EXECUTION COPY
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
by and among
XXXXXXX TECHNOLOGY COMPANY, INC.
and
STOCKHOLDERS OF MTC TRADING COMPANY
October 4, 2006
TABLE OF CONTENTS
PAGE
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ARTICLE I.....................................................DEFINITIONS 1
ARTICLE II.................................SALE OF SHARES; PURCHASE PRICE 12
2.1.....................................................Sale of Shares 12
2.2.....................................................Purchase Price 12
ARTICLE III........CALCULATION AND PAYMENT OF PRELIMINARY PURCHASE PRICE;
ADJUSTMENT TO PRELIMINARY PURCHASE PRICE 13
3.1..............Calculation and Payment of Preliminary Purchase Price 13
3.2......Calculation and Payment of Adjustment to Preliminary Purchase
Price 13
3.3........................................................Cooperation 16
ARTICLE IV..................REPRESENTATIONS AND WARRANTIES OF THE SELLERS 16
4.1.....................................Organization and Good Standing 16
4.2....................................Capitalization; Stock Ownership 17
4.3................................................Subsidiaries of MTC 17
4.4.......................................Authority and Enforceability 18
4.5.......................................No Conflicts; Authorizations 19
4.6...............................................Financial Statements 19
4.7.........................................No Undisclosed Liabilities 20
4.8..........................................................Inventory 20
4.9................................................Accounts Receivable 21
4.10.............................................................Taxes 21
4.11...............................................Compliance with Law 23
4.12....................................................Authorizations 23
4.13......................................Title to Personal Properties 23
4.14......................................Condition of Tangible Assets 24
4.15.....................................................Real Property 24
4.16.............................................Intellectual Property 24
4.17..............................Absence of Certain Changes or Events 26
4.18.........................................................Contracts 28
4.19........................................................Litigation 30
4.20.................................................Employee Benefits 30
4.21......................................Labor and Employment Matters 33
4.22.....................................................Environmental 33
4.23.........................................................Insurance 35
4.24..................................................Product Warranty 35
4.25.................................................Books and Records 36
4.26...........................................Suppliers and Customers 36
4.27................................................Brokers or Finders 36
4.28.....................................................Bank Accounts 36
4.29................................................Powers of Attorney 37
4.30..............................................Certain Acquisitions 37
4.31.....................................Foreign Corrupt Practices Act 37
4.32........................................Completeness of Disclosure 37
ARTICLE V.....................REPRESENTATIONS AND WARRANTIES OF THE BUYER 37
5.1................................................Corporate Existence 37
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TABLE OF CONTENTS
(continued)
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5.2................................................Corporate Authority 37
5.3...................................Governmental Approvals; Consents 38
5.4...................................................Finders; Brokers 38
5.5............................................Purchase for Investment 38
5.6.........................................................Litigation 38
5.7........................Due Diligence and Independent Investigation 38
ARTICLE VI......................................AGREEMENTS OF ALL PARTIES 39
6.1................................Conduct of Business Pending Closing 39
6.2..............................Cooperation with Respect to Financing 40
6.3...........................................Confidential Information 41
6.4....................................................Buyer's Actions 41
6.5.......................................................Other Offers 41
6.6.........................Mutual Cooperation; No Inconsistent Action 41
6.7.................................................Public Disclosures 42
6.8....................................Access to Records and Personnel 43
6.9...............................................Update to Disclosure 43
6.10..........................................Resignation of Directors 44
6.11..............................Director and Officer Indemnification 44
6.12...................................Employee Relations and Benefits 45
6.13.......................................................Tax Matters 46
6.14..........................................Non-Compete; Non-Solicit 48
6.15.................................................Medical Insurance 49
ARTICLE VII....................................................CONDITIONS 49
7.1.........................Conditions to the Obligations of the Buyer 49
7.2...........................Conditions to the Obligations of Sellers 50
7.3.....................Conditions to Obligations of Buyer and Sellers 50
7.4..................................Frustration of Closing Conditions 50
ARTICLE VIII......................................................CLOSING 50
8.1.......................................................Closing Date 50
8.2..................................The Buyer's Deliveries to Sellers 50
8.3...........................The Buyer's Delivery to the Escrow Agent 51
8.4...................................Sellers' Deliveries to the Buyer 51
8.5..............................Sellers' Delivery to the Escrow Agent 52
8.6........................Escrow Agents Delivery to Sellers and Buyer 52
ARTICLE IX................................................INDEMNIFICATION 52
9.1.............................................Agreement to Indemnify 52
9.2.........................Survival of Representations and Warranties 53
9.3...............................Notice of Claims for Indemnification 54
9.4..................................................Defense of Claims 54
9.5...........................................Settlement or Compromise 55
9.6........................................................Subrogation 55
9.7..........................................................Knowledge 55
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TABLE OF CONTENTS
(continued)
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9.8...............................................Post-Closing Actions 56
9.9.......................................Indemnification Calculations 56
9.10.....................................................Tax Treatment 56
9.11..................................................Exclusive Remedy 56
ARTICLE X.....................................................TERMINATION 57
10.1................................................Termination Events 57
10.2.............................................Effect of Termination 58
10.3..................................................Failure to Close 58
ARTICLE XI........................MISCELLANEOUS AGREEMENTS OF THE PARTIES 58
11.1...........................................................Notices 58
11.2..........................................................Expenses 59
11.3.................................................Non-Assignability 59
11.4.................................................Amendment; Waiver 59
11.5.....................................................Third Parties 59
11.6..........................................................Currency 60
11.7................Governing Law; Submission to Jurisdiction; Waivers 60
11.8..............................................Specific Performance 60
11.9..................................................Entire Agreement 60
11.10.........................Interpretation and Rules of Construction 61
11.11.....................................................Severability 61
11.12........................................................Schedules 62
11.13.........................................................Language 62
11.14.....................................................Counterparts 62
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of the 4th day of October, 2006, is by
and between XXXXXXX TECHNOLOGY COMPANY, INC. a Delaware corporation ("BUYER"),
and the stockholders listed on the signature page hereof (each, a "SELLER", and
collectively, the "SELLERS") of MTC TRADING COMPANY, an Arizona corporation
("MTC"). The Buyer and Sellers may be referred to in this Agreement individually
as a "PARTY" or collectively as the "PARTIES." Capitalized terms used herein
shall have the meanings set forth in Article I, unless otherwise defined herein.
WHEREAS, Sellers own 100% of the outstanding shares (the "SHARES") of common
stock of MTC as set forth in Exhibit A. Sellers desire to sell to Buyer, and
Buyer desires to purchase from Sellers, all, but not less than all, of the
Shares upon the terms and subject to the conditions set forth in this Agreement.
As a result of the transactions contemplated hereby, Buyer will acquire all of
the Shares, and Sellers will receive the consideration described in Article II
of this Agreement.
NOW, THEREFORE, in consideration of the premises and promises set forth herein,
and intending to be legally bound hereby, the Parties agree as set forth below.
ARTICLE I
DEFINITIONS
The following terms when used in this Agreement have the respective meanings set
forth below.
"ACQUISITION" has the meaning set forth in Section 2.1.
"ACQUISITION PROPOSAL" shall mean any inquiry, proposal or offer from any Person
(other than the Buyer) relating to any (a) direct or indirect acquisition
(whether in a single transactions or a series of related transactions) of MTC's
or any of its Subsidiaries' assets equal to fifty-one percent (51%) or more of
the value of MTC's or such Subsidiary's assets, respectively, or to which
fifty-one percent (51%) or more of MTC's or any of its Subsidiaries'
consolidated revenues or earnings are attributable, (b) direct or indirect
acquisition (whether in a single transactions or a series of related
transactions) of fifty-one percent (51%) or more of the equity securities of MTC
or any of its Subsidiaries, or (c) merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transactions involving substantially all of MTC or any of its Subsidiaries or
involving MTC's or any of its Subsidiaries' assets with the value set forth in
clause (a) of this definition; in each case, other than the Acquisition.
"ACTION" has the meaning set forth in Section 4.19.
"AFFECTED EMPLOYEES" has the meaning set forth in Section 6.12.
"AFFILIATE" means, with respect to any Person, any other Person that controls,
is controlled by, or is under common control with such Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, by ownership
of securities, contract, credit arrangement or otherwise.
"AGREEMENT" means this Stock Purchase Agreement, including all Exhibits and
Seller Disclosure Schedule, as each may be amended, modified or supplemented
from time to time in accordance with the terms of this Agreement.
"AGENTS" has the meaning set forth in Section 6.11(a).
"ANCILLARY AGREEMENT" has the meaning set forth in Section 11.12.
"ASIA PACIFIC" means Oxy-Dry Asia Pacific, Inc., a Delaware corporation and
wholly-owned subsidiary of Oxy-Dry, and includes its branch which does business
as Oxy-Dry Asia Pacific, Inc.
"AUTHORIZATION" means any authorization, approval, consent, certificate,
declaration, license, order, permit or franchise of or from, or registration or
filing with, any Governmental Authority or pursuant to any Law.
"BENEFIT PLAN" means any employee benefit plan (whether or not within the
meaning of ERISA Section 3(3)) or the German Company Pension Act (BetrAVG), as
the case may be, whether written or oral, maintained, sponsored, contributed to
or required to be contributed to by the Sellers, MTC or any of MTC's
Subsidiaries or ERISA Affiliates for the benefit of any present or former
directors, employees, contractors or consultants of the Sellers, MTC, or any of
MTC's Subsidiaries or ERISA Affiliates, or for which the Sellers, MTC or any of
MTC's Subsidiaries or ERISA Affiliates may have liability, including, but not
limited to, any (a) nonqualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan (as defined in ERISA
Section 3(2)), (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan, (d)
any Multiemployer Plan (as defined in ERISA Section 3(37) with respect to which
MTC or any of its Subsidiaries or ERISA Affiliates has an obligation to
contribute or has or could have withdrawal liability under ERISA Section 4201),
(e) Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material
fringe benefit plan or program, or (f) stock purchase, stock option, severance
pay, employment, change-in-control, vacation pay, company awards, salary
continuation, sick leave, excess benefit, deferred compensation, bonus or other
incentive compensation, life insurance, or other employee benefit plan,
contract, program, policy or other arrangement, whether or not subject to ERISA
or the German Company Pension Act (BetrAVG), as the case may be.
"BOOKS AND RECORDS" has the meaning set forth in Section 6.8(b).
"BUSINESS" means the business of developing, manufacturing, distributing,
marketing, selling and servicing of automatic blanket washing systems and
ancillary equipment for the graphic arts industry as conducted by MTC and its
Subsidiaries on the date hereof and the contract packaging, toll blending and
co-packing of dry ingredients, powders and pre-mixes as conducted by Food Blends
on the date hereof.
"BUSINESS DAY" means any day, excluding Saturday, Sunday and any other day on
which commercial banks in Chicago, Illinois are authorized or required by Law to
close.
"BUYER" has the meaning set forth in the introductory paragraph of this
Agreement.
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"BUYER INDEMNITEES" has the meaning set forth in Section 9.1(a).
"BUYER MATERIAL ADVERSE EFFECT" means a material adverse effect on the ability
of the Buyer to consummate the Acquisition and perform all of its obligations
hereunder.
"CAPITAL STOCK" means (a) in the case of a corporation, its shares of capital
stock, (b) in the case of a partnership or limited liability company, its
partnership or membership interests or units (whether general or limited), and
(c) any other interest that confers on a Person the right to receive a share of
the profits and losses, or distribution of assets, of the issuing entity.
"CASH AND CASH EQUIVALENTS" means all cash and Cash Equivalents of MTC and its
Subsidiaries.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, [and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof, which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation].
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq.
"CHARTER DOCUMENTS" means, with respect to any entity, the certificate of
incorporation, the articles of incorporation, by-laws, articles of organization,
limited liability company agreement, partnership agreement, trust agreement,
formation agreement, joint venture agreement or other similar organizational
documents of such entity (in each case, as amended).
"CLOSING" has the meaning set forth in Section 8.1.
"CLOSING DATE" has the meaning set forth in Section 8.1.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in Section 3.2(a).
"CLOSING WORKING CAPITAL VALUE" means the Working Capital Value as of the
Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, and any successor to such statute, rules or
regulations.
"CONFIDENTIALITY LETTER" means the letter agreement, dated April 25, 2006,
between Oxy-Dry and the Buyer.
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"CONTRACT" means any written contract or other legally binding written agreement
or arrangement.
"COPYRIGHTS" has the meaning set forth in Section 4.16.
"CURRENT ASSETS" means those current and other assets of MTC and its
Subsidiaries set forth on Schedule 1.2 hereto.
"CURRENT LIABILITIES" means those current and other liabilities of MTC and its
Subsidiaries set forth on Schedule 1.2 hereto.
"DECEMBER 31, 2005 BALANCE SHEET" has the meaning set forth in Section 4.6.
"DESIGNATED ACCOUNTANTS" has the meaning set forth in Section 3.2(a).
"ENVIRONMENT" means all indoor or outdoor air, surface water, groundwater,
surface or subsurface land, including all fish, wildlife, biota and all other
natural resources.
"ENVIRONMENTAL ACTION" means any claim, proceeding or other Action brought or
threatened under any Environmental Law or otherwise asserting that MTC or a
Subsidiary of MTC has incurred any Pre-Closing Environmental Liability.
"ENVIRONMENTAL CLEAN-UP SITE" means any location which is listed on the National
Priorities List, the Comprehensive Environmental Response, Compensation and
Liability Information System, or on any similar state or foreign list of sites
requiring investigation or cleanup, or which is the subject of any pending or
threatened Action related to or arising from any alleged violation of any
Environmental Law, or at which there has been a threatened or actual Release of
a Hazardous Substance.
"ENVIRONMENTAL LAWS" means any and all applicable Laws and Authorizations
issued, promulgated or entered into by any Governmental Authority relating to
the Environment, human health, worker health and safety, public health and
safety, preservation or reclamation of natural resources, or to the management,
handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling, Release or
threatened Release of or exposure to Hazardous Substances, whether now existing
or subsequently amended or enacted, including but not limited to: CERCLA; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean
Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq.; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300(f) et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act 7
U.S.C. Section 136 et seq.; RCRA, 42 U.S.C. Section 6901 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any similar or
implementing state or local Law, and any non-U.S. Laws and regulations of
similar import, and all amendments or regulations promulgated thereunder.
"ENVIRONMENTAL PERMITS" means any Authorization under Environmental Law, and
includes any and all Orders issued or entered into by a Governmental Authority
under Environmental Law.
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"EQUITY SECURITIES" means (a) shares of Capital Stock, and (b) options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or other Contracts that, directly or indirectly, could require the issuer
thereof to issue, sell or otherwise cause to become outstanding shares of
Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder, and any successor to such
statute, rules or regulations.
"ERISA AFFILIATE" means any person (within the meaning of Section 3(9) of ERISA)
who is, or at any time was, a member of a "controlled group of corporations"
with, under "common control" with or a member of an "affiliated services group"
as defined in Section 414(b), (c), (m) or (o) of the Code, with, the Sellers,
MTC or any Affiliate thereof, or any predecessor of any of the foregoing.
"ESCROW AGENT" means X.X. Xxxxxx Trust Company, National Association, a national
banking association.
"ESCROW AGREEMENT" means the Escrow Agreement in the form attached hereto as
Exhibit B.
"ESCROW AMOUNT" means Two Million Dollars ($2,000,000).
"EXCHANGE RATE" means the applicable exchange rate for converting the relevant
foreign currency into U.S. currency as published in the Wall Street Journal on
the relevant date.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"FOODS BLENDS" means Oxy-Dry Food Blends, Inc., a Delaware corporation and
wholly-owned subsidiary of Oxy-Dry.
"FUNDED DEBT" means all debt for borrowed money of MTC and its Subsidiaries owed
to any bank or other financial institution. Funded Debt shall include any unpaid
Promissory Notes or other indebtedness of MTC or any of its Subsidiaries payable
to (i) holders of shares of MTC Preferred Stock and issued or incurred in
connection with the redemption by MTC of such preferred stock, together with all
accrued and unpaid dividends thereon, and/or (ii) holders of shares of Oxy-Dry
common stock and issued or incurred in connection with the acquisition by MTC of
such Oxy-Dry common stock. Funded Debt shall not include (i) any amount or
amounts owed by MTC or any of its Subsidiaries as rent or additional rent with
respect to the Leased Personal Property or Leased Real Property.
"GAAP" means United States generally accepted accounting principles applied in a
manner consistent with the application thereof in the preparation of the MTC
Audited Financial Statements at December 31, 2005.
"GENERAL PARTNER" and "GENERAL PARTNERS" have the meanings set forth in Section
4.1(b).
"GOVERNMENTAL AUTHORITY" means any U.S. or foreign federal, state, provincial or
local governmental or regulatory commission, board, bureau, agency, court or
regulatory or administrative body.
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"HAZARDOUS SUBSTANCES" means all explosive materials, radioactive materials,
hazardous materials, toxic materials, wastes, chemicals, petroleum, petroleum
by-products and petroleum products (including crude oil or any fraction
thereof), asbestos and asbestos containing materials, and all other materials,
chemicals and substances that are regulated by, form the basis of liability or
are defined as hazardous, extremely hazardous, toxic or words of similar import,
under any Environmental Law, including materials listed in 49 C.F.R. Section
172.101 and materials defined as hazardous substances pursuant to Section
101(14) of CERCLA.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"IN-BOUND LICENSES" has the meaning set forth in Section 4.16.
"INDEMNIFYING PARTY" has the meaning set forth in Section 9.3.
"INDEMNITEES" has the meaning set forth in Section 9.1(c).
"INDEPENDENT ACCOUNTANTS" has the meaning set forth in Section 3.2(g).
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.16.
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section 4.16.
"JULY 30, 2006 BALANCE SHEET" has the meaning set forth in Section 4.6.
"KNOWLEDGE", when used in this Agreement, means that such Party has no actual
knowledge, after due inquiry, that such representation or warranty is not true
and correct to the same extent as provided in the applicable representation or
warranty. For the purpose of this definition, the "knowledge" of the Sellers
shall mean the actual knowledge, after due inquiry, of Xxxxxx XxXxxxxxxx, Xxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxx, Rune X. Xxxxxxx and Xxxxxx Xxxxx and the "knowledge"
of the Buyer shall mean the actual knowledge, after due inquiry, of Xxxxxx X.
Xxxxx, Xxxx X. Xxxxxxxxxx and Xxxxx Xxxxxxx.
"LAW" means any U.S. or foreign federal, state or local law, statute, ordinance,
regulation, rule, constitution, code, order or treaty of any Governmental
Authority.
"LEASE" has the meaning set forth in Section 4.15.
"LEASED PERSONAL PROPERTY" has the meaning set forth in Section 4.13.
"LEASED REAL PROPERTY" has the meaning set forth in Section 4.15.
"LIENS" means all liens, charges, security interests, pledges, mortgages or
other material encumbrances (other than restrictions on transfer generally
arising under the Securities Act or other applicable securities Laws).
"LOSS" means any liability, expense (including reasonable attorney's fees),
loss, damage, obligation or responsibility.
"MASCHINEN GMBH" means Oxy-Dry Maschinen GmbH, a company with limited liability
established under the laws of the Federal Republic of Germany and wholly-owned
subsidiary of Oxy-Dry.
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"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business,
results of operations or financial condition of MTC and its Subsidiaries taken
as a whole, after taking into effect any insurance recoveries; provided,
however, that none of the following shall be deemed in themselves, either alone
or in combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse
Effect: (i) any failure by MTC and its Subsidiaries to meet internal projections
or forecasts or revenue or earnings predictions, (ii) changes, effects, events,
occurrences or circumstances that generally affect the United States or the
global economy or the industries in which MTC or its Subsidiaries operate, (iii)
general economic, financial or securities market conditions in the United States
or elsewhere, (iv) the execution, delivery or announcement of this Agreement or
the announcement or pendency of the Acquisition, (v) changes in GAAP or legal
requirements applicable to MTC and its Subsidiaries, (vi) changes in Laws or
interpretations thereof by a Governmental Authority, (vii) changes, effects or
events caused by or resulting from the taking of any action required or
permitted by this Agreement or approved by Buyer, or (viii) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, any outbreak or material escalation of hostilities in
which the United States is involved or the occurrence of any military or any
terrorist attack upon the United States, or any of its territories, possessions
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States or directed against United States' facilities
or citizens wherever located; or (b) the ability of MTC or Sellers to consummate
the Acquisition.
"MATERIAL CONTRACTS" has the meaning set forth in Section 4.18.
"MAXIMUM AMOUNT" has the meaning set forth in Section 9.1(b).
"MINIMUM AMOUNT" has the meaning set forth in Section 9.1(b).
"MTC" has the meaning set forth in the introductory paragraph of this Agreement.
"MTC AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"MTC CAPITAL STOCK" has the meaning set forth in Section 4.2(a).
"MTC FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"MTC INTERIM FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"MTC OWNED INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.16.
"MTC PREFERRED STOCK" means the 3,298 shares of issued and outstanding preferred
stock, $100 per value per share, of MTC.
