as lessee, is responsible for paying such
taxes, general assessments imposed with respect to the Real Property and any
portion of the Leased Real Property owned by or for which Seller, as lessee,
is responsible for paying such assessments, and special assessments upon the
Real Property and any portion of the Leased Real Property owned by or for
which Seller, as lessee, is responsible for paying such assessments;
(v) "Personal Property Taxes" shall mean ad valorem taxes
imposed upon the Acquired Assets other than the Real Property or the Leased
Real Property; and
(vi) "Royalty Payments" shall mean any charges applicable to
the licensing of any Intellectual Property, including without limitation, any
charges payable under the License Agreement.
(c) As soon as practicable after the Closing Date, all Utility
Charges, Rental Charges, Equipment Charges, Real Property Taxes, Personal
Property Taxes and Royalty Payments (including amounts owed pursuant to
transferable state licenses applicable to the Acquired Assets and transferred
to Purchaser hereunder) which are not included in the Assumed Liabilities
shall be apportioned to the Closing Date, and representatives of the Seller
and Purchaser will examine all relevant books and records as of the Closing
Date in order to make the determination of the apportionments, which
determinations shall be calculated in accordance with past practices.
Payments in respect thereof shall be made to the appropriate party by check
within thirty (30) days after such determination, except that payments for
Real Property Taxes and Personal Property Taxes shall initially be determined
based on the previous year's taxes and shall later be adjusted to reflect the
current year's taxes when the tax bills are finally rendered. The parties
shall fully cooperate to avoid, to the extent legally possible, the payment
of duplicate Personal Property Taxes, and each party shall furnish, at the
request of the other, proof of payment of any Personal Property Taxes or
other documentation which is a prerequisite to avoiding payment of a
duplicate tax. No apportionment or payment shall be made by Purchaser with
respect to any amount credited to Seller under the License Agreement, which
amount is identified as a noncurrent asset included among the Acquired Assets
hereunder.
(d) In the event that either party (the "Payor") pays a Proration
Item (other than if and to the extent included in the Assumed Liabilities)
for which the other party (the "Payee") is obligated in whole or in part
under this Section 10.3, the Payor shall present to the Payee evidence of
payment and a statement setting forth the Payee's proportionate share of such
Proration item, and the Payee shall promptly pay such share to the Payor. In
the event either party (the "Recipient") receives payments of a Proration
Item to which the other party (the "Beneficiary") is entitled in whole or in
part under this Agreement, the Recipient shall promptly pay such share to the
Beneficiary.
(e) In the event there exists as of the Closing Date any pending
appeals of ad valorem tax assessments with regard to any Acquired Assets, the
continued prosecution and/or settlement of such appeals shall be subject to
the direction and control of Purchaser with respect to assessments for the
year within which the Closing occurs.
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ARTICLE 11
POST CLOSING MATTERS
11.1 EMPLOYMENT OF EMPLOYEES.
(a) On the Closing Date, Purchaser shall make offers of employment
to all of the hourly Employees and to those certain salaried Employees
identified on SCHEDULE 11.1, other than Employees who are "Not Actively
Employed" by Seller on the Closing Date for any reason whatsoever, including
but not limited to a leave of absence, long term or short term disability, or
prior termination of employment (an Employee shall be considered "Not
Actively Employed" if the Employee did not report to work with Seller for a
period of at least six consecutive business days which includes the Closing
Date (excluding vacation time or absences due to minor illness)). Employees
who accept the offer of employment made by Purchaser shall be referred to as
"Hired Employees."
