AGREEMENT AND PLAN OF MERGER among EASTMAN CHEMICAL COMPANY, EASTMAN TC, INC., and STERLING CHEMICALS, INC. Dated June 22, 2011
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
XXXXXXX CHEMICAL COMPANY,
XXXXXXX XX, INC.,
and
STERLING CHEMICALS, INC.
Dated
June 22, 2011
TABLE OF CONTENTS
Page | ||||
I. The Merger |
2 | |||
1.01. The Merger |
2 | |||
1.02. Closing |
2 | |||
1.03. Effective Time |
2 | |||
1.04. Effects |
2 | |||
1.05. Certificate of Incorporation and Bylaws |
2 | |||
1.06. Directors |
3 | |||
1.07. Officers |
3 | |||
II. Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates |
3 | |||
2.01. Effect on Capital Stock |
3 | |||
2.02. Exchange of Shares |
4 | |||
2.03. Company Stock Options |
6 | |||
III. Representations and Warranties of the Company |
7 | |||
3.01. Organization, Standing and Power |
7 | |||
3.02. Company Subsidiaries; Equity Interests |
7 | |||
3.03. Capital Structure |
8 | |||
3.04. Authority; Execution and Delivery; Enforceability |
9 | |||
3.05. No Conflicts; Consents |
9 | |||
3.06. SEC Documents; Undisclosed Liabilities; Internal Controls |
10 | |||
3.07. Absence of Certain Changes or Events |
12 | |||
3.08. Litigation |
12 | |||
3.09. Compliance with Applicable Laws |
13 | |||
3.10. Environmental Matters |
13 | |||
3.11. Taxes |
14 | |||
3.12. Employee Benefit Plans |
16 | |||
3.13. Labor Matters |
20 | |||
3.14. Contracts |
21 | |||
3.15. Intellectual Property |
21 | |||
3.16. Real Property |
22 |
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TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
3.17. Personal Property |
23 | |||
3.18. Inventory |
23 | |||
3.19. Brokers |
23 | |||
3.20. Opinion of Financial Advisor |
23 | |||
3.21. Information Supplied |
23 | |||
3.22. Export Control |
24 | |||
IV. Representations and Warranties of Parent and Sub |
24 | |||
4.01. Organization, Standing and Power |
24 | |||
4.02. Interim Operations of Sub |
24 | |||
4.03. Authority; Execution and Delivery; Enforceability |
24 | |||
4.04. No Conflicts; Consents |
25 | |||
4.05. SEC Documents; Undisclosed Liabilities |
25 | |||
4.06. Absence of Litigation |
26 | |||
4.07. Information Supplied |
26 | |||
4.08. Financing |
26 | |||
4.09. Brokers |
26 | |||
V. Covenants Relating to Conduct of Business |
26 | |||
5.01. Conduct of Business |
26 | |||
5.02. No Solicitation |
29 | |||
5.03. Transaction Fee |
32 | |||
VI. Additional Agreements |
32 | |||
6.01. Stockholder Action by Written Consent; Information Statement |
32 | |||
6.02. Access to Information; Confidentiality |
32 | |||
6.03. Reasonable Efforts; Notification |
33 | |||
6.04. Employees and Employee Benefits |
34 | |||
6.05. Indemnification, Exculpation and Insurance |
35 | |||
6.06. Public Announcements |
37 | |||
6.07. Transfer Taxes |
37 | |||
6.08. Stockholder Litigation |
37 | |||
6.09. Other Actions by Parent |
37 |
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TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
6.10. Rule 16b-3 |
38 | |||
6.11. Actions with Respect to Existing Debt |
38 | |||
6.12. Closing Statement |
38 | |||
6.13. Real Property Holding Corporation Determination |
38 | |||
VII. Conditions Precedent |
39 | |||
7.01. Conditions to Each Party’s Obligation to Effect the Merger |
39 | |||
7.02. Conditions to Obligations of Parent and Sub |
39 | |||
7.03. Conditions to Obligation of the Company |
40 | |||
VIII.Termination, Amendment and Waiver |
40 | |||
8.01. Termination |
40 | |||
8.02. Effect of Termination |
41 | |||
8.03. Fees and Expenses |
42 | |||
8.04. Amendment |
42 | |||
8.05. Extension; Waiver |
42 | |||
8.06. Procedure for Termination, Amendment, Extension or Waiver |
42 | |||
IX. General Provisions |
43 | |||
9.01. Nonsurvival of Representations and Warranties |
43 | |||
9.02. Notices |
43 | |||
9.03. Definitions |
44 | |||
9.04. Interpretation; Company Disclosure Letter; Parent Disclosure Letter |
51 | |||
9.05. Severability |
52 | |||
9.06. Counterparts |
52 | |||
9.07. Entire Agreement; No Third-Party Beneficiaries |
52 | |||
9.08. Governing Law |
52 | |||
9.09. Assignment |
52 | |||
9.10. Specific Performance; Enforcement |
53 |
Exhibit A Certificate of Incorporation
Exhibit B Bylaws
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AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of June 22, 2011 (this “Agreement”), among
Xxxxxxx Chemical Company, a Delaware corporation (“Parent”), Xxxxxxx XX, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (“Sub”), and Sterling Chemicals, Inc.,
a Delaware corporation (the “Company”).
RECITALS
A. The respective Boards of Directors of Parent and the Company have approved the merger (the
“Merger”) of Sub with and into the Company on the terms and subject to the conditions set
forth in this Agreement, whereby each issued share of common stock, par value $0.01 per share (the
“Company Common Stock”) and Series A convertible preferred stock, par value $0.01 per
share, of the Company (the “Preferred Stock” and together with the Company Common Stock,
the “Company Capital Stock”) not owned by Parent, Sub or the Company will be converted into
the right to receive the Merger Consideration (as defined herein);
B. Parent, Sub and the Company desire to make certain representations, warranties, covenants
and agreements in connection with the Merger and also to prescribe various conditions to the
Merger;
C. The Board of Directors of the Company (the “Company Board”) by resolution adopted
in accordance with applicable Law, has appointed a special committee of independent members of the
Company Board (the “Special Committee”), which has determined that the Merger and this
Agreement are fair to, and in the best interests of, the holders of Company Common Stock (other
than Resurgence Asset Management, L.L.C., its Affiliates and its and its Affiliates’ managed funds
and accounts (collectively, “Resurgence”)), and has recommended that the Company Board
approve this Agreement;
D. The Company Board, having received the recommendation of the Special Committee, has
approved this Agreement and determined that the terms of this Agreement are advisable;
E. Concurrently with the execution of this Agreement, and as a condition and inducement to
willingness of Parent to enter into this Agreement, Resurgence is entering into a voting agreement
with Parent with respect to the shares of Company Common Stock and the shares of Preferred Stock
owned by Resurgence pursuant to which, among other things, Resurgence has agreed, subject to the
terms thereof, to execute and deliver to the Company and Parent a written consent, substantially in
the form attached thereto as Exhibit A (the “Stockholder Consent”), pursuant to which
Resurgence will adopt this Agreement in accordance with Section 228 and Section 251(c) of the
General Corporation Law of the State of Delaware (the “DGCL”); and
F. That, as a condition and inducement to willingness of Parent to enter into this Agreement,
Resurgence has waived certain rights under the Restated Certificate of Designations, Preferences,
Rights and Limitations of Series A Convertible Preferred Stock.
NOW, THEREFORE, the parties hereto agree as follows:
I. THE MERGER
1.01. The Merger. On the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, Sub will be merged with and into the Company at the
Effective Time. At the Effective Time, the separate corporate existence of Sub will cease, and the
Company will continue as the surviving corporation (the “Surviving Corporation”) and will
succeed to and assume all the rights and obligations of Sub in accordance with the DGCL. The
Merger, the payments of the Merger Consideration, and the other transactions contemplated by this
Agreement are referred to in this Agreement collectively as the “Transactions.”
1.02. Closing. The closing (the “Closing”) of the Merger will take place at
the offices of Xxxxx Day, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000 at 10:00 a.m. local
time on the second business day following the satisfaction (or, to the extent permitted by Law,
waiver by all parties) of the conditions set forth in Section 7.01, or, if on such day any
condition set forth in Section 7.02 or 7.03 has not been satisfied (or, to the
extent permitted by Law, waived by the party or parties entitled to the benefits thereof), as soon
as practicable after all of the conditions set forth in Article VII have been satisfied
(or, to the extent permitted by Law, waived by the parties entitled to the benefits thereof), or at
such other place, time and date as may be agreed in writing between Parent and the Company, but in
no event will the Closing occur on a date that is earlier than 40 days after the date of this
Agreement. The date on which the Closing occurs is referred to in this Agreement as the
“Closing Date.”
1.03. Effective Time. Prior to the Closing, Parent will prepare, and on the Closing
Date or as soon as practicable thereafter Parent will file with the Secretary of State of the State
of Delaware, a certificate of merger or other appropriate documents (collectively, the
“Certificate of Merger”) executed in accordance with the relevant provisions of the DGCL
and will make all other filings or recordings required under the DGCL. The Merger will become
effective at such time as the Certificate of Merger is duly filed with such Secretary of State, or
at such other time as Parent and the Company will agree and specify in the Certificate of Merger
(the time the Merger becomes effective being the “Effective Time”).
1.04. Effects. The Merger will have the effects set forth in Section 259 of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all
the property, rights, privileges, powers and franchises of the Company and Sub will vest in the
Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and
duties of each of the Company and Sub will become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
1.05. Certificate of Incorporation and Bylaws. (a) At the Effective Time, the
certificate of incorporation of the Company will be amended and restated to read in its entirety in
the form attached hereto as Exhibit A and as so amended will be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended as provided therein
or by applicable Law.
(b) At the Effective Time, the bylaws of the Company will be amended and restated to read in
their entirety in the form attached hereto as Exhibit B and as so amended will be the
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bylaws of the Surviving Corporation until thereafter amended in accordance with the provisions
therein or by applicable Law.
1.06. Directors. The directors of Sub immediately prior to the Effective Time will be
the directors of the Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case may be.
1.07. Officers. The officers of Sub immediately prior to the Effective Time will be
the officers of the Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected or appointed and qualified, as the case may be.
II. EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.01. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any shares of Company Capital Stock or any shares
of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital stock of Sub
will be converted into and become one fully paid and nonassessable share of common stock, par value
$0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share of Company
Common Stock that is owned by the Company, Parent or Sub will no longer be outstanding and will
automatically be canceled and retired and will cease to exist, and no Merger Consideration or other
consideration will be delivered or deliverable in exchange therefor.
(c) Conversion of Company Capital Stock. (i) Subject to Section 2.01(b) and
Section 2.01(d), (A) each issued and outstanding share (or fraction thereof) of Company
Common Stock will be canceled and converted automatically into the right to receive $2.50 (or the
appropriate fraction thereof, in the case of a fractional share) (the “Common Stock
Consideration”) in cash without interest and (B) each issued and outstanding share (or fraction
thereof, in the case of a fractional share) of Preferred Stock will be canceled and converted
automatically into the right to receive an amount equal to the quotient of (A) $100,000,000 minus
the sum of the Aggregate Common Stock Consideration and the Adjustment Amount and (B) the number of
shares of Preferred Stock issued and outstanding immediately prior to the Effective Time (including
accrued and unpaid dividends thereon (whether or not declared)) in cash without interest (the
“Preferred Stock Consideration” and with the Common Stock Consideration collectively
referred to herein as the “Merger Consideration”).