"NET INCOME TAX LIABILITIES" means all liabilities of MTC and its Subsidiaries
as of the close of business on the Closing Date for any known and quantified as
of the date of determination federal, state, foreign and local net income taxes,
franchise taxes and taxes imposed in lieu of net income taxes (excluding any
refund of Taxes, deferred Tax assets or deferred Tax liabilities) accrued or due
and owing, determined in accordance with GAAP, not to exceed the actual Tax
liabilities as determined by the filing of all Tax Returns for all
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Tax periods ending on or before the Closing Date. Any amounts which are to be
included in any calculation of Net Income Tax Liabilities which are expressed in
a currency other than U.S. dollars shall be converted into U.S. dollars at the
Exchange Rate as published on the Closing Date or, if such calculation must be
made prior to the Closing Date, on the date closest in time to the Closing Date
that allows for the relevant calculation to be made in a timely manner.
"NONDISCLOSURE AGREEMENTS" has the meaning set forth in Section 4.16.
"ORDER" means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision issued, promulgated or entered by or with any
Governmental Authority of competent jurisdiction.
"OTHER ANTITRUST LAWS" means the antitrust and competition Laws of all
jurisdictions other than those of the United States.
"OUT-BOUND LICENSES" has the meaning set forth in Section 4.16.
"OXY-DRY" means Oxy-Dry Corporation, a Delaware corporation, which on the
Closing Date will be a wholly-owned subsidiary of MTC.
"OXY-DRY AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"OXY-DRY INTERIM FINANCIAL STATEMENTS" has the meaning set forth in Section 4.6.
"PARTY" or "PARTIES" has the meaning set forth in the introductory paragraph of
this Agreement.
"PATENTS" has the meaning set forth in Section 4.16.
"PCBS" has the meaning set forth in Section 4.22.
"PENSION PLAN" has the meaning set forth in Section 4.20.
"PERMITTED LIENS" means all (a) Liens set forth on Schedule 1.3; (b) Liens
disclosed in the Financial Statements; (c) Liens for Taxes, assessments and
other governmental charges not yet due and payable or, if due, (i) not
delinquent or (ii) being contested in good faith by appropriate proceedings
during which collection or enforcement against the property is stayed; (d)
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like
Liens arising or incurred in the ordinary course of business; (e) Liens
associated with original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business; and (f) with respect to any parcel of the Leased Real Property: (i)
easements, licenses, covenants, rights-of-way and other similar restrictions,
including any other agreements or restrictions which would be shown by a current
title report or other similar report or listing, (ii) any conditions that may be
shown by a current survey or physical inspection of the Real Property subject to
the lease and (iii) zoning, building and other similar restrictions, so long as
none of (i), (ii) or (iii) prevent the use of such Leased Real Property subject
to the lease substantially as currently used.
"PERSON" means any individual, firm, partnership, association, trust,
corporation, joint venture, unincorporated organization, limited liability
company, Governmental Authority or other entity.
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"PHANTOM EQUITY" means the gross amount due to Rune X. Xxxxxxx pursuant to his
Contract of Employment with Maschinen GmbH, dated as of May 1, 1992, as amended
December 31, 1999. As of December 31, 2005, Phantom Equity was One Million One
Hundred Forty-Seven Thousand Euros ((euro)1,147,000) or One Million Three
Hundred Fifty-Eight Thousand Dollars ($1,358,000).
"POLICIES" has the meaning set forth in Section 4.23.
"POST-CLOSING PERIOD" means any taxable period or portion thereof beginning
after the Closing Date.
"PRE-CLOSING ENVIRONMENTAL LIABILITIES" means liabilities based upon or arising
out of (a) the ownership or operation of the businesses of MTC and its
Subsidiaries at any time on or prior to the Closing, or (b) the operations
conducted on, or, to the Knowledge of the Sellers, the condition of the Leased
Real Property or any other real property currently or formerly owned, operated
or leased by MTC or any of its Subsidiaries at any time on or prior to the
Closing, in each case to the extent based upon or arising out of (i)
Environmental Law, (ii) a failure to obtain, maintain or comply with any
Environmental Permit, (iii) the Release or, to the Knowledge of the Sellers, the
presence of any Hazardous Substance by MTC or any of its Subsidiaries at, on or
under any Real Property or any other real property currently or formerly owned,
operated or leased by MTC or any of its Subsidiaries at any time on or prior to
the Closing or (iv) the use, generation, storage, transportation, treatment,
sale or other off-site disposal of Hazardous Substances generated by or
otherwise used in the businesses of MTC and its Subsidiaries.
"PRE-CLOSING PERIOD" means any taxable period or portion thereof that is not a
Post-Closing Period.
"PRELIMINARY CASH AND CASH EQUIVALENTS" means the good faith estimate of the
Cash and Cash Equivalents of MTC as of the Closing Date as determined by
Sellers, subject to the approval of the Buyer, which approval shall not be
unreasonably withheld.
"PRELIMINARY FUNDED DEBT" means the good faith estimate of the Funded Debt of
MTC as of the Closing Date as determined by Sellers, subject to the approval of
the Buyer, which approval shall not be unreasonably withheld.
"PRELIMINARY NET INCOME TAX LIABILITIES" means the good faith estimate of the
amount of all Net Income Tax Liabilities as of the Closing Date as determined by
Sellers, subject to the approval of the Buyer, which approval shall not be
unreasonably withheld.
"PRELIMINARY PHANTOM EQUITY" means the good faith estimate of the gross amount
of Phantom Equity of MTC and its Subsidiaries as of the Closing Date as
determined by Sellers, subject to the approval of the Buyer, which approval
shall not be unreasonably withheld.
"PRELIMINARY PURCHASE PRICE" means that amount equal to (i) Twenty-Five Million
Dollars ($25,000,000) plus (ii) the Preliminary Cash and Cash Equivalents less
(iii) the Preliminary Funded Debt less (iv) the Preliminary Phantom Equity and
less (v) the Preliminary Net Income Tax Liabilities, as adjusted pursuant to
Section 3.1 (b).
"PRELIMINARY PURCHASE PRICE STATEMENT" has the meaning set forth in Section
3.1(a).
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"PRELIMINARY WORKING CAPITAL VALUE" means the good faith estimate of the Working
Capital Value of MTC as of the Closing Date as determined by Sellers, subject to
the approval of the Buyer, which approval shall not be unreasonably withheld.
"PRODUCTS" has the meaning set forth in Section 4.24.
"PROPER COURTS" has the meaning set forth in Section 11.7.
"PROPRIETARY INFORMATION" has the meaning set forth in Section 4.16.
"PUBLIC SOFTWARE" means any software that contains, or is derived in any manner
(in whole or in part) from, any software that is distributed as free software,
open source software or similar licensing or distribution models, including
software licensed or distributed under any of the following licenses or
distribution models, or licenses or distribution models similar to any of the
following: (i) GNU's General Public License or Lesser/Library GPL; (ii) Mozilla
Public License; (iii) Netscape Public License; (iv) Sun Community Source/
Industry Standard License; (v) BSD License; and (vi) Apache License.
"PURCHASE PRICE" has the meaning set forth in Section 2.2.
"PURCHASE PRICE ADJUSTMENT" has the meaning set forth in Section 3.2(f).
"RCRA" means the Resource Conservation and Recovery Act of 1976.
"REFERENCE PURCHASE PRICE STATEMENT" means the reference statement set forth in
Schedule 1.2.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous
Substances into the Environment.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and any successor to such statute, rules or
regulations.
"SELLER" and "SELLERS" have the meanings set forth in the introductory paragraph
of this Agreement.
"SELLER DISCLOSURE SCHEDULE" means the disclosure schedule dated and delivered
as of the date hereof by Sellers to the Buyer, as amended, modified or
supplemented pursuant to Section 6.9, which is attached to this Agreement, is
designated therein as being the Seller Disclosure Schedule and is arranged in
sections corresponding to each Section of Article IV.
"SELLER INDEMNITEES" has the meaning set forth in Section 9.1(c).
"SELLER'S PERCENTAGE OF THE SHARES" means, with respect to any Seller, the
percentage of the Shares owned by such Seller, which is set forth on Exhibit A.
"SHARES" has the meaning set forth in the recitals to this Agreement.
"SOFTWARE" has the meaning set forth in Section 4.16.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any corporation, partnership,
limited liability company or other legal entity in which such Person (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, 50% or more of the stock or
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other equity or ownership interests, the holder of which is generally entitled
to elect a majority of the board of directors or other governing body of such
legal entity.
"SUBSIDIARY SHARES" has the meaning set forth in Section 4.3(b).
"TAXES" means any federal, state, provincial, local, territorial and foreign
income, profits, franchise, gross receipts, payroll, sales, employment, use,
property, real estate, excise, value added, estimated, stamp, escheat, abandoned
property, capital, transaction, license, alternative or add-on minimum, premium,
bank shares, deed, lease, service, service use, occupation, severance, energy,
unemployment, social security, workers' compensation, ad valorem, environmental,
withholding and any other taxes, duties, assessments, customs, duties, fees,
levies or other governmental charges of any nature whatever, whether disputed or
not, together with all interest, penalties and additions to tax imposed with
respect to such amounts.
"TAX RETURNS" means all federal, state, local, provincial and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax return relating to Taxes (as they relate to the
Business).
"THIRD PARTY CLAIM" has the meaning set forth in Section 9.4.
"TERMINATION DATE" means November 30, 2006.
"TRADEMARKS" has the meaning set forth in Section 4.13.
"TRANSFER TAXES" means sales, use, transfer, real property transfer, recording,
documentary, stamp, registration, stock transfer and similar taxes and fees.
"UK INC." means Oxy-Dry U.K., Inc., a Delaware corporation and wholly-owned
subsidiary of Oxy-Dry and includes its branch which does business as Oxy-Dry
U.K., Inc..
"UPDATED SCHEDULES" has the meaning set forth in Section 6.9.
"WORKING CAPITAL VALUE" shall be determined in accordance with the principles
employed in the preparation of the Reference Purchase Price Statement and shall
mean the consolidated Current Assets less the consolidated Current Liabilities
of MTC and its Subsidiaries, and shall exclude any refund of Taxes or any Net
Income Tax Liabilities (but shall not exclude any deferred Tax assets or
liabilities whether short or long-term) and shall exclude accrued and unpaid
dividends on the MTC Preferred Stock, if any. The Reference Purchase Price
Statement contains a calculation of Working Capital Value as of December 31,
2005. Any amounts which are to be included in any calculation of Working Capital
Value which are expressed in a currency other than U.S. dollars shall be
converted into U.S. dollars at the Exchange Rate as published on the Closing
Date or, if such calculation must be made prior to the Closing Date, on the date
closest in time to the Closing Date that allows for such calculation to be made
in a timely manner, provided however that any such calculation made for purposes
of the Working Capital Value as of December 31, 2005 contained in the Reference
Purchase Price Statement shall use the Exchange Rate as published on December
31, 2005.
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ARTICLE II
SALE OF SHARES; PURCHASE PRICE
2.1 SALE OF SHARES. Subject to the satisfaction or waiver of the conditions
set forth in Article VII, at the Closing and as of the Closing Date, each Seller
shall sell, convey, assign and transfer to Buyer, and Buyer shall purchase,
acquire and accept from each Seller delivery of, all of such Seller's right,
title and interest in and to all of the Shares. The purchase and sale of the
Shares is referred to in this Agreement as the "Acquisition".
2.2 PURCHASE PRICE. The aggregate purchase price (the "PURCHASE PRICE") for
the Shares shall be that amount equal to (i) Twenty-Five Million Dollars
($25,000,000) plus (ii) the amount of all Cash and Cash Equivalents as at the
Closing Date less (iii) the amount of all Funded Debt as at the Closing Date
less (iv) the amount of all Phantom Equity as at the Closing Date less (v) the
amount of all Net Income Tax Liabilities as at the Closing Date and (vi) plus
that amount, if any, by which the Working Capital Value as at the Closing Date
is greater than $5,588,000 or less that amount, if any, by which the Working
Capital Value as at the Closing Date is less than $5,588,000.
ARTICLE III
CALCULATION AND PAYMENT OF PRELIMINARY PURCHASE PRICE;
ADJUSTMENT TO PRELIMINARY PURCHASE PRICE
3.1 CALCULATION AND PAYMENT OF PRELIMINARY PURCHASE PRICE.
(a) On the third Business Day prior to the Closing Date, the Sellers
shall prepare and deliver, or cause to be prepared and delivered, to the Buyer a
preliminary purchase price statement (the "PRELIMINARY PURCHASE PRICE
STATEMENT") setting forth the Preliminary Working Capital Value, the Preliminary
Cash And Cash Equivalents, the Preliminary Funded Debt, the Preliminary Phantom
Equity and the Preliminary Net Income Tax Liabilities and a calculation of the
Preliminary Purchase Price. The Preliminary Purchase Price Statement shall be
prepared on a basis consistent with the December 31, 2005 Balance Sheet and the
Reference Purchase Price Statement.
(b) If the Preliminary Working Capital Value is (i) greater than
$5,588,000 (the Working Capital Value as of December 31, 2005), then the amount
of the Preliminary Purchase Price shall be increased by the amount of the excess
or (ii) less than $5,588,000 (the Working Capital Value as of December 31,
2005), then the amount of the Preliminary Purchase Price shall be reduced by
such deficiency.
(c) At the Closing, Buyer shall (i) pay to each Seller in immediately
available U.S. federal funds that amount equal to the product of (A) such
Seller's Percentage of the Shares times (B) that amount equal to (x) the
Preliminary Purchase Price less (y) the Escrow Amount and (ii) deposit with the
Escrow Agent the Escrow Amount pursuant to the Escrow Agreement.
3.2 CALCULATION AND PAYMENT OF ADJUSTMENT TO PRELIMINARY PURCHASE PRICE.
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(a) Within ninety (90) days after the Closing Date, the Buyer shall
prepare or cause to be prepared and cause to be audited by
PricewaterhouseCoopers LLP or such other firm of certified independent public
accountants of national reputation mutually agreed to by all of the parties (the
"Designated Accountants") a consolidated balance sheet of MTC and its
Subsidiaries as of the Closing Date and a consolidated income statement for the
period then ended (as it may be changed below, the "CLOSING DATE BALANCE
SHEET"), which shall reflect all Net Income Tax Liabilities as of the Closing
Date, in accordance with GAAP applied in a manner consistent with the
application of such principles in the preparation of the December 31, 2005
Balance Sheet and in accordance with the Reference Purchase Price Statement,
except for the absence of footnote disclosures and other financial statements
required thereby. For purposes of this Agreement, the Closing Date Balance Sheet
and any determination of revenue and income for the period ending on the Closing
Date, shall use the same revenue recognition policy used by MTC and its
subsidiaries as described in Note A to the MTC Financial Statements and as more
fully described in Section 3.2 of the Seller Disclosure Schedule. Buyer shall
deliver the Closing Date Balance Sheet, together with the calculation of Net
Income Tax Liabilities as of the Closing Date included therein and a calculation
of the Purchase Price calculated in accordance with Section 2.2, to the Sellers
within ninety (90) days after the Closing Date.
(b) The Closing Date Balance Sheet shall reflect as accrued expenses
(i) all unpaid expenses (including, without limitation, legal and accounting
fees) payable by MTC or any of its Subsidiaries in connection with the
origination, negotiation, execution and performance of this Agreement through
the Closing Date, and (ii) the severance bonus or bonuses payable to Xxxxxx
Xxxxx and all other amounts payable to Xxxxxx Xxxxx upon the consummation of the
Acquisition pursuant to that certain letter agreement between Oxy-Dry and Xxxxxx
Xxxxx dated May 3, 2006. The Closing Date Balance Sheet shall not give effect to
the investment banking fee or fees payable to Xxxxx Xxxxxxxx Corporate Finance
LLC by the Sellers and/or MTC in connection with the Acquisition, which fee or
fees shall be payable by Sellers.
(c) Buyer shall cause MTC to conduct a physical count of the inventory
(including, without limitation, raw materials, finished goods and
work-in-progress) of MTC and its Subsidiaries as at the Closing Date, or such
other date after the Closing as may be mutually agreed to by all of the parties.
The Designated Accountants shall observe the physical count and perform such
audit procedures as they deem necessary to enable them to audit the Closing Date
Balance Sheet. The Sellers and their representatives shall be entitled to
participate in such physical count. Upon completion of the physical count, MTC
under supervision of the Buyer shall cause the inventory to be tabulated and
each item to be valued at cost in accordance with GAAP applied in a manner
consistent with the application of such principles in the preparation of the
December 31, 2005 Balance Sheet. MTC under supervision of the Buyer will cause
the value of such inventory and related reserves to be rolled backward, based
upon purchases and use from the Closing Date through the date of the physical
count, to value the inventory of MTC and its Subsidiaries on the Closing Date.
The Buyer shall cause to be computed labor and overhead (to include
manufacturing, engineering and field service) costs incurred in the fulfillment
of orders not yet shipped (work-in-progress and finished goods) plus any freight
costs incurred to bring inventory to its condition and location as at the
Closing Date.
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(d) The fees and expenses of the Designated Accountants incurred in
connection with the preparation of the audited Closing Date Balance Sheet and
the calculation of the Purchase Price and Net Income Tax Liabilities shall be
paid by MTC as a post-closing expense. In the event the Sellers engage Xxxxx
Xxxxxxxx LLP to assist in their review of the audited Closing Date Balance Sheet
and the calculation of the Purchase Price and the Net Income Tax Liabilities,
the fees and expenses of Xxxxx Xxxxxxxx LLP in connection with such review shall
be paid by the Sellers.
(e) With respect to Sellers' review of the Closing Date Balance Sheet
and the calculation of the Net Income Tax Liabilities as provided in Section
3.2(a) hereof, the Buyer shall and shall cause MTC and its Subsidiaries to (i)
provide Sellers and their representatives with reasonable access to all relevant
books, records and work papers in the possession of employees of the Buyer or
any of its Affiliates or the Designated Accountants, (ii) cooperate with Sellers
and their representatives, including providing all information in the possession
of the Buyer, MTC or any of its Subsidiaries necessary or useful in the review
of the Closing Date Balance Sheet and Net Income Tax Liabilities, and (iii) be
entitled to observe and review the preparation of the Closing Date Balance
Sheet, the Net Income Tax Liabilities and the audit, including the Designated
Accountants' work papers, and shall have full access to the Designated
Accountants during such audit, which review shall not constitute any approval of
or acquiescence in the Closing Date Balance Sheet or Net Income Tax Liabilities
on the part of the Sellers.
(f) In the event that the Sellers do not disagree with the Closing
Date Balance Sheet and the calculation by the Designated Accountants of the
Purchase Price and Net Income Tax Liabilities pursuant to Section 3.2(a), then
the payment to be made pursuant to Section 3.2(h) (the "PURCHASE PRICE
ADJUSTMENT") shall be made in cash by wire transfer of immediately available
funds on or prior to the forty-fifth (45th) day after the delivery of the
Closing Date Balance Sheet as provided in Section 3.2(a).
(g) In the event that the Sellers disagree with the Closing Date
Balance Sheet or the calculation of the Net Income Tax Liabilities or the
Purchase Price pursuant to Section 3.2(a), the Sellers shall in writing advise
the Buyer within thirty (30) days after the delivery of the Closing Date Balance
Sheet or the calculation of the Net Income Tax Liabilities or the Purchase
Price, as the case may be, specifying in reasonable detail the nature of all
such disagreements, the reason therefor and Sellers' calculation. The Buyer and
the Sellers shall attempt to resolve all such disagreements. If the Buyer and
Sellers are unable to resolve all such disagreements within fifteen (15) days
after the Sellers shall have advised the Buyer of such disagreements, the Buyer
and Sellers shall then select a mutually acceptable firm of certified
independent public accountants of national reputation (the "INDEPENDENT
ACCOUNTANTS") to resolve the disagreements and to determine the amount of the
Purchase Price Adjustment. The Independent Accountants shall deliver their
determination of the Purchase Price Adjustment to the Buyer and Sellers as soon
as practicable and such determination shall be final and binding upon the Buyer
and Sellers. Payment of such Purchase Price Adjustment shall be made in cash by
wire transfer of immediately available funds within five (5) Business Days of
the receipt of the determination of the Purchase Price Adjustment as provided in
this Section 3.2(g).
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(h) Following the Closing, in accordance with this Section 3.2, the
Preliminary Purchase Price will be adjusted as set forth below to arrive at the
Purchase Price:
(i) if the Purchase Price exceeds the Preliminary Purchase Price,
the amount of such excess will be added to the Preliminary Purchase
Price and the Purchase Price Adjustment (the amount of such excess)
shall be paid by the Buyer to Sellers in cash by wire transfer of
immediately available funds as provided in this Article III; and
(ii) if the Purchase Price is less than the Preliminary Purchase
Price, the amount of such deficit will be subtracted from the
Preliminary Purchase Price and the Purchase Price Adjustment (the
amount of such deficit) shall be paid by the Sellers to the Buyer in
cash by wire transfer of immediately available funds as provided in
this Article III.