(b) Purchaser has confirmed to Seller that each Hired Employee
shall receive credit for the purposes of determining vesting service under
Purchaser's tax qualified deferred compensation plans applicable to the Hired
Employees. Purchaser has also confirmed to Seller that Hired Employees shall
be entitled to participate in Purchaser's group insurance plans and programs
(subject to the terms of such plans and programs) without regard to
applicable waiting, eligibility, or pre-existing condition limitation
periods, except to the extent that such eligibility, waiting, or pre-existing
limitation periods would apply under Seller's group insurance plans or
programs. Purchaser has further confirmed that Hired Employees shall receive
credit under applicable severance pay plans maintained by Purchaser as of the
Closing Date for employment service with Seller to the extent such Hired
Employees are not entitled to payment under Seller's severance pay (or
similar) plans with respect to such service with Seller. Notwithstanding any
possible inferences to the contrary, neither of Seller nor Purchaser intends
for this Article 11 to create any rights or obligations except as between the
parties hereto, and no past, present or future employees of Seller or
Purchaser shall be treated as third-party beneficiaries of this Article 11.
(c) Seller shall be responsible for the payment of all wages,
commissions, severance pay, accrued vacation, sick pay, and other employee
benefit plan obligations under ERISA Sections 601-609 (i) to Hired Employees
to the extent that such compensation or benefits are earned or accrued but
not yet paid through the Closing Date and (ii) to any Employees of Seller who
are not Hired Employees. Except for obligations specifically assumed by
Purchaser hereunder, Seller, General Partner or Resources shall be
responsible for the payment of any amounts due to its Employees (including
the Hired Employees) pursuant to the Seller Benefit Plans as a result of the
employment or termination of employment of its Employees or as a result of
the consummation of the transactions contemplated hereunder, including
actions taken by Purchaser post-closing which subsequently cause payment
obligations of Seller, General Partner or Resources. Seller shall be
responsible for reporting all employee-related costs and liabilities of Hired
Employees accruing prior to the Closing Date, whether payable on or after the
Closing Date. Seller is responsible for all incurred but unreported or
unpaid medical claims made, occurring or arising prior to the Closing Date
and for the cost associated with any hospital confinement that commences
prior to the Closing Date. Purchaser shall become responsible for all costs
and liabilities attributable to Hired Employees accruing after the Closing
Date; PROVIDED, HOWEVER, that Purchaser shall not be responsible for (a)
liabilities arising under the Seller Benefit Plans (except as specifically
assumed hereunder related to the Transferred Benefit Plans) or (b)
liabilities associated with any short term or long term disabilities
incurred, or leaves taken prior to the Closing Date. Effective on the
Closing Date, Seller shall, and hereby does, release all Hired Employees from
any employment and/or confidentiality agreement previously entered into
between Seller and such Hired Employees to the extent (but only to the
extent) necessary for Purchaser to operate the Business in substantially the
same manner as operated by Seller prior to the Closing Date.
11.2 SELLER BENEFIT PLANS. Except for obligations specifically assumed
by Purchaser hereunder related to the Transferred Benefit Plans, Purchaser
shall assume no responsibility with regard to any Seller Benefit Plans. To
the extent necessary, Seller may continue to communicate with the Hired
Employees
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regarding their rights and entitlement to any benefits under the Seller
Benefit Plans, subject to Purchaser's prior approval, which shall not be
unreasonably withheld, and the parties shall cooperate with each other in the
administration of all applicable employee benefit plans and programs.
11.3 USE OF NAME. Seller hereby grants to Purchaser a nonexclusive
royalty-free license to continue to use the "Nord" name for a one (1) year
period on any fixed Acquired Asset which at Closing bears the "Nord" name or
logo.
11.4 EMPLOYEE FILES. To the extent permitted by law, on the Closing
Date, or as soon as practicable thereafter, Seller shall deliver to a
designee of Purchaser a copy of all historical personnel and medical records
of each of the Hired Employees, including, but not limited to, employment
agreements, confidentiality and noncompete agreements, employment
applications, corrective action reports, disciplinary reports, notices of
transfer, notices of rate changes, other similar documents and all medical
records.