(i) As of the Effective Time, all shares of Company Capital Stock will no longer be
outstanding and will automatically be canceled and retired and will cease to exist, and each
holder of a certificate representing any such shares of Company Capital Stock will cease to
have any rights with respect thereto, except the right to receive Merger Consideration upon
surrender of such certificate in accordance with Section 2.02, without interest,
and except as otherwise provided in Section 2.01(d) with respect to Dissenting
Shares and Section 2.02(c) with respect to Unpaid Dividends.
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(d) Dissenting Stockholders. Notwithstanding any provision of this Agreement to the
contrary and to the extent available under the DGCL, any shares of Company Capital Stock
outstanding immediately prior to the Effective Time that are held by a stockholder (a
“Dissenting Stockholder”) who has neither voted in favor of the adoption of this Agreement
nor consented thereto in writing and who has demanded properly in writing an appraisal for such
shares and otherwise properly perfected and not withdrawn or lost their rights (the “Dissenting
Shares”) in accordance with Section 262 of the DGCL will not be converted into, or represent
the right to receive the Merger Consideration. Such Dissenting Stockholders will be entitled to
receive payment of the appraised value of Dissenting Shares held by them in accordance with the
provisions of such Section 262, except that all Dissenting Shares held by stockholders who have
failed to perfect or who effectively have withdrawn or lost their rights to appraisal of such
Dissenting Shares under such Section 262 will thereupon be deemed to have been converted into, and
represent the right to receive, the Merger Consideration in the manner provided in Section
2.01(c). Notwithstanding anything to the contrary contained in Section 2.01(c), if the
Merger is rescinded or abandoned, then the right of any stockholder to be paid the fair value of
such stockholder’s Dissenting Shares pursuant to Section 262 of the DGCL will cease. The Company
will give Parent prompt notice of any written demands for appraisal, attempted withdrawals of such
demands, and any other instruments served pursuant to applicable Law received by the Company
relating to stockholders’ rights of appraisal. The Company will give Parent the opportunity to
participate in all negotiations and proceedings with respect to demands for appraisal. The Company
will not, except with the prior written consent of Parent, voluntarily make any payment with
respect to any demands for appraisals of Dissenting Shares, offer to settle or settle any such
demands or approve any withdrawal of any such demands.
2.02. Exchange of Shares. (a) Paying Agent. Prior to the Effective Time,
Parent will select a bank or trust company reasonably satisfactory to the Company to act as paying
agent (the “Paying Agent”) for the payment of Merger Consideration upon surrender of a
certificate or certificates representing Company Capital Stock (the “Certificates”) or
transfer of non-certificated shares representing Company Capital Stock (the “Book-Entry
Shares”), as the case may be. At the Effective Time, Parent will deposit, or will cause to be
deposited, with the Paying Agent all the cash necessary to promptly pay for the shares of Company
Capital Stock converted into the right to receive cash pursuant to Section 2.01(c) (such
cash being hereinafter referred to as the “Exchange Fund”) less any Merger Consideration in
respect of which the Parent has made alternative provision for payment thereof pursuant to the
second sentence of Section 2.02(b) below.
(b) Exchange Procedures. As soon as practicable after the Effective Time, Parent will
cause the Paying Agent to mail or otherwise deliver to each holder of record of Certificates or
Book-Entry Shares, as the case may be, that immediately prior to the Effective Time represented
outstanding shares of Company Capital Stock whose shares were converted into the right to receive
Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal (which will
specify that delivery will be effected, and risk of loss and title to the Certificates will pass,
only upon delivery of the Certificates or transfer of the Book-Entry Shares, as the case may be, to
the Paying Agent and will be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the Certificates or transfer
of the Book-Entry Shares, as the case may be, in exchange for Merger Consideration. Parent will
use commercially reasonable efforts to cause provision to be made for holders of the
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Company Capital Stock to procure in person immediately after the Effective Time a letter of
transmittal and instructions and to cause to be delivered in person immediately after the Effective
Time such letter of transmittal and to provide immediate payment of the related Merger
Consideration against delivery thereof, to the extent practicable. Upon surrender of a Certificate
for cancellation or transfer of the Book-Entry Shares, as the case may be, to the Paying Agent,
together with such letter of transmittal, duly executed, and such other documents as may reasonably
be required by the Paying Agent, the holder of such Certificate or Book-Entry Share, as applicable,
will be entitled to receive in exchange therefor the amount of cash into which the shares of
Company Capital Stock theretofore represented by such Certificate or such Book-Entry Share will be
converted pursuant to Section 2.01, and the Certificate so surrendered or the Book-Entry
Share or so transferred, as applicable, will forthwith be canceled. In the event of a transfer of
ownership of Company Capital Stock that is not registered in the transfer records of the Company,
payment may be made to a Person other than the Person in whose name the Certificate so surrendered
or the Book-Entry Share so transferred is registered, if such Certificate or such Book-Entry Share,
as applicable, is properly endorsed or otherwise in proper form for transfer, if applicable, and
the Person requesting such payment will pay any transfer or other Taxes required by reason of the
payment to a Person other than the registered holder of such Certificate or such Book-Entry Share
or establish to the reasonable satisfaction of Parent that such Tax has been paid or is not
applicable. Except as otherwise identified in Section 2.01(d) and except as otherwise
provided with respect to Unpaid Dividends in Section 2.02(c), until surrendered as
contemplated by this Section 2.02, each Certificate or Book-Entry Share, as the case may
be, will be deemed at any time after the Effective Time to represent only the right to receive upon
such surrender Merger Consideration as contemplated by this Section 2.02. No interest will
be paid or accrue on any cash payable upon surrender of any Certificate or transfer of any
Book-Entry Share.
(c) No Further Ownership Rights in Company Capital Stock. The Merger Consideration
paid in accordance with the terms of this Article II upon conversion of any shares of
Company Capital Stock will be deemed to have been paid in full satisfaction of all rights
pertaining to such shares of Company Capital Stock (including any accrued and unpaid dividends on
the outstanding Preferred Stock (whether or not declared)), subject, however, to the Surviving
Corporation’s obligation to pay any other dividends or make any other distributions with a record
date prior to the Effective Time that may have been declared or made by the Company on such shares
of Company Capital Stock in accordance with (and not in violation of) the terms of this Agreement
or prior to the date of this Agreement and which remain unpaid at the Effective Time (collectively,
“Unpaid Dividends”), and after the Effective Time there will be no further registration of
transfers on the stock transfer books of the Surviving Corporation of shares of Company Capital
Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time,
any Certificates or Book-Entry Shares formerly representing shares of Company Capital Stock are
presented to the Surviving Corporation or the Paying Agent for any reason, they will be canceled
and exchanged as provided in this Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund that remains
undistributed to the holders of Company Common Stock for one year after the Effective Time will be
delivered to the Surviving Corporation, upon demand, and any holder of Company Common Stock who has
not theretofore complied with this Article II will thereafter look only to Parent for
payment of its claim for Merger Consideration.
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(e) No Liability. None of Parent, Sub, the Company or the Paying Agent will be liable
to any Person in respect of any cash from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar Law. If any Certificate or Book-Entry
Share has not been surrendered or transferred, as applicable, immediately prior to such date on
which Merger Consideration in respect of such Certificate or such Book-Entry Share would
irrevocably escheat to or become the property of any Governmental Entity, any such shares, cash,
dividends or distributions in respect of such Certificate or such Book-Entry Share will, to the
extent permitted by applicable Law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any Person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent will invest any cash included in
the Exchange Fund, as directed by Parent, in (i) direct obligations of the United States of
America, (ii) obligations for which the full faith and credit of the United States of America is
pledged to provide for the payment of all principal and interest, and/or (iii) securities of an
investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. §802 that
is (A) a money market fund and (B) is rated “AAA” or better by Standard & Poor’s, or a combination
thereof; provided that, in any such case, no such instrument will have a maturity exceeding three
months from the date of the investment therein. Any interest and other income resulting from such
investments will be the property of and will be paid to Parent. In no event will a decline in the
value of the Exchange Fund relieve Parent of its obligations under this Article II. To the
extent that there are any losses with respect to any such investments, or the Exchange Fund
diminishes for any reason below the level required for the Paying Agent to make prompt cash payment
under Section 2.02(a), Parent will, or will cause the Surviving Corporation to, promptly
replace or restore the cash in the Exchange Fund so as to ensure that the Exchange Fund is at all
times maintained at a level sufficient for the Paying Agent to make such payments under Section
2.02(a).
(g) Withholding Rights. Parent will be entitled to deduct and withhold from the
consideration otherwise payable to any holder of Company Capital Stock pursuant to this Agreement
such amounts as may be required to be deducted and withheld with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended (the “Code”), or under any
provision of Tax Law. To the extent that amounts are so withheld, such withheld amounts will be
treated for all purposes of this Agreement as having been paid to such holder in respect of which
such deduction and withholding were made.
(h) Lost Certificates. If any Certificate is lost, stolen, defaced or destroyed, upon
the making of an affidavit of that fact, which will include indemnities, by the Person claiming
such Certificate to be lost, stolen, defaced or destroyed and, if reasonably required by the
Surviving Corporation, the posting by such Person of a bond in such reasonable amount as the
Surviving Corporation may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent will pay in respect of such lost, stolen, defaced or
destroyed Certificate the Merger Consideration with respect to each share of Company Common Stock
formerly represented by such Certificate.
2.03. Company Stock Options. Each Option outstanding as of the Effective Time, by
virtue of the occurrence of the Closing and without any action on the part of any holder of any
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Option, whether vested or unvested, exercisable or not exercisable, will be canceled at or
immediately prior to the Effective Time.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as set forth in the
disclosure letter, dated as of the date of this Agreement, from the Company to Parent and Sub (the
“Company Disclosure Letter”) (subject to Section 9.04 of this Agreement) or, except
as set forth in any report, schedule, form or other document filed by the Company with the
Securities and Exchange Commission (the “SEC”) on or after the date the Company filed its
Annual Report on Form 10-K for its fiscal year ended December 31, 2010 (but disregarding risk
factors disclosures or disclosures set forth in any “forward looking statements” or any other
statements to the extent such disclosures or statements are non-specific or customary, predictive
or forward looking in nature) (the “Company SEC Documents”):
3.01. Organization, Standing and Power. Each of the Company and each of its
significant subsidiaries (as that term is defined in Rule 1-02(w) of Regulation S-X promulgated by
the SEC, herein referred to as the “Company Subsidiaries”) is duly organized, validly
existing and in good standing under the Laws of the jurisdiction in which it is organized other
than defects in such organization, existence or good standing that would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse Effect, and has full
corporate, limited liability or partnership power and authority and possesses all material
governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to
own, lease or otherwise hold its properties and assets and to conduct its businesses as presently
conducted, other than such power and authority, franchises, licenses, permits, authorizations and
approvals the lack of which would not reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect. The Company and each Company Subsidiary is duly qualified
to do business in each jurisdiction where the nature of its business or the ownership or leasing of
its properties make such qualification necessary or the failure to so qualify would not reasonably
be expected, individually or in the aggregate, to have a Company Material Adverse Effect.
3.02. Company Subsidiaries; Equity Interests. (a) Section 3.02(a) of the Company
Disclosure Letter lists each of the Company Subsidiaries and its jurisdiction of organization.