(i) The Sellers shall be jointly and severally responsible for the
payment to the Buyer of the amount, if any, by which the Purchase Price as
determined in accordance with this Article III is decreased from the Preliminary
Purchase Price.
(j) Any amounts owing under this Section 3.2 shall be paid by wire
transfer to the account or accounts specified by the payee(s). Any amount owing
pursuant to this Section 3.2 which is not paid within the specified time period
shall bear interest from and including the Closing Date to, but excluding, the
date of payment, at a rate per annum equal to the prime rate as published in The
Wall Street Journal, calculated daily on the basis of a year of three hundred
sixty-five days and the actual number of days elapsed.
(k) The fees and expenses of the Independent Accountants shall be
shared equally by the Buyer and the Sellers.
3.3 COOPERATION. Following the Closing, the Buyer shall and shall cause
MTC, its Subsidiaries and their respective officers, employees, consultants,
accountants and agents to cooperate fully with Sellers and its representatives
in connection with the review of the Closing Date Balance Sheet and the
calculation of the Net Income Tax Liabilities and the Purchase Price and to
provide any information requested by Sellers and its representatives in
connection with any disagreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Sellers jointly and severally represent and warrant to the Buyer as of the date
hereof that the statements contained in this Article IV are true and correct.
4.1 ORGANIZATION AND GOOD STANDING.
(a) Each Seller that is a limited partnership is a limited partnership
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization. Each Seller which is a trust is a trust duly
organized and validly existing under the
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Laws of the jurisdiction of its organization. None of Sellers that is a limited
partnership or trust is in default under its Charter Documents. The Charter
Documents of each Seller that is a limited partnership or trust in the forms
previously delivered to the Buyer are the Charter Documents of such Seller as in
effect on the date of this Agreement.
(b) XxXxxxxxxx Management, LLC is the sole general partner of Stem, LP
and Xxxxxx Management LLC is the sole general partner of Pine Harbour Partners,
LP. XxXxxxxxxx Management, LLC and Xxxxxx Management LLC are each hereinafter
referred to as a "GENERAL PARTNER" and, collectively, the "GENERAL PARTNERS".
Each of the General Partners is a limited liability company duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
organization. Neither General Partner is in default under its Charter Documents.
The Charter Documents of each General Partner in the forms previously delivered
to the Buyer are the Charter Documents of such General Partner as in effect on
the date of this Agreement.
(c) MTC is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization, has all
requisite power to own, lease and operate its properties and to carry on its
business as currently conducted, and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which it owns or
leases property or conducts any business so as to require such qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect. The Seller Disclosure Schedule contains a complete and accurate list of
each jurisdiction in which MTC is qualified to do business. MTC is not in
default under its Charter Documents. The Charter Documents of MTC in the forms
previously delivered to the Buyer are the Charter Documents of MTC.
(d) Since its incorporation, MTC has conducted no business or engaged
in any other activity other than (i) acquiring and holding as an investment
shares of Capital Stock of Oxy-Dry, The Xxxxx and Xxxxx Lines Incorporated, a
Tennessee corporation, and Arizona Kazakstan Development Group Incorporated, an
Arizona corporation, and (ii) rendering management services to Oxy-Dry and its
Subsidiaries for which Oxy-Dry has paid to MTC a management fee.
4.2 CAPITALIZATION; STOCK OWNERSHIP.
(a) The authorized Capital Stock of MTC consists of (i) 1,000,000
shares of Common Stock, no par value, of which 301,636 shares are issued,
150,818 of which are outstanding and held of record by the Sellers and 150,818
of which are held by MTC as treasury stock and (ii) 100,000 shares of preferred
stock, par value $100 per share, of which 6,195 shares are issued, 3,298 of
which are outstanding and 2,897 of which are held by MTC as treasury stock (the
"MTC CAPITAL STOCK"). All of the MTC Capital Stock is duly authorized, validly
issued, fully paid and nonassessable. All of the Shares are owned of record and
beneficially by Sellers as set forth in Exhibit A, free and clear of all Liens.
Upon transfer of the Shares to Buyer in accordance with the terms of Article II,
Buyer will receive valid title to the Shares, free and clear of all Liens.
-16-
(b) None of the MTC Capital Stock was issued in violation of any
Contract to which any Seller or MTC is a party or is subject or in violation of
any preemptive or similar rights of any Person.
(c) Other than the MTC Capital Stock, MTC does not have outstanding
any Equity Securities or any other securities. MTC is not a party or subject to
any Contract obligating MTC to issue any Equity Securities or any other
securities and there is no circumstance or condition that may give rise to a
claim by any Person that such Person is entitled to acquire any securities of
MTC. MTC does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) on any
matter.
(d) None of Sellers or MTC is a party or subject to any stockholder
agreement, voting agreement, voting trust or any other similar arrangement which
has the effect of restricting or limiting the transfer, voting or other rights
associated with the MTC Capital Stock.
4.3 SUBSIDIARIES OF MTC.
(a) Each Subsidiary of MTC is validly existing and in good standing
under the Laws of the jurisdiction of its formation, has all requisite power to
own, lease and operate its properties and to carry on its business as currently
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which it owns or leases property or conducts any business so as
to require such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect.
(b) The Seller Disclosure Schedule contains a true and complete list
of the Subsidiaries of MTC and sets forth with respect to each such Subsidiary
the jurisdiction of formation, each jurisdiction in which such Subsidiary is
qualified to transact business, the authorized and outstanding Capital Stock of
such Subsidiary and the owner of record of such outstanding Capital Stock.
Except as set forth on the Seller Disclosure Schedule, the outstanding shares of
Capital Stock of each Subsidiary (collectively, the "SUBSIDIARY SHARES") are
duly authorized, validly issued, fully paid and nonassessable, and are owned by
MTC or another Subsidiary of MTC free and clear of all Liens.
(c) None of the Subsidiaries of MTC is in default under its Charter
Documents. The Charter Documents of each Subsidiary of MTC in the forms
previously delivered to the Buyer are the Charter Documents of such Subsidiary
of MTC.
(d) None of the Subsidiary Shares was issued in violation of any
Contract to which any Seller, MTC or any of its Subsidiaries is a party or is
subject or in violation of any preemptive or similar rights of any person.
(e) Other than the Subsidiary Shares, no Subsidiary of MTC has
outstanding any Equity Securities or any other securities. No Subsidiary of MTC
is a party or subject to any Contract obligating such Subsidiary to issue any
Equity Securities or any other securities and there is no circumstance or
condition that may give rise to a claim by any Person that such
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Person is entitled to acquire any securities of any Subsidiary of MTC. No
Subsidiary of MTC has outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) on any
matter.
(f) Other than the Subsidiaries set forth in the Seller Disclosure
Schedule, neither MTC nor any of its Subsidiaries directly or indirectly owns
any Equity Securities or other securities in any Person.
(g) None of Sellers, MTC or any Subsidiary of MTC is a party or
subject to any stockholder agreement, voting agreement, voting trust or any
other similar arrangement which has the effect of restricting or limiting the
transfer, voting or other rights associated with the Subsidiary Shares.
4.4 AUTHORITY AND ENFORCEABILITY. Each Seller has the requisite power and
authority to enter into this Agreement and to consummate the Acquisition. The
execution and delivery of this Agreement and the consummation of the Acquisition
have been duly authorized by all necessary action on the part of each Seller
which is a trust and all necessary action by each Seller which is a limited
partnership. This Agreement has been duly executed and delivered by Sellers and,
assuming due authorization, execution and delivery by the Buyer, constitutes the
valid and binding obligation of Sellers, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to creditors' rights generally, and (b) the availability
of injunctive relief and other equitable remedies.
4.5 NO CONFLICTS; AUTHORIZATIONS.
(a) The execution and delivery of this Agreement by Sellers do not,
and the performance by Sellers of their obligations hereunder and the
consummation by Sellers of the Acquisition (in each case, with or without the
giving of notice or lapse of time, or both) will not, directly or indirectly,
(i) violate the provisions of any of the Charter Documents of any Seller, MTC or
any of its Subsidiaries, (ii) violate or constitute a default, an event of
default or an event creating rights of acceleration, termination, cancellation,
imposition of additional obligations or loss of rights, or require a consent to
assignment, under any Material Contract, (iii) violate or conflict with any Law,
Authorization or Order applicable to any Seller, MTC or any of its Subsidiaries,
or (iv) result in the creation of any Liens upon any of the assets owned or used
by MTC or any of its Subsidiaries. No consent, waiver, assignment or other
approval or action is required in connection with the Acquisition under any
Material Contract in order to preserve all rights of, and benefits to, MTC and
its Subsidiaries thereunder.
(b) No Authorization or Order of any Governmental Authority or other
Person is required by or with respect to any Seller, MTC or any of its
Subsidiaries in connection with the execution and delivery of this Agreement and
the consummation of the Acquisition, including any filing or report under the
HSR Act and the Other Antitrust Laws.
4.6 FINANCIAL STATEMENTS.
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(a) True and complete copies of the following financial statements are
included in the Seller Disclosure Schedule:
(i) Audited consolidated financial statements of MTC consisting
of the balance sheets of MTC as at December 31 in each of the years
2004 and 2005 and the related statements of income and retained
earnings, stockholders equity and cash flow, for the years then ended
(the "MTC AUDITED FINANCIAL STATEMENTS");
(ii) Unaudited consolidated financial statements of MTC
consisting of the balance sheets as at July 31 in each of the years
2005 and 2006 and the related statements of income and retained
earnings, stockholders' equity and cash flow for the seven-month
periods then ended (the "MTC INTERIM FINANCIAL STATEMENTS" and,
together with the MTC Audited Financial Statements, the "MTC FINANCIAL
STATEMENTS");
(iii) Audited consolidated financial statements of Oxy-Dry and
its Subsidiaries, consisting of the consolidated balance sheet of
Oxy-Dry and its Subsidiaries as at December 31 in each of the years
2004 and 2005 and the related consolidated statements of income and
retained earnings, stockholders' equity and cash flow, for the years
then ended (the "OXY-DRY AUDITED FINANCIAL STATEMENTS"); and
(iv) Unaudited consolidated financial statements of Oxy-Dry and
its Subsidiaries consisting of the consolidated balance sheet of
Oxy-Dry and its Subsidiaries and a balance sheet of MTC as at July 31
in each of the years 2005 and 2006 and the related consolidated
statements of income and retained earnings, stockholders' equity and
cash flow for the seven-month periods then ended (the "OXY-DRY INTERIM
FINANCIAL STATEMENTS" and together with the Oxy-Dry Audited Financial
Statements and the MTC Financial Statements, the "FINANCIAL
STATEMENTS").
(b) The Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved, subject, in
the case of the Oxy-Dry Interim Financial Statements, to normal and recurring
year-end adjustments (the effect of which will not be materially adverse) and
the absence of notes (that, if presented, would not differ materially from those
presented in the Oxy-Dry Audited Financial Statements).
(c) The Financial Statements are based on the books and records of MTC
and its Subsidiaries, and fairly present in all material respects the financial
condition of MTC and its Subsidiaries as of the respective dates they were
prepared and the results of the operations of MTC and its Subsidiaries for the
periods indicated.
(d) The consolidated balance sheet of Oxy-Dry and its Subsidiaries as
of December 31, 2005 is referred to herein as the "DECEMBER 31, 2005 BALANCE
SHEET" and the consolidated balance sheet of Oxy-Dry and its Subsidiaries as of
July 31, 2006 is referred to herein as the "JULY 31, 2006 BALANCE SHEET". Each
of MTC and its Subsidiaries maintains a
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standard system of accounting established and administered, in all material
respects, in accordance with GAAP and neither MTC nor any of its Subsidiaries
has made any change in accounting practices since December 31, 2005.
4.7 NO UNDISCLOSED LIABILITIES. (a) Oxy-Dry and its Subsidiaries have no
debts, liabilities, obligations or commitments of any nature whatsoever,
asserted or unasserted, known or unknown, absolute or contingent, accrued or
unaccrued, matured or unmatured or otherwise, except (i) those which are
adequately reflected or reserved against in the July 31, 2006 Balance Sheet,
(ii) those which have been incurred in the ordinary course of business and
consistent with past practice since July 31, 2006 and which are not,
individually or in the aggregate, material in amount, and (iii) those set forth
in the Seller Disclosure Schedule.
(b) Except as set forth on the Seller Disclosure Schedule, MTC has no
debts, liabilities, obligations or commitments of any nature whatsoever,
asserted or unasserted, known or unknown, absolute or contingent, accrued or
unaccrued, matured or unmatured or otherwise.
4.8 INVENTORY. The Sellers have previously delivered to Buyer a true and
complete list of all inventory of MTC and each of its Subsidiaries as of
December 31, 2005, and a list of all items of inventory that the inventory
accounting records of MTC and its Subsidiaries indicate had no movement (in or
out) during the twelve month period preceding each of December 31, 2005 and
August 31, 2006 (except for Oxy-Dry UK Inc., for whom such list is provided as
of August 31, 2006 only). The Sellers have previously delivered to Buyer a true
and complete list of all inventory items that the accounting records of MTC and
its Subsidiaries indicate were purchased during the period January 1, 2006
through August 31, 2006 by Oxy-Dry Mashinen GmbH and Food Blends.
4.9 ACCOUNTS RECEIVABLE. The Seller Disclosure Schedule sets forth a true
and complete list of all accounts receivable of MTC and each of its Subsidiaries
as of July 31, 2006 indicating with respect to each account receivable the
account debtor, the amount of such account receivable, the date on which such
account receivable was recorded, the date on which such account receivable is
due and, if the estimated payment date is different, such date. Such list also
details all balances that are greater than $10,000 and 60 days or older, noting
for each such balance a reason for the payment delay and identifying those
accounts receivable balances the payment of which are subject to acceptance of
related equipment by the customer.
4.10 TAXES.
(a) Except as set forth in the Seller Disclosure Schedule, all Tax
Returns required to have been filed by or with respect to MTC and its
Subsidiaries have been duly and timely filed (or, if due between the date hereof
and the Closing Date, will be duly and timely filed), and each such Tax Return
correctly and completely reflects liability for Taxes and all other information
required to be reported thereon in all material respects. The time periods to
file Tax Returns for the year ended December 31, 2005 for MTC and its
Subsidiaries have been extended as permitted by applicable taxing authorities.
All Taxes owed by MTC or any of its Subsidiaries (whether or not shown on any
Tax Return) have been timely paid (or, if due between the date hereof and the
Closing Date, will be duly and timely paid).
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(b) Except as set forth in the Seller Disclosure Schedule, there is no
audit currently proposed, threatened or pending against, or with respect to, MTC
or any of its Subsidiaries in respect of any Taxes. No claim has ever been made
by an authority in a jurisdiction where MTC or any of its Subsidiaries do not
file Tax Returns that any of them is or may be subject to taxation by that
jurisdiction or that any of them must file Tax Returns in that jurisdiction.
(c) Except as set forth in the Seller Disclosure Schedule, MTC and its
Subsidiaries have withheld and timely paid all Taxes required to have been
withheld and paid and have complied with all information reporting and backup
withholding requirements, including maintenance of required records with respect
thereto.
(d) There is no dispute or claim concerning any liability for Taxes
with respect to MTC or any of its Subsidiaries for which notice has been
provided, or which, to the Knowledge of Sellers, is asserted or threatened. The
Seller Disclosure Schedule (i) lists all federal, state, local, and foreign
income Tax Returns filed with respect to MTC or any of its Subsidiaries for
taxable periods ended on or after December 31, 2003, and (ii) indicates those
Tax Returns that have been audited. Sellers have made available to Buyer correct
and complete copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by any of MTC or its
Subsidiaries since December 31, 2003. Neither MTC nor any Subsidiary has waived
(or is subject to a waiver of) any statute of limitations in respect of Taxes or
has agreed to (or is subject to) any extension of time with respect to a Tax
assessment or deficiency.
(e) Neither MTC nor any of its Subsidiaries has filed a consent
pursuant to the collapsible corporation provisions of Section 341(f) of the Code
(or any corresponding provisions of state, local or foreign income Tax Law).
None of the assets or properties of MTC constitutes tax-exempt bond financed
property or tax-exempt use property within the meaning of Section 168 of the
Code. Neither MTC nor any of its Subsidiaries is a party to any "safe harbor
lease" within the meaning of Section 168(f)(8) of the Code, as in effect prior
to amendment by the Tax Equity and Fiscal Responsibility Act of 1982, or to any
"long-term contract" within the meaning of Section 460 of the Code. Neither MTC
nor any of its Subsidiaries has ever been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code. No foreign
Subsidiary of MTC has ever held a "United States real property interest" within
the meaning of Section 897(1)(1) of the Code. No Seller is a "foreign person"
within the meaning of Section 1445 of the Code. Neither MTC nor any of its
Subsidiaries has made any payments, is not obligated to make any payments, nor
is a party to any agreement that under certain circumstances could obligate it
to make payments that would result in a nondeductible expense under Section 280G
of the Code or an excise Tax to the recipient of such payments pursuant to
Section 4999 of the Code. To the Knowledge of Sellers, neither MTC nor any of
its Subsidiaries has participated in or cooperated with an international boycott
as defined in Section 999 of the Code.
(f) Neither MTC nor any Subsidiary has agreed to or is required to
make by reason of a change in accounting method or otherwise, any adjustment
under Section 481(a) of the Code. Neither MTC nor any Subsidiary has been the
"distributing corporation" (within the
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meaning of Section 355(c)(2) of the Code) with respect to a transaction
described in Section 355 of the Code within the five-year period ending as of
the date of this Agreement.
(g) Neither MTC nor any of its Subsidiaries is a party to any Tax
allocation or sharing agreement. Neither MTC nor any of its Subsidiaries has any
liability for the Taxes of any Person (i) as a transferee or successor, (ii) by
contract, or (iii) under Section 1.1502-6 of the Treasury regulations (or any
similar provision of state, local or foreign Law) except in respect of the
several liability of MTC and each of its Subsidiaries, other than Maschinen GmbH
and Oxy-Dry U.K. Ltd., for U.S. federal income taxes of such entities.
(h) No Subsidiary of MTC that is incorporated in a non-U.S.
jurisdiction has an investment in "United States property" within the meaning of
Section 956(c) of the Code. No Subsidiary of MTC is a passive foreign investment
company within the meaning of Section 1297 of the Code and neither MTC nor any
of its Subsidiaries is a shareholder, directly or indirectly, in a passive
foreign investment company. No Subsidiary of MTC that is incorporated in a
non-U.S. jurisdiction is, or at any time has been, engaged in the conduct of a
trade or business within the United States, or treated as or considered to be so
engaged.
(i) Except as set forth in the Seller Disclosure Schedule, neither MTC
nor any of its Subsidiaries is or at any time has been subject to (i) the dual
consolidated loss provisions of Section 1503(d) of the Code, (ii) the overall
foreign loss provisions of Section 904(f) of the Code or (iii) the
recharacterization provisions of Section 952(c)(2) of the Code. Neither MTC nor
any of its Subsidiaries has any "non-recaptured net Section 1231 losses" within
the meaning of Section 1231(c)(2) of the Code.
4.11 COMPLIANCE WITH LAW. Each of MTC and its Subsidiaries has complied in
all material respects with each, and is not in violation of any, applicable Law
to which MTC or any such Subsidiary or its respective business, operations,
assets or properties is subject, including, without limitation, any applicable
Law relating to the issuance of the Shares or the Subsidiary Shares, any
applicable Law relating to minimum insurance requirements and any applicable Law
relating to the processing, blending or packaging of foodstuffs. Neither MTC nor
any of its Subsidiaries has received written notice asserting a violation of,
conflict with, or failure to comply with, any Law, including, without
limitation, any work safety regulation issued by the German employers' liability
insurance association (Berufsgenossenschaft)..
4.12 AUTHORIZATIONS.
(a) Each of MTC and its Subsidiaries owns, holds or lawfully uses in
the operation of its business all Authorizations which are required or necessary
for it to conduct its business as currently conducted or for the ownership and
use of the assets owned or used by MTC or any Subsidiary in the conduct of its
business free and clear of all Liens. Such Authorizations are valid and in full
force and effect and none of such Authorizations will be terminated, revoked,
withdrawn, cancelled, suspended or modified or become terminable, revocable,
withdrawable, suspendable or modifiable as a result of the Acquisition.
(b) To the Knowledge of Sellers, no event has occurred and no
circumstances exist that would reasonably be expected to result in a violation
of, conflict with, failure to
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comply with the terms of, or the revocation, withdrawal, termination,
cancellation, suspension or modification of any Authorization which is necessary
for it to conduct the Business. Neither MTC nor any of its Subsidiaries has
received written notice asserting a violation of, conflict with, failure to
comply with the terms of, or any revocation, withdrawal, termination,
cancellation, suspension or modification of, or any claim of default with
respect to, any Authorization which is necessary for it to conduct its business.
(c) Each of MTC and its Subsidiaries has made all filings with each
Governmental Authority which are required or necessary to be filed by it in
connection with the consummation of the Acquisition and the other transactions
contemplated by this Agreement.