11.5 NON-SOLICITATION. Seller shall terminate effective as of the
Closing Date all employment agreements it has with any of the Hired
Employees. Until the expiration of thirty-six (36) months after the month in
which the Closing Date occurs, Seller shall not directly or indirectly
solicit or offer employment to any Hired Employee who is then an employee of
Purchaser, or who has terminated such employment without the consent of
Purchaser within 180 days of such solicitation or offer, and Purchaser shall
not directly or indirectly solicit or offer employment to any person who,
after the Closing Date is then an employee of Seller or who has terminated
such employment without the consent of Seller within 180 days of such
solicitation or offer.
11.6 MAINTENANCE OF BOOKS AND RECORDS.
(a) Each of Seller and Purchaser shall preserve until the seventh
anniversary of the Closing Date all Books and Records possessed or to be
possessed by such party relating to any of the assets, liabilities or
business of the Business prior to the Closing Date. Seller shall give
Purchaser written notice of any Books and Records discovered by Seller that
were not transferred to Purchaser because such Books and Records were not
located on the Real Property or the Leased Property. After the Closing Date,
where there is a legitimate purpose, such party shall provide the other
parties and their representatives with access, upon prior reasonable written
request specifying the need therefor, during regular business hours, to (i)
the officers and employees of such party and (ii) the books of account and
records of such party, but, in each case, only to the extent relating to the
assets, liabilities or business of the Business prior to the Closing Date,
and the other parties and their representatives shall have the right to make
copies of such books and records; provided, however, that the foregoing right
of access shall not be exercisable in such a manner as to interfere
unreasonably with the normal operations and business of such party; and
further, provided, that, as to so much of such information as constitutes
trade secrets or confidential business information of such party, the
requesting party, its affiliates, officers, directors and representatives
will use due care to not disclose such information except (i) as required by
law, (ii) with the prior written consent of such party, which consent shall
not be unreasonably withheld, or (iii) where such information becomes
available to the public generally, or becomes generally known to competitors
of such party, through sources other than the requesting party, its
affiliates or its officers, directors or representatives. Such records may
nevertheless be destroyed by a party if such party sends to the other parties
written notice of its intent to destroy records, specifying with
particularity the contents of the records to be destroyed. Such records may
then be destroyed after the 30th day after such notice is given unless
another party objects to the destruction in which case the party seeking to
destroy the records shall deliver such records to the objecting party.
(b) Purchaser shall cooperate with Seller in Seller's preparation
and filing of all tax filings relating to the period ending prior to the
Closing Date. Purchaser also shall make such other information available as
may be reasonably required by Seller in connection with audits or otherwise
for the proper payment of taxes for which Seller is responsible under the
terms of this Agreement.
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11.7 PAYMENTS RECEIVED. Seller and Purchaser each agree that after the
Closing they will hold and will promptly transfer and deliver to the other,
from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash), or other property that they may receive on or after the Closing
which properly belongs to the other party, including without limitation, any
insurance proceeds, and will account to the other for all such receipts.
11.8 UCC MATTERS. From and after the Closing Date, Seller will promptly
refer all inquiries with respect to ownership of the Acquired Assets to
Purchaser. In addition, Seller will execute such documents and financing
statements as Purchaser may reasonably request from time to time to evidence
transfer of the Acquired Assets to Purchaser, including any necessary
assignments of financing statements.
11.9 COOPERATION. Seller and Purchaser shall cooperate with each other
in all reasonable respects in connection with the defense of any claim
included within any Assumed Liability or Excluded Liability, as the case may
be, including making available records relating to such claim and furnishing,
management employees of the party as may be reasonably necessary for the
preparation of the defense of any such claim or for testimony as a witness in
any proceeding relating to such claim; provided, however, that the foregoing
right to cooperation shall not be exercisable by one party in such a manner
as to interfere unreasonably with the normal operations and business of the
other party.
11.10 TITANIUM DIOXIDE SUPPLY AGREEMENT. Purchaser shall enter into a
five (5) year Titanium Dioxide supply agreement substantially in the form of
Exhibit F attached hereto.