Except as set forth in Section 3.02(a) of the Company Disclosure Letter, all the outstanding shares
of capital stock of each Company Subsidiary have been validly issued and are fully paid and
nonassessable and are as of the date of this Agreement owned by the Company free and clear of all
material pledges, liens, charges, mortgages, encumbrances and security interests of any kind or
nature whatsoever (collectively, “Liens”).
(b) Except for its interests in the Company Subsidiaries or as set forth in Section
3.02(b) of the Company Disclosure Letter, the Company does not as of the date of this Agreement
own, directly or indirectly, any material capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any Person, other than investments in short-term
debt securities.
- 7 -
3.03. Capital Structure. The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock and 125,000 shares of preferred stock, par value $0.01
per share, of which 25,000 shares have been designated as Preferred Stock. Resurgence beneficially
owns 100% of the issued and outstanding shares of Preferred Stock. At the close of business on May
31, 2011 (the “Measurement Date”), (a) 2,828,460 shares of Company Common Stock and
7,980.086 shares of Preferred Stock were issued and outstanding, (b) zero shares of Company Common
Stock were held by the Company in its treasury, (c) 172,500 shares of Company Common Stock were
subject to outstanding Options and (d) 1,363,914 shares of Company Common Stock were reserved for
purchase or issuance pursuant to the Company Stock Plan. Except as set forth above and except for
the right of the holders of Preferred Stock to convert their shares of Preferred Stock into Company
Common Stock in accordance with the Company Charter and the accrual of dividends on the Preferred
Stock payable in additional shares of Preferred Stock, at the close of business on the Measurement
Date, (a) no shares of capital stock or other voting securities of the Company were, and,
immediately prior to the Effective Time no shares of capital stock or other voting securities of
the Company will be, issued, reserved for issuance or outstanding and (b) no Options, warrants or
other rights to acquire shares of capital stock or other voting securities of the Company were, and
immediately prior to the Effective Time no Options, warrants or other rights to acquire shares of
capital stock or other voting securities of the Company will be, issued. All outstanding shares of
Company Capital Stock are, and all such shares that may be issued prior to the Effective Time will
be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, the Second Amended and
Restated Certificate of Incorporation of the Company, as amended to the date of this Agreement (the
“Company Charter”), the Restated Bylaws of the Company, as amended to the date of this
Agreement (the “Company Bylaws”) or any Contract to which the Company is a party or
otherwise bound. There are not any bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which holders of Company Common Stock may vote (“Voting Company
Debt”). Except for the Options listed by exercise price in Section 3.03 of the Company
Disclosure Letter, the shares of Preferred Stock and grants under the Company’s Long-Term Incentive
Plan, there are not any Options, warrants, rights, convertible or exchangeable securities,
“phantom” stock rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary
is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any
Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend
or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking, or (c) that, to the Knowledge of the Company, give any Person the right to receive any
economic benefit or right similar to or derived from the economic benefits and rights accruing to
holders of Company Capital Stock. Except with respect to the Preferred Stock, there are not any
outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or any Company
- 8 -
Subsidiary. The Company does not have in place, and is not subject to, a stockholder rights
plan, “poison pill” or similar plan or instrument. Except as set forth in Section 3.03 of the
Company Disclosure Letter, from the Measurement Date through the date of this Agreement, neither
the Company nor any of the Company Subsidiaries has (a) accelerated the vesting of or lapsing of
restrictions with respect to any stock-based compensation awards, (b) with respect to executive
officers of the Company or the Company Subsidiaries, entered into or amended any employment,
severance, change of control or similar agreement (including any agreement providing for the
reimbursement of excise taxes under Section 4999 of the Code) or (c) adopted or amended any Plan.
3.04. Authority; Execution and Delivery; Enforceability. (a) The Company has all
requisite corporate power and authority to execute and deliver this Agreement and all other
agreements and documents contemplated hereby to which it is a party, and to consummate the
Transactions. The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the Transactions have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the Merger, to receipt of the
Stockholder Consent, and no other proceedings, corporate or otherwise, on the part of the Company
are necessary to authorize the execution and delivery of this Agreement, the performance by the
Company of its obligations hereunder and the consummation by the Company of the Transactions,
subject, in the case of the Merger, to receipt of the Stockholder Consent. The Company has duly
executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization or other Laws affecting the enforcement of creditors’ rights generally or by general
equitable principles.
(b) The Company Board, at a meeting duly called and held, duly and unanimously adopted
resolutions (i) approving this Agreement, the Merger and the other Transactions, (ii) determining
that the terms of the Merger and the other Transactions are advisable and fair to the Company and
its stockholders, and (iii) recommending that the Company’s stockholders adopt this Agreement and
the Merger. The Company Board has taken all necessary action such that the restrictions on
business combinations contained in Section 203 of the DGCL do not apply to this Agreement, the
Merger or the other Transactions. No other takeover statutes apply or purport to apply to this
Agreement, the Merger or any of the other Transactions. The Special Committee, at a meeting duly
called and held, duly and unanimously adopted resolutions (i) determining that the Merger and this
Agreement are fair to, and in the best interests of, the holders of Company Common Stock other than
Resurgence and (ii) recommending that the Company Board approve this Agreement.
(c) The delivery of the Stockholder Consent will constitute the requisite stockholder
action to adopt this Agreement under Section 251(c) of the DGCL and is the only approval of the
stockholders of the Company necessary to adopt this Agreement.
3.05. No Conflicts; Consents. (a) The execution, delivery and performance by the
Company of this Agreement do not, and the consummation of the Merger and the other Transactions and
compliance with the terms hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give rise to
- 9 -
a right of purchase, termination, cancellation or acceleration of any obligation or to loss of
a material benefit under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any Person under, or result in the creation of any Lien upon any of the properties
or assets of the Company or any Company Subsidiary under, or result in being declared void,
voidable, or without further binding effect, or otherwise result in a detriment to the Company
under, any provision of (i) the Company Charter (except with respect to the Preferred Stock), the
Company Bylaws or the comparable charter or organizational documents of any Company Subsidiary,
(ii) any Contract to which the Company or any Company Subsidiary is a party or by which any of
their respective properties or assets is bound (other than the Indenture) or (iii) subject to the
filings and other matters referred to in Section 3.05(b) and the receipt of the Stockholder
Consent, any Judgment or Law applicable to the Company or any Company Subsidiary or their
respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such
items that have not had or would not reasonably be expected, individually or in the aggregate, to
have or result in a Company Material Adverse Effect.
(b) To the Knowledge of the Company, and assuming receipt of the Stockholder Consent and
expiration of the 20 day period referred to in Rule 14c-2(b) of the Exchange Act, no consent,
approval, license, permit, order or authorization (“Consent”) of, or registration,
declaration or filing with, or permit from, any Governmental Entity is required to be obtained or
made by or with respect to the Company or any Company Subsidiary in connection with the execution,
delivery and performance of this Agreement or the consummation of the Transactions, other than (i)
compliance with and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the “HSR Act”), (ii) the filing with the SEC of (A) an information statement
relating to the adoption of this Agreement by the Company’s stockholders (the “Information
Statement”) and (B) such reports under Sections 12, 13, 15 and 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), as may be required in connection with this
Agreement, the Merger and the other Transactions, (iii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents with the relevant
authorities of the other jurisdictions in which the Company is qualified to do business, (iv)
compliance with the rules of the OTC Bulletin Board and the Financial Industry Regulatory
Authority, Inc., (v) compliance with the “blue sky” laws of various states, and (vi) such items
that would not reasonably be expected, individually or in the aggregate, to have a Company Material
Adverse Effect.
3.06. SEC Documents; Undisclosed Liabilities; Internal Controls. (a) The Company
has timely filed all Company SEC Documents together with any amendments required to be made with
respect thereto, that they were required to file.
(b) As of their respective dates, to the Knowledge of the Company, the Company SEC
Documents complied in all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the “Securities Act”), as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents,
and did not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated financial statements of
the Company included in the Annual Report on Form 10-K and Quarterly Report on Form 10-Q, in each
case, most recently filed with the SEC, comply as to form in all material
- 10 -
respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in conformity with United States generally
accepted accounting principles (“GAAP”) (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods shown
(subject, in the case of unaudited statements, to normal year-end audit adjustments).
(c) Other than liabilities or obligations set forth on the consolidated balance sheet of
the Company and its consolidated subsidiaries or in the notes thereto in the most recent
consolidated financial statements of the Company included in any Company SEC Document filed by the
Company and publicly available prior to the date of this Agreement (“Filed Company SEC
Documents”) or incurred since January 1, 2011 in the ordinary course of business, neither the
Company nor any Company Subsidiary has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a consolidated
balance sheet of the Company and its consolidated subsidiaries or in the notes thereto and that
would reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
(d) Each of the principal executive officer of the Company and the principal financial
officer of the Company (or each former principal executive officer of the Company and each former
principal financial officer of the Company, as applicable) has made all applicable certifications
required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002 (including the rules and regulations promulgated thereunder,
“SOX”) with respect to the Company SEC Documents and the statements contained in such
certifications are complete and accurate in all material respects. For purposes of this Agreement,
“principal executive officer” and “principal financial officer” will have the meanings ascribed to
such terms in SOX. None of the Company or any of the Company Subsidiaries has outstanding, or has
since the effective date of Section 402 of SOX arranged any outstanding, “extensions of credit” to
or for directors or executive officers of the Company in violation of Section 402 of SOX.
(e) The Company maintains a system of “internal control over financial reporting” (as
defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable
assurance (i) that transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, (ii) that receipts and expenditures are made only in accordance
with the authorizations of management and directors and (iii) regarding prevention or timely
detection of the unauthorized acquisition, use or disposition of the Company’s assets that could
have a material effect on the Company’s financial statements.
(f) The “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) utilized by the Company are reasonably designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the rules
and forms of the SEC, and that all such information required to be disclosed is accumulated and
communicated to the Company’s management as appropriate to allow timely
- 11 -
decisions regarding required disclosure and to enable the principal executive officer and
principal financial officer of the Company to make the certifications required under the Exchange
Act with respect to such reports.
(g) From the filing of the Company’s Form 10-K for the period ending December 31, 2010
through the date of this Agreement, the Company has not received any written notification of any
(i) “significant deficiency” or (ii) “material weakness” in the Company’s internal controls over
financial reporting. To the Knowledge of the Company, there is no outstanding “significant
deficiency” or “material weakness” that has not been appropriately and adequately remedied by the
Company. For purposes of this Agreement, the terms “significant deficiency” and “material
weakness” will have the meanings assigned to them in Release 2004-001 of the Public Company
Accounting Oversight Board, as in effect on the date hereof.
(h) None of the Company Subsidiaries is, or at any time has been, subject to the reporting
requirements of Sections 13(a) and 15(d) of the Exchange Act.
(i) To the Knowledge of the Company, there is no applicable accounting rule, consensus or
pronouncement that, as of the date of this Agreement, has been adopted by the SEC, the Financial
Accounting Standards Board or the Emerging Issues Task Force that is not in effect as of the date
of this Agreement but that, if implemented, would reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
(j) The Company is in material compliance with the applicable requirements of SOX.
3.07. Absence of Certain Changes or Events. From January 1, 2011 through the date
of this Agreement, the Company has conducted its business only in the ordinary course consistent
with past practice, and during such period there has not been any change, effect, event, occurrence
or state of facts that, individually or in the aggregate, has had or would reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect.