4.13 TITLE TO PERSONAL PROPERTIES.
(a) The Seller Disclosure Schedule sets forth a complete and accurate
list of all the personal properties and assets owned, leased or used by MTC or
any of its Subsidiaries as of June 30, 2006, with a current fair market value in
excess of $50,000.
(b) MTC or one of its Subsidiaries has good and valid title to, and is
the lawful owner of, all of the tangible assets listed in the Seller Disclosure
Schedule, free and clear of all Liens other than Permitted Liens, and no Person
other than MTC, its Subsidiaries or holders of Permitted Liens has any interest
in such tangible assets. With respect to personal properties and assets that are
leased ("LEASED PERSONAL PROPERTY"), MTC or one of its Subsidiaries has a valid
leasehold interest in such Leased Personal Property, all such leases are in full
force and effect and constitute valid and binding obligations of the other
party(ies) thereto and no Person other than MTC, its Subsidiaries or the lessors
of Leased Personal Property has any interest in such Leased Personal Property.
None of MTC, any of its Subsidiaries or any other party thereto is in breach of
any of the terms of any such lease.
4.14 CONDITION OF TANGIBLE ASSETS. All buildings, plants, leasehold
improvements, structures, facilities, equipment and other items of tangible
property and assets which are owned, leased or used by MTC or any of its
Subsidiaries are in good operating condition and repair (subject to normal wear
and tear given the use and age of such assets), are usable in the ordinary
course of business and conform in all material respects to all Laws and
Authorizations relating to their use and operation.
4.15 REAL PROPERTY. Neither MTC nor any Subsidiary owns any real property.
Schedule 4.15 of the Seller Disclosure Schedule lists all of the material real
property and interests therein leased or subleased by MTC and its Subsidiaries
(the "LEASED REAL PROPERTY"). The Leased Real Property listed on the Seller
Disclosure Schedule includes all interests in real property used in or necessary
for the conduct of the business and operations of MTC and its Subsidiaries as
currently conducted. Sellers have delivered to Buyer a true and complete copy of
every lease and sublease pursuant to which MTC or its Subsidiary, as the case
may be, holds a possessory interest in the Leased Real Property and all material
amendments, renewals, or extensions thereto (each, a "LEASE"). The leasehold
interest of MTC or its Subsidiary, as the case may be, with respect to each item
of Leased Real Property is held free and clear of any Liens, except Permitted
Liens. Neither MTC nor any of its Subsidiaries has received or given an uncured
default notice in respect of the performance, observance or fulfillment of any
obligation,
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covenant or condition contained in any Lease. There are no defaults by MTC or
any of its Subsidiaries under any Lease and, to the Knowledge of Sellers, there
are no defaults by a landlord under any Lease. The Leased Real Property is in
suitable condition for MTC's and each Subsidiary's business as currently
conducted.
4.16 INTELLECTUAL PROPERTY.
(a) As used in this Agreement, "INTELLECTUAL PROPERTY" means: (i)
inventions (whether or not patentable), trade secrets, technical data,
databases, designs, tools, specifications, mask works, drawings, graphics,
methods, processes, technology, know-how, source code, product road maps and
other proprietary information and materials used in the assembly of Products
(collectively "PROPRIETARY INFORMATION"); (ii) trademarks and service marks
(whether or not registered), trade names, logos, domain names, trade dress and
other proprietary indicia and all goodwill associated therewith (collectively,
"TRADEMARKS"); (iii) all registered and unregistered copyrights in both
published and unpublished works (collectively, "COPYRIGHTS"); (iv) all letters
patent, patent applications, provisional patents, design patents, PCT filings
(collectively, "PATENTS"); (v) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code, design documents, flow-charts, user manuals and training
materials relating thereto and any translations thereof (collectively,
"SOFTWARE"); and (vi) all forms of legal rights and protections that may be
obtained for, or may pertain to, the Intellectual Property set forth in clauses
(i) through (v) in any country of the world ("INTELLECTUAL PROPERTY RIGHTS").
(b) The Seller Disclosure Schedule lists (by name, owner and, where
applicable, registration number and jurisdiction of registration, application,
certification or filing) all Patents, Copyrights and Trademarks owned by MTC
and/or one or more of its Subsidiaries (whether exclusively, jointly with
another Person or otherwise) ("MTC OWNED INTELLECTUAL PROPERTY"); provided that
the Seller Disclosure Schedule is not required to list items of MTC Owned
Intellectual Property which are not registered or the subject of an application
for registration. Except as described in the Seller Disclosure Schedule, MTC or
one of its Subsidiaries owns the entire right, title and interest to all MTC
Owned Intellectual Property free and clear of all Liens and free of any
obligation to make any payment to any employee or former employee in the context
of employee inventions, including, without limitation, inventions under the
German Employee Invention Act (Arbeitnehmererfindergesetz).. To the Knowledge of
Sellers, the MTC Owned Intellectual Property and any Intellectual Property that
MTC rightfully uses or otherwise enjoys pursuant to the terms of a valid and
enforceable In-Bound License constitute all of the Intellectual Property Rights
required or necessary for the operation of the Business as it is currently
conducted.
(c) The Seller Disclosure Schedule lists all licenses, sublicenses and
other agreements ("IN-BOUND LICENSES") pursuant to which a third party
authorizes MTC or any of its Subsidiaries to use, practice any rights under, or
grant sublicenses with respect to, any Intellectual Property owned by such third
party, including the incorporation of any such Intellectual Property into MTC's
or any of its Subsidiaries' Products. Each In-Bound License is non-exclusive.
Except as described in the Seller Disclosure Schedule, neither MTC nor any of
its Subsidiaries is in default under any In-Bound License.
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(d) The Seller Disclosure Schedule lists all licenses, sublicenses and
other agreements ("OUT-BOUND LICENSES") pursuant to which MTC or any of its
Subsidiaries authorizes a third party to use, practice any rights under, or
grant sublicenses with respect to, any MTC Owned Intellectual Property or
pursuant to which MTC or any of its Subsidiaries grants rights to use or
practice any rights under any Intellectual Property owned by a third party and,
with respect to each Out-Bound License, whether the Out-Bound License is
exclusive or non-exclusive. To the Knowledge of the Sellers, no third party is
in default of any Out-Bound License.
(e) All registration, maintenance and renewal fees related to MTC
Owned Intellectual Property that are currently due have been paid and all
documents and certificates related to such MTC Owned Intellectual Property have
been filed with the relevant Governmental Authority or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such MTC Owned Intellectual Property.
(f) Sellers are not aware of any challenges (or any basis therefor)
with respect to the validity or enforceability of any MTC Owned Intellectual
Property. The Seller Disclosure Schedule lists the status of any Actions before
the United States Patent and Trademark Office or any other Governmental
Authority anywhere in the world related to any of MTC Owned Intellectual
Property, including the due date for any outstanding response by MTC or any of
its Subsidiaries in such Actions.
(g) None of the Products currently assembled, sold, distributed,
provided, shipped or licensed, by MTC or any of its Subsidiaries infringes upon,
or otherwise unlawfully uses, the Intellectual Property Rights of any third
party. Neither MTC nor any of its Subsidiaries, by conducting its business as
currently conducted, infringes upon, or otherwise unlawfully uses, any
Intellectual Property Rights of a third party. None of Sellers, MTC or any of
its Subsidiaries has received any written communication alleging that MTC or any
of its Subsidiaries or any of their respective Products infringe upon or
otherwise unlawfully use any Intellectual Property Rights of a third party nor,
to the Knowledge of Sellers, is there any basis therefor. No Action has been
instituted, or, to the Knowledge of Sellers, threatened, relating to any
Intellectual Property currently used by MTC or any of its Subsidiaries. To the
Knowledge of Sellers, no Person is infringing any Intellectual Property Rights
of MTC or any of its Subsidiaries or has otherwise misappropriated or is
otherwise misappropriating any MTC Owned Intellectual Property.
(h) To the Knowledge of Sellers, no Public Software: (A) forms part of
any Software owned by MTC; (B) was, or is, used in connection with the
development of any Software owned by MTC or any products or services developed
or provided through the Business; or (C) was, or is, incorporated or
distributed, in whole or in part, in conjunction with any Software owned by MTC;
that would adversely affect, limit, or restrict MTC's ownership of, or ability
to license, transfer or sell, any Software owned by MTC.
(i) MTC and its Subsidiaries have taken commercially reasonable steps
to protect and preserve the confidentiality of all Proprietary Information owned
by MTC or any of its Subsidiaries that is not covered by an issued Patent. All
employees of Oxy-Dry in the United States sign a form written confidentiality
and trade secret agreement (the "NONDISCLOSURE
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AGREEMENT"). A copy of the standard form of Nondisclosure Agreement has been
provided to the Buyer. To the Knowledge of the Sellers, no employee has breached
the provisions of his or her Nondisclosure Agreement.
4.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on the
Seller Disclosure Schedule, since December 31, 2005 to the date of this
Agreement (with respect to the representation and warranty made as of the date
of this Agreement) and to the Closing Date (with respect to the representation
and warranty made as of the Closing Date):
(a) there has not been any material adverse change in the condition
(financial or otherwise), operations, or results of operations of MTC and its
Subsidiaries taken as a whole;
(b) neither MTC nor any of its Subsidiaries has amended or changed its
Charter Documents;
(c) neither MTC nor any of its Subsidiaries has declared, set aside or
paid any dividend or other distribution (whether in cash, stock or property)
with respect to any Equity Security or any other security;
(d) neither MTC nor any of its Subsidiaries has split, combined or
reclassified any Equity Security or other security, or issued, or authorized for
issuance, any Equity Security or other security;
(e) neither MTC nor any of its Subsidiaries has altered any term of
any outstanding Equity Security or other security;
(f) neither MTC nor any of its Subsidiaries has (i) increased or
modified the compensation or benefits payable or to become payable by MTC or any
of its Subsidiaries to any of its current or former directors, employees,
contractors or consultants, (ii) increased or modified any bonus, severance,
termination, pension, insurance or other employee benefit plan, payment or
arrangement made to, for or with any current or former directors, employees,
contractors or consultants of MTC or any of its Subsidiaries, or (iii) entered
into any employment, severance or termination agreement;
(g) other than the sale of inventory in the ordinary course of
business neither MTC nor any of its Subsidiaries has sold, leased, transferred
or assigned any property or assets of MTC or any such Subsidiary having an
aggregate value of more than $10,000;
(h) neither MTC nor any of its Subsidiaries has incurred, assumed or
guaranteed any indebtedness;
(i) neither MTC nor any of its Subsidiaries has created or assumed any
Lien on any asset, except for Liens arising under lease financing arrangements
incurred in the ordinary course and Liens for Taxes not yet due and payable with
respect to which MTC and its Subsidiaries maintain adequate reserves;
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(j) (i) no Material Contract has been modified, (ii) no rights under
any Material Contract have been waived or accelerated and (iii) no Contract that
would be required to be listed as a Material Contract pursuant to Section 4.18
hereof if such Contract were in effect on the date hereof has been terminated or
cancelled;
(k) neither MTC nor any of its Subsidiaries has sold, transferred,
pledged or assigned, and there has been no material reduction in the value of,
any MTC Owned Intellectual Property;
(l) none of Sellers, MTC or its Subsidiaries has agreed or entered
into any arrangement to take any action which, if taken prior to the date
hereof, would have made any representation or warranty set forth in this Article
IV untrue or incorrect;
(m) there has not been any material damage, destruction or loss with
respect to the property and assets of MTC or any of its Subsidiaries, whether or
not covered by insurance;
(n) none of Sellers, MTC or any of its Subsidiaries has made any Tax
election;
(o) none of Sellers, MTC or any of its Subsidiaries has agreed,
whether in writing or otherwise, to do any of the foregoing; and
(p) none of MTC or any of its Subsidiaries has made any change in
their accounting or Tax methods or practices or their Tax elections, or settled
or compromised any income Tax liability of MTC or any of its Subsidiaries.
4.18 CONTRACTS.
(a) The Seller Disclosure Schedule contains a true and complete list
of each Contract to which MTC or any of its Subsidiaries is a party or is
subject, or by which any of their respective assets are bound meeting any of the
descriptions set forth below:
(i) for the purchase of materials, supplies, goods, services,
equipment or other assets involving aggregate payments by MTC or any
of its Subsidiaries of $100,000 or more;
(ii) for the sale by MTC or any of its Subsidiaries of any
Product or Products having an aggregate purchase price of more than
$50,000 in the year ending 2006;
(iii) that requires MTC or any of its Subsidiaries to purchase
its total requirements of any product or service from a third party or
that contains "take or pay" provisions;
(iv) that (A) continues over a period of more than twelve months
or (B) involves payments to or by MTC or any of its Subsidiaries
exceeding $50,000, other than arrangements disclosed pursuant to the
preceding subsections (i) and (ii);
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(v) that is an employment, termination or severance Contract,
other than any such Contract that is terminable at-will by MTC or any
of its Subsidiaries without liability to MTC or such Subsidiary;
(vi) that is a partnership or joint venture or other Contract
involving stock appreciation, phantom stock or the sharing of profits;
(vii) that is with any Seller, that is between MTC and any of its
Subsidiaries or that is between any of the Subsidiaries of MTC;
(viii) that is a distribution, dealer, representative or sales
agency Contract;
(ix) that is a Contract for the lease of personal property which
provides for payments to or by MTC or any of its Subsidiaries in any
one case of $100,000;
(x) that provides for the indemnification by MTC or any of its
Subsidiaries of any Person, the undertaking by MTC or any of its
Subsidiaries to be responsible for consequential damages, or the
assumption by MTC or any of its Subsidiaries of any Tax, environmental
or other Liability;
(xi) with any Governmental Authority;
(xii) that is a note, debenture, bond, equipment trust, letter of
credit, loan or other Contract for Indebtedness or lending of money or
advance or capital contribution, or investment in, any Person (other
than to employees for travel expenses in the ordinary course of
business) or Contract for a line of credit or guarantee, pledge or
undertaking of the Indebtedness of any other Person;
(xiii) for a charitable or political contribution in any one case
in excess of $1,000 or in the aggregate greater than $10,000;
(xiv) for any capital expenditure or leasehold improvement in any
one case in excess of $25,000 or in the aggregate greater than
$50,000;
(xv) that restricts the right of MTC or any of its Subsidiaries
to engage in any line of business, acquire any property, develop or
distribute any product or provide any service (including geographic
restrictions) or to compete with any Person or granting any exclusive
distribution rights, in any market, field or territory;
(xvi) that is an Out-Bound License (other than a license
incorporated in a Contract for the purchase of a Product) or an
In-Bound License (other than the manufacturer's standard form of
license accompanying off-the-shelf software purchased by MTC or any of
its Subsidiaries);
(xvii) that relates to the acquisition or disposition of any
material business (whether by merger, sale of stock, sale of assets or
otherwise);
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(xviii) that is a collective bargaining Contract or other
Contract with any labor organization, union or association.
(b) Each Contract required to be listed in the Seller Disclosure
Schedule (collectively, the "MATERIAL CONTRACTS") is in full force and effect
and valid and enforceable in accordance with its terms.
(c) Neither MTC nor any of its Subsidiaries is, and to the Knowledge
of Sellers, no other party thereto is, in default in the performance, observance
or fulfillment of any obligation, covenant, condition or other term contained in
any Material Contract, including any default with respect to minimum insurance
requirements, and neither MTC nor any of its Subsidiaries has given or received
written notice to or from any Person relating to any such alleged or potential
default that has not been cured. No event has occurred which with or without the
giving of notice or lapse of time, or both, may conflict with or result in a
violation or breach of, or give any Person the right to exercise any remedy
under or accelerate the maturity or performance of, or cancel, terminate or
modify, any Material Contract.
(d) Sellers have delivered accurate and complete copies of each
Material Contract, including all amendments thereto, to Buyer.
(e) Neither MTC nor any of its Subsidiaries is a party to any
enforceable oral agreement (i) entered into outside the ordinary course of
business, (ii) involving aggregate payments of $10,000 or more, or (iii) that
can not be fully performed in less than twelve (12) months.
4.19 LITIGATION.
(a) Except as set forth on the Seller Disclosure Schedule there is no
action, suit or proceeding, claim, arbitration, litigation or investigation
(each, an "ACTION") (i) pending or, to the Knowledge of Sellers, threatened
against or affecting in any material respect MTC or any of its Subsidiaries, or
(ii) that challenges or seeks to prevent, enjoin or otherwise delay the
Acquisition. To the Knowledge of the Sellers, no event has occurred or
circumstances exist that would reasonably be expected to give rise to any such
Action. There is no Action against any current or, to the Knowledge of Sellers,
former director or employee of MTC or any of its Subsidiaries with respect to
which MTC or any such Subsidiary has or is reasonably likely to have an
indemnification obligation.
(b) There is no unsatisfied judgment, penalty or award against MTC or
any of its Subsidiaries or any of their respective properties or assets. There
is no Order to which MTC or any of its Subsidiaries or any of their respective
properties or assets are subject.
4.20 EMPLOYEE BENEFITS.
(a) The Seller Disclosure Schedule sets forth a true and complete list
of all Benefit Plans. There has been delivered to Buyer true, accurate and
complete copies of each Benefit Plan (including amendments thereto), trust
agreement, insurance or annuity contract, and all summary plan descriptions,
summaries of material modifications, general notices to
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employees or beneficiaries and other material agreements, documents or
instruments relating thereto.
(b) Each Benefit Plan has at all times been maintained and
administered in material compliance in accordance with its terms and with all
reporting, disclosure and other requirements of all applicable Laws, including
ERISA and the Code and their foreign Law equivalents, including, without
limitation, the German Company Pension Act *BetrAVG) and the German Income Tax
Act (EStG). Each Benefit Plan that is an employee pension benefit plan (as
defined in Section 3(2) of ERISA) and which is intended to be tax qualified
under Section 401(a) of the Code (a "PENSION PLAN"), has been determined by the
Internal Revenue Service to be so qualified and no condition exists that will or
would reasonably be expected to give rise to disqualification or loss of
tax-exempt status of any such plan or related trust. No Benefit Plan is a
"defined benefit plan" within the meaning of Section 3(35) of ERISA or Section
414(j) of the Code and neither MTC, any Subsidiary nor any ERISA Affiliate has
ever maintained, sponsored, contributed to or was required to contribute to such
a plan.
(c) None of the Sellers, MTC, any Subsidiary of MTC, any ERISA
Affiliate or any other person has engaged in any prohibited transaction as
defined by Section 406 of ERISA or Section 4975 of the Code for which an
exemption is not applicable which could subject MTC, any Subsidiary of MTC, any
ERISA Affiliate or any other person to any taxes, penalties or other liabilities
imposed by Section 4975 of the Code or Sections 409 or 502 of ERISA.
(d) No "reportable event" (within the meaning of Section 4043 of
ERISA) with respect to which the 30 day notice requirement has not been waived
has occurred with respect to any Benefit Plan since the effective date of said
Section 4043. To the Knowledge of the Sellers, no condition exists which could
reasonably be expected to subject MTC or any of its Subsidiaries to a penalty
under Section 4071 of ERISA.
(e) Neither MTC nor any of its Subsidiaries or any ERISA Affiliate is,
or has been, party to any Multiemployer Plan or multiple employer plan. No
Benefit Plan is or has been a Multiemployer Plan or a multiple employer plan.
(f) Sellers have provided to Buyer: (i) true and complete copies of
the three most recent annual reports on Form 5500 and any attached schedules for
each Benefit Plan (if any such report was required by applicable Law), (ii) true
and complete copies of the three most recent actuarial reports with respect to
each Benefit Plan required to have an actuarial report, (iii) the most recent
audited financial statement with respect to each Benefit Plan required to have
an audited financial statement, and (iv) a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan.
(g) With respect to each Benefit Plan, no suit or other litigation
(other than routine claims for benefits in the ordinary course of plan
activities) have been brought or, to the Knowledge of the Sellers, threatened
against or with respect to any Benefit Plan, MTC, any Subsidiary of MTC, any
ERISA Affiliate or any trustee or agent of any Benefit Plan, and, to the
Knowledge of the Sellers, there are no facts or circumstances that would
reasonably be expected to give rise to any such suit, action or other
litigation.
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(h) There are no outstanding liabilities of any Benefit Plan other
than liabilities for benefits to be paid to participants in any Benefit Plan and
their beneficiaries in accordance with the terms of such Benefit Plan.
(i) No Benefit Plan provides health, life, death or other welfare
benefit coverage (whether or not insured) beyond the termination of an
employee's employment, except as required by Part 6 of Subtitle B of Title I of
ERISA or section 4980B of the Code or any State laws requiring continuation of
benefits coverage following termination of employment.
(j) All contributions to Benefit Plans that were required to be made
under such Benefit Plans or applicable Law have been made, and all benefits
accrued under any unfunded Benefit Plan have been paid, accrued or otherwise
adequately reserved in accordance with GAAP, all of which accruals under
unfunded Benefit Plans are as disclosed in the Seller Disclosure Schedule, and
each of MTC and each Subsidiary has performed all material obligations required
to be performed under all Benefit Plans, including, without limitation, each
required pension adjustment under Section 16 of the German Company Pension Act
(BetrAVG).