ARTICLE 12
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
12.1 CONFIDENTIALITY. Consummation of the transactions contemplated by
this Agreement has involved, and will continue to involve, the written or
verbal disclosure and communication of information or documentation owned by
Seller or Purchaser, which information may include, but is not necessarily
limited to, financial data, business plans, personnel information, drawings,
samples, devices, trade secrets, technical information, computer systems and
software, results of research and other data in either oral or written form
(collectively and individually referred to as the "Information"). Purchaser
and Seller agree that the following terms and conditions will apply:
(a) The Information is disclosed solely for use in completing
corporate investigation procedures incidental to this Agreement, and each
party agrees not to use the Information prior to the Closing Date for any
other purpose, nor to disclose or communicate the Information to any third
party, except to those employees, agents, attorneys, accountants, lenders, or
consultants who shall have a need to know the Information for the purpose
described above and for whom the appropriate party shall be responsible
unless (i) such Information is already known to such party or to others not
bound by a duty of confidentiality or such Information is or becomes publicly
available through no fault of such party, (ii) the use of such Information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the transactions contemplated
hereby, or (iii) the furnishing or use of such Information is required by or
necessary or appropriate in connection with a legal proceeding.
(b) Except to the extent contemplated by this Agreement, the
Information and all rights to the Information which have been or will be
provided by each party shall remain the exclusive world-wide property of such
party prior to the Closing Date and shall be held by such party in trust for
the benefit of the other. Neither party will directly or indirectly, deal
with, use, exploit, or disclose such Information to any person or entity for
any purpose prior to the Closing Date, except as described herein or unless
and until expressly authorized in writing to do so by the other. If the
transactions contemplated hereby are not consummated, each party will return
or destroy as much of such written Information as the party furnishing such
Information shall reasonably request.
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(c) The restrictions of this Section 12.1 shall terminate on the
Closing Date solely with respect to the Information conveyed to Purchaser,
and thereafter, such Information conveyed to Purchaser may be used free of
any restriction imposed by this Agreement.
12.2 PUBLIC ANNOUNCEMENTS. Seller and Purchaser will consult with each
other before issuing any press releases or otherwise making any public
statements or filings with governmental entities with respect to this
Agreement or the transactions contemplated hereby and shall not issue any
press releases or make any public statements or filings with governmental
entities prior to such consultation and shall modify any portion thereof if
the other party reasonably objects thereto, unless the same may be required
by applicable law or based upon advice of counsel.
ARTICLE 13
TERMINATION
13.1 TERMINATION. This Agreement may be terminated:
(a) by the mutual consent of Purchaser and Seller;
(b) by Purchaser: (i) if any condition in Article 8 becomes
impossible of performance or has not been satisfied in full or previously
waived by Purchaser in writing at or prior to the Closing Date, and (ii) as
provided in Sections 4.3(b), 4.7, or 8.19 hereof;
(c) by Seller if any condition in Article 9 becomes impossible of
performance or has not been satisfied in full or previously waived by Seller
in writing at or prior to the Closing Date; or
(d) by either party (other than a party that is in material breach
of its obligations under this Agreement) if the Closing shall not have
occurred on or before July 1, 1997.
13.2 EFFECT OF TERMINATION. As to any damages of either party arising
from the effect of termination or abandonment of this Agreement by the other
party, such party is only entitled to pursue its rights or remedies against
the other party to the extent the termination or abandonment by a party is
due to the other party's willful action or refusal to act as required
pursuant to the terms hereof.
ARTICLE 14
INDEMNIFICATION
For the purposes of this Article 14, "Losses" shall mean any and all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, removal and remediation requirements and expenses,
including without limitation, interest, penalties, and reasonable attorneys'
and other professional fees and expenses.