3.08. Litigation. There is no suit, action, claim, investigation or proceeding
(each, an “Action”) (or group of related Actions) pending or, to the Knowledge of the
Company, threatened against or directly affecting the Company, any Company Subsidiary or any of the
directors or officers of the Company or any of the Company Subsidiaries in their capacity as such,
that has had or would reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect, if adversely determined. Neither the Company nor any Company Subsidiary,
nor, to the Company’s Knowledge, any officer, director or employee of the Company or any Company
Subsidiary, has been permanently or temporarily enjoined by any order, writ, injunction or decree
(each, an “Order”) of any court or Governmental Entity or any arbitral or other dispute
resolution body from engaging in or continuing any conduct or practice in connection with the
business, assets or properties of the Company or such Company Subsidiary, nor, to the Knowledge of
the Company, is the Company, any Company Subsidiary or any officer, director or employee of the
Company or any Company Subsidiary under investigation by any Governmental Entity, that has had or
would reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect. There is no Order enjoining or requiring the Company or any of the Company Subsidiaries to
take any action of any kind with respect to its business, assets or properties, except as would not
reasonably be
- 12 -
expected, individually or in the aggregate, to have a Company Material Adverse Effect.
Notwithstanding the foregoing, the representations and warranties contained in Sections
3.10 and 3.13 will be the exclusive representations and warranties with respect to
environmental and labor matters, respectively, notwithstanding that the representations and
warranties set forth in this Section 3.08 may otherwise apply to the subject matter of such
representations and warranties.
3.09. Compliance with Applicable Laws. Except as disclosed in the Company SEC
Documents, the Company and the Company Subsidiaries are in compliance with all applicable Judgments
and Laws, except for instances of noncompliance that would not reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect. Each of the Company and the
Company Subsidiaries has in effect all approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights of or with all Governmental Entities
(“Permits”), necessary for it to own, lease or operate its properties and assets and to
carry on its business and operations as now conducted, and with respect to esters produced for BASF
Corporation (“BASF”) pursuant to the Third Amended and Restated Plasticizers Production
Agreement of April 1, 2008 (the “BASF Contract”), as conducted, during the time that
agreement was in effect, and that are material to the Company and the Company Subsidiaries taken as
a whole and except where the failure to obtain any such Permit would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect. There has occurred no
default under, or violation of, any such Permit, except for defaults under, or violations of,
Permits, that individually or in the aggregate, are not material to the Company and the Company
Subsidiaries taken as a whole. The Merger, in and of itself, would not cause the revocation or
cancellation of any such Permit which revocation or cancellation would reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect. Notwithstanding the
foregoing, the representations and warranties contained in Sections 3.10 and 3.13
will be the exclusive representations and warranties with respect to environmental and labor
matters, respectively, notwithstanding that the representations and warranties set forth in this
Section 3.09 may otherwise apply to the subject matter of such representations and
warranties.
3.10. Environmental Matters. (a) Except as set forth in Section 3.10(a) of the
Company Disclosure Letter and except in each case as would not reasonably be expected, individually
or in the aggregate, to be materially adverse to the Company and the Company Subsidiaries taken as
a whole: (i) the Company is, and at all times since January 1, 2008 has been, in compliance with
all Environmental Laws; (ii) the Company has obtained or has made timely applications for or is in
the process of obtaining and has maintained and is in compliance with all Environmental
Authorizations required for the operation of its business as currently conducted, and with respect
to esters produced for BASF pursuant to the BASF Contract, as conducted during the time that
agreement was in effect; and (iii) such Environmental Authorizations are in full force and effect
and there is no Action pending or, to the Knowledge of the Company, threatened which might directly
and adversely affect the validity of any effective or proposed Environmental Authorization.
(b) None of the Company’s assets are subject to any Lien imposed by or arising under any
Environmental Law, and there is no Action pending or, to the Knowledge of the Company, threatened
for imposition of any such Lien.
- 13 -
(c) Except as described in Section 3.10(c) of the Company Disclosure Letter, to the
Knowledge of the Company, since January 1, 2008, the Company has not received any written
communication from any Environmental Authority or any other Person alleging that the Company is in
violation of any Environmental Law or Environmental Authorization or subject to Environmental
Liabilities.
(d) Except as identified in Section 3.10(d) of the Company Disclosure Letter, to the
Knowledge of the Company, the Company has not been named, identified or alleged to be a responsible
party or a potentially responsible party under CERCLA or any state Law based on, or analogous to,
CERCLA.
(e) Except as described in Section 3.10(e) of the Company Disclosure Letter, there is no
Action arising under Environmental Laws pending against the Company nor, to the Knowledge of the
Company, is any such Action threatened.
(f) Except as described in Section 3.10(f) of the Company Disclosure Letter, since January
1, 2008 the Company has not released any Hazardous Substances that require any Response under
Environmental Law.
(g) Except for transfers of Environmental Authorizations necessary to operate the
Company’s business listed on Section 3.10(g) of the Company Disclosure Letter, the Transactions do
not require the pre-Closing consent or pre-approval of any Environmental Authority regarding
Environmental Laws or Environmental Authorizations.
(h) The emissions credits arising under applicable Environmental Laws prior to the
Effective Time and any emissions reductions that are eligible for use in an emissions netting or
offset analysis under applicable Environmental Laws are adequate for the operation of the Company’s
business as of Closing.
3.11. Taxes. Except as set forth in Section 3.11 of the Company Disclosure
Letter, (a) the Company and each Company Subsidiary has timely filed, or has caused to be timely
filed on its behalf, all Tax Returns required to be filed by or on behalf of the Company and each
Company Subsidiary in the manner prescribed by applicable Law and all such Tax Returns are complete
and correct except to the extent that any failure to file or any inaccuracies in any filed Tax
Return would not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. The Company and each Company Subsidiary has timely paid (or the Company
has paid on each such Company Subsidiary’s behalf) all Taxes due and owing, and, in accordance with
GAAP, the most recent financial statements contained in the Filed Company SEC Documents reflect an
adequate reserve (excluding any reserve for deferred Taxes) for all Taxes payable by the Company
and each Company Subsidiary for all taxable periods and portions thereof through the date of such
financial statement, in each case except as would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect.
(b) Neither the Company nor any Company Subsidiary has joined for any taxable period in
the filing of any affiliated, aggregate, consolidated, combined or unitary Tax Return,
- 14 -
other than Tax Returns for the affiliated, aggregate, consolidated, combined or unitary group
of which the Company is the common parent.
(c) No Tax Return of the Company or any Company Subsidiary is under audit or examination
by any Taxing Authority, and no written notice or, to the Knowledge of the Company, unwritten
notice of such an audit or examination has been received by the Company or any Company Subsidiary,
in each case except as would not reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect. Each assessed deficiency resulting from any audit or
examination relating to Taxes by any Taxing Authority has been timely paid and there is no assessed
deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Company or any Company Subsidiary, in each case except as would not
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
(d) There is no agreement or other document extending, or having the effect of extending,
the period of assessment or collection of any Taxes and no power of attorney with respect to any
such Taxes has been executed or filed with any Taxing Authority by or on behalf of the Company or
any Company Subsidiary, in each case except as would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect.
(e) No material Liens for Taxes exist with respect to any assets or properties of the
Company or any Company Subsidiary, except for statutory Liens for Taxes not yet due.
(f) Neither the Company nor any Company Subsidiary is a party to or bound by any Tax
sharing agreement, Tax indemnity obligation or similar agreement, arrangement or practice with
respect to Taxes (including any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any Taxing Authority), other than any such agreements (i) among the Company
and the Company Subsidiaries or (ii) that would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
(g) Except as would not reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect, the Company and each Company Subsidiary has complied with all
applicable Laws relating to the payment and withholding of Taxes (including withholding of Taxes
pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under any Laws)
and has, within the time and the manner prescribed by applicable Law, withheld from and paid over
to the proper Governmental Entities all amounts required to be so withheld and paid over under
applicable Law.
(h) Within the two-year period ending on the Closing Date, neither the Company nor any
Company Subsidiary has constituted either a “distributing corporation” or a “controlled
corporation” as such terms are defined in Section 355 of the Code in a distribution of stock
qualifying or intended to qualify for tax-free treatment (in whole or in part) under Section 355(a)
or 361 of the Code.
(i) No claim that has not been resolved has ever been made by any Taxing Authority in a
jurisdiction where the Company or any Company Subsidiary does not file a Tax Return that
- 15 -
it is, or may be, subject to an amount of Tax by that jurisdiction that would reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse Effect.
(j) No “ownership change” (as described in Section 382(g) of the Code) has occurred as of
the date of this Agreement or will occur prior to the Effective Time with respect to the Company or
any Company Subsidiary that is a “loss corporation” as described in Section 382(k) of the Code that
has had or will have the effect of limiting the use of “pre-change tax losses” (as described in
Section 382(d) of the Code) of the Company or any Company Subsidiary following the Effective Time.
(k) Neither the Company nor any Company Subsidiary will be required to include in a
taxable period ending after the Closing Date taxable income attributable to income that accrued in
a prior taxable period but was not recognized in any prior taxable period as a result of the
installment method of accounting, the long-term contract method of accounting, the cash method of
accounting or Section 481 of the Code or comparable provisions of Tax Law, or any other change in
method of accounting.
(l) Neither the Company nor any Company Subsidiary has participated in any “listed
transaction” as defined in Treasury Regulation Section 1.6011-4.
3.12. Employee Benefit Plans. (a) Except as listed in Section 3.12(a) of the
Company Disclosure Letter, neither the Company nor any Company Subsidiary maintains or contributes
to (i) any nonqualified deferred compensation or retirement plans for employees located in the
U.S., (ii) any qualified “defined contribution plans” (as such term is defined under Section 3(34)
of ERISA), (iii) any qualified “defined benefit plans” (as such term is defined under Section 3(35)
of ERISA) (the plans set forth in (ii) and (iii) are collectively referred to herein as the
“Pension Plans”), (iv) any “welfare benefit plans” (as such term is defined under Section
3(1) of ERISA) (the “Welfare Plans”), or (v) any material fringe benefit or stock option
plans, including individual Contracts, employee agreements, programs, or arrangements, whether or
not written, whether formal or informal, whether funded or unfunded, that currently are, or have
been in the past, maintained and sponsored in whole or in part, or contributed to by either the
Company, a Company Subsidiary, or any other Person that, together with the Company or any Company
Subsidiary, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or
any other applicable Law (a “Commonly Controlled Entity”), for the benefit of, providing
any remuneration or benefits to, or covering any current or former employee or retiree, any
dependent, spouse or other family member or beneficiary of such employee or retiree, or any
director, independent contractor, member, officer, consultant of the Company, or a Company
Subsidiary, or a Commonly Controlled Entity, or under (or in connection with) which the Company or
a Company Subsidiary may have any liability (collectively clauses (i)-(v) are referred to as
“Plans”). Each Pension Plan which is intended to meet the requirements of a “qualified
plan” under Section 401(a) and 501(a) of the Code has either received a favorable determination
letter (or may rely on an opinion or advisory letter) from the Internal Revenue Service that such
Pension Plan is so qualified or has requested such a favorable determination letter within the
remedial amendment period of Section 401(b). The Plans comply in form and in operation in all
material respects with the requirements of the Code, ERISA and state Law. None of the Company,
Company Subsidiaries or, to the Knowledge of the Company, the Commonly Controlled Entities has
received any notice from any Governmental Entity
- 16 -
questioning or challenging such compliance. The Company has delivered or made available to
Parent complete and correct copies (or in the case of any unwritten Plan or agreement, a
description thereof) of (i) each Plan, (ii) the three most recent annual reports required to be
filed, or such similar reports, statements, information returns or material correspondence filed
with or delivered to any Governmental Entity, with respect to each Plan (including reports filed on
Form 5500 with accompanying schedules and attachments), (iii) the most recent summary plan
description for each Plan for which a summary plan description is required under applicable U.S.
