STOCK PURCHASE AGREEMENT by and among THE STOCKHOLDERS OF KAUFMAN HOLDINGS CORPORATION, ALEX KAUFMAN and CHEMTURA CORPORATION Dated as of January 31, 2007
by
and among
THE
STOCKHOLDERS OF
XXXXXXX
HOLDINGS CORPORATION,
XXXX
XXXXXXX
and
CHEMTURA
CORPORATION
Dated
as of January 31, 2007
TABLE OF CONTENTS
Page
|
||
DEFINITIONS
AND TERMS
|
1
|
|
1.1
|
Specific
Definitions
|
1
|
1.2
|
Other
Definitional Provisions
|
7
|
ARTICLE
II
|
PURCHASE
AND SALE
|
8
|
2.1
|
Purchase
and Sale of Shares
|
8
|
2.2
|
Purchase
Price
|
8
|
2.3
|
Working
Capital Adjustment
|
8
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF XXXXXXX
|
9
|
3.1
|
Ownership
of Shares
|
9
|
3.2
|
Authorization
|
10
|
3.3
|
Binding
Effect
|
10
|
3.4
|
No
Violations
|
10
|
3.5
|
Consents
and Approvals
|
10
|
3.6
|
Brokers
and Finders
|
11
|
3.7
|
Proceedings
|
11
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF XXXXXXX RELATING TO THE COMPANY
|
11
|
4.1
|
Organization
|
11
|
4.2
|
Capitalization;
Subsidiaries
|
11
|
4.3
|
Authorization
|
12
|
4.4
|
No
Violations
|
12
|
4.5
|
Consents
and Approvals
|
13
|
4.6
|
Financial
Statements
|
13
|
4.7
|
Absence
of Change
|
13
|
4.8
|
Real
Property
|
14
|
4.9
|
Title
to Assets; Condition and Sufficiency of Assets
|
14
|
4.10
|
Personal
Property
|
15
|
4.11
|
Proceedings;
Judgments; Compliance with Law
|
15
|
4.12
|
Permits
|
15
|
TABLE
OF CONTENTS
(continued)
Page
|
||
4.13
|
Environmental
Matters
|
15
|
4.14
|
Brokers
and Finders
|
15
|
4.15
|
Contracts
|
16
|
4.16
|
Intellectual
Property
|
16
|
4.17
|
Taxes
|
16
|
4.18
|
Labor
and Employment Matters
|
18
|
4.19
|
Employee
Benefit Matters
|
18
|
4.20
|
Customers
and Suppliers
|
18
|
4.21
|
Inventory
|
19
|
4.22
|
Affiliate
Transactions
|
19
|
4.23
|
Long-Term
Indebtedness
|
19
|
ARTICLE
V
|
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
|
19
|
5.1
|
Organization
|
19
|
5.2
|
Authorization
|
20
|
5.3
|
Binding
Effect
|
20
|
5.4
|
No
Violations
|
20
|
5.5
|
Consents
and Approvals
|
20
|
5.6
|
Brokers
and Finders
|
20
|
5.7
|
Proceedings
|
21
|
5.8
|
Investment
Intent
|
21
|
ARTICLE
VI
|
COVENANTS
|
21
|
6.1
|
Public
Announcements
|
21
|
6.2
|
Tax
Matters
|
21
|
6.3
|
Non-Competition
|
25
|
6.4
|
Required
Consents
|
27
|
6.5
|
Employee
Terminations
|
27
|
6.6
|
Transition
Period for Xxxxxxx; Excluded Assets
|
27
|
ARTICLE
VII
|
CLOSING
|
27
|
7.1
|
The
Closing
|
27
|
7.2
|
Sellers’
Closing Deliveries
|
27
|
7.3
|
Purchaser’s
Closing Deliveries
|
28
|
TABLE
OF CONTENTS
(continued)
Page
|
||
ARTICLE
VII
|
INDEMNIFICATION
|
29
|
8.1
|
Indemnification
by Xxxxxxx
|
29
|
8.2
|
Indemnification
by Purchaser
|
29
|
8.3
|
Indemnification
Process
|
29
|
8.4
|
Limitations
on Indemnity Payments
|
31
|
8.5
|
Survival
|
32
|
8.6
|
Characterization
of Indemnification Payments
|
32
|
ARTICLE
IX
|
GENERAL
PROVISIONS
|
32
|
9.1
|
Expenses
|
32
|
9.2
|
Further
Assurances
|
33
|
9.3
|
Amendment
|
33
|
9.4
|
Waiver
|
33
|
9.5
|
Notices
|
33
|
9.6
|
Headings
and Schedules
|
34
|
9.7
|
Applicable
Law
|
35
|
9.8
|
No
Third Party Rights
|
35
|
9.9
|
Counterparts
|
35
|
9.10
|
Severability
|
35
|
9.11
|
Confidentiality
Agreement; Entire Agreement
|
35
|
9.12
|
Consent
to Jurisdiction; Waiver of Jury Trial
|
35
|
9.13
|
Fair
Construction
|
35
|
Disclosure
Memorandum Schedules
Schedule
|
Description
|
|
1.1A
|
Financial
Statements
|
|
2.2(a)
|
Closing
Date Wire Transfer Instructions
|
|
3.1
|
Ownership
of Shares
|
|
3.5
|
Sellers
and Xxxxxxx Required Consents and Approvals
|
|
4.1
|
Jurisdictions
|
|
4.2(a)
|
Ownership
of Shares
|
|
4.2(b)
|
Capitalization
and Ownership of Subsidiaries
|
|
4.2(c)
|
Other
Securities and Interests
|
|
4.2(d)
|
Contractual
Obligations Relating to Securities
|
|
4.5
|
Company
Required Consents and Approvals
|
|
4.6
|
Undisclosed
Liabilities
|
|
4.7
|
Absence
of Change
|
|
4.8(a)
|
Owned
Real Property
|
|
4.8(b)
|
Leased
Real Property
|
|
4.10(a)
|
Fixed
Assets Register
|
|
4.10(b)
|
Leased
Assets
|
|
4.11(a)
|
Proceedings;
Judgments
|
|
4.11(b)
|
Compliance
With Applicable Law
|
|
4.12
|
Permits
|
|
4.13(a)
|
Environmental
Materials Made Available to Purchaser
|
|
4.13(b)
|
Impairment
of Indemnity Remedies
|
|
4.15
|
Contracts
|
|
4.16(a)
|
Intellectual
Property Rights
|
|
4.16(b)
|
Infringement
of Intellectual Property Rights
|
|
4.17
|
Tax
Matters
|
|
4.18(a)
|
Union
Agreements
|
|
4.18(b)
|
Pending
Union Recognition; Labor Disputes
|
|
4.18(c)
|
Employees
|
|
4.19
|
Employee
Benefit Matters
|
|
4.20
|
Customers
and Suppliers
|
|
4.21
|
Inventory
|
|
4.22(a)
|
Affiliate
Transactions
|
|
4.22(b)
|
Excluded
Assets
|
|
5.5
|
Purchaser
Required Consents and Approvals
|
|
6.2(c)
|
Estimated
Make-Whole Amount
|
This
STOCK PURCHASE AGREEMENT, dated as of January 31, 2007, is by and among the
holders of Shares listed on the signature pages hereto (collectively,
“Sellers”),
Xxxx
Xxxxxxx (“Xxxxxxx”)
and
Chemtura Corporation, a Delaware corporation (“Purchaser”).
RECITALS
WHEREAS,
Sellers own all of the issued and outstanding shares of common stock, no par
value per share (the “Shares”),
of
Xxxxxxx Holdings Corporation, a Delaware corporation (the “Company”);
and
WHEREAS,
based on the foregoing, and on the terms and subject to the conditions of this
Agreement, Sellers desire to sell, and Purchaser desires to purchase, all of
Sellers’ right, title and interest in and to the Shares.
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration the receipt and sufficiency of which is acknowledged,
Sellers, Xxxxxxx and Purchaser hereby agree as follows:
ARTICLE
I
DEFINITIONS
AND TERMS
1.1 Specific
Definitions.
As used
in this Agreement, the following terms have the following meanings:
“ACE
Policy”
means
ACE Remediation Expense Containment and Premises Pollution Liability Insurance
Policy, Policy No. PRM G23566047 001.
“Affiliate”
means,
with respect to any Person, any Person directly or indirectly controlling,
controlled by or under common control with, such Person. For purposes of this
definition, “control” (including, with correlative meaning, the terms
“controlling,” “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person through the ownership
of
more than 50% of such Person’s voting securities or equity. For clarification,
the Company and the Subsidiaries are Affiliates of Xxxxxxx prior to the Closing,
and Affiliates of Purchaser subsequent to the Closing.
“Affiliate
Transactions”
has
the
meaning specified in Section
4.22.
“Agreement”
means
this Stock Purchase Agreement, as the same may be amended or supplemented from
time to time in accordance with its terms.
“Allocation
Schedule”
has
the
meaning specified in Section
6.2(a)(iii).
“Basket”
has
the
meaning specified in Section
8.4(a).
1
“Business
Day”
means
any day other than a Saturday, a Sunday or a day on which banks in New York
City
are authorized or obligated by Law or executive order to close.
“Claim
Notice”
has
the
meaning specified in Section
8.3(a).
“Closing”
means
the closing of the transactions contemplated by this Agreement.
“Closing
Date”
means
January 31, 2007.
“Closing
Date Balance Sheet”
has
the
meaning specified in Section
2.3(a).
“Closing
Debt Repayment Amount”
means
the sum of the amounts reflected in the Pay-Off Letters.
“Closing
Sellers Amount”
has
the
meaning specified in Section 2.2(a).
“Code”
means
the U.S. Internal Revenue Code of 1986, as amended, and any successor Law and
the Treasury regulations promulgated thereunder.
“Company”
has
the
meaning specified in the recitals.
“Confidentiality
Agreement”
means
the Confidentiality Agreement, dated May 22, 2006, between the Company and
Purchaser.
“Consent”
means
any consent, waiver, approval, authorization, exemption, registration or
declaration.
“Contracts”
means
all oral or written agreements, contracts, leases, purchase and sale orders,
arrangements, commitments and licenses to which the Company or any Subsidiary
is
a party or is otherwise bound.
“Counter
Notice”
has
the
meaning specified in Section
8.3(c).
“Damages”
has
the
meaning specified in Section
8.1.
“Deferred
Payment”
has
the
meaning specified in Section
2.2(b).
“Deferred
Payment Amount”
has
the
meaning specified in Section
2.2(b).
“Designated
Representations”
has
the
meaning specified in Section 8.4(a).
“Direct
Claim”
has
the
meaning specified in Section
8.3(a).
“Disclosure
Memorandum”
means
the schedules attached to this Agreement and referred to in Articles
I,
II,
III,
IV,
V
and
VI.
“Enforceability
Limitations”
means
limitations on enforcement and other remedies imposed by or arising under or
in
connection with applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar Laws affecting creditors’ rights
generally from time to time in effect or general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing with
respect to those jurisdictions that recognize such concepts).
2
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Financial
Statements”
means
(i) the audited consolidated balance sheets and statements of income,
stockholders’ equity and cash flow as of and for the years ended
December 31, 2004 and 2005 for the Company and the Subsidiaries and (ii)
the unaudited consolidated balance sheet and statements of income, stockholders’
equity and cash flow as of and for the year ended December 31, 2006 (the
“Most
Recent Financial Statements”)
for
the Company and the Subsidiaries, all of which are included in Schedule 1.1A.
“fraud”
or
“fraudulent
misrepresentation”
means,
with respect to Xxxxxxx, Xxxxxxx’x willful withholding from, or knowing
misrepresentation to, Purchaser or its representatives of a material fact,
and
actual reliance by Purchaser on such withheld or misrepresented fact to
Purchaser’s detriment. Notwithstanding the use of the words “willful” and
“knowing” in this definition, the requisite showing of scienter
necessary for Purchaser to prove fraud or fraudulent misrepresentation shall
be
the scienter
required
to prove fraud under the laws of the State of New York. Purchaser shall bear
the
burden of proving fraud or fraudulent misrepresentation as required by
applicable law.
“GAAP”
means
U.S. generally accepted accounting principles as in effect from time to
time.
“Governmental
Authority”
means
any federal, state, local or foreign government or other political subdivision
thereof or any entity, body, regulatory or administrative authority, agency,
commission, court, tribunal or judicial body exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
“Hatco
Settlement Agreement”
means
the April 8, 2005 Settlement Agreement among Hatco Corporation, the New
Jersey Department of Environmental Protection, X.X. Xxxxx & Co. and
Remedium Group, Inc.
“HSR
Act”
means
the U.S. Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“Indemnified
Party”
has
the
meaning specified in Section
8.3.
“Indemnified
Taxes”
has
the
meaning specified in Section
6.2(c)(i).
“Indemnifying
Party”
has
the
meaning specified in Section
8.3.
“Independent
Accounting Firm”
has
the
meaning specified in Section
2.3(a).