14.1 AGREEMENT OF SELLER TO INDEMNIFY. Subject to the terms and
conditions of this Article 14, Seller agrees to indemnify, defend, and hold
harmless Purchaser and its officers, directors, shareholders, employees and
agents (collectively, the "Purchaser Indemnitees") from, against, for, and in
respect of any and all Losses asserted against, relating to, imposed upon, or
incurred by the Purchaser Indemnitees by reason of, resulting from, based
upon, or arising out of:
(a) the breach of any representation or warranty of Seller
contained in or made pursuant to this Agreement or any other Acquisition
Document or in any certificate, Schedule, or Exhibit furnished by Seller in
connection herewith or therewith;
(b) the breach of any covenant or agreement of Seller contained in
or made pursuant to this Agreement or any other Acquisition Document;
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(c) any Excluded Liability;
(d) the failure to deliver good, valid and marketable title to any
of the Acquired Assets and the encroachment of any building, structures or
other improvements, including pavement, currently located on the Real
Property onto the property of others including public rights-of-way and the
location of any buildings or other structures currently located on the Real
Property in violation of any set back lines or requirements imposed pursuant
to zoning or other ordinances now existing or existing at the time of the
construction of buildings or structures;
(e) any act or omission of Seller (as to the Real Property and
Leased Real Property), or any previous owner or operator (as to the Real
Property) of the underground storage tanks that are now or previously have
been located on the Real Property or Leased Real Property (the "Seller USTs")
that would prevent Seller from qualifying for reimbursement by the
[Georgia Petroleum Storage Tank Remediation Fund] or any other state having
similar remediation funds for costs associated with contamination caused by
the Seller USTs; and
(f) any Environmental Liabilities. Seller also indemnifies
Purchaser to the same extent Seller has indemnified the landlords under the
Real Property Leases being assumed by Purchaser hereunder relating to actions
taken or omissions occurring prior to Closing.
14.2 AGREEMENT OF PURCHASER TO INDEMNIFY SELLER. Subject to the terms
and conditions of this Article 14, Purchaser agrees to indemnify, defend, and
hold harmless Seller and its officers, directors, shareholders, employees and
agents (collectively, the "Seller Indemnitees") from, against, for, and in
respect of any and all Losses asserted against, relating to, imposed upon, or
incurred by the Seller Indemnities arising out of:
(a) the breach of any representation or warranty of Purchaser
contained in or made pursuant to this Agreement or any other Acquisition
Document or in any certificate, Schedule, or Exhibit furnished by Purchaser
in connection herewith or therewith;
(b) the breach of any covenant or agreement of Purchaser contained
in or made pursuant to this Agreement or any other Acquisition Document; and
(c) any (i) Assumed Liability and (ii) liability arising out of
the operation of the Business by Purchaser or ownership of the Acquired
Assets by Purchaser after the Closing Date, except for any liability against
which Purchaser is entitled to indemnification pursuant to Section 14.1.
14.3 PROCEDURES FOR INDEMNIFICATION. As used herein, the term
"Indemnitor" means the party against whom indemnification hereunder is
sought, and the term "Indemnitee" means the party seeking indemnification
hereunder.
(a) A claim for indemnification hereunder ("Indemnification
Claim") shall be made by the Indemnitee by delivery of a written declaration
to the Indemnitor requesting indemnification and specifying the basis on
which indemnification is sought and the amount of asserted Losses and, in the
case of a Third Party Claim (as hereinafter defined), containing (by
attachment or otherwise) such other information as the Indemnitee shall have
concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim, the
procedures set forth in Section 14.4 hereof shall be observed by the
Indemnitee and the Indemnitor.
(c) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Indemnitor shall have thirty (30) business days to
object to such Indemnification Claim by delivery of a written notice of such
objection to the Indemnitee specifying in reasonable detail the basis for
such objection. Failure
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to timely so object shall constitute a final and binding acceptance of the
Indemnification Claim by the Indemnitor and the Indemnification Claim shall
be paid in accordance with Section 14.3(d) hereof. If an objection is timely
interposed by the Indemnitor, then the Indemnitee and the Indemnitor shall
negotiate in good faith for a period of sixty (60) business days from the
date (such period is hereinafter referred to as the "Negotiation Period") the
Indemnitee receives such objection prior to commencing any formal legal
action, suit or proceeding with respect to such Indemnification Claim.