Law, (iv) each trust agreement and group annuity Contract and other material documents relating to
the funding or payment of benefits under any Plan, (v) the most recent determination or
qualification letter (or advisory or opinion letter as applicable) issued by any Governmental
Entity for each Pension Plan intended to qualify for favorable tax treatment, as well as a true,
correct and complete copy of each pending application for a determination or qualification letter,
if applicable, and a complete and correct list of all material amendments to any Pension Plan as to
which a favorable determination letter has not yet been received and (vi) the three most recent
actuarial valuations for each Plan for which such valuations are required. All participant data
necessary to administer each Plan is in the possession of, or readily accessible by, the Company
or a Company Subsidiary and is in form that is reasonably sufficient for the proper administration
of the Plans in accordance with their terms and applicable Laws and such data is complete and
correct in all material respects.
(b) Except as set forth in Section 3.12(b) of the Company Disclosure Letter, with respect
to the Plans, (i) there are no actions, suits or claims pending or, to the Company’s and Company
Subsidiaries’ Knowledge, threatened, other than routine claims for benefits which would subject the
Company, its Commonly Controlled Entities, or any of their respective directors, officers, managers
or employees to any material liability under ERISA or any applicable Law, (ii) to the Company’s and
Company Subsidiaries’ Knowledge, there have been no nonexempt “prohibited transactions” (as that
term is defined in Section 406 of ERISA or Section 4975 of the Code) which would subject the
Company, its Commonly Controlled Entities, or any of their respective directors, officers, managers
or employees to any material liability under ERISA or any applicable Law, (iii) all material
reports, returns and similar documents required to be filed with any Governmental Entity or
distributed to any Plan participant have been timely filed or distributed, and (iv) none of the
assets of any Pension Plan is “employee security” (within the meaning of Section 401(d)(1) of
ERISA) or “employee real property” (within the meaning of Section 401(d)(2) of ERISA).
(c) Neither the Company nor any Company Subsidiary has, nor, to the Company’s and Company
Subsidiaries’ Knowledge, has any of their respective directors, officers, managers or employees or
any Plan “fiduciary”, as such term is defined in Section 3 of ERISA, committed any material breach
of fiduciary responsibility imposed by ERISA or any other applicable Law with respect to the Plans
which would subject Parent, its Commonly Controlled Entities, or any of their respective directors,
officers, managers or employees to any material liability under ERISA or any applicable Law.
(d) Neither the Company nor any Company Subsidiary has incurred any material liability for
any Taxes or civil penalty imposed by the Code, ERISA or state Law in respect of any Plan which has
not been satisfied in full or reflected on the Company’s financial statements or had any Plan or
related trust that is intended to be exempt from taxation subject to tax
- 17 -
disqualification. To the Company’s and Company Subsidiaries’ Knowledge, no events have
occurred which could cause a material liability for any Tax or civil penalty imposed by the Code,
ERISA or state Law in respect of any Plan or any uncorrectable material violation that reasonably
could be expected to subject any such Plan or related trust that is intended to be exempt from
taxation to tax disqualification.
(e) Except as set forth in Section 3.12(e) of the Company Disclosure Letter, none of the
Company, Company Subsidiaries or Commonly Controlled Entities (i) has sponsored, maintained or
contributed to, or been obligated to maintain or contribute to, or has any liability under, any
Pension Plan that is subject to Title IV of ERISA or Section 412 of the Code or is otherwise a
defined benefit pension plan; (ii) has an “unfunded benefit liability” (as defined in Section
4001(a)(18) of ERISA) as of the respective last annual valuation date for each such Pension Plan,
and there has been no material adverse change in the financial condition of any Pension Plan since
its last such annual valuation date (excluding changes to actuarial assumptions in effect as of
such annual valuation date consistent with recommendations made by the Pension Plan’s enrolled
actuary and changes resulting from changes in interest rates and discount rates outside of the
control of the Company or its actuary, returns on investments and benefit payments made in
accordance with the Pension Plan’s terms) (iii) has any liability under Title IV of ERISA or
Section 412 of the Code (other than for premiums to the Pension Benefit Guaranty Corporation) nor
is expected to incur such liability with respect to any ongoing, frozen or terminated
“single-employer” plan (as defined in Section 4001(a)(15) of ERISA), currently or formerly
maintained by any of them; or (iv) has a Pension Plan with an “accumulated funding deficiency” (as
defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, nor has any
waiver of the minimum funding standards of Section 302 of ERISA or Section 412 of the Code been
requested for such a Pension Plan. Except as could not reasonably be expected to result in a
material liability of the Company and the Company Subsidiaries, taken as a whole, (i) no Pension
Plan or related trust has been terminated and (ii) there has been no “reportable event” (as defined
in Section 4043 of ERISA), other than an event for which the 30-day notice period has been waived,
with respect to any Pension Plan during the last year.
(f) All contributions and payments to or with respect to each Plan required to be made
prior to the date hereof have been made (and all such contributions and payments required to be
made prior to the Closing will be made prior to the Closing), and all contributions and payments to
or with respect to each Plan for all periods ending on or prior to the date hereof have been
properly accrued and are reflected on the financial statements (and all such contributions and
payments for all periods ending on or prior to the Closing that are not required to be made prior
to such date will be properly accrued).
(g) Except as set forth in Section 3.12(g) of the Company Disclosure Letter, neither the
Company nor any Company Subsidiary has communicated a commitment (whether orally or in writing,
whether as part of the collective bargaining process or not) generally to employees or specifically
to any employee regarding (i) any future increase of benefit levels (or creation of new benefits)
with respect to the Plans beyond those reflected in such Plans, or (ii) the adoption or creation of
any new benefit plan, each of (i) or (ii) which could reasonably be expected to result in material
liability.
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(h) None of the Company, Company Subsidiaries or Commonly Controlled Entities contributes
to or has any liability or potential liability with respect to any “multiemployer plan” (as defined
in Section 3(37) of ERISA) during the five year period ending as of the Closing. None of the
Company, Company Subsidiaries or Commonly Controlled Entities is subject to any withdrawal or
partial withdrawal liability within the contemplation of Section 4201 of ERISA. None of the
Company, Company Subsidiaries or Commonly Controlled Entities has entered into any transaction
which has or could subject the Company, any Company Subsidiary, or any Commonly Controlled Entity
to any withdrawal or partial withdrawal liability.
(i) Except as set forth in Section 3.12(i) of the Company Disclosure Letter, none of the
Welfare Plans obligates the Company or Company Subsidiaries to provide a Retained Employee, current
employee or former employee (or any dependent thereof) any life insurance or medical or health
benefits after his or her termination of employment with the Company or any Company Subsidiary,
other than as required under COBRA or any similar state Law.
(j) All Welfare Plans that are group health plans, including each benefit package made
available under such plans in which employees, former employees and Retained Employees of the
Company or Company Subsidiaries participate are in material compliance with PPACA.
(k) Except as listed in Section 3.12(k) of the Company Disclosure Letter, no amounts
payable under any Plan will fail to be deductible for federal income tax purposes by virtue of
Section 280G of the Code. Except as listed in Section 3.12(k) of the Company Disclosure Letter,
consummation of the transaction contemplated by this Agreement will not (i) entitle any Retained
Employee, current employee, or former employee (or spouse, dependent or other family member of such
employee) of the Company or Company Subsidiaries to severance pay, or any payment contingent upon a
change in control or ownership of the Company or Company Subsidiaries, or (ii) accelerate the time
of payment or vesting, or increase the amount, of any compensation due to any such Retained
Employee, current employee, or former employee (or any spouse, dependent, or other family member of
such employee).
(l) No Plan is or at any time was funded through a “welfare benefit fund” (as defined in
Section 419(e) of the Code), and no benefits under any Plan are or at any time have been provided
through a “voluntary employees’ beneficiary association” (within the meaning of Section 501(c)(9)
of the Code) or a “supplemental unemployment benefit plan” (within the meaning of Section
501(c)(17) of the Code).
(m) Section 3.12(m) of the Company Disclosure Letter contains a list of all Plans
containing a change of control provision that would be triggered by the consummation of the
transactions contemplated by this Agreement that will result in a payment to any of the Company’s
officers (as defined in Rule 16a-1(f) under the Exchange Act).
(n) To the Company’s Knowledge, each Plan that is a “nonqualified deferred compensation
plan” (within the meaning of Section 409A(d)(1) of the Code) subject to Section 409A of the Code
is, and has been in material documentary and operational compliance with Section 409A of the Code
and any guidance issued with respect thereto. To the extent that the Company obtains Knowledge
after the date hereof of any failure to be in such material
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documentary or operational compliance, the Company may amend the Company Disclosure Letter to
disclose such failure and the disclosure contained in such amendment will be deemed for all
purposes of this Agreement to have been contained in the original Company Disclosure Letter
delivered to Parent and Sub as of the date hereof.
(o) To the Company’s Knowledge, neither the Company nor any Company Subsidiary has any
material liability or obligations, including under or on account of a Plan or agreement, arising
out of the hiring of Persons to provide services to the Company or any Company Subsidiary and
treating such Persons as consultants or independent contractors and not as employees of the Company
or any Company Subsidiary. To the extent that the Company obtains Knowledge after the date hereof
of any such material liability or obligation, the Company may amend the Company Disclosure Letter
to disclose such material liability or obligation and the disclosure contained in such amendment
will be deemed for all purposes of this Agreement to have been contained in the original Company
Disclosure Letter delivered to Parent and Sub as of the date hereof.
3.13. Labor Matters. Set forth in Section 3.13 of the Company Disclosure Letter
is a list of all collective bargaining agreements or other labor union Contracts currently in
effect to which the Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary is bound (the “Collective Bargaining Agreements”). Since January 1,
2008, neither the Company nor any Company Subsidiary has experienced any labor strikes, union
organization attempts, requests for representation, work slowdowns or stoppages or material labor
disputes and to the Knowledge of the Company, there is currently no such action threatened against
or affecting the Company or any Company Subsidiary. The Company and the Company Subsidiaries are
each, and each have been since January 1, 2008, in compliance in all material respects with all
applicable Laws with respect to labor relations, employment and employment practices, terms and
conditions of employment and wages and hours, human rights, pay equity and workers compensation,
and have not engaged in any unfair labor practice, except for such non-compliance or practice that
would not reasonably be expected, individually or in the aggregate, to have a Company Material
Adverse Effect. There is no unfair labor practice charge or complaint against the Company or any
Company Subsidiary pending or, to the Knowledge of the Company, threatened, in each case, before
the National Labor Relations Board or any comparable federal, state, provincial or foreign agency
or authority. No grievance or arbitration proceeding arising out of a Collective Bargaining
Agreement is pending or, to the Knowledge of the Company, threatened against the Company or any
Company Subsidiary, except for proceedings that would not reasonably be expected, individually or
in the aggregate, to have a Company Material Adverse Effect. Since January 1, 2008, to the extent
applicable, each of the Company and the Company Subsidiaries has complied in all material respects
with the WARN Act or with any similar state Law, including by furnishing any required notice of any
“plant closing,” “mass layoff” or collective dismissal, as applicable, in respect of any
termination of employees or former employees of any of the Company or the Company Subsidiaries.