(k) Except as set forth in the Seller Disclosure Schedule, neither MTC
nor any Subsidiary is subject to any (i) Contract or oral agreement with any
stockholder, director, officer or other employee of MTC or any Subsidiary (A)
the benefits of which are contingent either alone or in combination with any
other event (e.g. termination of employment), or the terms of which will be
materially altered, upon the occurrence of the Acquisition, (B) providing any
term of employment or compensation guarantee or (C) providing severance benefits
or other benefits after the termination of employment of such director, officer
or employee; or (ii) Contract, including any stock option plan, stock
appreciation right plan, restricted stock plan, stock purchase plan, employment
agreement, change in control agreement or severance benefit plan, the benefits
of which shall be triggered or increased, or the vesting of the benefits under
which shall be accelerated, by the Acquisition, either alone or in combination
with any other event, or the value of any benefits under which shall be
calculated on the basis of the value of the Acquisition.
(l) Each individual that renders services to MTC or any Subsidiary who
is classified by MTC or such Subsidiary as having the status of (i) an
independent contractor or any other non-employee status, or (ii) as an exempt or
non-exempt employee, is properly so classified for all purposes, including but
not limited to (a) taxation and tax reporting and social security contributions,
(b) eligibility to participate in the Benefit Plans, (iii) Fair Labor Standards
Act purposes, and (iv) applicable Laws governing the payment of wages.
(m) Each Benefit Plan that is a "nonqualified deferred compensation
plan" (as defined under Section 409A(d)(1) of the Code) has been operated and
administered in good faith compliance with Section 409A of the Code during the
period beginning January 1, 2005 through the date hereof and has not been
materially modified since October 2, 2004. Any amounts paid or payable pursuant
to each Benefit Plan subject to Section 409A is not includible in the gross
income of a service recipient (within the meaning of Section 409A) until
received by the service recipient and is not subject to interest or the
additional tax imposed by Section 409A of the Code, and there are no agreements
in place that would entitle a participant in any such plan to reimbursement for
any such additional tax.
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(n) Neither the Sellers, MTC nor any of its Subsidiaries are subject
to any legal, contractual, equitable, or other obligation to establish or
continue any Benefit Plan on or after the date hereof.
(o) Neither the Sellers, MTC nor any of its Subsidiaries have made any
representations or communications (directly or indirectly, orally, in writing or
otherwise) with respect to participation, eligibility for benefits, vesting,
benefit accrual coverage or other material terms of any Benefit Plan to any
employee, beneficiary or other person other than those which are in accordance
with the terms and provisions of each such Benefit Plan as in effect immediately
prior to the Closing Date.
(p) Except as disclosed on the Seller Disclosure Schedule, MTC and
each ERISA Affiliate may, in any manner, subject to the limitations imposed by
applicable Law, and without the consent of any employee, beneficiary or other
person, prospectively terminate, modify or amend any Benefit Plan or any other
plan, program or practice (or its participation in such Benefit Plan or any
other plan, program or practice) effective as of a date on or after the date
hereof.
4.21 LABOR AND EMPLOYMENT MATTERS.
(a) The Seller Disclosure Schedule sets forth (i) a list of all
employees of MTC and its Subsidiaries (including title and position) as of the
date hereof, and (ii) the base compensation and benefits of each such employee
whose base compensation and bonus exceeded, in the aggregate, $75,000 in the
year ending December 31, 2005 or whose base compensation and target bonus
exceeds or is expected to exceed, in the aggregate, $75,000 in the year ending
December 31, 2006. No former employees of MTC or any of its Subsidiaries are
receiving or scheduled to receive pension benefits, medical insurance coverage
or other benefits from MTC or any Subsidiary. Subject to applicable Law, all
directors, employees, contractors and consultants of MTC and its Subsidiaries
may be terminated by MTC or a Subsidiary at any time with or without any
severance or other liability to MTC or such Subsidiary.
(b) Neither MTC nor any of its Subsidiaries is a party or subject to
any labor union or collective bargaining agreement or any German shop agreement
(Betriebsvereinbarung). There is no German works council (Betriebrsrat) and, to
the Knowledge of Sellers, there is no employee effort to establish any such
works council. There have not been since January 1, 2003 and, to the Knowledge
of Sellers, there are not pending or threatened any labor disputes, work
stoppages, requests for representation, pickets, work slow downs due to labor
disagreements or any actions or arbitrations which involve the labor or
employment relations of MTC or any of its Subsidiaries. There is no unfair labor
practice, charge or complaint pending, or, to the Knowledge of Sellers,
threatened before the National Labor Relations Board or a German labor court. To
the Knowledge of Sellers, no event has occurred or circumstances exist that
would reasonably be expected to give rise to a work stoppage or other labor
dispute.
(c) None of MTC or any of its Subsidiaries is a party to any Contract
which restricts MTC or any of its Subsidiaries from relocating, closing or
terminating any of its operations or facilities or any portion thereof or which
would require the payment of any
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severance or other comparable payment to any affected employee. None of Sellers,
MTC or any of its Subsidiaries have since January 1, 2003 effectuated a "plant
closing" (as defined in the WARN Act or the German Works Constitution Act
(BetrAVG)) or (ii) a "mass lay-off" (as defined in the WARN Act or the German
Termination Protection Act (KSchG)), in either case affecting any site of
employment or facility of MTC or any of its Subsidiaries, except in accordance
with the WARN Act or the German Termination Protection Act (KSchG), as the case
may be. The consummation of the Acquisition will not create liability for any
act by MTC or any of its Subsidiaries on or prior to the Closing under the WARN
Act or any other Law respecting reductions in force or the impact on employees
on plant closings or sales of businesses.
4.22 ENVIRONMENTAL.
(a) Each of MTC and its Subsidiaries has obtained, and is in material
compliance with, all Environmental Permits required in connection with its
operations and the Leased Real Property. Each Environmental Permit, together
with the name of the Governmental Authority issuing such Environmental Permit,
is set forth in the Seller Disclosure Schedule. All such Environmental Permits
are valid and in full force and effect and all renewal applications for such
Environmental Permits have been timely filed with the appropriate Governmental
Authority. None of such Environmental Permits will be terminated, revoked,
withdrawn, cancelled, suspended or modified or become terminable, revocable,
withdrawable, suspendable or modifiable as a result of the Acquisition. Each of
MTC and its Subsidiaries is currently in material compliance with all
Environmental Laws. None of MTC or any of its Subsidiaries has received written
notice alleging that MTC or any of its Subsidiaries is not in material
compliance with Environmental Laws.
(b) There are no past, pending or, to the Knowledge of Sellers,
threatened Environmental Actions against or affecting MTC or any of its
Subsidiaries, and to the Knowledge of Sellers, there are no facts or
circumstances which would reasonably be expected to form the basis for any
Environmental Action against MTC or any such Subsidiary.
(c) Neither MTC nor any of its Subsidiaries has entered into or agreed
to any Order, and neither MTC nor any of its Subsidiaries is subject to any
Order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law.
(d) There has been no treatment, storage, disposal or Release by MTC
or any of its Subsidiaries of any Hazardous Substance at, from, into, on or
under any Leased Real Property or any other property currently or formerly
owned, operated or leased by MTC or any of its Subsidiaries. To the Knowledge of
Sellers, no Hazardous Substances are present in, on, about or migrating to or
from any Leased Real Property that could be expected to give rise to an
Environmental Action against MTC or any of its Subsidiaries.
(e) Neither MTC nor any of its Subsidiaries has received a CERCLA
104(e) information request nor has MTC or any of its Subsidiaries been named a
potentially responsible party for any National Priorities List site under CERCLA
or any other site under analogous state
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Law. Neither MTC nor any of its Subsidiaries has received an analogous notice or
request from any non-U.S. Governmental Authority.
(f) To the Knowledge of Sellers, there are no aboveground tanks or
underground storage tanks on, under or about the Leased Real Property. To the
Knowledge of Sellers, any aboveground or underground tanks previously situated
on the Leased Real Property or any other property currently or formerly owned,
operated or leased by MTC or any of its Subsidiaries have been removed in
accordance with all Environmental Laws and, to the Knowledge of Sellers, no
residual contamination, if any, remains at such sites in excess of applicable
standards.
(g) To the Knowledge of Sellers, there are no polychlorinated
biphenyls ("PCBs") leaking from any article, container or equipment on, under or
about the Leased Real Property and there are no such articles, containers or
equipment containing PCBs in, at, on, under or within the Leased Real Property.
(h) To the Knowledge of Seller, there is no asbestos containing
material or lead based paint containing materials in, at, on, under or within
the Leased Real Property.
(i) Neither MTC nor any of its Subsidiaries has transported or, to the
Knowledge of Sellers, arranged for the treatment, storage, handling, disposal,
or transportation of any Hazardous Material to any off-site location which is an
Environmental Clean-up Site.
4.23 INSURANCE.
(a) The Seller Disclosure Schedule sets forth (i) a true and complete
list of each insurance policy which covers MTC or any of its Subsidiaries or
their respective businesses, properties, assets, directors or employees (the
"POLICIES") and (ii) a list of all pending claims and the claims history for MTC
and its Subsidiaries during the current year and the preceding three years
(including with respect to insurance obtained but not currently maintained).
There are no pending claims under any of such Policies as to which coverage has
been questioned, denied or disputed by the insurer or in respect of which either
MTC or any of its Subsidiaries has received any notice that the insurer has
reserved its rights.
(b) There are no self-insurance arrangements by or affecting MTC or
any of its Subsidiaries other than standard deductibles.
(c) All Policies are in full force and effect and are enforceable in
accordance with their terms and will continue in full force and effect with
respect to MTC and its Subsidiaries following the Acquisition.
(d) Neither MTC nor any of its Subsidiaries has received a notice of
cancellation of any Policy or of any material changes that are required in the
conduct of the businesses of MTC and its Subsidiaries as a condition to the
continuation of coverage under, or renewal of, any such Policy. To the Knowledge
of Sellers, there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default under any Policy or
entitle any insurer to terminate or cancel any Policy. Sellers have no Knowledge
of any
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threatened termination of, or material premium increase with respect to, any
Policy and none of such Policies provides for retroactive premium adjustments.
4.24 PRODUCT WARRANTY.
(a) There are no warranties (express or implied) outstanding with
respect to any products currently or formerly assembled, sold, distributed,
provided or shipped ("Products"), or any services rendered, by MTC or any of its
Subsidiaries, beyond that set forth in the standard conditions of sale or
service, copies of which are included in the Seller Disclosure Schedule.
(b) Each Product assembled, sold, distributed, provided or shipped, or
service rendered, by MTC or any of its Subsidiaries has been in conformity with
all applicable contractual commitments and warranties. There are no material
design, manufacturing or other defects, latent or otherwise, with respect to any
Products. Each Product that has been assembled, sold, distributed, provided or
shipped prior to Closing contains all warnings required by applicable Law.
(c) The July 30, 2006 Balance Sheet reflects adequate reserves (in
accordance with GAAP) for product design and warranty claims and other damages
in connection with any Product assembled, sold, distributed or shipped, or
service rendered, by MTC and its Subsidiaries on or prior to July 31, 2006.
4.25 BOOKS AND RECORDS.
(a) The accounting and other financial books and records of the
Company are complete and accurate in all material respects, and are maintained
in accordance with customary business practices.
(b) The minute books, the stock certificate books, and the stock
record books of MTC and its Subsidiaries contain accurate and complete records
of all meetings, or actions taken by written consent, of the stockholders, the
board of directors and any committees of the board of directors, of MTC and its
Subsidiaries, and no meeting, or action by written consent in lieu of such
meeting, of any such stockholders, board of directors or committee of such board
of directors, has been held for which minutes have not been prepared and not
contained in the minute books. At the Closing, all of the books and records of
MTC and its Subsidiaries will be in the possession of MTC. At the Closing,
Sellers will deliver, or cause to be delivered, to Buyer or its designee all of
the minute books of MTC and its Subsidiaries.
4.26 SUPPLIERS AND CUSTOMERS. The Seller Disclosure Schedule sets forth
with respect to each of MTC and its Subsidiaries (a) each supplier of materials
or components from whom purchases exceeded $200,000 in the year ended 2004 or
2005 (including, without limitation, the top twenty suppliers for each of 2004
and 2005 by dollar amount of purchase volume), (b) each supplier who constitutes
a sole source of supply to MTC or any of its Subsidiaries, and (c) with respect
to each year ended 2004 or 2005 and the six-month period ended June 30, 2006,
the top twenty customers in terms of MTC's and its Subsidiaries' revenues on a
consolidated basis for such year or period. The relationships of each of MTC and
its
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Subsidiaries with each such supplier and customer listed on the Seller
Disclosure Schedule are good commercial working relationships. No such supplier
or customer has canceled or otherwise terminated, or threatened to cancel or
otherwise terminate, its relationship with MTC or any of its Subsidiaries. None
of MTC or the Subsidiaries of MTC has received written notice that any such
supplier or customer may cancel or otherwise materially and adversely modify its
relationship with MTC or any of its Subsidiaries or limit its services, supplies
or materials to MTC or any of its Subsidiaries, either as a result of the
Acquisition or otherwise.
4.27 BROKERS OR FINDERS. Except for fees and commissions of Xxxxx Xxxxxxxx
Corporate Finance LLC which will be paid by Seller, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Acquisition contemplated by this Agreement
based upon arrangements made by or on behalf of Seller or MTC or any of its
Subsidiaries.
4.28 BANK ACCOUNTS. The Seller Disclosure Schedule sets forth the name of
each bank, safe deposit company or other financial institution in which MTC or
any of its Subsidiaries has an account, lock box or safe deposit box and the
names of all persons authorized to draw thereon or have access thereto.
4.29 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed by or on behalf of MTC or any of its Subsidiaries in favor of any
Person, other than those given to freight forwarders for the import or export of
Products in the ordinary course or business.
4.30 CERTAIN ACQUISITIONS. Except as set forth in the Seller Disclosure
Schedule, there is no Acquisition, and no Acquisition now proposed, to which MTC
or any Subsidiary was or is to be a party and in which any director or officer
of MTC or any Subsidiary or any person owning of record or beneficially more
than 10% of the outstanding capital stock of any class of MTC or any Subsidiary
or any associate of any such person had or has a direct or indirect material
interest.
4.31 FOREIGN CORRUPT PRACTICES ACT. To the Knowledge of Sellers, neither
MTC or any Subsidiary nor any director, officer, agent, employee or other person
associated with or acting on behalf of MTC or any Subsidiary has used any
corporate funds for any unlawful contribution, gift, entertainment or other
expense relating to political activity or made any direct or indirect unlawful
payment to any United States or foreign government official or employee from
corporate funds or violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977 or paid or made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment.
4.32 COMPLETENESS OF DISCLOSURE. Except as specifically set forth in this
Agreement or the Seller Disclosure Schedule, there are no facts or circumstances
of which the Sellers are aware that would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the condition
(financial or otherwise), operations or results of operations of MTC and its
Subsidiaries taken as a whole. Each exception to a representation and warranty
set forth in the Seller Disclosure Schedule qualifies the specific
representation and warranty which is referenced in the applicable section of the
Seller Disclosure Schedule, and no other representation or warranty.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to each Seller as of the date of this
Agreement that the statements contained in this Article V are true and correct.
5.1 CORPORATE EXISTENCE. The Buyer is a corporation validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the Acquisition.
5.2 CORPORATE AUTHORITY. This Agreement and the consummation of all of the
Acquisition have been duly authorized by all requisite corporate acts or
proceedings of the Buyer and the Buyer has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by the Buyer and,
assuming due authorization, execution and delivery hereof by Sellers,
constitutes a valid and binding obligation of the Buyer, enforceable in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency reorganization, moratorium or other similar Laws
affecting or relating to creditors' rights generally, and (ii) the availability
of injunctive relief and other equitable remedies. The execution and delivery of
this Agreement by the Buyer and the consummation by the Buyer of the Acquisition
will not (a) violate, conflict with or result in the breach of the Charter
Documents of the Buyer, (b) conflict with or violate any Law, judgment or decree
of any Governmental Authority applicable to the Buyer or (c) conflict with,
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination or cancellation,
modification or acceleration of, any Contract to which the Buyer is a party,
except, in the case of clauses (b) and (c), as would not reasonably be expected
to have a Buyer Material Adverse Effect.
5.3 GOVERNMENTAL APPROVALS; CONSENTS. No Action is pending or, to the
Knowledge of the Buyer, overtly threatened in writing against the Buyer which
would enjoin or delay the Acquisition. Except as required by Antitrust Laws, no
consent, approval, order or authorization of, license or permit from, notice to
or registration, declaration or filing with any Governmental Authority or of any
third party, is or has been required on the part of the Buyer in connection with
the execution and delivery of this Agreement or the consummation of the
Acquisition, except for such consents, approvals, orders or authorizations of,
licenses or permits, filings or notices the failure of which to obtain or make
would not reasonably be expected to have a Buyer Material Adverse Effect or
which have been obtained.
5.4 FINDERS; BROKERS. Except for Groton Partners LLC (whose expenses will
be paid by the Buyer), the Buyer is not a party to any agreement with any finder
or broker, or in any way obligated to any finder or broker for any commissions,
fees or expenses, in connection with the origin, negotiation, execution or
performance of this Agreement for which any Seller or any Affiliate of any
Seller will be liable.
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5.5 PURCHASE FOR INVESTMENT. The Buyer is aware that the Shares being
acquired are not registered under the Securities Act, or under any state or
foreign securities Laws. The Buyer is not an underwriter, as such term is
defined under the Securities Act, and the Buyer is purchasing such Shares solely
for investment, with no present intention to distribute any Shares to any
Person, and the Buyer will not sell or otherwise dispose of the Shares, except
in compliance with the registration requirements or exemption provisions under
the Securities Act and the rules and regulations promulgated thereunder, or any
other applicable securities laws.
5.6 LITIGATION. There is no pending or, to the Knowledge of the Buyer,
overtly threatened in writing Action, against the Buyer which reasonably would
be expected to affect the legality, validity or enforceability of this Agreement
or the consummation of the Acquisition.
5.7 DUE DILIGENCE AND INDEPENDENT INVESTIGATION.
(a) The Buyer has conducted such investigations of the Business as it
deems necessary and appropriate, and has received all of the information that it
has requested from MTC and Sellers in connection with the execution and delivery
of this Agreement and the consummation or the Acquisition.
(b) In making the decision to enter into this Agreement and to
consummate the Acquisition, other than reliance on the representations and
warranties contained in Article IV, the Buyer acknowledges and agrees that it
has relied solely on its own independent investigation, analysis and evaluation
of MTC and the Business (including the Buyer's own estimate and appraisal of the
value of MTC, the Business, and the financial condition, operations and
prospects of MTC and the Business). The representations and warranties of the
Sellers set forth in Article IV constitute the sole and exclusive
representations and warranties of the Sellers to the Buyer in connection with
the Acquisition contemplated hereby, and the Buyer understands, acknowledges and
agrees that all other representations and warranties of any kind or nature
expressed or implied (including, but not limited to, any relating to the future
or historical financial condition, results of operations, assets or liabilities
of MTC, or the quality, quantity or condition of MTC's assets) are specifically
disclaimed by the Sellers. The Sellers do not make or provide, and the Buyer
hereby waives, any warranty or representation, express or implied, as to the
quality, merchantability, fitness for a particular purpose, conformity to
samples, or condition of MTC's or its Subsidiaries' assets or any part thereof.
(c) The Buyer has no knowledge that the representations and warranties
of Sellers set forth in this Agreement are not true and correct.
ARTICLE VI
AGREEMENTS OF ALL PARTIES
6.1 CONDUCT OF BUSINESS PENDING CLOSING. From the date hereof until the
Closing, except as consented to by the Buyer in writing:
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(a) Sellers will cause MTC and each of its Subsidiaries to maintain
itself at all times as a corporation validly existing and in good standing under
the Laws of the jurisdiction of its incorporation;
(b) Sellers will cause MTC and each of its Subsidiaries to carry on
its business and operations in the ordinary course and substantially in the
manner carried on as of the date hereof and Sellers will not permit MTC or any
of its Subsidiaries to engage in any activity or Acquisition or make any
commitment to purchase or spend other than in the ordinary course of its
business as heretofore conducted; provided, however, without the written consent
of Buyer, Sellers will not permit MTC and its Subsidiaries to make capital
expenditures exceeding, in the aggregate, $100,000;
(c) Sellers will not permit MTC or any of its Subsidiaries to declare,
authorize or pay any distribution to its stockholders and Sellers will not
permit MTC or any of its Subsidiaries to redeem, purchase or otherwise acquire
or agree to redeem, purchase or otherwise acquire any of its Equity Securities,
provided however, at or prior to the Closing, Sellers will cause (i) MTC to
distribute to its shareholders all of the Capital Stock owned by MTC in The
Xxxxx and Xxxxx Lines Incorporated, a Tennessee corporation, and Arizona
Kazakstan Development Group Incorporated, an Arizona corporation, (ii) MTC to
redeem all of the outstanding shares of preferred stock of MTC, together with
all accrued and unpaid dividends thereon, in exchange for promissory notes
and/or other indebtedness of MTC and (iii) MTC to purchase all of the
outstanding shares of capital stock of Oxy-Dry not owned by MTC in exchange for
promissory notes and/or other indebtedness of MTC.