(d) Upon determination of the amount of an Indemnification Claim
that is binding on both the Indemnitor and the Indemnitee, the Indemnitor
shall pay the amount of such Indemnification Claim by check within ten (10)
days of the date such amount is determined.
14.4 DEFENSE OF THIRD PARTY CLAIMS. Should any claim be made, or suit
or proceeding (including, without limitation, a binding arbitration or an
audit by any taxing authority) be instituted against the Indemnitee which, if
prosecuted successfully, would be a matter for which the Indemnitee is
entitled to indemnification under this Agreement (a "Third Party Claim"),
Indemnitee shall promptly notify the Indemnitor of such Third Party Claim,
and the obligations and liabilities of the parties hereunder with respect to
such Third Party Claim shall be subject to the following terms and conditions:
(a) The Indemnitor shall have thirty (30) days (or such lesser
time as may be necessary to comply with statutory response requirements for
litigation claims) from receipt of the Indemnification Claim (the "Notice
Period") to notify the Indemnitee, (i) whether or not the Indemnitor disputes
its liability to the Indemnitee with respect to such claim, and (ii)
notwithstanding any such dispute, whether or not the Indemnitor desires, at
its sole cost and expense, to defend the Indemnity against such claim.
(i) In the event that the Indemnitor notifies the Indemnitee
within the Notice Period that it desires to defend the Indemnitee against
such claim then, except as hereinafter provided, the Indemnitor shall have
the right to defend the Indemnitee by appropriate proceedings, which
proceedings shall be promptly settled or prosecuted by the Indemnitor to a
final conclusion in such a manner as to minimize the risk of the Indemnitee
becoming subject to liability for any other significant matter. If the
Indemnitee desires to participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense. If, in the reasonable
opinion of the Indemnitee, any such claim or the litigation or resolution of
any such claim involves an issue or matter which could have a material and
adverse effect on the business, operations, material assets, material
properties or material prospects of the Indemnitee, including without
limitation the administration of the tax returns and responsibilities under
the tax laws of the Indemnitee, then the Indemnitee shall have the right to
control the defense or settlement of any such claim or demand and its
reasonable costs and expenses shall be included as part of the
indemnification obligation of the Indemnitor. If the Indemnitee should elect
to exercise such right, the Indemnitor shall have the right to participate
in, but not control, the defense or settlement of such claim at its sole cost
and expense.
(ii) Except where the Indemnitor (A) timely elects to defend
the Indemnitee against such claim or demand (in which case Section 14.4(a)(i)
shall govern), or (B) Indemnitor disputes its liability in a timely manner
under this Section 14.4, the Indemnitor shall be conclusively liable for the
amount of any such claim or defense which is unsuccessful.
(b) The Indemnitee and the Indemnitor shall cooperate with each
other in all reasonable respects in connection with the defense of any Third
Party Claim, including making available records relating to such claim and
furnishing, without expense to the Indemnitor, management employees of the
Indemnitee as may be reasonably necessary for the preparation of the defense
of any such claim or for testimony as witness in any proceeding relating to
such claim.
14.5 SETTLEMENT OF THIRD PARTY CLAIMS. No settlement of a Third Party
Claim involving the asserted liability of the Indemnitee under this Article
14 shall be made without the prior written consent by or on behalf of the
Indemnitee, which consent shall not be unreasonably withheld or delayed.
Consent shall be
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presumed in the case of settlements of $20,000 or less where the Indemnitee
has not responded within twenty (20) business days of written notice of a
proposed settlement. In the event of any dispute regarding the
reasonableness of a proposed settlement, the party that will bear the larger
financial loss resulting from such settlement shall make the final
determination in respect thereto, which determination shall be final and
binding on all involved parties.