3
“Intellectual
Property”
means,
collectively, (i) all inventions, improvements, U.S., foreign and international
design and utility patents and patent applications (including all reissues,
divisions, continuations, continuations-in-part, and extensions of any patent
or
patent application), industrial designs and applications for registration of
industrial designs, including all rights, to the extent permitted by law, to
file corresponding applications in any country in the world; (ii) all trade
secrets, know-how and confidential or proprietary information, whether
patentable or unpatentable, including but not limited to, technologies in
development, computer programs and other computer software (including software
systems and applications), internet sites, domains, domain names and related
software, user interfaces, topographies, source code, object code, algorithms,
display screens, layouts, development tools, instructions, templates, evaluation
software and hardware, formulae and information, manufacturing, engineering,
and
other drawings and manuals, recipes, technology, processes, designs, lab
journals, notebooks, schematics, data, plans, blue prints, research and
development reports, agency agreements, technical information, technical
assistance, engineering data, design and engineering specifications, and similar
materials recording or evidencing expertise or information, including those
related to products under development, and further including any rights as
permitted by law to obtain patents thereon in any country in the world; (iii)
all trademarks, service marks and trade dress (whether registered, unregistered
or existing at common law), internet domain names, business names and trade
names, trademark registrations and applications, including the goodwill
associated therewith, and copyrights (registered and unregistered); and (iv)
all
other intellectual property rights of any nature.
“Intellectual
Property Rights”
means
registered or recorded patents, trademarks, service marks, copyrights, internet
domain names relating to Intellectual Property, and applications relating to
same.
“Inventory”
means
all supplies, materials and other inventories of raw materials,
works-in-progress and finished goods owned by the Company or any of the
Subsidiaries
“IRS”
means
the U.S. Internal Revenue Service.
“ISRA”
means
the New Jersey Industrial Site Remediation Act, N.J. Stat. Xxx. §§ 13:1K-6
et
seq.,
as
amended.
“Italian
Indebtedness”
means
any indebtedness of Anderol Italia S.A., including accrued but unpaid interest
thereon.
“Judgments”
means
any judgments, injunctions, orders, decrees, writs, rulings or awards of any
court or other judicial authority or any Governmental Authority of competent
jurisdiction.
“Xxxxxxx”
has
the
meaning specified in the preamble.
“knowledge”
means with respect to Xxxxxxx, the actual knowledge of Xxxxxxx as of the
date hereof, without any duty of inquiry. Such term excludes imputed, inferred
or constructive knowledge of a fact, or any fact of which Xxxxxxx might acquire
knowledge as a result of any level of inquiry, nor does it include any fact
that
Xxxxxxx or the Sellers arguably should have known, but did not know, as a
shareholder, trustee, officer, director or employee of the Company, its
Subsidiaries, or any of his or their Affiliates.
“Laws”
means
any federal, state, local or foreign law, statute, ordinance, rule, regulation,
order or decree.
4
“Leased
Real Property”
has
the
meaning specified in Section
4.8(b).
“Leases”
has
the
meaning specified in Section
4.8(b).
“Liens”
means
all liens, mortgages, easements, charges, security interests, options or other
encumbrances.
“Make-Whole
Amount”
has
the
meaning specified in Section
6.2(c)(i).
“Material
Adverse Effect”
means
any change, effect or circumstance that, individually or in the aggregate,
is
reasonably likely to have a material adverse effect on the business, operations,
assets, liabilities, results of operations, cash flows, condition (financial
or
otherwise) of the Company and the Subsidiaries, taken as a whole.
“Most
Recent Financial Statements”
has
the
meaning specified in the definition of “Financial Statements.”
“NRD
Settlement Agreement”
means
the Natural Resource Damages Settlement Agreement among the New Jersey
Department of Environmental Protection, Weston Solutions, Inc., Hatco
Corporation, X.X. Xxxxx & Co. and Remedium Group,
Inc.
“Owned
Real Property”
has
the
meaning specified in Section
4.8(a).
“Pay-Off
Letters”
has
the
meaning specified in Section
7.2(b).
“Pending
Amount”
has
the
meaning specified in Section
2.2(b).
“Permits”
means
all permits, authorizations, approvals, registrations, licenses, certificates,
variances, franchises, rights granted by or obtained from any Governmental
Authority, as well as applications for any of the foregoing.
“Permitted
Liens”
means
(i) Liens created by Purchaser, (ii) Liens for or in respect of Taxes,
impositions, assessments, fees, water and sewer rents and other governmental
charges levied or assessed or imposed against the Real Property which are not
yet due and payable or are being contested in good faith by appropriate
proceedings, (iii) Liens, and rights to Liens, of mechanics, warehousemen,
carriers, repairmen and others arising by operation of law and incurred in
the
ordinary course of business, securing obligations not yet delinquent or being
contested in good faith by appropriate proceedings and (iv) any conditions
relating to the Owned Real Property disclosed on any title commitments, if
any,
made available to Purchaser.
“Person”
means
an individual, a corporation, a limited liability company, a partnership, an
association, a trust or other entity or organization, including any Governmental
Authority.
“Plans”
has
the
meaning specified in Section
4.19(a).
“Pre-Closing
Tax Period”
means
(i) any Tax period ending on or before the close of business on the Closing
Date
and (ii) in the case of any Tax period which includes, but does not end on,
the
Closing Date, the portion of such period up to and including the Closing Date.
5
“Principal
Subsidiaries”
means
Hatco Corporation and Anderol, Inc.
“Proceeding”
means
any action, suit, demand, claim or legal, administrative, arbitration or other
alternative dispute resolution proceeding, hearing, inquiry or
investigation.
“Purchase
Price”
has
the
meaning specified in Section
2.2.
“Purchaser”
has
the
meaning specified in the preamble.
“Purchaser
Indemnified Party”
means
Purchaser, Purchaser’s Affiliates and their respective directors, officers,
shareholders, attorneys, accountants, representatives, agents and employees,
and
their respective heirs, successors and assigns.
“Reference
Balance Sheet”
means
the balance sheet of the Company included within the Most Recent Financial
Statements.
“Related
Agreements”
means
any agreement or instrument that is to be entered into or delivered pursuant
to
this Agreement at the Closing.
“Remediation
Agreement”
means
the April 2005 Remediation Agreement among Weston Solutions, Inc., Hatco
Corporation, X.X. Xxxxx & Co. Conn and Remedium Group,
Inc.
“Required
Consents”
has
the
meaning specified in Section
3.5.
“RLI
Agreement”
means
the January 31, 1997 Asset Purchase and Sale Agreement by and between RLI
Acquisition, Inc. and Royal Lubricants Company, Inc.
“Section
338 Forms”
has
the
meaning specified in Section
6.2(a)(ii).
“Section
338(h)(10) Elections”
has
the
meaning specified in Section
6.2(a)(i).
“Securities
Act”
means
the United States Securities Act of 1933, as amended.
“Seller
Indemnified Parties”
means
Sellers, Sellers’ Affiliates, Xxxxxxx and (as applicable) their respective
directors, officers, shareholders, partners, attorneys, accountants,
representatives, agents and employees, and their respective heirs, successors
and assigns.
“Sellers”
has
the
meaning specified in the preamble.
“Shares”
has
the
meaning specified in the recitals.
“Short
Tax Period”
has
the
meaning specified in Section
6.2(b)(ii).
“Significant
Customers”
means
the ten (10) largest customers of each of the Principal Subsidiaries (as
measured by Dollar amounts of purchases of products or services from the
Principal Subsidiaries) during each of the years ended December 31, 2005 and
2006.
6
“Significant
Suppliers”
means
the ten (10) largest suppliers of each of the Principal Subsidiaries (as
measured by Dollar amounts paid by the Principal Subsidiaries for products
and
services) during each of the years ended December 31, 2005 and 2006
“Subsidiaries”
mean
the Persons other than the Company listed on Schedule 4.2(b).
“Tax
Returns”
means
any report, return, declaration or other filing required to be supplied to
any
Taxing Authority or Person with respect to Taxes, including any amendments
to
such reports, returns, declarations or other filings.
“Taxes”
means
all taxes however denominated imposed by any Taxing Authority, including all
net
income, alternative or add-on minimum taxes, gross income, gross receipts,
sales, use, goods and services, ad valorem, earnings, franchise, profits,
license, withholding (including all obligations to withhold or collect for
Taxes
imposed on others), payroll, employment, excise, severance, stamp, occupation,
premium, property, excess profit or windfall profit taxes, custom duty, value
added or other taxes, governmental fees or other like assessments or charges
of
any kind whatsoever, together with any interest and any penalties or additions
to such taxes.
“Taxing
Authority”
means
the United States or any entity, body, instrumentality, division, bureau or
department of any Governmental Authority, or any agent thereof, legally
authorized to assess, lien, levy or otherwise collect, litigate or administer
Taxes.
“Territory”
means
the United States, Brazil, Canada, Germany, Italy, Japan, The Netherlands and
all other countries in which the Company or any Subsidiary has transacted
business prior to the Closing Date.
“Third
Party Claim”
has
the
meaning specified in Section
8.3(a).
“Transition
Period”
has
the
meaning specified in Section
6.6.
“United
States”
and
“U.S.”
means
the United States of America, its territories and possessions, any state of
the
United States and the District of Columbia.
“Working
Capital”
means
the sum of consolidated accounts receivable and Inventory of the Company and
the
Subsidiaries minus consolidated accounts payable of the Company and the
Subsidiaries as of a given date, calculated and presented in a manner consistent
with that reflected on the Reference Balance Sheet.
“Working
Capital Adjustment”
has
the
meaning specified in Section
2.3(b).
1.2 Other
Definitional Provisions.
i)
All
underscored references to Articles and Sections are references to Articles
and
Sections of this Agreement. All underscored references to Schedules are
references to Schedules of the Disclosure Memorandum.
(b) Terms
defined in the singular have a comparable meaning when used in the plural,
and
vice versa. The use of the masculine, feminine or neuter gender herein shall
not
limit any provision of this Agreement.
7
(c) The
words
“include,”
“includes”
and
“including”
are
not
limiting.
(d) The
terms
“dollars”
and
“$”
mean
U.S. dollars.
ARTICLE
II
PURCHASE
AND SALE
2.1 Purchase
and Sale of Shares.
Upon
the terms and subject to the conditions of this Agreement, at the Closing,
Sellers shall sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser shall purchase, acquire and accept from Sellers, all of Sellers’
right, title and interest in and to the Shares, free and clear of all
Liens.
2.2 Purchase
Price.
As
payment for the sale, transfer, conveyance, assignment and delivery of the
Shares, Purchaser shall deliver or cause to be delivered to Sellers the
following:
(a) an
aggregate amount (the “Closing
Sellers Amount”)
in
cash, which shall be paid to Sellers at the Closing by wire transfer to the
accounts and in the amounts set forth on Schedule
2.2(a),
equal
to (i) $160,000,000, minus (ii) the Closing Debt Repayment Amount,
minus (iii) an amount equal to fifty-one percent (51%) of the amount of Italian
Indebtedness outstanding as of the Closing Date.
(b) an
aggregate amount (the “Deferred
Payment Amount”)
in
cash, which shall be paid to Sellers on the second anniversary of the Closing
Date (or, if such date is not a Business Day, on the first Business Day after
the second anniversary of the Closing Date), by wire transfer to the accounts
and in the amounts specified by Sellers in writing at least ten Business Days
prior to the date such Deferred Payment Amount is to be paid, equal to
(i) $5,000,000 (the “Deferred
Payment”),
minus
(ii) the aggregate amount paid to Purchaser pursuant to Article
VIII
by means
of a reduction to the amount of the Deferred Payment, minus (iii) any amount
subject to a pending indemnification claim pursuant to Article
VIII
(the
“Pending
Amount”).
Purchaser shall pay to Sellers any portion of the Pending Amount remaining
after
the indemnification claims referred to in clause
(iii)
above
have been finally determined within three (3) Business Days after the date
of
such final determination.
The
sum
of the Closing Sellers Amount, the Closing Debt Repayment Amount, and the
Deferred Payment Amount, together with any adjustments made pursuant to
Sections
2.3
and
6.2(c),
is
referred to herein as the “Purchase
Price.”
2.3 Working
Capital Adjustment.
ii)
Within
30 Business Days after the Closing Date, Purchaser shall prepare and deliver
to
Xxxxxxx an unaudited balance sheet for the Company as of the close of business
on the Closing Date (as it may be adjusted pursuant to Section
2.3(b),
the
“Closing
Date Balance Sheet”).