(d) Sellers will not permit MTC or any of its Subsidiaries to pay or
provide or obligate itself to pay or to increase or provide any compensation,
commission or bonus or to provide any benefit under any Benefit Plan or any
other arrangement to any director, officer, employee, consultant, independent
contractor or agent (excluding accountants, attorneys and other professional
advisors) as such, except for the regular compensation and commissions payable
to and the existing benefits available under the Benefit Plans for such
director, officer, employee, consultant, independent contractor or agent
(excluding accountants, attorneys and other professional advisors) at the rate
in effect on the date of this Agreement and Sellers shall not permit MTC or any
of its Subsidiaries to establish or increase or promise to increase any benefit
under any Benefit Plan, or enter into an employment, severance, change in
control or similar agreement, in any case, except for increases or other changes
required by Law;
(e) Sellers will cause MTC and each of its Subsidiaries to continue to
carry the insurance policies it currently has in effect;
(f) Sellers will cause MTC and each of its Subsidiaries to use all
commercially reasonable efforts to preserve for the Buyer, the Business and
their respective employees and independent contractors, and their respective
relationships with suppliers, licensees, distributors and customers and others
having business relationships with MTC and each of its Subsidiaries,
respectively;
(g) Sellers will not permit MTC or any of its Subsidiaries to sell or
otherwise dispose of or pledge or otherwise encumber (other than for Permitted
Liens), or obligate itself to
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sell or otherwise dispose of or pledge or otherwise encumber (other than
Permitted Liens) any of its properties or assets except in the ordinary course
of business and Sellers will cause MTC and its Subsidiaries to maintain its
facilities, machinery and equipment in good operating condition and repair,
subject only to ordinary wear and tear;
(h) Sellers will not permit MTC or any of its Subsidiaries to amend
its Charter Documents; and
(i) Sellers will not permit MTC or any of its Subsidiaries to make any
change in its accounting or Tax methods or practices or its Tax elections or
enter into any agreement or arrangement with respect to Taxes or settle or
compromise any income Tax liability of MTC or any of its Subsidiaries; and
(j) without limiting the foregoing, Sellers will consult with the
Buyer regarding all significant transactions and proposals relating to the
Business or the assets of MTC or any of its Subsidiaries.
6.2 COOPERATION WITH RESPECT TO FINANCING. If and to the extent reasonably
requested by Buyer, Sellers shall cooperate with the Buyer in connection with
the Buyer's efforts to obtain the financing.
6.3 CONFIDENTIAL INFORMATION. Sellers shall cause MTC and each of its
Subsidiaries to exert reasonable efforts, at least as stringent as those
employed by it prior to the date of this Agreement, for the preservation and
maintenance of its Proprietary Information, to preserve and maintain all
Proprietary Information of MTC and each of its Subsidiaries, and, except as
required by Law, Sellers shall not disclose, and shall not permit MTC or any of
its Subsidiaries to disclose, to any third person (other than the Buyer and its
representatives) any such Proprietary Information, except in the ordinary course
of business; provided, however, that Sellers shall be free to disclose all or
any of such Proprietary Information which are a matter of public knowledge. The
covenants of Sellers contained in this Section 6.3 shall survive the Closing for
a period of five years.
6.4 BUYER'S ACTIONS. The Buyer shall not acquire or agree to acquire, nor
permit any of its Affiliates to acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial portion of the assets of or
equity in, or by any other manner, any Person or portion thereof, or otherwise
acquire or agree to acquire any assets, if the entering into of a definitive
agreement relating to or the consummation of such acquisition, merger or
consolidation would reasonably be expected to (a) impose any delay in the
obtaining of, or significantly increase the risk of not obtaining, any
authorizations, consents, orders, declarations or approvals of any Governmental
Authority necessary to consummate the Acquisition or the expiration or
termination of any applicable waiting period, (b) significantly increase the
risk of any Governmental Authority entering an order prohibiting the
consummation of the Acquisition or (c) delay the consummation of the
Acquisition.
6.5 OTHER OFFERS. Sellers shall cause MTC and its directors, officers,
employees and other representatives to cease any discussions or negotiations
with any Person (other than the Buyer or any Governmental Authority) that may be
ongoing as of the date of this Agreement
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with respect to an Acquisition Proposal. Until the earlier to occur of the
termination of this Agreement in accordance with Article X or the Closing,
Sellers shall not, and shall cause MTC and its directors, officers, employees
and other representatives not to, (a) solicit, initiate or knowingly encourage
the initiation of any Acquisition Proposal or (b) participate in any discussions
with any Person (other than the Buyer or any Governmental Authority) regarding,
or furnish to any Person (other than the Buyer or any Governmental Authority)
any non-public information in connection with, any Acquisition Proposal. Sellers
shall not enter into any contract or agreement (other than a confidentiality
agreement) with respect to an Acquisition Proposal.
6.6 MUTUAL COOPERATION; NO INCONSISTENT ACTION.
(a) Subject to the terms and conditions of this Agreement, Sellers, on
one hand, and the Buyer, on the other hand, shall cooperate with each other and
use their respective best efforts to promptly (i) take or cause to be taken all
actions, and do or cause to be done all things, necessary, proper or advisable
under this Agreement and applicable Laws to consummate the Acquisition as soon
as practicable, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents
(including any required filings under applicable Antitrust Laws) and (ii) obtain
all approvals, consents, registrations, permits, authorizations and other
confirmations from any Governmental Authority necessary to consummate the
Acquisition. Subject to applicable Laws relating to the exchange of information
and in addition to Section 6.6(b), the Parties shall have the right to review in
advance, and to the extent practicable each will consult the other regarding,
all the information relating to the Party, as the case may be, that appears in
any filing made with, or written materials submitted to, any third party and/or
any Governmental Authority in connection with the Acquisition.
(b) Each Party shall use its best efforts to (i) cooperate in all
respects with each other in connection with any filing or submission with any
Governmental Authority in connection with the Acquisition and in connection with
any investigation or other inquiry by or before a Governmental Authority
relating to the Acquisition, including any Action initiated by a private party,
and (ii) keep the other Party informed in all material respects and on a
reasonably timely basis of any communication received by such Party or its
Affiliates from, or given by such Party to, any other Governmental Authority and
of any communication received or given in connection with any Action by a
private party, in each case regarding any of the Acquisition.
(c) In furtherance and not in limitation of the covenants of the
Parties contained in this Section 6.6, each Party shall use commercially
reasonable efforts to resolve such objections, if any, as may be asserted by a
Governmental Authority or other Person with respect to the Acquisition. Without
limiting any other provision hereof, the Parties shall each use commercially
reasonable efforts to (i) avoid the entry of, or to have vacated or terminated,
any decree, order or judgment that would restrain, prevent or delay the
consummation of the Acquisition, on or before the Termination Date, including by
defending through litigation on the merits any claim asserted in any court by
any Person, and (ii) avoid or eliminate each and every impediment under any
Antitrust Law that may be asserted by any Governmental Authority with respect to
the Acquisition so as to enable the consummation of the Acquisition to occur as
soon
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as reasonably possible (and in any event no later than the Termination Date). In
addition, the Buyer shall use its best efforts to defend through litigation on
the merits any claim asserted in court by any Party in order to avoid entry of,
or to have vacated or terminated, any decree, order or judgment (whether
temporary, preliminary or permanent) that would prevent the Closing from
occurring as promptly as practicable.
(d) The Sellers, on the one hand, and the Buyer, on the other hand,
shall notify and keep the other advised as to any Action pending and known to
such Party, or, to its Knowledge, overtly threatened in writing, which
challenges the Acquisition. Subject to Section 6.5 and Article X, MTC, Sellers
and the Buyer shall not take any action inconsistent with their obligations
under this Agreement or which would materially hinder or delay the consummation
of the Acquisition.
6.7 PUBLIC DISCLOSURES. Prior to the Closing Date, no Party shall (except
in the case of MTC with respect to disclosures made to the employees or
customers of MTC and its Subsidiaries) issue any press release or make any other
public disclosures concerning the Acquisition or the contents of this Agreement
without the prior written consent of the other Party, unless a Party believes,
upon advice of counsel, it is required by Law or regulation (of any applicable
stock or securities exchange or otherwise) to make such public disclosure. The
Parties shall reasonably cooperate as to the timing and contents of any public
announcement or communication.
6.8 ACCESS TO RECORDS AND PERSONNEL.
(a) From the date hereof until the earlier of the Closing or
termination of this Agreement, upon reasonable notice, Sellers shall cause MTC
and each of its Subsidiaries to (i) afford the Buyer and its representatives
reasonable access to the senior managers of MTC and its Subsidiaries and (ii)
furnish to the representatives of the Buyer such additional financial and
operating data and other material information regarding the Business (or copies
thereof) as the Buyer may from time to time reasonably request; provided,
however, that any such access or furnishing of information shall be conducted at
the Buyer's expense, during normal business hours, and in such a manner as not
to interfere with the normal operations of the Business. Notwithstanding
anything to the contrary in this Agreement, neither Sellers, MTC nor its
Subsidiaries shall be required to disclose any information to the Buyer, if such
disclosure would (i) contravene any applicable Laws, fiduciary duty or binding
agreement entered into prior to the date hereof, (ii) disrupt or jeopardize any
material customer or vendor relationship or (iii) include Tax information
pertaining to Sellers or their respective Affiliates, other than MTC and its
Subsidiaries.
(b) From and after the Closing Date, the Parties shall, and the Buyer
shall cause MTC and its Subsidiaries to, retain the books, records, documents,
instruments, accounts, correspondence, writings, evidences of title and other
papers relating to MTC and its Subsidiaries in their possession (the "BOOKS AND
RECORDS") for eight (8) years or for such longer period as may be required by
Law.
(c) From and after the Closing Date, the Parties shall allow each
other, and Buyer shall cause MTC and each of its Subsidiaries to allow each
Seller, its Affiliates and their
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respective representatives, reasonable access to the Books and Records and to
personnel having knowledge of the whereabouts and/or contents of the Books and
Records, for legitimate non-competitive business reasons, including the
preparation of the Post-Closing Working Capital Statement and any Seller's Tax
Returns and the defense of any Action. Each Party shall be entitled to recover
its out-of-pocket costs (including copying costs) incurred in providing such
Books and Records to the other Party, except with respect to information
provided by Buyer, MTC and its Subsidiaries to Sellers in connection with the
preparation of the Closing Balance Sheet and Working Capital Statement or any
Seller's Tax Returns. The requesting Party shall, and the Buyer shall cause MTC,
each of its Subsidiaries and their Affiliates to hold in confidence all
confidential information identified as such by, and obtained after the Closing
from, the disclosing Party, any of its officers, agents, representatives or
employees; provided, however, that information that (i) was in the public
domain; (ii) was in fact known to the requesting Party prior to disclosure by
the disclosing Party, its officers, agents, representatives or employees; (iii)
becomes known to the requesting Party from or through a third party not under an
obligation of non-disclosure to the disclosing Party; or (iv) Seller is required
by Law or otherwise deems necessary and proper to disclose in connection with
the filing, examination or defense of any Tax Return or other document required
to be filed, shall not be deemed to be confidential information. In addition,
the Parties agree that confidential information may be used for the purpose for
which it was supplied.
6.9 UPDATE TO DISCLOSURE. Between the date of this Agreement and the
Closing, Buyer shall promptly inform Sellers in writing of any material
variances discovered by the Buyer or their representatives in the
representations and warranties of MTC and Sellers contained in this Agreement.
MTC and Sellers shall have the right to update the Seller Disclosure Schedule
(the "UPDATED SCHEDULES") with respect to any matter arising after the date
hereof but prior to the Closing, provided that Sellers deliver the Updated
Schedules to Buyer no later than five business days prior to the Closing Date.
If Buyer receives Updated Schedules from Sellers, Buyer shall have the right to
(a) terminate this Agreement pursuant to Section 10.1(c)(i), provided the
matters disclosed on such Updated Schedules would otherwise result in the
condition set forth in Section 7.1 not being satisfied, or (b) proceed with the
Closing, provided that Sellers shall not be deemed to be in breach of their
representations and warranties hereunder as a result of any updated matter set
forth in such Updated Schedules and upon the Closing the Buyer shall be deemed
to have waived all claims against Sellers, including all indemnity claims
pursuant to Article IX, for all updated matters set forth in such Updated
Schedules. For all purposes under this Agreement, the Updated Schedules shall be
deemed to supersede and amend the original Disclosure Schedule dated as of the
date of this Agreement.
6.10 RESIGNATION OF DIRECTORS. Prior to or at the Closing, Sellers will
cause each director of MTC and each of its Subsidiaries to resign as a director
of MTC or such Subsidiary, as the case may be, effective at the Closing.
6.11 DIRECTOR AND OFFICER INDEMNIFICATION.
(a) From and after the Closing Date, the Buyer shall, and shall cause
MTC and its Subsidiaries to, (i) indemnify and hold harmless each individual who
at the Closing Date is, or at any time prior to the Closing Date was, a
director, officer, agent, or employee of MTC or
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any of its Subsidiaries (collectively, the "AGENTS") with respect to all claims,
liabilities, losses, damages, judgments, fines, penalties, costs (including
amounts paid in settlement or compromise) and expenses (including fees and
expenses of legal counsel) in connection with any Action (whether civil,
criminal, administrative or investigative), whenever asserted, based on or
arising out of, in whole or in part, acts or omissions by an Agent in the
Agent's capacity as a director, officer or employee of MTC or any of its
Subsidiaries or taken at the request of MTC or any of its Subsidiaries
(including in connection with serving at the request of MTC or any of its
Subsidiaries as a director, officer, employee or agent of another Person
(including in connection with the Acquisition)), to the fullest extent permitted
under applicable Law, and (ii) assume all obligations of MTC and its
Subsidiaries to the Agents in respect of indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Closing Date as
provided in the applicable organizational or Charter Documents, which shall
survive the Closing and continue in full force and effect in accordance with
their respective terms. Without limiting the foregoing, the Buyer, from and
after the Closing Date, shall cause the organizational and Charter Documents of
MTC and its Subsidiaries to contain provisions no less favorable to the Agents
with respect to limitation of liabilities of directors and officers and
indemnification than are set forth as of the date of this Agreement in the
applicable organizational or Charter Documents of MTC and its Subsidiaries,
which provisions shall not be amended, repealed or otherwise modified in a
manner that would adversely affect the rights thereunder of the Agents. In
addition, the Buyer shall, and shall cause MTC and its Subsidiaries to, pay any
expenses (including fees and expenses of legal counsel) of any Agent under this
Section 6.11 (including in connection with enforcing the indemnity and other
obligations provided for in this Section 6.11) as incurred to the fullest extent
permitted under applicable Law, provided that the Person to whom expenses are
advanced provides an undertaking to repay such advances to the extent required
by applicable Law.
(b) In the event any claim is asserted or made, any determinations
that are required to be made with respect to whether an Agent's conduct complies
with an applicable standard shall be made by independent legal counsel selected
by the Agent; provided that nothing in this Section 6.11 shall impair any rights
of any current or former director or officers of MTC or any of its Subsidiaries,
including pursuant to the respective organizational and Charter Documents, under
applicable Law or otherwise.
(c) The obligations of the Buyer, MTC and its Subsidiaries under this
Section 6.11 shall continue in full force and effect following the Closing and
shall not be terminated or modified in such a manner as to adversely affect the
rights of any Agent to whom this Section 6.11 applies unless the affected Agent
shall have consented in writing to such termination or modification (it being
expressly agreed that the Agent to whom this Section 6.11 applies shall be third
party beneficiaries of this Section 6.11). The provisions of this Section 6.11
are (i) intended to be for the benefit of, and shall be enforceable by, each
Agent, his or her heirs and his or her representatives and (ii) in addition to,
and not in substitution for, any other rights to indemnification or contribution
that any such Person may have by contract or otherwise.
(d) If Buyer or any of its successors or assigns (i) consolidates with
or merges into any other Person and shall not be the continuing or surviving
corporation or entity in such consolidation or merger or (ii) transfers all or
substantially all its properties and assets to any
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Person, then, and in each case, proper provision shall be made so that the
successors and assigns of Buyer, assume, honor and discharge the obligations set
forth in this Section 6.11.
(e) Notwithstanding the foregoing, the indemnification provisions of
this Section 6.11 shall not apply to claims for indemnification under Article IX
of this Agreement against Xxxxxx X. XxXxxxxxxx and Xxxx Xxxxx Xxxxxx in their
capacity as Sellers.
6.12 EMPLOYEE RELATIONS AND BENEFITS.
(a) Effective as of the Closing, and for a period of 12 months
thereafter, the Buyer shall cause MTC and its Subsidiaries to provide to the
individuals who are employees of MTC or any of its Subsidiaries on the Closing
Date (the "AFFECTED EMPLOYEES"), to the extent and only so long as they remain
as employees of MTC or any of its Subsidiaries during such 12 month period,
compensation and employee benefits which in the aggregate are substantially
equal in value to the compensation and benefits provided by MTC or its
Subsidiaries to the Affected Employees at the time of Closing. For a period of
12 months after Closing, the Affected Employees shall be entitled to severance
pay on substantially the same terms as currently provided by and in a manner
consistent with the current practices of, MTC and its Subsidiaries, as disclosed
in the Seller Disclosure Schedule.
(b) To the extent that the Affected Employees become eligible to
participate in any employee benefit plan, program or arrangement maintained by
the Buyer or any of its Affiliates, the Buyer shall cause the Affected Employees
to receive credit for all periods of employment and/or service with MTC
(including service with predecessor employers, where such credit was provided by
MTC) prior to the Closing Date for purposes of determining eligibility and
vesting service, to the extent such credit does not result in a duplication of
benefits.
(c) The Buyer shall cause all welfare benefit plans in which Affected
Employees participate following the Closing to (i) waive all waiting periods
with respect to participation and coverage requirements applicable to the
Affected Employees and their covered dependents under such plans (except to the
extent that such waiting periods would apply under the Company's or any of its
Subsidiary's plans as in existence prior to the Closing), to the extent
permitted by any insurance carriers and third-party administrators for such
plans, and (ii) provide each Affected Employee and his or her covered dependents
with credit for any copayments and deductibles paid during the relevant plan
year prior to Closing in satisfying any applicable deductible or out-of-pocket
requirements under such plans, to the extent permitted by any insurance carriers
and third-party administrators for such plans. This Section 6.12(c) shall not
apply with respect to any German welfare benefit plans which is applicable to
German Affected Employees, except that all such plans shall be continued in
accordance with applicable Law and under their regular terms in the same way as
if the Acquisition had not been consummated and that any expectancy rights
(Anwartschaftsrechte) which may exist due to terms of service, copayments by
Affected Employees or otherwise will be fully recognized.
(d) Nothing contained in this Section 6.12 shall confer upon any
Affected Employee, or legal representative or beneficiary thereof, any rights or
remedies, be construed as requiring the Buyer or MTC to continue any specific
employee benefit plans or to continue the
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employment of any specific person, or prevent the Buyer or MTC from modifying or
terminating any Benefit Plan, or otherwise modifying the terms and conditions of
an Affected Employee's employment.
(e) The Buyer shall have full responsibility for compliance with the
Worker's Adjustment and Restraining Notification Act of 1988, as amended, and be
solely responsible for furnishing any required notice of any "plant closing" or
"mass layoff", as applicable, which arise as a result of any facility closings,
reductions in work force or termination or other action, that MTC and its
Subsidiaries may cause or initiate on or after the Closing Date and shall
jointly and severally indemnify Sellers and their respective Affiliates for any
liability related thereto, including reasonable attorneys' fees related thereto.
6.13 TAX MATTERS.
(a) Preparation and Filing of Tax Returns. Buyer shall prepare, or
cause to be prepared, and file, or cause to be filed, all Tax Returns of MTC and
its Subsidiaries that are due after the Closing Date. The Sellers shall pay to
Buyer, within five (5) days following the filing of such Tax Returns by Buyer,
an amount equal to the portion of their Taxes with respect to such Tax Returns
which relates to any taxable period, or portion thereof, ending on or before the
Closing Date, except to the extent such Taxes are accrued as a liability for
purposes of calculating either the Closing Working Capital Value or Net Income
Tax Liabilities as of the Closing Date. Buyer shall provide drafts of the Tax
Returns of MTC and its Subsidiaries (along with related work papers) which it
prepares and files relating to any Pre-Closing Period at least 15 Business Days
before such Tax Returns are filed for Sellers' review and comment.