14.6 DURATION; LIMITATIONS. The indemnification rights of the parties
hereto for Losses resulting from a breach of representations and warranties
or for breaches of covenants contained in this Agreement or any other
Acquisition Document (other than for tax, employee benefit, and environmental
matters) is subject to the condition that the Indemnitor shall have received
written notice of the Losses for which indemnity is sought within two (2)
years after the Closing Date. The Indemnitor shall be obligated to indemnify
the Indemnitee only when, and only with respect to amounts by which the
aggregate of all Losses actually paid or suffered by the Indemnitee as to
which a right of indemnification is provided under this Article 14 exceeds
Two Hundred Thousand Dollars ($200,000.00) in the aggregate (the "Deductible
Amount"). The indemnification rights of the parties hereto for Losses
resulting from a breach of representations and warranties or for breaches of
covenants that are related to environmental matters is subject to the
condition that the Indemnitor shall have received written notice of the
Losses for which indemnity is sought within ten (10) years of the Closing
Date. The indemnification rights of the parties hereto for Losses resulting
from a breach of representations and warranties or for breaches of covenants
that are related to tax or employee benefit matters is subject to the
condition that the Indemnitor shall have received written notice of the
Losses for which indemnity is sought prior to the expiration of the
applicable statute of limitations therefor. The indemnification rights of
the parties hereto for Losses resulting from a breach of any representation
and warranty with respect to title to any of the Acquired Assets, or with
respect to the breach of any agreement or undertaking with respect to payment
of the Excluded Liabilities or Assumed Liabilities shall be effective for all
purposes hereunder without limitation as to the time within which such notice
may be given and without deduction for the Deductible Amount. Indemnitee
shall seek indemnification for individual claims related to losses resulting
from a breach of representations and warranties or for breaches of covenants
only where each such claim is in excess of $4,000.
ARTICLE 15
GENERAL PROVISIONS
15.1 FEES AND EXPENSES. Except as specifically provided in this
Agreement, Seller and Purchaser each shall pay their respective fees and
expenses in connection with the transactions contemplated by this Agreement.
Notwithstanding anything to the contrary set forth herein, Seller shall not
pay any Excluded Liabilities or any fees or expenses incurred by Seller in
connection with the transactions contemplated by this Agreement, using the
Acquired Assets or any portion thereof, and if prior to the Effective Time a
portion of the Acquired Assets is used to pay any Excluded Liabilities, or
any of such fees and expenses, Seller shall reimburse Purchaser by the amount
of Acquired Assets so used.
15.2 NOTICES. All notices, request, demands, and other communications
hereunder shall be in writing (which shall include communications by telex
and telecopy) and shall be delivered (a) in person or by courier or overnight
service, (b) mailed by first class registered or certified mail, postage
prepaid, return receipt requested, or (c) by facsimile transmission followed
by first class mail, as follows:
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(a) If to Seller:
Nord Kaolin Company
c/o Nord Resources Corporation
0000 Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxx
Facsimile (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Facsimile (000) 000-0000
(b) If to Purchaser:
Dry Branch Kaolin Company
Xxxxx 0, Xxx 000-X
Xxx Xxxxxx, Xxxxxxx 00000-0000
Telephone (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. XxXxxxx, Esq.
Facsimile (000) 000-0000
or to such other address as the parties hereto may designate in writing to
the other in accordance with this Section 15.2. Any party may change the
address to which notices are to be sent by giving written notice of such
change of address to the other parties in the manner above provided for
giving notice. If delivered personally or by courier, the date on which the
notice, request, instruction or document is delivered shall be the date on
which such delivery is made and if delivered by facsimile transmission or
mail as aforesaid, the date on which such notice, request, instruction or
document is received shall be the date of delivery.