Xxxxxxx shall cooperate with Purchaser and its outside accountants in the
preparation of the Closing Date Balance Sheet. The Closing Date Balance Sheet
shall (i) be prepared on a consistent basis and using categories,
principles and policies consistent with those contained in the Reference Balance
Sheet, with no changes in the method of application of the Company’s accounting
policies or changes in the method of applying the Company’s use of estimates;
(ii) include line items (including the constituent components of such line
items) consistent with those in the Reference Balance Sheet, and (iii) reflect
a
value for Inventory as of December 31, 2006, equal to $32.568 million,
which shall be adjusted solely to reflect additions and removals from inventory
during the month of January 2007. On the Closing Date or, if not reasonably
practicable to perform on the Closing Date, as promptly as practicable after
the
Closing Date, the parties shall perform a physical count of all inventory as
of
January 31, 2007 for purposes of calculating and verifying Working Capital
as of
the Closing Date in accordance with the immediately preceding sentence. Each
of
Xxxxxxx and Purchaser shall have the right to have his or its representatives
present at each such physical inventory. Xxxxxxx and his representatives shall
have the right to review all work papers and procedures of Purchaser and its
outside accountants used to prepare the Closing Date Balance Sheet and shall
have the right to perform any other reasonable procedures necessary to verify
the accuracy of the Closing Date Balance Sheet. Unless Xxxxxxx, within 25
Business Days after delivery to Xxxxxxx of the Closing Date Balance Sheet,
notifies Purchaser in writing that Xxxxxxx objects to the Closing Date Balance
Sheet and specifies the basis for such objection, such Closing Date Balance
Sheet shall become final and binding upon the parties for the purposes of this
Section
2.3.
If
Purchaser and Xxxxxxx are unable to resolve all of Xxxxxxx’x objections within
25 Business Days after any such notification has been given to Purchaser, all
remaining matters in dispute shall be submitted to a nationally recognized
public accounting firm mutually agreed upon by Purchaser and Xxxxxxx (an
“Independent
Accounting Firm”).
In
the event Purchaser and Xxxxxxx are unable to agree upon the selection of an
Independent Accounting Firm within five Business Days after expiration of such
25 Business Day period, an Independent Accounting Firm shall be appointed by
the
American Arbitration Association. The Independent Accounting Firm shall make
a
final determination as to all remaining matters in dispute that shall be
conclusive and binding on Purchaser and Xxxxxxx. Purchaser and Xxxxxxx each
shall bear one-half of the fees, costs and expenses of the Independent
Accounting Firm retained to resolve any objection under this Section 2.3(a).
8
(b) Within
5
Business Days after the Closing Date Balance Sheet has been finally determined,
the difference, if any, between $40 million and the Working Capital reflected
on
the Closing Date Balance Sheet (the “Working
Capital Adjustment”)
shall
be paid (i) by Purchaser to Sellers, if the Working Capital reflected on the
Closing Date Balance Sheet exceeds $40 million or (ii) by Xxxxxxx to Purchaser,
if the Working Capital reflected on the Closing Date Balance Sheet is less
than
$40 million. Payment of the Working Capital Adjustment shall be by wire transfer
of immediately available funds to the account specified by the payee and shall
include simple interest on such amount at a rate per annum equal to eight
percent (8%), commencing on the Closing Date and continuing until the date
of
full payment.
(c) For
the
avoidance of doubt, the Company may liquidate all cash positions as of the
close
of business on the Closing Date, and Sellers intend that such liquidation
occur.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF XXXXXXX
Except
as
disclosed in the Disclosure Memorandum, Xxxxxxx, on behalf of himself and
Sellers, represents and warrants to Purchaser as follows:
3.1 Ownership
of Shares.
Each
Seller is the owner, beneficially and of record, of the number of Shares, free
and clear of any and all Liens, set forth opposite such Seller’s name on
Schedule 3.1.
The
endorsed certificates, stock powers or other instruments of transfer delivered
by each Seller to Purchaser at the Closing will be sufficient to transfer such
Seller’s entire right, title and interest, legal and beneficial, in the Shares.
Each Seller has, and on the Closing Date will have, full power and authority
to
convey good and marketable title to such Seller’s Shares, and upon transfer to
Purchaser of the certificates representing such Shares, Purchaser will receive
good and marketable title to such Shares, free and clear of all
Liens.
3.2 Authorization.
Each
Seller has the requisite trust or other power and authority to execute, deliver
and perform this Agreement and its Related Agreements to which such Seller
is a
party, if any, and to consummate the transactions contemplated hereby and
thereby. Xxxxxxx has the requisite right, power and legal capacity to execute,
deliver and perform this Agreement and the Related Agreements to which he is
a
party, if any, and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the
Related Agreements by each Seller and the consummation by each Seller of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate, trust or other action (if any) of each
Seller, and no additional authorization on the part of any Seller or any
beneficiary of any Seller is necessary in connection with the execution,
delivery and performance by Sellers of this Agreement or the Related
Agreements.
9
3.3 Binding
Effect.
This
Agreement has been duly executed and delivered by each Seller and by Xxxxxxx
and, assuming the due authorization, execution and delivery of this Agreement
and the Related Agreements by Purchaser, this Agreement is, and each Related
Agreement will after the Closing be, legal, valid and binding obligations of
each Seller and Xxxxxxx, enforceable against each Seller and Xxxxxxx in
accordance with their respective terms, subject to the Enforceability
Limitations.
3.4 No
Violations.
The
execution, delivery and performance by each Seller and Xxxxxxx of this Agreement
and the Related Agreements and the consummation of the transactions contemplated
by this Agreement and the Related Agreements do not and will not
(a) conflict with or violate any provision of the agreement of trust or
other organizational documents of any Seller, (b) to the knowledge of
Xxxxxxx, and subject to obtaining the Required Consents, conflict with, or
result in the breach of, or constitute a default under, or permit or result
in
the termination, cancellation or acceleration of any right or obligation of
any
Seller or Xxxxxxx under, or result in the creation of any Lien upon any of
the
assets of any Seller or Xxxxxxx under, or result in or constitute a circumstance
which would constitute any of the foregoing under, any contract or agreement
to
which any Seller or Xxxxxxx is a party or to which any of Sellers’ or Xxxxxxx’x
assets or properties is subject or (c) to the knowledge of Xxxxxxx, and
subject to obtaining the Required Consents, violate or result in a breach of,
or
constitute a default under, any Law or Judgment applicable to any Seller or
Xxxxxxx or by which any Seller or Xxxxxxx or any of its or his assets or
properties is bound or affected, except, in the cases of clauses
(b)
and
(c),
for any
conflict, breach, default, termination, cancellation, acceleration or violation
which, individually or in the aggregate, would not reasonably be expected to
materially impair any Seller’s or Xxxxxxx’x ability to effect the Closing and to
perform their other obligations hereunder.
3.5 Consents
and Approvals.
To the
knowledge of Xxxxxxx, except as set forth on Schedule
3.5
or as
required by the HSR Act and any similar federal, state, local or foreign Laws
or
regulations or as required by ISRA (together with the Consents, notices and
filings referred to in Sections
4.5
and
5.5
and
Schedules
4.5
and
5.5,
the
“Required
Consents”),
no
Consent is required to be obtained by Sellers or Xxxxxxx from, and no notice
or
filing is required to be given by Sellers or Xxxxxxx to, or made by Sellers
or
Xxxxxxx with, any Governmental Authority or other Person in connection with
the
execution, delivery and performance by Sellers or Xxxxxxx of this Agreement
and
the Related Agreements, other than in all cases where the failure to obtain
such
Consent or to give or make such notice or filing would not, individually or
in
the aggregate, reasonably be expected to materially impair any Seller’s or
Xxxxxxx’x ability to effect the Closing and to perform their other obligations
hereunder.
10
3.6 Brokers
and Finders.
No
investment banker, broker, finder or other intermediary (a) has been
retained by, (b) is authorized to act on behalf of or (c) is entitled
to any fee or commission from Sellers, Xxxxxxx or any of their respective
Affiliates in connection with the transactions contemplated by this
Agreement.
3.7 Proceedings.
To the
knowledge of Xxxxxxx, there is no Proceeding pending or threatened against
any
Seller or Xxxxxxx (a) with respect to which there is a reasonable likelihood
of
a determination which, individually or in the aggregate, would materially hinder
or impair the consummation of the transactions contemplated by this Agreement
or
(b) which seeks to enjoin or obtain damages in respect of the consummation
of
the transactions contemplated by this Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF
XXXXXXX
RELATING TO THE COMPANY
Except
as
disclosed in the Disclosure Memorandum, Xxxxxxx represents and warrants to
Purchaser as follows:
4.1 Organization.
The
Company and the Subsidiaries are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of organization,
with
all requisite corporate or other power and authority to conduct their respective
businesses as they are now being conducted and to own, lease and operate their
respective properties where now conducted, owned, leased or operated. To the
knowledge of Xxxxxxx, the Company and the Subsidiaries are duly licensed or
qualified to do business and are in good standing as foreign corporations (or
other entities, as applicable) in each jurisdiction where such license or
qualification is required to carry on their respective businesses as now
conducted, except where the failure to be so qualified or licensed or in good
standing, as the case may be, would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. The jurisdictions
in which the Company and each of the Subsidiaries are incorporated or licensed
or qualified to do business as foreign corporations (or other entities, as
applicable) are set forth on Schedule 4.1.
4.2 Capitalization;
Subsidiaries.
iii)
The
authorized capital stock of the Company consists of 1,500 Shares, of which
100
Shares are issued and outstanding. All of the issued and outstanding Shares
(i) have been duly authorized and are validly issued, fully paid and
nonassessable, (ii) are, and when issued were, free of preemptive rights
and (iii) are held beneficially and of record by Sellers as set forth on
Schedule
4.2(a).
There
are no Shares held in the treasury of the Company, and no Shares are currently
reserved for issuance for any purpose or upon the occurrence of any event or
condition.
11
(b) The
authorized, issued and outstanding capital stock of each Subsidiary, and the
legal and beneficial ownership thereof, are accurately set forth on Schedule
4.2(b).
Except
as set forth on Schedule 4.2(b),
all of
the outstanding shares of capital stock of each Subsidiary (i) have been
duly authorized and are validly issued, fully paid and nonassessable,
(ii) are, and when issued were, free of preemptive rights and
(iii) are held beneficially and of record by the Company or another
Subsidiary, free and clear of all Liens. Except as set forth on Schedule 4.2(b),
the
Company has no direct or indirect subsidiaries, either wholly- or
partially-owned, and the Company does not hold any direct or indirect economic,
voting or management interest in any Person or directly or indirectly own any
security issued by any Person.
(c) Except
for the Shares (with respect to the Company) and except as set forth on
Schedule
4.2(c),
there
are no shares of capital stock or other securities (whether or not such
securities have voting rights) of the Company or any Subsidiary issued or
outstanding or any outstanding ownership, voting, economic or other interests
in, or rights to participate in the management of, or receive information
concerning, the Company or any Subsidiary. There are no outstanding or
authorized purchase rights, subscriptions rights, options, warrants, calls,
exchange rights, conversion rights, other rights or other contracts, agreements
or commitments of any character (i) obligating the Company or any Subsidiary,
(ii) obligating the Company to cause any Subsidiary, or (iii) obligating
any Subsidiary to cause any other Subsidiary, in each case to issue, transfer
or
sell, or cause the issuance, transfer or sale of, or otherwise cause to become
outstanding, any shares of capital stock or other securities (whether or not
such securities have voting rights) of the Company or any Subsidiary. There
are
no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company or any
Subsidiary.
(d) Except
as
set forth on Schedule
4.2(d),
there
are no outstanding contractual obligations of Sellers, the Company or any
Subsidiary which relate to the purchase, sale, issuance, repurchase, redemption,
acquisition, transfer, disposition, holding or voting of any shares of capital
stock or other securities of the Company or any Subsidiary or the management
or
operation of the Company or any Subsidiary. Except for Sellers’ rights as
holders of Shares, no Person has any right to participate in, or receive any
payment based on any amount relating to, the revenue, income, value or net
worth
of the Company and the Subsidiaries or any component or portion thereof, or
any
increase or decrease in any of the foregoing.
4.3 Authorization.
The
transactions contemplated by this Agreement have been approved by all necessary
corporate action (if any) of the Company. No additional authorization on the
part of the Company or its stockholders is necessary in connection with the
consummation of the transactions contemplated by this Agreement.
4.4 No
Violations.
This
Agreement and the transactions contemplated hereby do not and will not
(a) conflict with or violate any provision of the certificate of
incorporation, bylaws or other organizational documents of the Company or the
Subsidiaries, (b) to the knowledge of Xxxxxxx, and subject to obtaining the
Required Consents, conflict with, or result in the breach of, or constitute
a
default under, or permit or result in the termination, cancellation or
acceleration of any right or obligation of the Company or any Subsidiary under,
or result in the creation of any Lien upon any of the assets of the Company
or a
Subsidiary under, or result in or constitute a circumstance which would
constitute any of the forgoing under, any Contract, or (c) to the knowledge
of Xxxxxxx, and subject to obtaining the Required Consents, violate or result
in
a breach of or constitute a default under, any Law or Judgment, except, in
the
cases of clauses
(b)
and
(c),
for any
conflict, breach, default, termination, cancellation or acceleration which,
individually or in the aggregate, would not reasonably be expected to result
in
a Material Adverse Effect.
12
4.5 Consents
and Approvals.