With respect to the termination of employment of any executive officer of the Company since January
1, 2011, (a) the Company and the Company Subsidiaries are in compliance with all applicable Laws
and no Action of any kind is currently pending or, to the Knowledge of the Company, has been
threatened by any terminated executive officer and (b) all payments to be made by the Company or
any Company Subsidiary in connection with any such termination have been made,
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except where the failure to make such payments would not reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect.
3.14. Contracts. Except with respect to Plans (which are the subject of
Section 3.12) and Collective Bargaining Agreements and except as set forth in Section 3.14
of the Company Disclosure Letter, as of the date of this Agreement, neither the Company nor any of
the Company Subsidiaries is a party to, and none of their respective properties or other assets is
subject to, any Contract that is material to the business, financial condition or results of
operations of the Company and the Company Subsidiaries, taken as a whole, or of a nature required
to be filed as an exhibit to a report or filing under the Securities Act or the Exchange Act and
the rules and regulations promulgated thereunder, that in either case has not been so filed. None
of the Company, any of the Company Subsidiaries or, to the Knowledge of the Company, any other
party thereto is in violation of or in default under (nor to the Knowledge of the Company does
there exist any condition which upon the passage of time or the giving of notice or both would
cause such a violation of or default under) any Contract, to which it is a party or by which it or
any of its properties or other assets is bound, except for violations or defaults that would not
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect. None of the Company or any of the Company Subsidiaries has entered into any written or
material oral Contract with any Affiliate of the Company that is currently in effect other than the
Plans. None of the Company or any of the Company Subsidiaries is a party to or otherwise bound by
any agreement or covenant (a) restricting the Company’s or any of its Affiliates’ ability to
compete or restricting in any respect the research, development, distribution, sale, supply,
license or marketing of products or services of the Company or any of its Affiliates, in each case
other than those entered into in the ordinary course of business consistent with past practice, (b)
containing a right of first refusal, right of first negotiation or right of first offer for any
asset or business or (c) containing any indemnity obligations to third parties, in the case of
clauses (a) through (c), that is material to the Company and the Company Subsidiaries, taken as a
whole. Notwithstanding the foregoing, the Company has not been notified of any open and material
disagreements, discrepancies or claims regarding any Contract by and between the Company and BP
Amoco Chemical Company, BASF, Praxair, Inc. or Praxair Hydrogen Supply, Inc.
3.15. Intellectual Property. (a) The Company owns and possesses all right, title
and interests in and to all Company Intellectual Property, free and clear of any Lien or other
restriction on its use or disclosure, except as set forth in Section 3.15 of the Company Disclosure
Letter.
(b) No portion of the Company Intellectual Property is subject to any adverse Order,
Judgment or charge.
(c) No Action, interference, opposition, reexamination, hearing, written claim or written
demand is pending or, to the Knowledge of the Company, is threatened, which challenges any aspect
of the validity, enforceability, ownership, authorship, inventorship or use of any portion of the
Company Intellectual Property.
(d) The Company and the Company Subsidiaries have taken commercially reasonable actions in
accordance with normal industry practice to protect, maintain and preserve that portion
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of the Company Intellectual Property described in subsection (b) of the definition of
Intellectual Property in Section 9.03 and to maintain the confidentiality of the trade
secrets and other confidential Company Intellectual Property.
(e) The issued patents, registered trademarks and registered copyrights, and the
applications for patents, trademarks and copyrights, that are Company Intellectual Property have
been duly filed in, registered with or issued or granted by the appropriate Governmental Entity,
and have been prosecuted and maintained in accordance with the rules and regulations of those
Governmental Entities in all material respects.
(f) To the Knowledge of the Company no Person is infringing the Company Intellectual
Property.
(g) To the Knowledge of the Company, the use by the Company and the Company Subsidiaries
of the Company Intellectual Property, or any portion thereof, does not violate, infringe,
misappropriate, misuse or violate the Intellectual Property of any Person.
(h) During the three year period prior to the date of this Agreement, neither the Company
nor any Company Subsidiary has received written or, to the Knowledge of the Company, oral notice of
any material pending or threatened claims alleging violation, infringement or misappropriation of
the Intellectual Property of any Person.
3.16. Real Property. (a) As of the date of this Agreement, the Company and the
Company Subsidiaries have valid title to, or valid leasehold or sublease interests or other
comparable contract rights in or relating to, the real properties and other tangible assets
necessary for the Company to conduct business, as currently conducted. As of the date of this
Agreement, except as would not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect, the Company, and/or one or more of the Company Subsidiaries will
have valid title to, or valid leasehold or sublease interests or other comparable contract rights
in or relating to, the real properties and other tangible assets necessary for the Company to
conduct business, as currently conducted.
(b) Section 3.16(b) of the Company Disclosure Letter contains a true and complete list of
all real property owned by the Company or any of the Company Subsidiaries as of the date of this
Agreement (the “Owned Real Property”) that is material to the Company or any of the Company
Subsidiaries.
(c) Section 3.16(c) of the Company Disclosure Letter contains a true and complete list of
all real property leased or subleased (whether as tenant or subtenant) by the Company or any of the
Company Subsidiaries as of the date of this Agreement (including improvements thereon, the
“Leased Real Property”) that is material to the Company or any of the Company Subsidiaries.
(d) Except as would not reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect, the Company or one of the Company Subsidiaries has good and fee
simple title to all Owned Real Property and valid leasehold estates in all Leased Real Property.
Except as would not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect, the Company or one of the Company Subsidiaries has
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exclusive possession of each Leased Real Property and Owned Real Property, other than any use
and occupancy rights granted to third-party owners, tenants or licensees pursuant to agreements
with respect to such real property entered in the ordinary course of business.
(e) Except as would not reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect, (i) each lease for the Leased Real Property is in full force and
effect and is valid, binding and enforceable in accordance with its terms and (ii) there is no
default under any lease for the Leased Real Property either by the Company or the Company
Subsidiaries or, to the Knowledge of the Company, by any other party thereto, and no event has
occurred that, with the lapse of time or the giving of notice or both, would constitute a default
by the Company or the Company Subsidiaries thereunder.
3.17. Personal Property.
(a) Except as set forth in Section 3.17 of the Company Disclosure Letter, the tangible
personal property (other than Inventory) used in connection with the business of the Company and
the Company Subsidiaries has been maintained in accordance with the Company’s and the Company
Subsidiaries’ customary practice in all material respects and is in reasonable operating condition
and repair (subject to normal wear and tear).
(b) The tangible personal property (other than Inventory) used in connection with the
esters produced pursuant to the BASF Contract is still present at the site within the esters
operating area and is in the same material condition as it was on April 18, 2011.
3.18. Inventory. The Inventory of the Company and the Company Subsidiaries is
merchantable and fit for the purpose for which it was procured or manufactured in all material
respects. The Inventory of the Company and the Company Subsidiaries does not include any slow
moving, obsolete, damaged or defective items other than as carried on the books and records of the
Company and the Company Subsidiaries in accordance with past custom and practice of the Company and
the Company Subsidiaries.
3.19. Brokers. No broker, investment banker, financial advisor or other Person,
other than Moelis & Company LLC (“Moelis”), the fees and expenses of which will be paid by
the Company, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the Merger and the other Transactions based upon arrangements made by
or on behalf of the Company. The Company has furnished to Parent a true and complete copy of all
agreements between the Company and Moelis relating to the Merger and the other Transactions.
3.20. Opinion of Financial Advisor. The Special Committee has received the
opinion of Moelis, dated the date the Special Committee recommended that the Company Board approve
this Agreement, to the effect that, subject to certain assumptions, qualifications, limitations and
other matters considered in rendering such opinion, as of such date, the Common Stock Consideration
to be received by the holders of Company Common Stock other than Resurgence in the Merger is fair
to such holders of Company Common Stock from a financial point of view.
3.21. Information Supplied. None of the information supplied or to be supplied by
the Company for inclusion or incorporation by reference in the Information Statement will, at the
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date it is first mailed to the Company’s stockholders or on the 21st day after the
date the Information Statement is first sent or given to the Company stockholders, contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under
which they are made, not misleading.
3.22. Export Control. The Company and the Company Subsidiaries represent that
they are in compliance in all material respects with all applicable Laws and regulations relating
to the export of U.S.-origin technology and equipment, including those arising under the U.S.
Export Administration Regulations, and that for a period of five years prior to the Effective Date,
they have not materially violated such Laws and regulations.
IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, represent and warrant to the Company that, except as
set forth in the disclosure letter, dated as of the date of this Agreement, from Parent and Sub to
the Company (the “Parent Disclosure Letter”) (subject to Section 9.04 of this
Agreement) or, except as set forth in any report, schedule, form or other document filed by Parent
with the SEC on or after the date Parent filed its Annual Report on Form 10-K for its fiscal year
ended December 31, 2010 (but disregarding risk factors disclosures or disclosures set forth in any
“forward looking statements” or any other statements to the extent such disclosures or statements
are non-specific or customary, predictive or forward looking in nature) (the “Parent SEC
Documents”):
4.01. Organization, Standing and Power. Each of Parent and Sub is duly organized,
validly existing and in good standing under the Laws of the jurisdiction in which it is organized,
other than defects in such organization, existence or good standing that would not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse Effect, and has full
corporate power and authority and possesses all material governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently conducted, other than such power
and authority, franchises, licenses, permits, authorizations and approvals the lack of which would
not reasonably be expected, individually or in the aggregate, to have a Parent Material Adverse
Effect. Parent is duly qualified to do business in each jurisdiction where the nature of its
business or the ownership or leasing of its properties make such qualification necessary or the
failure to so qualify would not reasonably be expected, individually or in the aggregate, to have a
Parent Material Adverse Effect.
4.02. Interim Operations of Sub. Since the date of its incorporation, Sub has not
carried on any business nor conducted any operations other than the execution of this Agreement,
the performance of its obligations hereunder and thereunder and matters ancillary thereto.
4.03. Authority; Execution and Delivery; Enforceability. (a) Each of Parent and
Sub has all requisite corporate power and authority to execute and deliver this Agreement and all
other agreements and documents contemplated hereby to which it is a party, and to consummate the
Transactions. The execution and delivery and performance by each of Parent and Sub of this
Agreement and the consummation by Parent and Sub of the Transactions have been duly
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authorized by all necessary corporate action on the part of Parent and Sub, and no other
proceedings, corporate or otherwise, on the part of Parent or Sub are necessary to authorize the
execution and delivery of this Agreement, the performance by Parent or Sub of their respective
obligations hereunder and the consummation by Parent or Sub of the Transactions. Parent, as sole
stockholder of Sub, has adopted this Agreement. Each of Parent and Sub has duly executed and
delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except to the extent that its enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other
Laws affecting the enforcement of creditors’ rights generally or by general equitable principles.
(b) The Board of Directors of Parent, at a meeting duly called and held, duly and
unanimously adopted resolutions approving this Agreement, the Merger and the other Transactions.
The Board of Directors of Sub, pursuant to a written consent action executed in accordance with the
DGCL, approved this Agreement, the Merger and the other Transactions.