(b) Cooperation in Filing Tax Returns. Buyer and the Sellers shall,
and shall each cause their Subsidiaries and Affiliates to, provide to the other
such cooperation and information, as and to the extent reasonably requested, in
connection with the preparation, execution and filing of any Tax Return, amended
Tax Return or claim for refund, determining liability for Taxes or a right to
refund of Taxes, or in conducting any audit, litigation or other proceeding with
respect to Taxes. Such cooperation and information shall include, without
limitation, providing copies of all relevant portions of relevant Tax Returns,
together with relevant accompanying schedules and relevant work papers, relevant
documents relating to rulings and other determinations by taxing authorities,
and relevant records concerning the ownership and Tax basis of property, which
any such party may possess. Each Party will retain all Tax Returns, schedules,
work papers, and all material records and other documents relating to Tax
matters, of MTC and its Subsidiaries for the Tax period first ending after the
Closing Date and for all prior Tax periods until the later of either (i) the
expiration of the applicable statute of limitations (and, to the extent notice
is provided with respect thereto, any extensions thereof) for the Tax periods to
which the Tax Returns and other documents relate or (ii) eight years following
the due date (without extension) for such Tax Returns. Thereafter, the Party
holding such Tax Returns or other documents may dispose of them provided that
such Party shall give to the other party the notice described in Section 11.1
prior to doing so. Buyer and its Affiliates shall make their employees
reasonably available on a mutually convenient basis at its cost to provide
explanation of any documents or information provided by Buyer (or its
Subsidiaries or Affiliates) pursuant to this Section 6.13(b). Sellers shall make
themselves and their employees
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reasonably available on a mutually convenient basis at Sellers' cost to provide
explanation of any documents or information provided by Sellers pursuant to this
Section 6.13(b).
(c) Allocation of Certain Taxes.
(i) If MTC and its Subsidiaries are permitted but not required
under applicable state, local, or foreign income tax Laws to treat the
Closing Date as the last day of a taxable period, then the parties
shall treat that day as the last day of a taxable period.
(ii) In the case of Taxes arising in a taxable period of MTC or
any of its Subsidiaries that includes, but does not end on, the
Closing Date, except as provided in Section 6.13(c)(iii), the
allocation of such Taxes between the Pre-Closing Period and the
Post-Closing Period shall be made on the basis of an interim closing
of the books as of the end of the Closing Date. If a taxable period
begins on or prior to the Closing Date and ends after the Closing
Date, then the portion of the taxable period that begins on the day
following the Closing Date shall constitute a Post-Closing Period. For
the avoidance of doubt, for purposes of this Agreement, any Tax
resulting from the transactions contemplated by this Agreement,
including the distribution of Capital Stock of The Xxxxx and Xxxxx
Lines Incorporated, a Tennessee corporation, and Arizona Kazakstan
Development Group Incorporated, an Arizona corporation, is allocable
to the Pre-Closing Period.
(iii) In the case of Taxes based on capitalization, debt or
shares of stock authorized, issued or outstanding, or personal
property, real property or other ad valorem Taxes, that are payable
for a taxable period that includes, but does not end on, the Closing
Date, the portion of such Tax which relates to the portion of such
taxable period ending on the Closing Date shall be deemed to be the
amount of such Tax for the entire taxable period multiplied by a
fraction, the numerator of which is the number of days in the taxable
period ending on the Closing Date and the denominator of which is the
number of days in the entire taxable period. However, any such Taxes
attributable to any property that was owned by MTC or any of its
Subsidiaries at some point in the Pre-Closing Period, but is not owned
as of the Closing Date (including, but not limited to, any assets
owned by, or Capital Stock of, The Xxxxx and Xxxxx Lines Incorporated,
a Tennessee corporation, and Arizona Kazakstan Development Group
Incorporated, an Arizona corporation) shall be allocated entirely to
the Pre-Closing Period.
(d) Payment of Transfer Taxes and Fees. The Sellers shall pay all
Transfer Taxes arising out of or in connection with the transactions effected
pursuant to this Agreement, and shall indemnify, defend, and hold harmless
Buyer, Buyer's Affiliates including, following the Closing, MTC and its
Subsidiaries, with respect to such Transfer Taxes. The Sellers shall file all
necessary documentation and Tax Returns with respect to such Transfer Taxes.
Buyer shall provide, and following the Closing shall cause MTC and its
Subsidiaries to provide, such cooperation as may be reasonably requested by
Sellers in connection with the preparation, execution and filing of such Tax
Returns. Sellers and Buyer shall, at least ten (10) days prior to
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the Closing, reasonably allocate the purchase price among the assets to the
extent required or desirable to complete any necessary Transfer Tax Returns or
reports and to compute the amount of any Transfer Taxes and shall cooperate in
the preparation, execution and filing of all such Tax Returns.
(e) FIRPTA. Sellers shall deliver to the Buyer on the Closing Date a
properly prepared and executed certificate of MTC under Treas. Reg. Sections
1.897-2(h) and 1.1445-2(c) to the effect that the Shares are not "U.S. real
property interests", within the meaning of Section 897(c)(1) of the Code.
(f) Refunds. If after the Closing Date, MTC or any of its Subsidiaries
receives a refund of any Tax that is attributable to a Pre-Closing Period, then
MTC or its Subsidiary, as the case may be, shall promptly pay or cause to be
paid to Sellers the amount of such refund together with any interest thereon,
but net of any Taxes imposed on any Buyer Indemnitee with respect thereto. Any
refund of Taxes (including any interest thereon) that relates to MTC or any of
its Subsidiaries and that is attributable to a Post-Closing Period shall be the
property of MTC or such Subsidiary, as the case may be, and shall be retained by
MTC or such Subsidiary (or promptly paid by Sellers to MTC or such Subsidiary if
any such refund (or interest thereon) is received by any Seller or any
Subsidiary or Affiliate of any Seller). In applying this Section 6.13(f), any
refund of Taxes (including any interest thereon) for a taxable period that
includes but does not end on the Closing Date shall be allocated between the
Pre-Closing Period and the Post-Closing Period in accordance with Section
6.13(c).
6.14 NON-COMPETE; NON-SOLICIT. For a period of five (5) years commencing on
the Closing Date, the Sellers will not, directly or indirectly, or as a
stockholder, partner, member, manager, employee, consultant or other owner or
participant in any Person (a) engage in, assist any other Person to, hire any
other Person to or have any employees that engage in the Business (as conducted
by MTC and its Subsidiaries on the Closing Date) anywhere in the United States,
or anywhere else in the world where MTC or any of its Subsidiaries does
business, or (b) adversely affect the business relationship of MTC or any of its
Subsidiaries with any Person who is, or was within the one-year period prior to
the Closing, a customer, employee or consultant of, a supplier or service
provider to, or other Person having business relations with, MTC or any of its
Subsidiaries. For a period of one (1) year commencing on the Closing Date, the
Sellers will not, directly or indirectly, or as a stockholder, partner, member,
manager, employee, consultant or other owner or participant in any Person,
solicit or endeavor to entice away from MTC or any of its Subsidiaries, or offer
employment or a consulting position to, any Person who is an employee or
consultant of MTC or any of its Subsidiaries on the Closing Date, except those
whose employment has been terminated by Buyer, MTC or any of its Subsidiaries
following the Closing, and except for Xxxxxx Xxxxx.
6.15 MEDICAL INSURANCE. Buyer shall provide to each of Xx XxXxxxxxxx and
Xxxx Xxxxx Xxxxxx medical insurance comparable to the medical insurance provided
at the time by Buyer to its executive employees and on terms no less favorable
than Buyer offers such medical insurance to its executive employees for a period
commencing on the Closing Date and ending on their respective 65th birthdays.
Spouses and dependents of Xx XxXxxxxxxx and Xxxx Xxxxx
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Xxxxxx shall be eligible for coverage under such medical insurance in the same
manner that spouses and dependents of Buyer's employees are eligible for
coverage as secondary insureds.
ARTICLE VII
CONDITIONS
7.1 CONDITIONS TO THE OBLIGATIONS OF THE BUYER.
(a) The obligations of the Buyer to consummate the Acquisition shall
be subject to the satisfaction or waiver at or prior to the Closing Date of the
condition that the representations and warranties of the Sellers contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date with the same force and effect as though made at and as of that
time, except (i) for changes specifically permitted by or disclosed pursuant to
this Agreement, (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date and (iii) that those representations and warranties which by their terms
are qualified by materiality shall be true and correct in all respects. Sellers
shall have performed and complied with all of their respective obligations
required by this Agreement to be performed or complied with at or prior to the
Closing Date. Sellers shall have delivered to the Buyer a certificate dated as
of the Closing Date, and executed by Sellers, certifying the foregoing.
(b) The obligations of the Buyer to consummate the Acquisition shall
be subject to the Buyer obtaining a loan from a bank or other financial
institution in an amount sufficient to permit the Buyer to pay to Sellers the
purchase price upon such other terms and conditions as shall be satisfactory to
the Buyer.
7.2 CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of Sellers to
consummate the Acquisition shall be subject to the satisfaction or waiver at or
prior to the Closing Date of the condition that the representations and
warranties of the Buyer contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date with the same force and
effect as though made at and as of that time except (i) for changes specifically
permitted by or disclosed pursuant to this Agreement, (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date and (iii) that those
representations and warranties which by their terms are qualified by materiality
shall be true and correct in all respects. The Buyer shall have performed and
complied in with all of its obligations required by this Agreement to be
performed or complied with at or prior to the Closing Date. The Buyer shall have
delivered to Sellers a certificate, dated as of the Closing Date, and executed
by an executive officer of the Buyer, certifying the foregoing.
7.3 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS. The respective
obligations of the Buyer and Sellers to consummate the Acquisition shall be
subject to the satisfaction or waiver at or prior to the Closing Date of the
condition that at the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any Governmental Authority that is in effect
that prohibits or materially restricts the consummation of the purchase by, or
the transfer by Sellers to Buyer of the Shares; provided, however, that the
benefits of this Section 7.3 shall
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not be available to a Party whose failure to fulfill its obligations pursuant to
Section 6.6 shall have been the cause of, or shall have resulted in, such
injunction, restraining order or decree.
7.4 FRUSTRATION OF CLOSING CONDITIONS. Neither the Buyer nor Sellers may
rely on the failure of any condition set forth in Section 7.1(a), Section 7.2 or
Section 7.3, as the case may be, to be satisfied if such failure was caused by
such Party's failure to use commercially reasonable efforts to consummate the
Acquisition, as required by and subject to Section 6.6.
ARTICLE VIII
CLOSING
8.1 CLOSING DATE. Unless this Agreement shall have been terminated pursuant
to Article X hereof, the closing of the Acquisition (the "CLOSING") shall take
place at the offices of XxXxxxxxx Will & Xxxxx LLP, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, at 10:00 A.M., Chicago time, on the date three (3) Business
Days after all of the conditions to the Closing set forth in Article VII hereof
have been satisfied or waived, but in no event later than November 30, 2006, or
such other date, time and place as shall be agreed upon by Sellers and Buyer
(the actual date and time being herein called the "CLOSING DATE").
8.2 THE BUYER'S DELIVERIES TO SELLERS. At the Closing, the Buyer shall
deliver, or caused to be delivered, to Sellers the following, in form and
substance reasonably acceptable to Sellers:
(a) a copy of the certificate of incorporation and bylaws, partnership
agreement or analogous organizational document of Buyer, as amended, certified
by the corporate secretary of Buyer;
(b) a copy of the resolutions duly adopted by the Board of Directors
of the Buyer evidencing its authorization of the execution and delivery of this
Agreement and the consummation of the Acquisition, certified by the corporate
secretary of the Buyer;
(c) the Initial Payment in immediately available U.S. federal funds;
(d) the Escrow Agreement duly executed by the Buyer; and
(e) a certificate or certificates of an officer of the Buyer (i)
certifying the names and signatures of the officers of the Buyer authorized to
sign this Agreement and all other agreements relating hereto and (ii) certifying
those matters set forth in Section 7.2 above.
8.3 THE BUYER'S DELIVERY TO THE ESCROW AGENT. At the Closing, the Buyer
shall deliver or cause to be delivered, to the Escrow Agent, the Escrow
Agreement duly executed by the Buyer and the Escrow Amount in immediately
available U.S. federal funds.
8.4 SELLERS' DELIVERIES TO THE BUYER. At the Closing, Sellers shall
deliver, or cause to be delivered, to the Buyer the following, in form and
substance reasonably acceptable to the Buyer:
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(a) a copy of the certificate of incorporation and bylaws of MTC and
each of its Subsidiaries certified by the corporate secretary of such entity;
(b) certificates evidencing the Shares properly endorsed or with stock
powers executed in blank or otherwise in form suitable for transfer to Buyer;
(c) certificates of Good Standing as of a recent date with respect to
MTC and each of MTC's Subsidiaries from the Secretary of State (or other
appropriate governmental official) of the state of its formation;
(d) the Escrow Agreement duly executed by the Sellers; and
(e) a certificate or certificates of the Sellers (i) certifying the
names and signatures of those Sellers who are individuals and of those persons
who are authorized to sign on behalf of those Sellers who are not individuals,
this Agreement and all other agreements relating hereto and (ii) certifying
those matters set forth in Section 7.1 above.
(f) a copy of the Charter Documents of each Seller that is a limited
partnership or trust certified by the general partner or trustee, as the case
may be, of such entity.
(g) a copy of the Charter Documents of each General Partner that is a
limited liability company certified by the managing member or board of managers,
as the case may be, of such entity.
(h) an opinion of counsel for the Sellers substantially in the form
attached as Exhibit C.
8.5 SELLERS' DELIVERY TO THE ESCROW AGENT. At the Closing, Sellers shall
deliver to the Escrow Agent the Escrow Agreement duly executed by Sellers.
8.6 ESCROW AGENTS DELIVERY TO SELLERS AND BUYER. At the Closing, Escrow
Agent shall deliver to Sellers and the Buyer the Escrow Agreement duly executed
by the Escrow Agent.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations provided herein, Sellers shall jointly
and severally indemnify and hold harmless the Buyer and its Affiliates
(collectively, the "BUYER INDEMNITEES") to the extent set forth in this Article
IX in respect of any Losses reasonably and proximately incurred by Buyer
Indemnitees as a result of (i) any inaccuracy or misrepresentation in any
representation or warranty of MTC or Sellers made herein or any breach of or
failure to perform any covenant, agreement or obligation of MTC or Sellers in
this Agreement or any agreement, document or certificate delivered hereunder;
provided, however, that Sellers shall have no liability on account of this
Section 9.1(a)(i) with respect to any claim relating to any
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events, facts or circumstances of which the Buyer had Knowledge on or before the
Closing Date (except in the case of any claim relating to any Taxes in which
case Sellers shall have liability on account of this Section 9.1(a)(i) whether
or not Buyer has Knowledge of any events, facts or circumstances with respect to
such claim); (ii) any federal or state income Taxes incurred by MTC or its
Subsidiaries caused by or resulting from the sale of the Shares, except to the
extent such Taxes are accrued as a liability for purposes of calculating either
the Closing Working Capital Value or Net Income Tax Liabilities as of the
Closing Date; (iii) any Taxes imposed on or relating to MTC or any of its
Subsidiaries for any Pre-Closing Period, except to the extent such Taxes are
accrued as a liability for purposes of calculating either the Closing Working
Capital Value or Net Income Tax Liabilities as of the Closing Date, and (iv) any
Liabilities of MTC unrelated to its ownership of Oxy-Dry.
(b) Notwithstanding the foregoing paragraph (a):
(i) Sellers shall not be liable under Section 9.1(a)(i) for any
Losses in respect of any claim (or group of directly related claims)
subject to Section 9.1(a)(i) until all Losses in respect of all claims
exceed One Hundred Thousand Dollars ($100,000) in the aggregate (the
"MINIMUM AMOUNT"), and thereafter Sellers shall be liable, subject to
the other limitations provided for elsewhere in this Agreement, for
all Losses in excess of the Minimum Amount;
(ii) The aggregate liability of Sellers for all Losses under this
Agreement and any agreement, document or certificate delivered
herewith and the Acquisition shall not exceed Two Million Dollars
($2,000,000) (the "MAXIMUM AMOUNT"), provided however, that the
liability of Sellers for Taxes, and for liabilities of MTC unrelated
to its ownership of Oxy-Dry and for fraud shall be unlimited; and
(iii) Sellers shall have no liability to indemnify any Buyer
Indemnitee for any Losses (other than in respect of Taxes, any
Liabilities of MTC unrelated to its ownership of Oxy-Dry or fraud) (A)
related to any liability that is specifically set forth (i) in the
calculation of Closing Working Capital Value or (ii) on the Financial
Statements or the Reference Purchase Price Statement, (B) under
Section 9.1(a)(i), if the Buyer had Knowledge that the representations
and warranties of MTC or Sellers in this Agreement were not true and
correct prior to the Closing, to the extent arising as a result of any
action taken or omitted to be taken by Buyer or any of its Affiliates,
(C) under Section 9.1(a)(i), in respect of a breach of any
representations and warranties, to the extent disclosed in the Seller
Disclosure Schedule, (D) to the extent arising from a change in Law
that becomes effective after the Closing Date or (E) arising or
resulting from any action taken or omitted to be taken by the Buyer or
any of its Affiliates after the Closing Date other than as
contemplated or permitted by this Agreement.
(c) Buyer shall indemnify and hold harmless Sellers and their
respective Affiliates (collectively the "SELLER INDEMNITEES" and, together with
the Buyer Indemnitees, the "INDEMNITEES") to the extent set forth in this
Article IX in respect of any and all Losses
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reasonably and proximately incurred by any Seller Indemnitee: (i) as a result of
any inaccuracy or misrepresentation in any representation or warranty of the
Buyer made herein or any breach of or failure to perform any covenant, agreement
or obligation of the Buyer in this Agreement or any agreement, document or
certificate delivered hereunder; or (ii) as a result of liabilities of MTC and
its Subsidiaries, including liabilities arising from matters, facts and
circumstances set forth in the Seller Disclosure Schedule to Article IV hereof,
other than (x) Tax liabilities of MTC or any of its Subsidiaries arising from
any Pre-Closing Period, (y) liabilities of MTC unrelated to its ownership of
Oxy-Dry or (z) liabilities in respect of which Sellers are obligated to
indemnify and hold harmless Buyer Indemnitees pursuant to Section 9.1(a).
(d) Notwithstanding the foregoing paragraph (c):
(i) Buyer shall not be liable under Section 9.1(c)(i) for any
Losses in respect of any claim (or group of directly related claims)
subject to Section 9.1(c)(i) until all Losses in respect of all claims
exceed One Hundred Thousand Dollars ($100,000) in the aggregate (the
"MINIMUM AMOUNT"), and thereafter Buyer shall be liable, subject to
the other limitations provided for elsewhere in this Agreement, for
all Losses in excess of the Minimum Amount; and
(ii) The aggregate liability of Buyer for all Losses under this
Agreement and any agreement, document or certificate delivered
herewith and the Acquisition shall not exceed Two Million Dollars
($2,000,000) (the "MAXIMUM AMOUNT"); provided however, that the
liability of Buyer for fraud shall be unlimited.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties shall survive the Closing and expire on the eighteen month
anniversary of the Closing Date; provided, however, all representations and
warranties of Sellers made pursuant to Section 4.10 (Taxes) and Section 4.22
(Environmental) shall survive the Closing for a period continuing until thirty
(30) days following the expiration of the applicable statute of limitations, as
extended, and all representations and warranties of Sellers made pursuant to
Sections 4.1 (Organization and Good Standing), 4.2 (Capitalization; Stock
Ownership), 4.3 (Subsidiaries of MTC), 4.4 (Authority and Enforceability) and
4.5 (No Conflicts; Authorizations) shall survive the Closing indefinitely. Each
covenant, agreement and obligation of the Parties hereto shall survive the
Closing and expire on the first anniversary of the date on which such covenant,
agreement or obligation was to be performed, unless a different term is
expressly specified. Any cause of action for breach of a representation or
warranty, covenant, agreement or obligation contained herein shall expire and
terminate, unless the Party claiming that such breach occurred delivers to the
other Party written notice and a reasonably detailed explanation of the alleged
breach on or before 5:00 P.M., Chicago time, on the date on which such
representation or warranty, covenant, agreement or obligation expires pursuant
to this Section 9.2. If any claim for indemnification or other recovery is
timely asserted pursuant to this Section 9.2, the Indemnitee shall have the
right to bring an Action with respect to such claim within one (1) year after
first giving the Indemnifying Party notice thereof, but may not bring any such
Action thereafter.
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9.3 NOTICE OF CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe
that such Indemnitee is entitled to indemnification pursuant to Section 9.1 in
respect of any Losses, such Indemnitee shall give the appropriate indemnifying
Party (the "INDEMNIFYING PARTY") written notice within ten (10) Business Days of
its becoming aware thereof, which notice shall specify in reasonably sufficient
detail the facts alleged to have been breached and the amount the Indemnitee
seeks hereunder from Indemnifying Party, together with such information as may
be necessary for the Indemnitee to determine the limitations in Section
9.1(b)(i) have been satisfied; provided, however, the failure to give such
notice shall not release the Indemnifying Party from its obligations under this
Article IX, except to the extent that the Indemnifying Party is prejudiced by
such failure. If the Indemnifying Party contests the assertion of a claim, the
Parties covenant and agree to use their commercially reasonable efforts to
resolve their dispute with respect to such claim.