To the
knowledge of Xxxxxxx, except as set forth in Schedule
4.5
or as
required by the HSR Act and any similar federal, state, local or foreign Laws
or
regulations, or as required by ISRA, no Consent is required to be obtained
by
the Company or any Subsidiary from, and no notice or filing is required to
be
given by the Company or any Subsidiary to, or made by the Company or any
Subsidiary with, any Governmental Authority or other Person in connection with
the execution, delivery and performance by Sellers or Xxxxxxx of this Agreement
and the Related Agreements. All filings required to be made by Sellers, Kaufman,
the Company or its Subsidiaries under the HSR Act and other similar Laws
applicable to the transactions contemplated by this Agreement or under ISRA
have
been made, and any required waiting period under such Laws applicable to the
transactions contemplated by this Agreement have expired or been earlier
terminated.
4.6 Financial
Statements.
iv)
To the
knowledge of Xxxxxxx, the Financial Statements are in accordance with the books
and records of the Company and the Subsidiaries, have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods to
which they relate and present fairly and accurately, in all material respects,
the consolidated financial condition of the Company and the Subsidiaries as
of
such dates and the consolidated results of operations and cash flows of the
Company and the Subsidiaries for such periods; provided,
however,
that
the Most Recent Financial Statements do not contain footnotes and are subject
to
normal year-end adjustments.
(b) To
the
knowledge of Xxxxxxx, the Financial Statements, including the notes thereto,
make full and adequate disclosure of, and provision for, all material
obligations and liabilities of the Company and the Subsidiaries as of the date
thereof, and the Company and the Subsidiaries have no material liabilities,
debts, claims or obligations (including “off-balance sheet” liabilities, debts,
claims or obligations), whether accrued, absolute, contingent or otherwise,
and
whether due or to become due, other than (i) as set forth on Schedule
4.6
or in
the Reference Balance Sheet and (ii) trade payables and accrued expenses
incurred in the ordinary course of business since the date of the Reference
Balance Sheet.
4.7 Absence
of Change.
To the
knowledge of Xxxxxxx, except as disclosed on Schedule
4.7
and
except to the extent arising out of or relating to the transactions contemplated
by this Agreement, since January 1, 2006, (a) the Company and the Subsidiaries
have been operated in the ordinary course in a manner consistent with past
practice, (b) there has been no disposal of assets in an aggregate amount
exceeding $100,000, (c) there has been no issuance of securities, and (d) there
has not been any change in the business or financial condition of the Company
or
the Subsidiaries other than changes which, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse
Effect.
13
4.8 Real
Property.
v) Schedule
4.8(a)
lists
all real property owned by the Company or any Subsidiary (the “Owned
Real Property”).
Except as set forth on Schedule
4.8(a),
the
Company or a Subsidiary has good and marketable fee title to the Owned Real
Property, and all such properties and assets are free and clear of all Liens,
except for Permitted Liens. To the knowledge of Xxxxxxx, there are no leases,
subleases, licenses, concessions or other agreements granting any Person the
right to use or occupy any material portion of any Owned Real Property so as
to
materially adversely affect the Company’s or any Subsidiary’s use of such Owned
Real Property in the ordinary course of business as currently
conducted.
(b) To
the
knowledge of Xxxxxxx, (i) Schedule
4.8(b)
lists
all real property held or used by the Company or any Subsidiary (the
“Leased
Real Property”)
under
real property leases (the “Leases”),
(ii)
except as set forth on Schedule 4.8(b),
each
material Lease is a valid agreement, duly authorized and entered into, in full
force and effect in all material respects, and (iii) neither the Company nor
any
Subsidiary has received or given a written notice of default under the Leases
other than notices with respect to defaults which have either been cured or
waived or with respect to defaults which, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect. True
and complete copies of the Leases have been made available to Purchaser and,
except as set forth on Schedule
4.8(b),
such
Leases have not been amended or modified since that date.
(c) The
Owned
Real Property and the Leased Real Property constitute all of the land owned,
held or used by the Company and the Subsidiaries in the conduct of their
respective businesses. The Company has made available to Purchaser copies of
the
most recent title insurance policies and surveys (if any) in the possession
of
the Company or any Subsidiary for the Owned Real Property and the Leased Real
Property, together with copies of all reports (if any) of any engineers,
environmental consultants or other consultants in its possession relating to
any
of the Owned Real Property or Leased Real Property. Xxxxxxx makes no
representation as to the accuracy of the information contained in such
reports.
(d) To
the
knowledge of Xxxxxxx, except as set forth on Schedule
4.8(a)
or
(b),
there
is no pending, threatened or proposed Proceeding or governmental action to
modify the zoning classification of, or to condemn or take by the power of
eminent domain (or to purchase in lieu thereof), or to classify as a landmark,
or to impose special assessments on, or otherwise to take or restrict in any
way
the right to use, develop or alter, all or any part of the Owned Real Property
or the Leased Real Property.
4.9 Title
to Assets; Condition and Sufficiency of Assets.
vi)
Except
for Intellectual Property, which is addressed in Section
4.16,
either
the Company or a Subsidiary has good and valid record and marketable title
to,
and is the lawful owner of, all of the assets reflected on the balance sheet
included in the December 31, 2005 Financial Statements or acquired after
December 31, 2005 (other than assets disposed of since December 31, 2005
that have been disclosed in Schedule
4.7
or fall
within the exception set forth in clause
(b)
of
Section
4.7),
free
and clear of any Lien other than Permitted Liens.
(b) To
the
knowledge of Xxxxxxx, no third party has asserted a claim against any of the
assets, properties or rights of the Company or a Subsidiary that if successful
would materially threaten the conduct of the business of the Company and the
Subsidiaries as currently conducted.
14
4.10 Personal
Property.
Schedule 4.10(a)
sets
forth the December 31, 2006 fixed assets register of the Company and its
Subsidiaries. Schedule 4.10(b)
sets
forth the December 31, 2006 leased asset schedule of the Company and its
Subsidiaries. The Company has made available to Purchaser true and complete
copies of all the personal property leases with respect to the assets listed
on
Schedule 4.10(b).
4.11 Proceedings;
Judgments; Compliance with Law.
vii)
To the
knowledge of Xxxxxxx, except as set forth on Schedule
4.11(a),
there
are no material Proceedings pending or threatened, involving the Company or
any
of the Subsidiaries, neither the Company nor any Subsidiary is subject to any
material Judgment, and neither the Company nor any Subsidiary has entered into
any agreement to settle or compromise any material Proceeding pending or
threatened against it which has involved any obligation other than the payment
of money and for which it has any continuing obligation.
(b) To
the
knowledge of Xxxxxxx, except as set forth on Schedule
4.11(b),
the
Company has not received any notice or claim that it is not in compliance with
all applicable Laws and Judgments in all material respects.
4.12 Permits.
To the
knowledge of Xxxxxxx, Schedule
4.12
sets
forth each material Permit affecting, or relating to, the businesses and
operations of the Principal Subsidiaries. To the knowledge of Xxxxxxx, except
as
set forth on Schedule
4.12,
(i)
such Permits are valid and in full force and effect, (ii) the Principal
Subsidiaries are in substantial compliance with all such Permits, and (iii)
no
condition exists that would cause the Principal Subsidiaries not to be in
substantial compliance with all such Permits.
4.13 Environmental
Matters.
viii)
Due to
their operations as chemical companies, the Company and its Subsidiaries use
raw
materials and processes that could cause concern, and they are subject to
regulations under Laws relating to safety and protection of the environment.
To
the knowledge of Xxxxxxx, the Company has made available to Purchaser and its
representatives all reasonably available information concerning compliance
by
the Company and the Subsidiaries with such Laws relating to safety and
protection of the environment. Schedule
4.13(a)
summarizes all such information that has been made available to
Purchaser.
(b) Except
as
set forth on Schedule
4.13(b),
to the
knowledge of Xxxxxxx, no fact, event or condition exists or has occurred that
would reasonably be expected to prevent the Company or any Subsidiary from
recovering under (i) any release, indemnity or other rights available to it
pursuant to the Remediation Agreement, the RLI Agreement, the NRD Settlement
Agreement, the Hatco Settlement Agreement or any other similar Contract; or
(ii) the ACE Policy or any other similar applicable policy of insurance
relating to pollution or the protection of the environment.
4.14 Brokers
and Finders.
No
investment banker, broker, finder or other intermediary (a) has been retained
by, (b) is authorized to act on behalf of or (c) is entitled to any fee or
commission from the Company or any Affiliate of the Company in connection with
the transactions contemplated by this Agreement.
15
4.15 Contracts.
To the
knowledge of Xxxxxxx, Schedule
4.15
lists
each of the following Contracts to which the Company or any Subsidiary is a
party or is otherwise bound:
(a) any
Contract with or relating to any Significant Customer or Significant
Supplier;
(b) any
Contract pursuant to which the Company or any Subsidiary has made or will make
loans or advances, or has incurred, or is obligated to incur, indebtedness
for
borrowed money or has become a guarantor or surety or pledged its credit for
or
otherwise become responsible with respect to any undertaking of another Person
(except for the negotiation or collection of negotiable instruments in
transactions in the ordinary course of business);
(c) any
Contract involving a partnership, joint venture or other cooperative
undertaking;
(d) any
employment Contract; and
(e) any
other
material Contract of the Company or any Subsidiary.
Except
as
disclosed on Schedule 4.15,
to the
knowledge of Xxxxxxx, (i) each Contract listed on Schedule 4.15
is a
valid and binding agreement of the Company or a Subsidiary and is in full force
and effect in all material respects and (ii) neither the Company nor any
Subsidiary has received any claim that the Company or any Subsidiary is in
material default under any such Contract.
4.16 Intellectual
Property.
ix)
To the
knowledge of Xxxxxxx, Schedule
4.16(a)
lists
the Intellectual Property Rights belonging to the Company and/or the
Subsidiaries, and any agreements in which the Company or any Subsidiary has
granted licenses under any such Intellectual Property Rights to any third
party.
(b) Except
as
set forth on Schedule 4.16(b),
to the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has received any
claim that the use of all Intellectual Property as currently used by the Company
or any Subsidiary infringes in any material respect the Intellectual Property
of
any other Person.
4.17 Taxes.
x)
To the
knowledge of Xxxxxxx, except as set forth in Schedule
4.17,
(i) the
Company is a small business corporation as defined in section 1361 of the Code,
(ii) has had in effect for each taxable year that it has been in existence
a
valid election to be treated as a subchapter S corporation for federal income
tax purposes under the Code and under the income Tax laws of each state in
which
the Company does business under which such an election is permitted, (iii)
the
Company would not be liable for any Tax under section 1374 of the Code if its
assets were sold for their fair market value as of the Closing Date, and (iv)
each Subsidiary of the Company has been a qualified subchapter S subsidiary
since its formation or for a minimum of ten years, whichever period is
shorter.
16
(b) To
the
knowledge of Xxxxxxx, (i) all Tax Returns required to be filed by or with
respect to the Company or the Subsidiaries through the Closing Date have been
or
will be timely filed and the information provided in such Tax Returns is
complete and accurate in all material respects; (ii) all Taxes of the Company
and the Subsidiaries, to the extent due and payable as of the Closing Date,
have
been or will be timely paid, except for such Taxes as may be contested in good
faith in appropriate proceedings; and (iii) adequate provision will be made
on
the Closing Date Balance Sheet for the payment of all Taxes, with respect to
any
Pre-Closing Tax Period of the Company, to the extent such Taxes are not due
and
payable as of the Closing Date.
(c) To
the
knowledge of Xxxxxxx, except as set forth in Schedule
4.17,
(i) no Tax Return has been audited by the IRS or any other Taxing Authority
or if a Tax Return has been audited by the IRS or another Taxing Authority,
such
audit has been completed without the issuance of any notice of deficiency or
similar notice of additional liability or (ii) the time for assessing or
collecting income Tax with respect to a Tax Return for a taxable period of
the
Company and the Subsidiaries ending prior to the date of this Agreement has
closed and such Tax Return is not subject to review by the IRS or any other
Taxing Authority.
(d) To
the
knowledge of Xxxxxxx, except as set forth in Schedule
4.17,
there
is no pending or threatened action, audit, proceeding or investigation by any
Taxing Authority with respect to the assessment or collection of Taxes of the
Company or any Subsidiary.
(e) To
the
knowledge of Xxxxxxx, all Taxes which the Company and each Subsidiary is
required by law to withhold or collect, including sales and use taxes, and
amounts required to be withheld for Taxes of employees, have been duly withheld
or collected and, to the extent required, have been paid over to the proper
Taxing Authority or are held in separate bank accounts for such
purpose.
(f) To
the
knowledge of Xxxxxxx, there are no Tax sharing, Tax indemnity, Tax allocation
or
similar agreements, arrangements or understandings with respect to Taxes in
effect to which the Company or a Subsidiary is a party.
(g) To
the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has extended or
waived the application of any statute of limitations of any jurisdiction
regarding the assessment or collection of any Tax.
(h) To
the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has received any
notice from any Tax Authority in any jurisdiction in which the Company or a
Subsidiary does not file a Tax Return that it may be subject to taxation by
that
jurisdiction.