4.04. No Conflicts; Consents. (a) The execution, delivery and performance by each
of Parent and Sub of this Agreement do not, and the consummation of the Merger and the other
Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in
any violation of or default (with or without notice or lapse of time, or both) under, or give rise
to a right of purchase, termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any Person under, or result in the creation of any Lien upon any of the properties
or assets of Parent or Sub under, or result in being declared void, voidable, or without further
binding effect, or otherwise result in a detriment to Parent or Sub under, any provision of (i) the
articles of incorporation or bylaws of Parent or Sub, (ii) any Contract to which Parent or Sub is a
party or by which any of their respective properties or assets is bound, or (iii) subject to the
filings and other matters referred to in Section 4.04(b), any Judgment or Law applicable to
Parent or Sub or their respective properties or assets, other than in the case of clauses (ii) or
(iii) above, any such items that have not had or would not reasonably be expected, individually or
in the aggregate, to have or result in a Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, or permit from, any
Governmental Entity is required to be obtained or made by or with respect to Parent or Sub in
connection with the execution, delivery and performance of this Agreement or the consummation of
the Transactions, other than (i) compliance with and filings under the HSR Act, (ii) the filing
with the SEC of (A) the Information Statement and (B) such reports under Sections 13 and 16 of the
Exchange Act, as may be required in connection with this Agreement, the Merger and the other
Transactions, (iii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iv) compliance with the rules of the NYSE, and (v) such other items that would
not reasonably be expected, individually or in the aggregate, to have a Parent Material Adverse
Effect.
4.05. SEC Documents; Undisclosed Liabilities. Parent has timely filed all Parent
SEC Documents. As of their respective dates, to the Knowledge of Parent, the Parent SEC Documents
complied in all material respects with the requirements of the Securities Act and the rules and
regulations of the SEC promulgated thereunder applicable to such Parent SEC
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Documents, and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in the Parent SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in conformity with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of Parent and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods shown (subject, in
the case of unaudited statements, to normal year-end audit adjustments).
4.06. Absence of Litigation. As of the date of this Agreement, there is no Action
pending or, to the Knowledge of Parent or Sub, threatened, against Parent or Sub before any
Governmental Entity that would or seeks to materially delay or prevent the consummation of the
Merger or the other Transactions, or otherwise challenge the validity of or obtain damages or other
relief in connection with this Agreement or the Transactions. As of the date of this Agreement,
neither Parent nor Sub is subject to any continuing Judgment that would or seeks to materially
delay or prevent the consummation of the Merger or any of the other Transactions.
4.07. Information Supplied. None of the information supplied or to be supplied by
Parent or Sub for inclusion or incorporation by reference in the Information Statement will, at the
date it is first mailed to the Company’s stockholders or on the 21st day after the date
the Information Statement is first sent or given to the Company stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
are made, not misleading.
4.08. Financing. Parent has cash and cash equivalents on hand and committed
credit facilities (without restrictions on the use of such facilities for the funding of the
Transactions for such purposes or conditions precedent with respect to funding) sufficient for
payment of the Merger Consideration, to consummate the Merger in accordance with the terms of this
Agreement and to satisfy all of its own and Sub’s obligations under this Agreement.
4.09. Brokers. No broker, investment banker, financial advisor or other Person,
other than Xxxxxxxxxxx & Co. Inc., the fees and expenses of which will be paid by Parent, is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Merger and the other Transactions based upon arrangements made by or on behalf
of Parent.
V. COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01. Conduct of Business. (a) From the date of this Agreement to the Effective
Time, except as contemplated by this Agreement or as set forth in Section 5.01 of the Company
Disclosure Letter, the Company will, and will cause each Company Subsidiary to, conduct its
business in the usual and ordinary course in all material respects; preserve the present material
business operations, organizations and goodwill; maintain insurance upon all of the material
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assets of the Company in such amounts and of such kinds comparable to that in effect on the
date of this Agreement; maintain all Permits, including Environmental Permits for currently active
operations as well as Environmental Permits for inactive operations, including but not limited to
the esters operations, the phthalic anhydride operations or the oxo alcohols operations (provided,
that the foregoing will not require the Company to renew Permits for inactive operations that lapse
due to the passage of time, other than with respect to the Company’s esters, phthalic anhydride and
oxo alcohols operations, nor will any such lapse be (or be deemed to be) a breach of this Agreement
and, provided further, that Parent and Sub acknowledge and agree that the continued validity of the
Environmental Permits for phthalic anhydride and oxo-alcohols could be subject to challenge by
Governmental Entities and no such challenge or threatened challenge will constitute a breach of
this Agreement by the Company), maintain capital expenditures in all material respects consistent
with past practice, maintain and manage the Pension Plans in all material respects consistent with
past practice, maintain its books, accounts and records in the ordinary course of business, on a
basis consistent in all material respects with past practice; and maintain a normalized level of
working capital consistent with past practices. In addition, and without limiting the generality
of the foregoing, from the date of this Agreement to the Effective Time, except as contemplated by
this Agreement or as set forth in Section 5.01 of the Company Disclosure Letter, the Company will
not, and will not permit any Company Subsidiary to, do any of the following without the prior
written consent of Parent (which consent will not be unreasonably withheld, delayed or
conditioned):
(i) (A) declare, set aside or pay any dividends on, or make any other distributions
in respect of, any of its capital stock, other than dividends and distributions that are
required or permitted under the Company Charter with respect to the Preferred Stock, by a
direct or indirect wholly owned subsidiary of the Company to its parent or as in connection
with the dissolution of S & L Cogeneration Company with regard to distributions to the
Company, (B) split, combine or reclassify any of the Company Capital Stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in substitution
for shares of the Company Capital Stock, or (C) purchase, redeem or otherwise acquire any
shares of the Company Capital Stock other than Preferred Stock to the extent required by the
Company Charter or any capital stock of a Company Subsidiary or any other securities thereof
or any rights, warrants or Options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of Company Capital Stock, except
as such transactions are required or (in the case of Preferred Stock dividends) permitted by
the Company Charter, (B) any Voting Company Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any Options, warrants or rights to
acquire, any such shares other than dividends on the outstanding shares of Preferred Stock
in the form of additional shares of Preferred Stock, Voting Company Debt, voting securities
or convertible or exchangeable securities, or (D) any “phantom” stock, “phantom” stock
rights, stock appreciation rights or stock-based performance units;
(iii) amend the Company Charter, the Company Bylaws or the comparable charter or
organizational documents of any Company Subsidiary, except as may be contemplated by the
terms hereof or as required by Law;
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(iv) other than in the ordinary course of business consistent with prior practice,
acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any equity interest in or business or any
corporation, partnership, joint venture, association or other business organization or
division thereof having a purchase price of more than $100,000;
(v) (A) grant to any employee, officer or director of the Company or any Company
Subsidiary any increase in compensation, except in the ordinary course of business
consistent with prior practice or required under Plans or agreements in effect as of the
date of this Agreement, (B) grant to any employee, officer or director of the Company or any
Company Subsidiary any increase in severance or termination pay, except to the extent
required under any agreement in effect as of the date of this Agreement or as a result of
any permitted action under Section 5.01(a)(v)(A), (C) enter into any employment,
consulting, indemnification, severance or termination agreement with any such employee,
officer or director, or (D) establish, adopt, enter into or amend in any material respect
any collective bargaining agreement or Plan except as may be required by Law;
(vi) make any change in Tax, financial or other accounting methods, principles or
practices materially affecting the reported consolidated assets, liabilities or results of
operations of the Company, except as may be required by a change in GAAP or Tax Laws;
(vii) sell, lease (as lessor), license or otherwise dispose of or subject to any
Lien any properties or assets that have a fair market value in excess of $100,000
individually; provided, that, in no event will the Company dispose of any assets or
properties related to the esters, the phthalic anhydride and oxo alcohols operations other
than a sale of all or any portion of the Company’s assets or properties related to the
Company’s phthalic anhydride operations pursuant to the terms of that certain Option
Agreement dated August 2, 2010 between the Company and Industrial Asset Management LLC, as
amended by the First Amendment to Option Service Agreement dated December 31, 2010;
(viii) (A) incur any indebtedness for borrowed money (other than issuances of
letters of credit under the Company’s existing letter of credit facility in replacement of
any letters of credit that may expire during the term of this Agreement) or guarantee any
such indebtedness of another Person, issue or sell any debt securities or other rights to
acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt
securities of another Person, enter into any “keep well” or other agreement to maintain any
financial statement condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, except in each case in the ordinary course of
business or (B) make any loans, advances or capital contributions to, or investments in, any
other Person, other than to or in the Company or any direct or indirect wholly owned
subsidiary of the Company;
(ix) make or change any material Tax election or settle or compromise any material
Tax liability or refund;
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(x) (A) pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge
or satisfaction of claims, liabilities and obligations (1) in the ordinary course of
business or in accordance with their terms, (2) reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the notes thereto) of
the Company included in the Company SEC Documents, or (3) as permitted by clause (C) below,
(B) cancel any material indebtedness (individually or in the aggregate) or waive any claims
or rights of substantial value, or (C) settle any Action requiring payments by the Company
(net of insurance) in excess of $100,000 or that would in any manner restrict the operation
of the business of the Company or any Company Subsidiary;
(xi) enter into a new line of business or make any material change in any line of
business in which it engages as of the date of this Agreement;
(xii) purchase or otherwise acquire, or enter into any Contract to purchase or
otherwise acquire, any real property having a purchase price in excess of $100,000;
(xiii) enter into any Contract with a term greater than two (2) years (excluding
evergreen terms if the Company has the right to terminate prior to the commencement of such
evergreen term at no cost) and annual payments by the Company greater than $2,000,000;
(xiv) sell or enter into any agreement to sell any emissions reduction credit,
including any nitrogen oxide reduction credits;
(xv) make any capital expenditures (or authorize to make any capital expenditures)
that are not contemplated by the capital expenditure budget set forth in Section 5.01(a)(xv)
of the Company Disclosure Letter, other than capital expenditures required by Law, required
to secure the health or safety of the Company’s employees or the public or required to
protect the Environment;
(xvi) elect to permanently close the esters units under the BASF Contract; or
(xvii) authorize any of, or commit or agree to take any of, the foregoing actions.
(b) The Company and Parent will not, and will not permit any of their respective
subsidiaries to, take any action that would reasonably be expected to result in any condition to
the Merger set forth in Article VII not being satisfied.
5.02. No Solicitation. (a) Subject to the provisions of this Section
5.02, after the date hereof and prior to the Effective Time, the Company agrees that the
Company and its subsidiaries will not, and that it will use commercially reasonable efforts to
cause its directors, members of senior management identified in the definition of Knowledge herein,
investment bankers, or attorneys (collectively, “Representatives”) of the Company or its
subsidiaries to not, (i) solicit, initiate, or knowingly encourage the making, submission or
announcement of any inquiry regarding, or any proposal or offer which would reasonably be expected
to lead to, a merger, acquisition, consolidation, tender offer, exchange offer or other transaction
involving, or
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any proposal or offer to purchase or acquire in any manner, directly or indirectly, (A) assets
(including equity interests of a Company Subsidiary) representing 20% or more of the assets or
revenues of the Company and its subsidiaries taken as a whole, or (B) 20% or more of the voting
securities of the Company, other than, in each case, the Merger or other transactions with Parent
(any such proposal or offer being hereinafter referred to as an “Acquisition Proposal”),
(ii) enter into, participate, continue or otherwise engage in discussions or negotiations with, or
provide any non-public information to any Person (other than Parent, Sub and their Representatives)
with respect to any inquiries regarding, or the making, submission or announcement of, an
Acquisition Proposal, (iii) enter into or approve any letter of intent, agreement in principle,
option agreement, share purchase agreement, acquisition agreement or similar agreement for an
Acquisition Proposal, or (iv) terminate, waive, amend or modify any provision of, or grant
permission under, any standstill, confidentiality agreement or similar Contract to which the
Company or any Company Subsidiary is a party; provided, that the foregoing will not prohibit the
Company Board from terminating, waiving, amending or modifying any provision of, or granting
permission under, any standstill, confidentiality agreement or similar Contract if the Company
Board determines in good faith that the failure to take such action, would be reasonably likely to
constitute a breach of the Company Board’s fiduciary duties to the Company’s stockholders under
applicable Law. The Company will immediately cease and cause to be terminated any existing
solicitation, discussion or negotiation with any Person (other than Parent, Sub or their
Representatives) conducted prior to the date of this Agreement by the Company, its subsidiaries or
any of their respective Representatives with respect to any actual or potential Acquisition
Proposal.