9.4 DEFENSE OF CLAIMS. In connection with any claim for which
indemnification has been sought under this Article IX resulting from or arising
out of any claim or Action against an Indemnitee by a Person that is not a Party
hereto (a "THIRD PARTY CLAIM"), the Indemnifying Party may assume the defense of
any such claim or Action (unless such Indemnitee elects not to seek indemnity
hereunder for such claim), upon written notice to the relevant Indemnitee. If
the Indemnifying Parties shall have assumed the defense of any claim or Action
in accordance with this Section 9.4, the Indemnifying Parties shall be
authorized to consent to a settlement of, or the entry of any judgment arising
from, any such claim or Action, without the prior written consent of such
Indemnitee; provided, however, that the Indemnifying Parties shall pay or cause
to be paid all amounts arising out of such settlement or judgment concurrently
with the effectiveness thereof (less any unapplied portion of the Minimum Amount
and up to the Maximum Amount); provided, further, that the Indemnifying Parties
shall not be authorized to encumber any of the assets of any Indemnitee or to
agree to any restriction that would apply to any Indemnitee or to its conduct of
business; and provided, further, that a condition to any such settlement shall
be a complete release of such Indemnitee and its Affiliates, officers,
employees, consultants and agents with respect to such claim. Each Indemnitee
shall be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense. Each Indemnitee shall, and
shall cause each of its Affiliates, officers, employees, consultants and agents
to, cooperate fully with the Indemnifying Parties in the defense of any claim or
Action being defended by the Indemnifying Parties pursuant to this Section 9.4.
If the Indemnifying Parties do not assume the defense of any claim or Action
resulting therefrom in accordance with the terms of this Section 9.4, such
Indemnitee must defend against such claim or Action. The Indemnitee shall not
pay, or permit to be paid, any part of the Third Party Claim unless the
Indemnifying Parties consent in writing to such payment, such consent not to be
unreasonably withheld or delayed, or unless a final judgment from which no
appeal may be taken by or on behalf of the Indemnifying Party is entered against
the Indemnitee for such Third Party Claim. If the Indemnitee controls the
defense of any such claim or Action in accordance with this Section 9.4 and
proposes to settle any such claim or Actions prior to a final judgment thereon
or to forego any appeal with respect thereto, then the Indemnitee shall give the
Indemnifying Party prompt written notice thereof and the Indemnifying Party
shall have the right to participate in the settlement or assume or reassume the
defense of such claim or Action.
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9.5 SETTLEMENT OR COMPROMISE. Any settlement or compromise made or caused
to be made by the Indemnitee (unless the Indemnifying Person has the exclusive
right to settle or compromise under Section 9.4) or the Indemnifying Person, as
the case may be, of any such claim or Action of the kind referred to in Section
9.4 shall also be binding upon the Indemnifying Person or the Indemnitee, as the
case may be, in the same manner as if a final judgment or decree had been
entered by a court of competent jurisdiction in the amount of such settlement or
compromise; provided, that (i) no obligation, restriction or Loss shall be
imposed on the Indemnitee as a result of such settlement or compromise without
its prior written consent, which consent shall not be unreasonably withheld, and
(ii) the Indemnitee will not compromise or settle any claim or Action without
the prior written consent of the Indemnifying Person, which consent shall not be
unreasonably withheld.
9.6 SUBROGATION. To the extent that any Indemnifying Party discharges any
claim for indemnification hereunder, such Indemnifying Party shall be subrogated
to all rights of any Indemnitee against third parties, including all rights
relating to claims under any insurance, contracts, common law or otherwise. Such
Indemnitee (and its Affiliates) and Indemnifying Party will execute upon request
all instruments reasonably necessary to evidence or further protect such
subrogation rights.
9.7 KNOWLEDGE. Notwithstanding anything contained herein to the contrary,
no Party shall have (a) any liability under Section 9.1(a)(i) or Section
9.1(c)(i) for any breach of or inaccuracy in any representation or warranty by
such Party, if the other Party (i) had Knowledge at or before the Closing of the
facts as a result of which such representation or warranty was breached or
inaccurate or (ii) was provided access to, at or before the Closing, a document
disclosing such facts (except in the case of a breach of or inaccuracy in a
representation or warranty by Sellers relating to any Taxes, in which case
Sellers shall have liability under Section 9.1(a)(i) whether or not Buyer (x)
had Knowledge at or before the Closing of the facts as a result of which such
representation or warranty was breached or inaccurate or (y) was provided access
to, at or before the Closing, a document disclosing such facts) or (b) any
liability after the Closing for any breach of or failure to perform before the
Closing any covenant or obligation of such Party if the other Party or any of
its Affiliates or any of their respective officers, employees, counsel or other
representatives (i) had Knowledge at or before the Closing of such breach or
failure or (ii) was provided access to, at or before the Closing, a document
disclosing such breach or failure (except in the case of a breach or failure by
Sellers relating to any Taxes, in which case Sellers shall have liability
whether or not Buyer (x) had Knowledge at or before the Closing of such breach
or failure or (y) was provided access to, at or before the Closing, a document
disclosing such breach or failure).
9.8 POST-CLOSING ACTIONS. Sellers shall not be required to indemnify Buyer
Indemnified Parties pursuant to Section 9.1(a) or otherwise for any liability
under any Environmental Law as a result of any Buyer Party's or, following the
Closing MTC's or any of its Subsidiary's unsolicited voluntary action,
including, but not limited to, intrusive site investigations or contacts with or
disclosures to a Governmental Authority or other Person. None of the Buyer shall
voluntarily solicit or request any Governmental Authority or other Person to
make a claim with the purpose of triggering the indemnity provisions of this
Agreement.
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9.9 INDEMNIFICATION CALCULATIONS. The amount of any Losses for which
indemnification is provided under this Article IX shall be computed net of any
insurance proceeds, Tax benefits or other recoveries available to any Indemnitee
in connection with such Losses. Each Indemnitee shall exercise commercially
reasonable efforts to obtain such proceeds, benefits and recoveries. If any such
proceeds, benefits or recoveries are received by an Indemnitee (or any of its
Affiliates) with respect to any Losses after an Indemnifying Party has made a
payment to the Indemnitee with respect thereto, the Indemnitee (or such
Affiliate) shall promptly pay to the Indemnifying Party the amount of such
proceeds, benefits or recoveries (up to the amount of the Indemnifying Party's
payment).
9.10 TAX TREATMENT. The Parties agree that any indemnification payments
made pursuant to this Agreement shall be treated for tax purposes, as between
Buyer and Sellers, as an adjustment to the Purchase Price, unless otherwise
required by applicable Law or Governmental Authority interpretations thereof.
9.11 EXCLUSIVE REMEDY. Except in the case of fraud or as set forth in
Section 11.8, to the extent that the Buyer or any of its Affiliates has any
Losses for which it may assert any other right to indemnification, contribution
or recovery from Sellers or any of their respective Affiliates (whether under
this Agreement or under any common law theory or any statute or other Law), the
Buyer hereby waives, releases and agrees not to assert such right, and the Buyer
agrees to cause each of its Affiliates to waive, release and agree not to assert
such right, regardless of the theory upon which any claim may be based, whether
contract, equity, tort, warranty, strict liability or any other theory of
liability. Except in the case of fraud or as otherwise specifically provided in
this Agreement, the indemnification provisions in Article IX of this Agreement
shall provide the sole and exclusive remedy of the Parties hereto, their
Affiliates, and any of their officers, directors, employees, stockholders,
agents and representatives with respect to any and all Losses of any kind or
nature whatever incurred because of or resulting from or arising out of this
Agreement, any agreement, document or certificate delivered herewith or
therewith, the Acquisition, the Business, MTC and its Subsidiaries and any of
their assets and liabilities (other than Losses to the extent resulting from the
failure of the Buyer to complete the Acquisition other than for reasons
permitted by the Agreement). In furtherance of the foregoing, each Party hereby
waives (and agrees not to bring any Action in respect of), on its own behalf and
on behalf of its Affiliates and of any of their officers, directors, employees,
stockholders, agents and representatives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action any of them may
now or hereafter have against the other Party and its Affiliates and their
officers, directors, employees, stockholders, agents and representatives,
arising under or based upon any Law (including any such rights, claims or causes
of action relating to CERCLA or any other Environmental Law or arising under or
based upon common law) or otherwise (except pursuant to Section 6.11, 6.12 or
Article IX of this Agreement).
ARTICLE X
TERMINATION
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10.1 TERMINATION EVENTS. Without prejudice to other remedies which may be
available to the Parties by Law or this Agreement, this Agreement may be
terminated and the Acquisition may be abandoned prior to Closing:
(a) by mutual written consent of the Parties hereto;
(b) by Buyer or MTC, by written notice to the other if:
(i) the Closing shall not have been consummated on or before the
Termination Date, unless extended by written agreement of the Parties
hereto; provided, however, that the right to terminate this Agreement
under this Section 10.1(b) shall not be available to any Party whose
failure to perform or comply with any of its obligations under this
Agreement shall have been the cause of, or shall have resulted in, the
failure of the Closing to occur by such date; or
(ii) any Governmental Authority shall have enacted, promulgated,
issued, entered or enforced (A) any Law prohibiting the Acquisition or
making them illegal, or (B) any injunction, judgment, order or ruling
or taking any other action, in each case, permanently enjoining,
restraining or prohibiting the Acquisition, which shall have become
final and nonappealable.
(c) by Buyer:
(i) if the condition set forth in Section 7.1 shall have become
incapable of fulfillment; or
(ii) if all of the conditions set forth in Article VII shall have
been satisfied and Sellers shall not have made all of the deliveries
required by Section 8.4 on or before ten (10) days following the date
designated for Closing pursuant to Section 8.1; or
(d) by Sellers:
(i) if the condition set forth in Section 7.2 shall have become
incapable of fulfillment; or
(ii) if all of the conditions set forth in Article VII shall have
been satisfied and (i) the Buyer shall not have made all of the
deliveries required by Sections 8.2 and 8.3 on or before ten (10) days
following the date designated for Closing pursuant to Section 8.1.
10.2 EFFECT OF TERMINATION. In the event of any termination of the
Agreement as provided in Section 10.1 above, then all further obligations of the
Parties under this Agreement shall terminate without further liability on the
part of any Party to the others, other than (a) with respect to the obligations
of the Buyer and Sellers under the Confidentiality Letter and Sections 6.7,
10.2, 10.3 and 11.3 of this Agreement and (b) except as to liability for any
willful or fraudulent misrepresentation, breach or default in connection with
any warranty, representation,
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covenant or obligation given, occurring or arising pursuant to this Agreement
prior to the date of termination.
10.3 FAILURE TO CLOSE. If all of the conditions set forth in Sections 7.1
and 7.3 to the obligations of Buyer to consummate the Acquisition (other than
the condition that Buyer shall have obtained the financing referred to in
Section 7.1(b)) have been satisfied or waived and Buyer fails to consummate the
Acquisition by November 30, 2006, the Buyer shall pay to Sellers as liquidated
damages One Million Five Hundred Thousand Dollars ($1,500,000), by wire transfer
of immediately available funds within five business days following such failure
by Buyer to consummate the Acquisition. Buyer shall have no other liability or
obligation to Sellers because of the failure by Buyer to consummate the
Acquisition.
ARTICLE XI
MISCELLANEOUS AGREEMENTS OF THE PARTIES
11.1 NOTICES. All communications provided for hereunder shall be in writing
and shall be deemed to be given when delivered in person or by private courier
with receipt, when telefaxed and received (if the telefax is confirmed by next
day receipted courier), and,
If to the Buyer:
Xxxxxxx Technology Company, Inc.
0 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Chairman of the Board
Fax: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxxxxxx III
1211 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to Sellers:
Xxxx Xxxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
and
Xxxxxx X. XxXxxxxxxx
00000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
with a copy to:
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XxXxxxxxx Will & Xxxxx LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: 000-000-0000
or to such other address as any such Party shall designate by written notice to
the other Parties hereto.
11.2 EXPENSES. Subject to Section 3.2(b) and Section 6.13, the Sellers and
the Buyer shall each pay their respective expenses (such as legal, investment
banker and accounting fees) incurred in connection with the origination,
negotiation, execution and performance of this Agreement.
11.3 NON-ASSIGNABILITY. This Agreement shall inure to the benefit of and be
binding on the Parties hereto and their respective successors and permitted
assigns. This Agreement shall not be assigned by operation of Law or otherwise
by any Party hereto without the express prior written consent of the other
Parties, and any attempted assignment, without such consents, shall be null and
void. Notwithstanding the foregoing provisions of this Section 11.3, the Buyer
shall be permitted to collaterally assign its rights (and related remedies)
under this Agreement (and related agreements and instruments) to its lenders
from time to time (or their agent(s)); provided that the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder (and
thereunder).
11.4 AMENDMENT; WAIVER. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the Parties hereto.
No waiver by any Party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the Party so waiving. The waiver
by any Party hereto of any condition to this Agreement or breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other condition of this Agreement or subsequent breach.
11.5 THIRD PARTIES. Except for the rights provided in Sections 9.1, this
Agreement does not create any rights, claims or benefits inuring to any Person
that is not a Party hereto nor create or establish any third party beneficiary
hereto; provided that nothing contained in this Section 11.5 shall, or be
interpreted to, limit the provisions with respect to the collateral assignment
of this Agreement by the Buyer pursuant to Section 11.3.
11.6 CURRENCY. All references to currency, monetary values and dollars set
forth herein shall mean U.S. dollars and all payments hereunder shall be made in
U.S. dollars.
11.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS. This Agreement and
each other document delivered pursuant to this Agreement shall be governed by,
and construed in accordance with, the Laws of the State of Illinois. Each of the
Parties agrees that if any dispute shall be resolved is not resolved by the
Parties, it shall be resolved only in the courts of the State of Illinois
sitting in the County of Illinois or the United States District Court for the
Northern District of Illinois and the appellate courts having jurisdiction of
appeals in such courts (collectively, the "PROPER COURTS"). In that context, and
without limiting the generality of the
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foregoing, each of the Parties irrevocably and unconditionally (a) submits for
itself and its property in any action relating to this Agreement or any document
delivered pursuant to this Agreement or for recognition and enforcement of any
judgment in respect thereof, to the exclusive jurisdiction of the courts, and
agrees that all claims in respect of any such action shall be heard and
determined in such Illinois state court or, to the extent permitted by law, in
such federal court; (b) consents that any such action may and shall be brought
in such Proper Court and waives any objection that it may now or thereafter have
to the venue or jurisdiction of any such action in any such Proper Court or that
such action was brought in an inconvenient court and agrees not to plead or
claim the same; (c) waives all right to trial by jury in any action (whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or any document delivered pursuant to this Agreement, or its
performance under or the enforcement of this Agreement or any document delivered
pursuant to this Agreement; (d) agrees that service of process in any such
action may be effected by mailing a copy of such process by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Party at its address as provided in Section 11.1; and (e) agrees that
nothing in this Agreement or any document delivered pursuant to this Agreement
shall affect the right to effect service of process in any other manner
permitted by the Laws of the State of Illinois.
11.8 SPECIFIC PERFORMANCE. The Parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
The parties hereto agree and acknowledge that, in the event of a breach of any
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement the aggrieved party may elect to institute and
prosecute any Action exclusively in the Proper Court to obtain specific
performance or to enjoin the continuing breach of such provision, as well as to
obtain damages for breach of this Agreement and to obtain reasonable attorneys'
fees, without bond or other security being required. By seeking or obtaining any
such relief, the aggrieved party will not be precluded from seeking or obtaining
any other relief to which it may be entitled at law or in equity.
11.9 ENTIRE AGREEMENT. This Agreement, the Seller Disclosure Schedule and
Exhibits and agreements referred to herein (including the Confidentiality
Letter) set forth the entire understanding of the Parties hereto as to matters
not expressly excepted or excluded herefrom.
11.10 INTERPRETATION AND RULES OF CONSTRUCTION. In this Agreement, except
to the extent otherwise provided or that the context otherwise requires:
(a) when a reference is made in this Agreement to an Article, Section,
Exhibit or Schedule, such reference is to an Article or Section of, or an
Exhibit or Schedule to, this Agreement, unless otherwise indicated;
(b) the table of contents and headings for this Agreement are for
reference purposes only, are for convenience only and not deemed to be a part of
this Agreement and do not affect in any way the meaning or interpretation of
this Agreement;
(c) whenever the words "include," "includes" or "including" are used
in this Agreement, they are deemed to be followed by the words "without
limitation";
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(d) the words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(e) all terms defined in this Agreement have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein;
(f) the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms;
(g) reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof, and, if
applicable, the terms hereof;
(h) references to a Person are also to its permitted successors and
assigns;
(i) reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;
(j) the use of "or" is not intended to be exclusive, unless expressly
indicated otherwise; and
(k) when a reference is made in this Agreement to a U.S. Law concept
or a U.S. Governmental Authority, such reference shall be deemed and interpreted
as a reference to a corresponding concept or authority or semi-public
administrative body under a corresponding foreign jurisdiction Law in those
cases in which the reference relates to a Person falling under such foreign
jurisdiction and in which such interpretation is required to economically
approximate the intention of this Agreement, and such interpretation shall be
made in line with the respective foreign Law, including those cases in which an
explicit reference is made in this Agreement to a specific foreign Law in
italics.
11.11 SEVERABILITY. If any provision of this Agreement shall be declared by
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the Acquisition are
fulfilled to the extent possible. With respect to any provision of this
Agreement finally determined by a court of competent jurisdiction to be
unenforceable, the Buyer and Sellers hereby agree that such court shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by Law, and the parties agree to abide by such court's
determination. If any such provision of this Agreement cannot be reformed, such
provision shall be deemed to be severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
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11.12 SCHEDULES. Neither the specification of any dollar amount or any item
or matter in any provision of this Agreement or any agreement, document or
instrument entered into or delivered in connection with the Acquisition (the
"ANCILLARY AGREEMENTS") nor the inclusion of any specific item or matter in the
Seller Disclosure Schedule or any schedule to any Ancillary Agreement is
intended to imply that such amount, or higher or lower amounts, or the item or
matter so specified or included, or other items or matters, are or are not
material, shall not be employed as a point of reference in determining any
standard of materiality under this Agreement and no Party shall use the fact of
the specification of any such amount or the specification or inclusion of any
such item or matter in any dispute or controversy between the Parties as to
whether any item or matter is or is not material for purposes of this Agreement
or any Ancillary Agreement. Neither the specification of any item or matter in
any provision of this Agreement or any Ancillary Agreement nor the inclusion of
any specific item or matter in the Seller Disclosure Schedule or any schedule to
any Ancillary Agreement is intended to imply that such item or matter, or other
items or matters, are or are not in the ordinary course of business and no party
shall use the fact or the specification or the inclusion of any such item or
matter in any dispute or controversy between the parties as to whether any item
or matter is or is not in the ordinary course of business for purposes of this
Agreement or any Ancillary Agreement.
11.13 LANGUAGE. Sellers and the Buyer agree that the language used in this
Agreement is the language chosen by the parties to express their mutual intent,
and that no rule of strict construction is to be applied against the Sellers or
the Buyer. Each of Sellers and the Buyer and their respective counsel have
reviewed and negotiated the terms of this Agreement.
11.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.
SELLERS: BUYER:
XXXXXX XXXXXXXXXX GRANTOR TRUST XXXXXXX TECHNOLOGY COMPANY, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------------- ------------------------------------
Xxxxxx Xxxxx, Trustee Xxxxxx X. Xxxxx,
Chairman of the Board
/s/ Xxxxxx X. XxXxxxxxxx
---------------------------------
Xxxxxx X. XxXxxxxxxx
STEM, LP
By: XxXxxxxxxx Management, LLC
General Partner
By: /s/ Xxxxxx X. XxXxxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxxx, Manager
PINE HARBOUR PARTNERS, LP
By: Xxxxxx Management LLC
General Partner
By: /s/ Xxxx Xxxxx Xxxxxx
-----------------------------
Xxxx Xxxxx Xxxxxx, Manager
/s/ Xxxx Xxxxx Xxxxxx
-----------------------------
Xxxx Xxxxx Xxxxxx
XXXX XXXXX XXXXXX FAMILY 2006
IRREVOCABLE TRUST
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Xxxxxxx Xxxxx, Trustee
Signature Page to Stock Purchase Agreement
EXHIBIT A
SHARE OWNERSHIP OF MTC
Shareholder Common
----------- ------
Xxxxxx X. XxXxxxxxxx 29,625
Xxxx Xxxxx Xxxxxx 37,367
STEM LP 45,245
Xxxxxx XxXxxxxxxx Grantor Trust 539
Xxxx Xxxxx Xxxxxx 2006 Irrevocable Trust 337
Pine Harbour Partners 37,705