(i) To
the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has not entered
into any closing agreement (as defined in section 7121 of the Code) or any
similar provision of any state, local or foreign Law that relates to Company
or
a Subsidiary.
(j) To
the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has ever been
a
member of an affiliated group within the meaning of section 1504(a) of the
Code
(or any similar or analogous group defined under a similar or analogous state,
local or foreign Law) other than an affiliated group the common parent of which
is the Company.
17
(k) To
the
knowledge of Xxxxxxx, neither the Company nor any Subsidiary has engaged in
a
transaction that would be reportable by or with respect to the Company or a
Subsidiary pursuant to sections 6011, 6111 or 6112 of the Code. Neither the
Company nor any Subsidiary has entered into any transactions that required
or
will require the filing of IRS Form 8886.
4.18 Labor
and Employment Matters.
xi)
Except
as set forth on Schedule 4.18(a),
neither
the Company nor any Subsidiary is a party to, or bound by, any labor agreement,
collective bargaining agreement, shop agreement, work rules or practices, or
any
other labor-related agreement or arrangement with any labor union, labor
organization, trade union or works council.
(b) To
the
knowledge of Xxxxxxx, except as set forth on Schedule 4.18(b),
(i) no labor union, labor organization, trade union, works council or group
of employees of the Company or any Subsidiary has made a pending demand for
recognition or certification, and there are no material representation or
certification proceedings, or petitions seeking a material representation
proceeding, presently pending or threatened in writing to be brought or filed
with the National Labor Relations Board or any other labor relations tribunal
or
authority, and (ii) there currently are no material actual or threatened
arbitrations, grievances, labor disputes, strikes, lockouts, slowdowns or work
stoppages against the Company or any Subsidiary, nor has there been any of
the
foregoing during the three-year period before the date of this
Agreement.
(c) To
the
knowledge of Xxxxxxx, Schedule 4.18(c)
contains
a complete and accurate list of the following information for each employee
(including part time employees and temporary employees), independent contractor
and consultant of the Company and the Subsidiaries as of January 1, 2007,
including each employee, independent contractor and consultant on leave of
absence or layoff status: name; job title; date of employment; current
compensation and PTO balance.
4.19 Employee
Benefit Matters.
xii)
To the
knowledge of Xxxxxxx, Schedule 4.19
lists
each employee benefit plan, program, agreement, policy or arrangement, including
each “employee benefit plan” (as defined in section 3(3) of ERISA), that the
Company or any Subsidiary maintains, is a party to, participates in or has
any
liability under or with respect to (collectively, the “Plans”).
The
Company has made available to Purchaser true and complete copies of each Plan
and, to the extent applicable, (i) the summary plan description, (ii) the
most recent determination letter received from the IRS and (iii) the most recent
Form 5500 Annual Report with respect to each Plan. To the knowledge of Xxxxxxx,
except as disclosed in Schedule
4.19,
none of
the Plans is subject to title IV of ERISA and none of the Plans is a
multiemployer plan (as defined in section 3(37) of ERISA).
(b) Neither
the Company nor any Subsidiary is obligated to make or, as a result of any
event
related to the transactions contemplated by this Agreement, will become
obligated to make, any “excess parachute payment” within the meaning of
section 280G of the Code, determined without regard to
subsection (b)(4) of such section.
4.20 Customers
and Suppliers.
To the
knowledge of Xxxxxxx, Schedule
4.20
sets
forth a true, accurate and complete list of all Significant Customers and
Significant Suppliers. Except as set forth on Schedule
4.20,
to the
knowledge of Xxxxxxx, (a) there is no material dispute between the Company
or any of the Subsidiaries (on the one hand) and any Significant Customer or
Significant Supplier (on the other hand), (b) no Significant Customer or
Significant Supplier presently intends to terminate or cancel any Contract
with
the Company or any of the Subsidiaries or to materially reduce the amount of
business presently done with the Company or any of the Subsidiaries, and (c)
since December 31, 2005 through the date of this Agreement, no Significant
Customer or Significant Supplier has materially reduced the level of business
conducted with the Company or any of the Subsidiaries.
18
4.21 Inventory.
To the
knowledge of Xxxxxxx, (a) the Inventory reflected in the Financial Statements
is
fairly valued in accordance with GAAP; (b) the Inventory (i) is in saleable
condition and not beyond its shelf life and (ii) taken as a whole, is in
quantities reasonably sufficient for the operation of the business of the
Company and the Subsidiaries in the ordinary course of business consistent
with
past practice; and (c) the inventory obsolescence policies of the Company and
the Subsidiaries are appropriate for the nature of the products sold. To the
knowledge of Xxxxxxx, Schedule
4.21
sets
forth a list of the locations where material inventories of the Company and
the
Subsidiaries were located as of December 31, 2006 and identifies, with
respect to each such location, the Contract pursuant to which the Company or
a
Subsidiary stores Inventory at such location.
4.22 Affiliate
Transactions.
Except
as set forth on Schedule 4.22(a)
(the
“Affiliate
Transactions”),
none
of Sellers, Xxxxxxx or any of their respective Affiliates is or within the
past
12 months has been a party to or otherwise bound by any Contract with the
Company or any of the Subsidiaries. Except as set forth on Schedule 4.22(b)
and
except as contemplated by Section
6.6,
all
Affiliate Transactions and all receivables and payables between the Company
or
any Subsidiary, on the one hand, and Xxxxxxx,
any Seller or any of their respective Affiliates,
on the
other hand, have been settled or terminated prior to the Closing. Except as
set
forth on Schedule 4.22(b)
and
except as contemplated by Section
6.6,
after
the Closing, the Company and the Subsidiaries shall have no liabilities or
obligations whatsoever to Xxxxxxx, any Seller or any of their respective
Affiliates. Except as set forth on Schedule 4.22(a),
no
Seller or any of their respective Affiliates owns any asset, tangible or
intangible, which is used in the businesses of the Company and the
Subsidiaries.
4.23 Long-Term
Indebtedness.
Except
for the indebtedness that will be repaid at Closing in the amounts set forth
in
the Pay-Off Letters and the Italian Indebtedness, the Company and the
Subsidiaries have no long-term indebtedness.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Except
as
disclosed in the Disclosure Memorandum, Purchaser represents and warrants to
Sellers and Xxxxxxx as follows:
5.1 Organization.
Purchaser is duly organized, validly existing and in good standing under the
laws of the State of Delaware.
19
5.2 Authorization.
Purchaser has the requisite corporate power and authority to execute, deliver
and perform this Agreement and its Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Related Agreements and the consummation
by
Purchaser of the transactions contemplated hereby and thereby have been duly
and
validly authorized by all necessary corporate action of Purchaser, and no
additional authorization on the part of Purchaser or its stockholders is
necessary in connection with the execution, delivery and performance by
Purchaser of this Agreement or the Related Agreements.
5.3 Binding
Effect.
This
Agreement has been duly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery of this Agreement and the Related
Agreements by Sellers and Xxxxxxx, this Agreement is, and each Related Agreement
will after the Closing be, legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their respective terms, subject
to the Enforceability Limitations.
5.4 No
Violations.
The
execution, delivery and performance by Purchaser of this Agreement and the
Related Agreements and the consummation of the transactions contemplated by
this
Agreement and the Related Agreements do not and will not (a) conflict with
or
violate any provision of the certificate of incorporation, bylaws or other
organizational documents of Purchaser, (b) subject to obtaining the Required
Consents, conflict with, or result in the breach of, or constitute a default
under, or permit or result in the termination, cancellation or acceleration
(whether after the giving of notice or the lapse of time or both) of any right
or obligation of Purchaser under, or result in the creation of any Lien upon
any
of the assets of Purchaser under, or result in or constitute a circumstance
which, with or without notice or lapse of time or both, would constitute any
of
the foregoing under, any contract or agreement to which Purchaser is a party
or
to which or any of its assets of properties is subject or (c) subject to
obtaining the Required Consents, violate or result in a breach of, or constitute
a default under, any Law or Judgment applicable to Purchaser or by which
Purchaser or any of its assets or properties is bound or affected, except,
in
the cases of clauses
(b)
and
(c),
for any
conflict, breach, default, termination, cancellation, acceleration or violation
which, individually or in the aggregate, would not reasonably be expected to
materially impair Purchaser’s ability to effect the Closing and to perform
Purchaser’s other obligations hereunder.
5.5 Consents
and Approvals.
Except
as set forth on Schedule
5.5
or as
required by the HSR Act and any other similar federal, state, local or foreign
Laws or regulations or as required by ISRA, no Consent is required to be
obtained by Purchaser from, and no notice or filing is required to be given
by
Purchaser to, or made by Purchaser with, any Governmental Authority or other
Person in connection with the execution, delivery and performance by Purchaser
of this Agreement or the Related Agreements. All filings required to be made
by
Purchaser under the HSR Act and other similar Laws applicable to the
transactions contemplated by this Agreement or under ISRA have been made and
any
required waiting period under such Laws applicable to the transactions
contemplated by this Agreement have expired or been earlier
terminated.
5.6 Brokers
and Finders.
There
is no investment banker, broker, finder or other intermediary which (a) has
been
retained by, (b) is authorized to act on behalf of or (c) is entitled
to any fee or commission from Purchaser or any Affiliate of Purchaser in
connection with the transactions contemplated by this Agreement.
20
5.7 Proceedings.
There
is no Proceeding pending or, to the knowledge of Purchaser, threatened against
Purchaser (a) with respect to which there is a reasonable likelihood of a
determination which, individually or in the aggregate, would materially hinder
or impair the consummation of the transactions contemplated by this Agreement
or
(b) which seeks to enjoin or obtain damages in respect of the consummation
of
the transactions contemplated by this Agreement.
5.8 Investment
Intent.
Purchaser acknowledges that the Shares being purchased by Purchaser under this
Agreement are not registered under the Securities Act or registered or qualified
for sale under any state securities law and cannot be resold without
registration under, or an exemption from, the Securities Act. Purchaser is
acquiring the Shares for its own account for investment and not with a view
toward the sale or distribution of the Shares. Purchaser has sufficient
knowledge and experience in financial and business matters to enable it to
evaluate the risks of investment in such Shares and has the ability to bear
the
economic risks of such investment.
ARTICLE
VI
COVENANTS
6.1 Public
Announcements.
Purchaser and Xxxxxxx shall consult with each other before issuing any press
release or otherwise making any public statement with respect to this Agreement
or the transactions contemplated by this Agreement. None of Purchaser, Sellers
or Xxxxxxx shall issue any such press release or make any such public statement
without the prior written approval of the other party to this Agreement, such
approval not to be unreasonably withheld, except as may be required by Law
or
any securities exchange on which the securities of Purchaser or its Affiliates
are then listed.
6.2 Tax
Matters.
xiii) Section
338(h)(10) Election.
(i)
Sellers and Purchaser shall (A) join in making an election under section
338(h)(10) of the Code (and any election corresponding to section 338(h)(10)
of
the Code under foreign, state, or local laws) with respect to the purchase
of
the Shares (the “Section
338(h)(10) Elections”);
(B) provide to the other the necessary information to permit the Section
338(h)(10) Elections to be made; and (C) take all actions necessary and
appropriate (including filing any necessary forms, returns, elections, schedules
and other documents) as may be required to effect and preserve timely the
Section 338(h)(10) Election in accordance with the provisions of Treas. Reg.
§1.338(h)(10)-1 (or any provisions comparable to section 338(h)(10) of state
or
local Tax Law).
(ii) Purchaser
shall be responsible for preparing drafts of all forms, attachments and
schedules necessary to effectuate the Section 338(h)(10) Election (including
IRS
Forms 8023 and 8883 and any similar forms under applicable state or local income
tax laws (the “Section
338 Forms”)).
The
parties shall execute and deliver IRS Form 8023 no later than ten days following
the Closing Date.
21
(iii) The
“aggregate deemed sales price” (as defined in Treas. Reg. §1.338-4) and the
“adjusted grossed-up basis” (as defined in Treas. Reg. §1.338-5) shall be
allocated among the assets of the Company and the non-competition agreement
as
described in Section 6.3
in
accordance with Treas. Reg. §1.338-6. Within 90 days of Closing, Purchaser shall
deliver to Sellers a schedule allocating the adjusted grossed-up basis among
the
assets of the Company and the non-competition agreement as described in
Section 6.3
(the
“Allocation
Schedule”).
If
Sellers dispute any item on the Allocation Schedule, Sellers and Purchaser
shall
cooperate in good faith to resolve any dispute. Should the parties fail to
reach
an agreement within 30 days after the Purchaser’s delivery of the Allocation
Schedule, the determination of the allocation shall be made by an Independent
Accounting Firm, whose decision shall be final and made within 90 days after
the
Closing Date. The Allocation Schedule shall be adjusted in accordance with
the
Independent Accounting Firm’s resolution of the dispute. Sellers and Purchaser
shall file the Section 338 Forms in accordance with the Allocation Schedule.