15.3 ASSIGNMENT; BINDING EFFECT. Except as provided in this Section
15.3, prior to the Closing, this Agreement shall not be assignable by any of
the parties hereto without the written consent of the other; provided,
however, that (a) at the Closing and upon notice to Seller, Purchaser may
assign all of its rights to be indemnified as provided in Article 14 to any
lender or lenders providing financing to Purchaser subject to all of the
provisions hereof, and (b) after the Closing, Purchaser may assign its
interest in this Agreement to any person or entity without the consent of
Seller. From and after any such assignment, the word "Purchaser" shall mean
such assignee; provided, however, that notwithstanding such assignment Dry
Branch Kaolin Company shall not be relieved of any of its obligations
hereunder.
15.4 NO BENEFIT TO OTHERS. The representations, warranties, covenants,
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article 14 hereof, the
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Xxxxxxxxx Xxxxxxxxxxx and the Seller Indemnitees and their heirs, executors,
administrators, legal representatives, successors and assigns, and they shall
not be construed as conferring any rights on any other persons.
15.5 HEADINGS, GENDER, AND "PERSON". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of
this Agreement and shall not affect in any way the meaning or interpretation
of this Agreement. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine, or neuter, as
the context requires. Any reference to a "person" herein shall include an
individual, firm, corporation, partnership, trust, governmental authority or
body, association, unincorporated organization or any other entity.
15.6 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one counterpart has been signed by each party
and delivered to the other party hereto.
15.7 INTEGRATION OF AGREEMENT. This Agreement supersedes all prior
agreements, oral and written, between the parties hereto with respect to the
subject matter hereof. Neither this Agreement, nor any provision hereof, may
be changed, waived, discharged, supplemented, or terminated orally, but only
by an agreement in writing signed by the party against which the enforcement
of such change, waiver, discharge, or termination is sought.
15.8 TIME OF ESSENCE. Time is of the essence in this Agreement.
15.9 GOVERNING LAW. This Agreement shall be construed under the laws of
the State of Georgia.
15.10 PARTIAL INVALIDITY. Whenever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision or provisions had never been contained herein unless
the deletion of such provision or provisions would result in such a material
change as to cause completion of the transactions contemplated hereby to be
unreasonable.
15.11 INVESTIGATION. Any inspection, preparation, or compilation of
information or Schedules, or assessment of the inventories, properties,
financial condition, or other matters relating to Seller conducted by or on
behalf of Purchaser pursuant to this Agreement shall in no way limit, affect,
or impair the ability of Purchaser to rely upon the representations,
warranties, covenants, and agreements of Seller set forth herein. Any
disclosure made on one Schedule shall not be deemed made on any other
Schedule, unless appropriate cross-referencing is made. The covenants and
representations and warranties of Seller and Purchaser shall survive the
Closing and the execution and delivery of all instruments of conveyance for
the periods set forth in Section 14.6.
15.12 ARBITRATION. The parties agree that any dispute between or among
them arising out of or based upon this Agreement, the remaining Acquisition
Documents or the consummation of the transactions provided for herein shall
be submitted to and resolved by arbitration in Washington, D.C. in accordance
with the rules and procedures of the American Arbitration Association, and
the decision of the arbiter(s) in such dispute shall be final and binding on
the parties to such arbitration proceeding. Except as the arbiter(s) may
otherwise award or assess the expenses of any such proceeding, each party
shall bear its own costs and expenses, including the expense of its counsel,
in any such arbitration proceeding. If the matter in dispute is under
$100,000, the parties shall agree upon one (1) arbiter. If the matter in
dispute exceeds $100,000, the parties shall agree upon three (3) arbiters.
Notwithstanding the foregoing, either party shall be entitled to seek and
obtain specific performance and/or injunctive relief from a court of
competent jurisdiction.
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(signatures appear on the following page)
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed and sealed on its behalf by its duly authorized officer, all as of
the day and year first above written.
PURCHASER:
DRY BRANCH KAOLIN COMPANY
[CORPORATE SEAL] By: ___________________________
SELLER:
NORD KAOLIN COMPANY
[CORPORATE SEAL] By: Norplex, Inc., its General Partner
By:
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