The
parties agree not to take any position inconsistent with the Allocation Schedule
for Tax reporting purposes.
(b) Tax
Returns. (i)
The
current accountants for the Company will prepare (at the Company’s expense), and
the Company will file or cause to be filed when due, all federal, state and
local income and franchise Tax Returns and other Tax Returns with respect to
Company for taxable periods ending prior to the Closing Date, but which are
not
yet due as of the Closing Date. Sellers shall pay the U.S. federal and any
applicable state income tax attributable to the Company’s taxable income for
such return periods for which such Sellers would be liable individually assuming
a valid election by the Company to be taxed as an S corporation for federal
income tax purposes and for purposes of all state income taxes in those states
which allow such elections, and shall also pay any entity-level Tax liability
of
the Company reflected on such Tax Returns if not reserved for on the Closing
Date Balance Sheet.
(ii) The
current accountants for the Company will prepare, and the Company will file
or
cause to be filed when due, all federal, state and local income and franchise
Tax Returns and other Tax Returns with respect to the Company and the
Subsidiaries with respect to taxable periods ending on the Closing Date (the
“Short
Tax Period”).
With
respect to the Short Tax Period, (i) the Company and the Subsidiaries shall
close their books as of the end of the Short Tax Period and compute taxable
income or taxable loss for the Short Tax Period on the basis of the permanent
books and records (including work papers) of the Company and the Subsidiaries
for such Short Tax Period, taking into account the effect of the Section
338(h)(10) Elections (and after applying the Next Day Rule under Treas. Reg.
Section 1.338-1(d), to the extent applicable); (ii) the current accountants
for
the Company will prepare the necessary Tax Returns, in accordance with the
Subchapter S requirements of the Code and in a manner consistent with the Tax
Returns previously filed by the Company (but taking into account the effects
of
the Section 338(h)(10) Elections), and provide such information to Sellers
and
Purchaser for review and approval; (iii) such Tax Returns shall be filed by
the
Company by the due date of such Tax Returns (taking into account any
extensions); and (iv) Sellers shall pay the federal and any applicable
state income tax attributable to the Company’s taxable income for the Short Tax
Period for which such Sellers would be liable individually assuming a valid
election by the Company to be taxed as an S corporation for federal income
tax
purposes and for purposes of all state income taxes in those states which allow
such elections, and shall also pay any entity-level Tax liability of Company
reflected on such Tax Returns if not reserved for on the Closing Date Balance
Sheet.
22
(c) Additional
Purchase Price for Certain Taxes.
(i)
Except as otherwise provided in and subject to the terms of this Section
6.2(c),
Purchaser shall pay to Sellers additional consideration under this Section
6.2(c)
(the
“Make-Whole
Amount”)
equal
to the excess of (A) the aggregate Taxes imposed on Sellers solely as a result
of (x) the deemed transfer of the assets by the Company and the Subsidiaries
contemplated by section 338(h)(10) of the Code and the deemed liquidation of
the
Company as contemplated by section 338(h)(10) of the Code (assuming for this
purpose the distribution by the Company of the Purchase Price) and (y) the
allocation of a portion of the Purchase Price to the non-competition agreement
as described in Section 6.3,
over
(B) the aggregate amount of Taxes that would have been imposed on Sellers if
Sellers had sold the stock of the Company to Purchaser in a fully taxable
transaction outside the scope of section 338 of the Code under the same terms
as
are provided in this Agreement and without any allocation of a portion of the
Purchase Price to the non-competition agreement as described in Section 6.3
(such
excess Taxes, “Indemnified
Taxes”).
In
computing Indemnified Taxes with respect to any Seller (other than for purposes
of calculating the Tax benefit resulting from the accrual or payment of an
Indemnified Tax as provided below), it shall be assumed that the only tax items
of such Seller are those that arise (or would have arisen) as a result of the
transactions (or deemed transactions) described in clauses
(A)
and
(B)
above,
that Xxxxxxx is an individual resident of Colorado, and that each other Seller
is an individual resident of the state shown on Schedule
3.1.
The
Make-Whole Amount will be increased so that Sellers, after receipt of the
Make-Whole Amount, will have received on a net after-tax basis an amount equal
to the Indemnified Taxes.
(ii) Schedule
6.2(c)
contains
the parties’ estimate of the Make-Whole Amount. Pursuant to the procedures
outlined in Section
6.2(c)(i),
Purchaser shall cause any Make-Whole Amount resulting from the application
of
such procedures to be paid, subject to the procedures described herein, at
least
5 days prior to the filing of the appropriate Tax Return. Sellers and Purchaser
agree to prepare their respective Tax Returns in a manner consistent with
Schedule
6.2(c)
and the
determination of the Make-Whole Amount pursuant to Section
6.2(c)(i)
(and, if
there is an adjustment to such amount by an Independent Accounting Firm pursuant
to this Section
6.2(c)(ii),
consistent with that adjustment), and to not take any position inconsistent
with
Schedule
6.2(c)
and any
such determination (or, if applicable, adjustment). Subject to the next
sentence, no additional Make-Whole Amount shall be payable unless there has
been
an audit or other inquiry described in Section
6.2(c)(iii),
and a
final determination of additional Indemnified Taxes owing in accordance with
the
procedures set forth in Section
6.2(c)(iii).
Notwithstanding the foregoing, if at least 30 days prior to the time the Company
is required to file its Tax Returns for the period that includes the Closing
Date, either Sellers or Purchaser determine that a position inconsistent with
the initial determination of the Make-Whole Amount pursuant to Section
6.2(c)(i)
is
required by law, and such position would result in an increase or decrease
in
the Make-Whole Amount previously determined (or adjusted): (A) the party making
such determination shall notify the other party no later than such time (failure
to notify within such time shall result in a waiver of any right to an
adjustment pursuant to this sentence unless such failure to notify within such
time did not result in any prejudice to a party) and the parties shall attempt
in good faith to resolve the matter and agree to any revised Make-Whole Amount
within ten days of such notice; (B) if the parties are unable to so agree
within such time, they shall submit the matter to an Independent Accounting
Firm, (1) that shall be instructed to determine the proper treatment of the
item
in question consistent with Schedule
6.2(c)
and no
later than five days prior to the due date for filing such Tax Return,
(2) whose determination shall be final and binding on the parties, and (3)
whose fees shall be borne equally by Sellers, on the one hand, and Purchaser,
on
the other, and (C) such Tax Return shall be prepared in a manner consistent
with
the determination by such Independent Accounting Firm. Any adjustment to the
Make-Whole Amount shall be paid by Sellers (to the extent of a reduction in
the
Make-Whole Amount) or Purchaser (to the extent an increase in the Make-Whole
Amount), as the case may be, no later than ten Business Days following the
final
determination thereof.
23
(iii) Sellers
shall notify Purchaser in writing of any audit or other inquiry of any of
Sellers by any Taxing Authority that could result in a claim for additional
Indemnified Taxes. Such notification shall be given as soon as reasonably
practicable. Purchaser shall have sole control over all audits or other
proceedings as the same pertain to items relevant to Indemnified Taxes, provided
Sellers shall be entitled at any time to participate in such audits or other
proceedings at their expense. Sellers shall cooperate as reasonably requested
by
Purchaser in order to enable Purchaser to control such proceedings. Sellers
shall not submit information to any Taxing Authority (orally or otherwise)
that
could reasonably be expected to affect Purchaser’s liability for additional
Indemnified Taxes without the prior written consent of Purchaser which shall
be
not unreasonably withheld or delayed. In its sole discretion, Purchaser may
pursue or forego any and all administrative appeals, proceedings, hearings
and
conferences with the Taxing Authority in respect of Indemnified Taxes and may,
at their sole option, either direct Sellers to pay the Indemnified Tax claimed
and xxx for a refund or contest the claim in any permissible manner, and Sellers
agree to cooperate with Purchaser as reasonably requested in prosecuting such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as Purchaser shall
determine; provided,
however,
that
(A) if Purchaser directs Sellers to pay Indemnified Taxes and xxx for a refund,
Purchaser shall advance an amount equal to such Indemnified Taxes to Sellers,
on
an interest-free basis but not in excess of the maximum amount of Purchaser’s
exposure for Indemnified Taxes hereunder, with Purchaser being entitled to
any
permitted refund of such amounts, (B) the right of Purchaser to control
proceedings pursuant to this section (but not the obligation of Purchaser to
indemnify Sellers as provided in this Agreement) shall terminate with respect
to
any such proceeding if Sellers reasonably determine that Purchaser is conducting
such proceedings in manner that is unreasonable and that could reasonably be
expected to cause a Material Adverse Effect on Sellers (provided, that in such
case Sellers shall not consent to any settlement of any issue without the prior
written consent of Purchaser, not to be unreasonably withheld or delayed),
and
(C) Purchaser shall not take or advocate (unless otherwise required by Law)
any
position that could reasonably be expected to have a Material Adverse Effect
on
or legally bind Sellers without obtaining the consent of Sellers, not to be
unreasonably withheld or delayed.
(iv) For
purposes of this Section
6.2(c),
a
“final determination” with respect to any Indemnified Tax shall be deemed to
occur upon the earliest of (A) the expiration of any period following which
no right of appeal or any decision of a court exists, (B) the date upon
which a closing agreement or similar agreement with respect to a claim for
Indemnified Taxes is executed by Sellers and the Taxing Authority following
written approval from Purchaser, such approval not to be unreasonably withheld
or delayed, and (C) the receipt by Sellers of notice from Purchaser that they
no
longer seek to pursue a contest with respect to Indemnified Taxes.
24
(v) Amounts
payable by Purchaser under this Section
6.2(c)
shall be
allocated among the assets of the Company and the Subsidiaries in accordance
with Treas. Reg. Section 1.338-6.
(vi) Notwithstanding
anything in this Section
6.2(c)
to the
contrary, no Make-Whole Amount shall be payable:
(A) to
the
extent of any additional federal income Tax payable if the Company failed to
qualify as a “small business corporation” as defined in section 1361 of the Code
or failed to have in effect a valid election to be treated as an “S corporation”
for federal income Tax purposes under the Code;
(B) to
the
extent of any additional state or local income Tax of any Seller (with respect
to its income pertaining to that Seller or its shares), if the Company failed
to
qualify as a “small business corporation” as defined in provisions of such state
or local income Tax Law comparable to section 1361 of the Code or failed to
have
in effect a valid election to be treated as an “S corporation” for such state or
local income Tax purposes;
(C) to
the
extent of any additional federal, state or local income Tax imposed on any
of
the Subsidiaries if such Subsidiary (or its predecessor) failed to be treated
as
a “qualified subchapter S subsidiary” for purposes of such Tax;
(D) to
the
extent of any Tax imposed by reason of section 1374 of the Code (or
comparable provisions of state or local law);
(E) without
duplication of any reductions described in clauses
(A)
through
(D),
to the
extent the Make-Whole Amount exceeds the Make-Whole Amount that would have
been
payable had none of the circumstances described in clauses
(A)
through
(D)
above
(e.g., the Company not having in effect a valid election to be treated as an
“S
corporation” or a Subsidiary failing to be treated as a “qualified subchapter S
subsidiary”) occurred. For purposes of applying this clause
(E),
in
computing the Make-Whole Amount that would have been so payable, it shall be
assumed that each Seller received the after-tax proceeds from the transactions
contemplated by this Agreement and the distribution of assets from Sellers
that
such Shareholder would have received had none of such circumstances occurred;
and
(F) to
the
extent the Indemnified Tax is attributable to fraud of a Seller.
For
the
sake of clarity, there shall be no increase in the Make-Whole Amount by reason
of a Seller receiving less after-tax proceeds from the Company as a result
of a
Tax that was the subject of a reduction described in this Section
6.2(c).
The
reductions in clauses
(A)
through
(F)
are not
mutually exclusive.
6.3 Non-Competition.
xiv)
Except
as Purchaser may expressly agree in writing, Xxxxxxx agrees that, from and
after
the date of this Agreement until five years after the Closing Date, Xxxxxxx
shall not, and shall not permit any of his post-Closing Affiliates, directly
or
indirectly:
25
(i)
engage in, control, advise, manage, serve as a director, officer, or employee
of, act as a consultant to, receive any economic benefit from or exert any
influence upon, any business which conducts activities in the Territory similar
to those conducted by the Company or any of the Subsidiaries;
(ii)
solicit, divert or attempt to solicit or divert any party who is, was, or was
solicited to become, a customer or supplier of the Company or any of the
Subsidiaries at any time prior to the Closing Date;
(iii)
employ, solicit for employment or encourage to leave their employment, any
person who was during the two-year period prior to such employment, solicitation
or encouragement or is an officer or employee of the Company or any of the
Subsidiaries;
(iv)
avail himself of or invest in any business opportunity which is related to
the
activities conducted by the Company or any of the Subsidiaries, except as a
passive investor in the stock of a publicly traded company;
(v)
disturb, or attempt to disturb, any business relationship between any third
party and the Company or any of the Subsidiaries; or
(vi)
make
any statement to any third party, including the press or media, likely to result
in adverse publicity for the Company or any of the Subsidiaries.
For
purposes of this Section
6.3(a),
the
term “directly or indirectly” shall include acts or omissions as proprietor,
partner, joint venturer, employer, salesman, agent, employee, officer, director,
lender or consultant of, or owner of any interest in, any Person.
(b) In
the
event of actual or threatened breach of the provisions of this Section 6.3,
Purchaser, in addition to any other remedies available to it for such breach
or
threatened breach, including the recovery of damages, shall be entitled to
an
injunction restraining Xxxxxxx from such conduct.
(c) If
at any
time any of the provisions of this Section 6.3
shall be
determined to be invalid or unenforceable by reason of being vague or
unreasonable as to duration, area, scope of activity or otherwise, then this
Section 6.3
shall be
considered divisible (with the other provisions to remain in full force and
effect) and the invalid or unenforceable provisions shall become and be deemed
to be immediately amended to include only such time, area, scope of activity
and
other restrictions, as shall be determined to be reasonable and enforceable
by
the court or other body having jurisdiction over the matter, and Xxxxxxx
expressly agrees that this Section 6.3,
as so
amended, shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
(d) Nothing
in this Section
6.3
is
intended to impose any non-compete obligations on any employee of the Company
or
any Subsidiary other than Xxxxxxx.
26
6.4 Required
Consents.
After
the Closing, Sellers and Xxxxxxx shall cooperate with Purchaser and use
commercially reasonable efforts to assist Purchaser in obtaining any Required
Consents not obtained prior to Closing.
6.5 Employee
Terminations.
Subject
to any individual arrangements with individual employees of the Company as
disclosed in the Disclosure Memorandum, if any individual employed by the
Company or any of its Subsidiaries as of the Closing Date is terminated by
Purchaser during the first twelve (12) months after the Closing Date, for any
reason except for good cause, such individual shall be entitled to receive
the
same severance benefits as such individual would have received as a result
of
such termination under the Company’s severance policy as in effect as of the
date of this Agreement. For the avoidance of doubt, such severance policy
provides for two (2) weeks of base pay for every full year of employment by
the Company, subject to a maximum six (6) months of base pay, and continued
medical and dental coverage during the same period.
6.6 Transition
Period for Xxxxxxx; Excluded Assets.
Purchaser shall give Xxxxxxx up to thirty (30) days after the Closing Date
(the
“Transition
Period”)
to
remove his personal effects from the premises of the Company and its
Subsidiaries and to arrange for support services previously provided to Xxxxxxx
by the Company. Notwithstanding the previous sentence, the Transition Period
for
the New York apartment (as referred to on Schedule
4.22(b))
shall
extend to July 31, 2007, and the Transition Period for the NetJet lease
arrangement (as referred to on Schedule
4.22(b))
shall
extend to September 27, 2007. During the Transition Period, the Company and
its
Subsidiaries shall provide to Xxxxxxx substantially the same support services
as
have been provided to Xxxxxxx during the one-year prior to the date of this
Agreement. Xxxxxxx shall use commercially reasonable efforts to cause title
to
the assets listed on Schedule
4.22(b)
to be
transferred from the Company and its Subsidiaries to Xxxxxxx (or to a Person
designated by Xxxxxxx) effective on or prior to the expiration of the Transition
Period. If title to any such asset is not transferred to Xxxxxxx (or to a Person
designated by Xxxxxxx) prior to the expiration of the Transition Period, then
Purchaser shall use commercially reasonable efforts to provide Xxxxxxx with
the
same use of such asset after the Transition Period in accordance with the terms
of any Contract related to the use or enjoyment of such asset, provided
that
Xxxxxxx shall reimburse Purchaser for all out-of-pocket costs or expenses
incurred by Purchaser or any of its Affiliates in connection
therewith.
ARTICLE
VII
CLOSING
7.1 The
Closing.
The
Closing, which shall be effective as of the close of business on the Closing
Date, shall take place at the offices of Mayer, Brown, Xxxx & Maw LLP, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the date of this Agreement, concurrently
with the execution hereof.
7.2 Sellers’
Closing Deliveries.
At the
Closing, Sellers and Xxxxxxx shall deliver or cause to be delivered to Purchaser
the following:
(a) one
or
more stock certificates representing all of the Shares, endorsed in blank or
accompanied by duly executed stock powers;
27
(b) pay-off
letters in form and substance satisfactory to Purchaser (collectively, the
“Pay-Off
Letters”),
duly
executed by the lenders of all outstanding indebtedness of the Company and
the
Subsidiaries as of the date of this Agreement, other than the Italian
Indebtedness, which set forth each such lender’s agreement that, upon payment of
the amount specified in the applicable Pay-Off Letter, (i) the Company and
its Subsidiaries shall have no further liabilities or obligations with respect
to the indebtedness to which such Pay-Off Letter relates and (ii) all
security interests (if any) in collateral securing such indebtedness shall
be
released by such lender;
(c) a
letter,
in form and substance satisfactory to Purchaser, duly executed by the lender
of
the Italian Indebtedness, that sets forth the aggregate amount of Italian
Indebtedness outstanding as of the Closing Date;
(d) a
letter
of resignation from each officer and member of the board of directors of the
Company and the Subsidiaries resigning from such position as officer or director
(but not employment, other than Xxxxxxx) effective as of the
Closing;
(e) a
copy of
the agreement of trust for each Seller, certified by the trustee thereof that
such copy is a true, accurate and complete copy of such agreement of trust
as in
effect as of the date this Agreement;
(f) certificates
dated as of a recent date from (i) the Secretary of State of Delaware
listing all charter documents of the Company then on file and certifying that
the Company is in good standing under the Laws of Delaware and has paid all
its
franchise taxes, and (ii) the Treasurer of New Jersey listing all charter
documents of the Principal Subsidiaries, respectively, then on file and
certifying that the Principal Subsidiaries, respectively, are in good standing
under the Laws of New Jersey and have filed all requisite annual reports;
and
(g) such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as may reasonably be required to
consummate the transactions contemplated by this Agreement and the Related
Agreements.
7.3 Purchaser’s
Closing Deliveries.
At the
Closing, Purchaser shall deliver or cause to be delivered to or on behalf of
Sellers the following:
(a) the
Closing Sellers Amount, pursuant to the payment instructions set forth in
Schedule
2.2(a);
(b) the
Closing Debt Repayment Amount, pursuant to the payment instructions set forth
in
the Pay-Off Letters;
(c) a
certificate of the secretary or an assistant secretary of Purchaser certifying
resolutions of the board of directors of Purchaser, approving and authorizing
the execution, delivery and performance by Purchaser of this Agreement and
its
Related Agreements and the consummation by Purchaser of the transactions
contemplated hereby and thereby (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of Purchaser);
and
28
(d) such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as may reasonably be required to
consummate the transactions contemplated by this Agreement and the Related
Agreements.
ARTICLE
VIII
INDEMNIFICATION
8.1 Indemnification
by Xxxxxxx.
From
and after the Closing Date and subject to the provisions of this Article
VIII
(including the limitations set forth in Section
8.4),
Xxxxxxx agrees to indemnify, hold harmless and defend each Purchaser Indemnified
Party from and against any and all claims and/or liabilities, damages,
penalties, Judgments, assessments, fines, losses, costs and expenses (including
reasonable attorneys’ fees, interest expense (including pre-judgment interest)
and expenses and costs of investigation) (collectively, “Damages”)
arising out of or relating to:
(a) any
inaccuracy or breach of any representation or warranty of Xxxxxxx contained
in
this Agreement;
(b) any
fine,
penalty or fee with respect to any Permit of the Company or any Subsidiary
that
is specified in a written fine or penalty notice received by the Company or
any
Subsidiary between January 1, 2007 and the Closing Date; or
(c) any
breach of any covenant or agreement of Sellers or Xxxxxxx contained in this
Agreement.
8.2 Indemnification
by Purchaser.
From
and after the Closing Date and subject to the provisions of this Article
VIII,
Purchaser agrees to, and agrees to cause the Company to, indemnify, hold
harmless and defend each Seller Indemnified Party from and against any and
all
claims and/or Damages arising out of or relating:
(a) any
inaccuracy or breach of any representation or warranty of Purchaser contained
in
this Agreement; or
(b) any
breach of any covenant or agreement of Purchaser contained in this
Agreement.
8.3 Indemnification
Process.
The
party or parties making a claim for indemnification under this Article
VIII
shall
be, for the purposes of this Agreement, referred to as the “Indemnified
Party”
and
the
party or parties against whom such claims are asserted under this Article
VIII
shall
be, for the purposes of this Agreement, referred to as the “Indemnifying
Party.”
All
claims by any Indemnified Party under this Article
VIII
shall be
asserted and resolved as follows:
(a) In
the
event that (i) any claim, demand or Proceeding is asserted or instituted by
any
Person other than the parties to this Agreement or their Affiliates which could
give rise to Damages for which an Indemnifying Party could be liable to an
Indemnified Party under this Agreement (such claim, demand or Proceeding, a
“Third
Party Claim”)
or
(ii) any Indemnified Party under this Agreement shall have a claim to be
indemnified by any Indemnifying Party under this Agreement which does not
involve a Third Party Claim (such claim, a “Direct
Claim”),
the
Indemnified Party shall with reasonable promptness send to the Indemnifying
Party a written notice specifying the nature of such claim, demand or Proceeding
and the amount or estimated amount of such claim, demand or Proceeding (which
amount or estimated amount shall not be conclusive of the final amount, if
any,
of such claim, demand or Proceeding) (a “Claim
Notice”);
provided,
however,
that a
delay in notifying the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations under this Agreement except to the extent that (and
only to the extent that) such failure shall have caused the Damages for which
the Indemnifying Party is obligated to be greater than such Damages would have
been had the Indemnified Party given the Indemnifying Party proper
notice.
29
(b) In
the
event of a Third Party Claim, the Indemnifying Party shall control the defense
of, and shall be entitled to appoint counsel of the Indemnifying Party’s choice
at the expense of the Indemnifying Party to represent the Indemnified Party
and
any others the Indemnifying Party may reasonably designate in connection with,
such claim, demand or Proceeding (in which case the Indemnifying Party shall
not
thereafter be responsible for the fees and expenses of any separate counsel
retained by any Indemnified Party except as set forth below); provided,
however,
that
such counsel is reasonably acceptable to the Indemnified Party. Notwithstanding
an Indemnifying Party’s election to appoint counsel to represent an Indemnified
Party in connection with a Third Party Claim, an Indemnified Party shall have
the right to employ separate counsel, and the Indemnifying Party shall bear
the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of
counsel selected by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest, (ii) the
Indemnified Party shall reasonably conclude, based upon advice of counsel,
that
(A) there is a conflict of interest between the Indemnifying Party and the
Indemnified Party in the conduct of the defense of such Third Party Claim or
(B) there are specific defenses available to the Indemnified Party which
are different from or additional to those available to the Indemnifying Party
and which could be materially adverse to the Indemnifying Party or
(iii) the Indemnifying Party shall not have employed counsel to represent
the Indemnified Party within a reasonable time after notice of the institution
of such Third Party Claim; provided,
however,
that
the Indemnifying Party shall continue to control the defense of such Third
Party
Claim. If requested by the Indemnifying Party, the Indemnified Party agrees
to
cooperate with the Indemnifying Party and its counsel in contesting any claim,
demand or Proceeding which the Indemnifying Party defends or, if appropriate
and
related to the claim, demand or Proceeding in question, in making any
counterclaim against the Person asserting the Third Party Claim or any
cross-complaint against any Person. No Third Party Claim may be settled or
compromised (1) by the Indemnified Party without the prior written consent
of the Indemnifying Party or (2) to the extent the Indemnified Party would
not be entitled to indemnification with respect to such Third Party Claim under
this Article
VIII,
by the
Indemnifying Party without the prior written consent of the Indemnified Party.
In the event any party settles or compromises or consents to the entry of any
Judgment with respect to any Third Party Claim without the prior written consent
of the other parties, such party shall be deemed to have waived all rights
against the other parties for indemnification under this Article
VIII.
Notwithstanding anything in this Section 8.3(b)
to the
contrary, the Indemnified Party shall have the right to employ separate counsel
at the Indemnified Party’s expense and to control the defense of any Third Party
Claim that relates to pollution or the protection of the environment, including
any cleanup, removal, treatment or remediation of hazardous substances, or
that
could reasonably be expected, if adversely decided against the Indemnified
Party, to materially adversely affect any of the Indemnified Party’s other
business operations.
(c) In
the
event of a Direct Claim, the Indemnifying Party shall notify the Indemnified
Party within 30 Business Days of receipt of a Claim Notice whether or not the
Indemnifying Party disputes such claim. If the Indemnifying Party gives timely
notice disputing any claim (a “Counter
Notice”),
the
Indemnifying Party shall promptly pay to Indemnified Party all non-disputed
amounts and the parties shall attempt in good faith to agree on resolution
of
the disputed amount. Any amount mutually agreed upon or awarded to the
Indemnified Party under a final and non-appealable Judgment shall be paid by
the
Indemnifying Party within five Business Days following execution of such
agreement or the entering of such Judgment, as applicable, subject to the
limitations set forth in Section
8.4.
If no
Counter Notice is received by the Indemnified Party within the 30 Business
Days,
then the dollar amount of the Claim as set forth in the original notice shall
be
deemed established for purposes of this Agreement and, at the end of such
30-Business Day period, the Indemnifying Party shall make a payment to the
Indemnified Party in the dollar amount claimed in the Indemnified Party’s
notice, subject to the limitations set forth in Section
8.4.
30
(d) From
and
after the delivery of a Claim Notice under this Agreement, at the reasonable
request of the Indemnifying Party, each Indemnified Party shall grant the
Indemnifying Party and its representatives all reasonable access to the books,
records and properties of such Indemnified Party to the extent reasonably
related to the matters to which the Claim Notice relates. All such access shall
be granted during normal business hours and shall be granted under conditions
that will not unreasonably interfere with the business and operations of such
Indemnified Party. The Indemnifying Party shall not, and shall require that
its
representatives do not, use (except in connection with such Claim Notice) or
disclose to any third Person other than the Indemnifying Party’s representatives
(except as may be required by applicable Law or in connection with a Claim,
in
which case the Indemnifying Party will use its commercially reasonable efforts
to obtain an appropriate protective order) any information obtained pursuant
to
this Section
8.3(d)
which is
designated as confidential by an Indemnified Party.
8.4 Limitations
on Indemnity Payments.
xv)
No claim
for indemnification under Section 8.1(a)
may be
made by the Purchaser Indemnified Parties, and no payment in respect of a claim
for indemnification shall be required from Xxxxxxx, unless and only to the
extent that the aggregate amount of Damages against which the Purchaser
Indemnified Parties are entitled to be indemnified exceeds $500,000 (the
“Basket”);
provided,
however,
that
the Basket shall not apply to, and the Purchaser Indemnified Parties shall
be
entitled to indemnification without regard to the Basket with respect to,
(i) claims for fraud or fraudulent misrepresentation and (ii) claims
for breach of any representation or warranty made in Section 3.1,
3.2,
3.3,
3.6,
4.2,
4.3,
4.9(a)
(other
than for Liens arising out of claims of vendors or tradesmen in the ordinary
course of business), 4.14,
4.22
or
4.23
(collectively, the “Designated
Representations”)
(b) The
maximum aggregate amount of Damages against which the Purchaser Indemnified
Parties shall be entitled to be indemnified under Section
8.1(a)
with
respect to all claims thereunder shall be equal to $5,000,000; provided,
however,
that
the foregoing indemnification cap shall not apply to, and the Purchaser
Indemnified Parties shall be entitled to indemnification without regard to
the
foregoing indemnification cap with respect to, (i) claims for fraud or
fraudulent misrepresentation and (ii) claims for breach of any Designated
Representation.
(c) The
right
to indemnification pursuant to this Article
VIII
shall be
the exclusive remedy for any and all claims arising under this Agreement
following the Closing, other than claims for fraud or fraudulent
misrepresentation. Any payment required to be made to a Purchaser Indemnified
Party under Section 8.1
shall be
made (i) first, by means of a dollar-for-dollar reduction to the Deferred
Payment Amount to be paid by Purchaser to Sellers on the two-year anniversary
of
the date of the Agreement and (ii) second, in the case of any payment with
respect to which the cap set forth in Section
8.4(b)
does not
apply or the Deferred Payment Amount has been either reduced to zero pursuant
to
clause
(i)
above or
already paid to Sellers, by Xxxxxxx.
31
8.5 Survival.
The
representations and warranties of Xxxxxxx and Purchaser contained in this
Agreement shall survive the Closing for a period of two years after the Closing
Date; provided,
however,
that
the representation and warranties contained in Sections
3.1
and
4.2(a)
shall
survive for six years after the Closing Date. The covenants of Sellers, Xxxxxxx
and Purchaser contained in this Agreement shall survive the Closing for the
period specified therein, or if no survival period is specified therein for
a
period of two years after the Closing Date. Any and all claims and causes of
action for indemnification under this Article VIII
arising
out of the inaccuracy or breach of any representation or warranty of Xxxxxxx
or
Purchaser, or the breach of any covenant by Sellers, Xxxxxxx or Purchaser,
must
be made prior to the termination of the applicable survival period; it being
understood that in the event notice of any claim for indemnification under
Section 8.1
or
8.2
shall
have been given within the applicable survival period, the representations,
warranties and covenants that are the subject of such indemnification claim
shall survive until such time as such claim is finally resolved.
8.6 Characterization
of Indemnification Payments.
Purchaser and Sellers agree to treat any payment made under this Article
VIII
as an
adjustment to the Purchase Price. If, contrary to the intent of Purchaser and
Sellers as expressed in the preceding sentence, any payment made pursuant to
this Article
VIII
is
treated as taxable income of an Indemnified Party, then the Indemnifying Party
shall indemnify and hold harmless the Indemnified Party from any liability
for
Taxes attributable to the receipt of such payment.
ARTICLE
IX
GENERAL
PROVISIONS
32
9.2 Further
Assurances.
From
time to time after the Closing and without further consideration, each of the
parties, upon the request of the other party and at such other party’s expense,
shall execute and deliver such documents and instruments as such other party
may
reasonably request in order to consummate more effectively the terms of this
Agreement (including the purchase and sale of the Shares as contemplated by
this
Agreement and the vesting in Purchaser of title to the Shares transferred under
this Agreement).
9.3 Amendment.
This
Agreement may not be amended except by an instrument in writing signed by
Purchaser, Sellers and Xxxxxxx. Notwithstanding the foregoing, Purchaser may
assign its rights to purchase the Shares and its obligations under this
Agreement without Sellers’ or Xxxxxxx’x consent to one or more direct or
indirect majority-owned subsidiaries of Purchaser; provided,
however,
that no
such assignment shall relieve Purchaser of its obligations under this
Agreement.
9.4 Waiver.
Either
Purchaser (on the one hand) or Sellers and Xxxxxxx (on the other hand) may
(a)
extend the time for the performance of any of the obligations or other acts
of
the other, (b) waive any inaccuracies in the representations and warranties
of
the other contained in this Agreement or in any document delivered by the other
pursuant to this Agreement or (c) waive compliance with any of the agreements,
or satisfaction of any of the conditions, contained in this Agreement by the
other. Any agreement on the part of a party to this Agreement to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by such party.
9.5 Notices.
Any
notices or other communications required or permitted under, or otherwise in
connection with, this Agreement shall be in writing and shall be deemed to
have
been duly given when delivered in person or upon confirmation of receipt when
transmitted by facsimile transmission or upon receipt after dispatch by
registered or certified mail, postage prepaid, addressed as
follows:
If
to Sellers:
|
|||||
Xxxx
Xxxxxxx
0000
Xxxxxxxxxx Xxx
Xxxxx,
Xxxxxxxx 00000
Facsimile:
970.920.3248
|
|||||
With
a copy to:
|
|||||
Xxxxxx
XxXxxxxxxx & Marcus, P.C.
X.X.
Xxx 0000
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Attention: G.
Xxxxxx Xxxxxx
Facsimile: 908.722.0755
|
|||||
33
If
to Kaufman:
|
|||||
Xxxx
Xxxxxxx
0000
Xxxxxxxxxx Xxx
Xxxxx,
Xxxxxxxx 00000
Facsimile:
970.920.3248
|
|||||
With
a copy to:
|
|||||
Xxxxxx
XxXxxxxxxx & Marcus, P.C.
X.X.
Xxx 0000
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Attention: G.
Xxxxxx Xxxxxx
Facsimile: 908.722.0755
|
|
If
to Purchaser or the Company to:
Chemtura
Corporation
000
Xxxxxx Xxxx
Xxxxxxxxxx,
Xxxxxxxxxxx 00000
Attention: Xxxx
X. Xxxxxxxx
Senior
Vice President and General Counsel
Facsimile: 203.573.4301
With
a copy to:
Mayer,
Brown, Xxxx & Maw LLP
00
Xxxxx Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxx
X. Xxxxx
D.
Xxxxxxx Xxxxxx
Facsimile: 312.701.7711
or
such
other address as the Person to whom notice is to be given has furnished in
writing to the other party. A notice of change in address shall not be deemed
to
have been given until received by the addressee.
9.6 Headings
and Schedules.
The
descriptive headings of the Articles and Sections of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement. The
disclosure or inclusion of any matter or item on any Schedule of the Disclosure
Memorandum shall not be deemed an acknowledgment or admission that any such
matter or item is required to be disclosed or is material for purposes of the
representations and warranties set forth in this Agreement. A representation
or
warranty shall not be deemed to be qualified by any item disclosed or described
in any schedule of the Disclosure Memorandum (other than the schedule
corresponding to such representation or warranty) unless it is reasonably
apparent (by cross-reference or otherwise) that such item is also applicable
to
such other representation or warranty.
34
9.7 Applicable
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF
LAWS THEREOF OR OF ANY OTHER JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
9.8 No
Third Party Rights.
Except
as specifically provided in Article
VIII,
this
Agreement is intended to be solely for the benefit of the parties to this
Agreement and is not intended to confer any benefits upon, or create any rights
in favor of, any Person other than the parties to this Agreement.
9.9 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute a single
instrument.
9.10 Severability.
If any
provision of this Agreement shall be held invalid, illegal or unenforceable,
the
validity, legality or enforceability of the other provisions of this Agreement
shall not be affected and there shall be deemed substituted for the provision
or
provisions at issue a valid, legal and enforceable provision as similar as
possible to the provision at issue.
9.11 Confidentiality
Agreement; Entire Agreement.
Effective upon the execution of this Agreement, the Confidentiality Agreement
shall automatically terminate without any further action by the parties hereto.
This Agreement (including the documents and instruments referred to in this
Agreement) sets forth the entire understanding and agreement among the parties
as to the matters covered in this Agreement and supersedes and replaces any
prior understanding, agreement or statement of intent, in each case, written
or
oral, of any and every nature with respect to such understanding, agreement
or
statement including the Confidentiality Agreement.
9.12 Consent
to Jurisdiction; Waiver of Jury Trial.
Each of
the parties hereto (a) consents to submit itself to the personal
jurisdiction of any federal court sitting in the State of New York or any New
York state court, in either case, located in New York, New York, if any dispute
arises out of this Agreement or any of the transactions contemplated hereby,
(b)
agrees that it will not attempt to deny or defeat the jurisdiction of such
courts by motion or other request for leave from any such court, (c) waives
any
claim that such proceedings have been brought in an inconvenient forum, and
(d)
agrees that it will not bring any action relating to this Agreement in any
court
other than a federal court sitting in the State of New York or a New York state
court, in either case, located in New York, New York. THE PARTIES HEREBY WAIVE
ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ANY CLAIMS MADE IN
CONNECTION WITH THIS AGREEMENT.
9.13 Fair
Construction.
This
Agreement shall be deemed to be the joint work product of Purchaser, Sellers
and
Xxxxxxx without regard to the identity of the draftsperson, and any rule of
construction that a document shall be interpreted or construed against the
drafting party shall not be applicable.
*
* * * * * * *
35
Each
of
the parties to this Agreement has caused this Agreement to be executed as of
the
day and year first above written.
SELLERS:
XXXX
XXXXXXX REVOCABLE LIVING
TRUST
DATED OCTOBER 20, 2000
By:
________________________
Name: Xxxx
Xxxxxxx
Title: Trustee
XXXXXXX
XXXXXXX AND XXXXX XXXXXXX, CO-TRUSTEES UNDER AGREEMENT OF TRUST DATED AUGUST
2,
1996, FOR BENEFIT OF XXXX XXXXXXX
By:
________________________
Name: Xxxxxxx
Xxxxxxx
Title: Co-Trustee
By:
________________________
Name: Xxxxx
Xxxxxxx
Title: Co-Trustee
XXXXXXX
XXXXXXX AND XXXXX XXXXXXX, CO-TRUSTEES UNDER AGREEMENT OF TRUST DATED AUGUST
2,
1996, FOR BENEFIT OF XXXXX XXXXXXX
By:
________________________
Name: Xxxxxxx
Xxxxxxx
Title: Co-Trustee
By:
________________________
Name: Xxxxx
Xxxxxxx
Title: Co-Trustee
36
XXXXXXX
XXXXXXX AND XXXXX XXXXXXX, CO-TRUSTEES UNDER AGREEMENT OF
TRUST
DATED AUGUST 2, 1996, FOR BENEFIT OF XXXXXXX XXXXXXX
By:
________________________
Name: Xxxxxxx
Xxxxxxx
Title: Co-Trustee
By:
________________________
Name: Xxxxx
Xxxxxxx
Title: Co-Trustee
KAUFMAN:
XXXX
XXXXXXX
________________________
PURCHASER:
CHEMTURA
CORPORATION
By:
________________________
Name:
________________________
Title:
________________________
37