(b) Subject to the provisions of this Section 5.02, the Company may, and may
authorize any of its Representatives to, prior to the date that is 40 days following the date of
this Agreement, (i) in response to a request by a Person who has made a bona fide written
Acquisition Proposal that was not initiated or solicited in violation of Section 5.02(a),
provide information to such Person (including to potential financing sources of such Person), if
the Company receives from such Person so requesting the information an executed confidentiality
agreement no more favorable in any material respect to such Person than the Confidentiality
Agreement is to Parent (it being agreed that the Company will promptly provide to Parent, in
accordance with the terms of the Confidentiality Agreement, any information concerning the Company
or its subsidiaries provided to such other Person which was not previously provided to Parent);
(ii) engage in discussions or negotiations with any Person (and such Person’s potential financing
sources) who has made a bona fide written Acquisition Proposal that was not initiated or solicited
in violation of Section 5.02(a); and/or (iii) withdraw, modify or qualify in any manner
adverse to Parent the Company Board’s recommendation to the Company’s stockholders to approve and
adopt this Agreement and the Merger or publicly approve or recommend, or publicly propose to
approve or recommend, any Acquisition Proposal if, in each case, the Company Board determines in
good faith after consultation with the Special Committee and its advisors and the Company’s outside
legal counsel that (A) failure to take this action would be reasonably likely to constitute a
breach of its fiduciary duties to the Company’s stockholders under applicable Law and (B) the
Acquisition Proposal, if applicable, either constitutes a Superior Proposal or is reasonably likely
to lead to a Superior Proposal. As used in this Agreement, “Superior Proposal” means an
unsolicited, bona fide written Acquisition Proposal made after the date hereof (for this purpose
substituting “50%” for each reference to 20% in the definition of “Acquisition Proposal”) and that
the Company Board determines in good faith
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(after consultation with the Special Committee and its advisors and the Company’s outside
legal counsel) is reasonably expected to be consummated on the terms proposed, taking into account
all legal, financial and regulatory aspects of the proposal, including the financing terms thereof
and the Person making such proposal, and if consummated would result in a transaction that is more
favorable to the stockholders of the Company from a financial point of view than the Transactions
(after taking into account any revisions to the terms of the Transactions agreed to by Parent
pursuant to Section 5.02(c)).
(c) The Company will notify Parent orally and in writing promptly (and in any event within
24 hours) after the Company Board has determined that it has received any Acquisition Proposal or
any request for information or inquiry which could reasonably be expected to lead to an Acquisition
Proposal. The written notice will include the identity of the Person making such Acquisition
Proposal, request or inquiry, the material terms of the Acquisition Proposal, request or inquiry
(including any material written amendments or modifications, or any proposed material written
amendments or modifications, thereto), and the Company will keep Parent reasonably informed on a
current basis of any material changes with respect to such Acquisition Proposal, request or
inquiry. The Company will provide Parent with at least 36 hours prior notice (or such shorter
notice as may be provided to the Company Board) of any meeting of the Company Board at which the
Company Board is reasonably expected to determine that an Acquisition Proposal is a Superior
Proposal. The Company will not exercise its right to terminate this Agreement pursuant to
Section 8.01(e) hereof, and any purported termination pursuant thereto will be void of no
force or effect, until after the fifth business day following Parent’s receipt from the Company of
written notice (i) advising Parent that the Company Board has received a Superior Proposal,
specifying the material terms and conditions of the Superior Proposal (and attaching a copy of the
definitive agreement related thereto, if available) and (ii) stating that the Company intends to
exercise its right to terminate this Agreement pursuant to Section 8.01(e) (in which case
all references to 40 days in Section 1.02 and this Section 5.02 will be deemed
extended for such new five business day period). The Company agrees that after notifying Parent
that an Acquisition Proposal is a Superior Proposal, including during the five-business day period
specified in the preceding sentence (such period, the “Parent Review Period”), Parent will
be permitted to propose to the Company revisions to the terms of the Transactions, and the Company
and its Representatives will, if requested by Parent, consider in good faith any revisions to the
terms of the Transactions proposed by Parent. The Company will not be entitled to terminate this
Agreement pursuant to Section 8.01(e) if Parent has, during the Parent Review Period, made
a binding offer that, after consideration of such offer by the Company Board in good faith and
after consultation with the Special Committee and its advisors and the Company’s outside legal
counsel, results in the Company Board concluding that such Superior Proposal no longer constitutes
a Superior Proposal. In the event of any amendment to the consideration or any other material
revisions to the Superior Proposal, the Company will be required to deliver a new written notice to
Parent and to comply with the requirements of this Section 5.02(c) with respect to such new
written notice (including a new Parent Review Period except that the new Parent Review Period will
be three business days, in which case all references to 40 days in Section 1.02 and this
Section 5.02 will be deemed extended for such new three business day period).
(d) The Company agrees that any action taken by any of its subsidiaries or a
Representative of the Company or any of its subsidiaries that, if taken by the Company, would
- 31 -
constitute a breach of the restrictions set forth in this Section 5.02, will be deemed
to be a breach of this Agreement (including this Section 5.02) by the Company.
(e) Nothing contained in this Section 5.02 will prohibit the Company or its
Company Board from taking and disclosing to the Company’s stockholders a position with respect to a
tender offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or from making such disclosure to the Company’s stockholders which, in the judgment of the
Company Board after receiving advice of outside legal counsel, is reasonably likely to be required
under applicable Law.
5.03. Transaction Fee. The Company will pay a Transaction Fee (as defined in the
Genova Agreement) to Xxxx X. Xxxxxx pursuant to the terms of the Genova Agreement.
VI. ADDITIONAL AGREEMENTS
6.01. Stockholder Action by Written Consent; Information Statement. In lieu of
calling a meeting of the Company’s stockholders, the Company will seek approval and adoption of
this Agreement and the Merger by the Stockholder Consent. Such approval will be sought so that
such consent will be obtained and effective on the 21st day after the date the Information
Statement is first sent or given to the Company stockholders in accordance with Rule 14c-2(b) under
the Exchange Act. Subject to Section 5.02, the Company Board will recommend approval and
adoption of this Agreement and the Merger by the Company’s stockholders. In connection with such
action by written consent, the Company will (a) as promptly as reasonably practicable after the
date of this Agreement, but no later than 14 days after the date of this Agreement unless otherwise
agreed to by the parties to the Agreement, such agreement not to be unreasonably withheld, prepare
and file with the SEC the preliminary Information Statement and use its commercially reasonable
efforts to have cleared by the SEC and thereafter mail to its stockholders as promptly as
reasonably practicable the Information Statement, and (b) otherwise comply with all legal
requirements applicable to approvals by its stockholders of this Agreement and the Transactions.
The Company will provide Parent and its respective counsel with sufficient opportunity to comment
upon the form and substance of the Information Statement (including any amendments or supplements
thereto) prior to filing such with the SEC and the Company will use its commercially reasonable
efforts to incorporate Parent’s reasonable comments into the Information Statement (including any
amendments or supplements thereto). The Company will promptly provide to Parent copies of any
comments received from the SEC in connection therewith and will consult with Parent in responding
to the SEC.
6.02. Access to Information; Confidentiality. The Company will, and will cause
each of its subsidiaries to, afford to Parent and to the officers, employees, accountants, counsel,
lenders, financial advisors and other Representatives of Parent, reasonable access during normal
business hours during the period prior to the Effective Time to all its own and its subsidiaries’
properties, books, Contracts, commitments, personnel and records and, during such period, the
Company will, and will cause each of its subsidiaries to, furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other document filed by it during such period
pursuant to the federal or state securities Laws, including information necessary to satisfy Permit
application requirements, and (b) all other information concerning its business, properties and
personnel as such other party may reasonably request. The Company will not be required to
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disclose any information if such disclosure would contravene any applicable Law or where such
access or disclosure would jeopardize the attorney-client privilege of the institution in
possession or control of such information or contravene any fiduciary duty or binding agreement
entered into prior to the date of this Agreement. The parties hereto will make appropriate
substitute disclosure arrangements under the circumstances in which the restrictions of the
preceding sentence apply. The Company will, within two business days of request therefor, provide
to Parent the information described in Rule 14a-7(a)(2)(ii) under the Exchange Act. All
information exchanged pursuant to this Section 6.02 will be subject to the Confidentiality
Agreement.
6.03. Reasonable Efforts; Notification. (a) Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties will use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the Merger and the other
Transactions, including (i) the making of all registrations and filings and obtaining of all
necessary actions or nonactions, waivers, Consents from Governmental Entities (including in
connection with the HSR Act and any other applicable Law) and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any) and the taking of
all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, provided, that, Parent will not be required to
agree, and the Company will not agree without Parent’s consent, to waive any rights or accept any
limitations on its operations or to dispose of any assets in connection with obtaining any such
consent or authorization, but at Parent’s written request, the Company will agree to any such
waiver, limitation or disposal, which agreement may, at the Company’s option, be conditioned upon
and effective as of the Effective Time, (ii) the responding to any information requests from
Governmental Entities as soon as reasonably practicable, (iii) the obtaining of all necessary
Consents or waivers from third parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or the consummation of
the Transactions, including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed, and (v) the execution and delivery of any
additional instruments necessary to consummate the Transactions and to fully carry out the purposes
of this Agreement. In connection with and without limiting the foregoing, the Company and the
Company Board will (i) use commercially reasonable efforts to ensure that no state takeover statute
or similar statute or regulation is or becomes applicable to any Transaction or this Agreement and
(ii) if any state takeover statute or similar statute or regulation becomes applicable to any
Transaction or this Agreement, use commercially reasonable efforts to ensure that the Merger and
the other Transactions may be consummated as promptly as practicable on the terms contemplated by
this Agreement. To the extent permitted by applicable Law relating to the exchange of information,
(i) the Company will promptly furnish Parent with copies of notices or other communications
received by the Company from any Governmental Entity with respect to the Transactions, (ii) the
Company will promptly furnish such necessary information and reasonable assistance as Parent may
reasonably request in connection with the foregoing, and (iii) the Company and Parent and their
respective counsel will have the right to review in advance, and to the extent practicable each
will consult the other on, any filing made with, or written materials submitted to, any
Governmental Entity in connection with the Merger and the other Transactions. The Company and
Parent will provide
- 33 -
the other party and its counsel with the opportunity to participate in any meeting with any
Governmental Entity in respect of any filing, investigation or other inquiry in connection with the
Merger or the other Transactions.
(b) The Company will give prompt notice to Parent, and Parent or Sub will give prompt
notice to the Company, of (i) any representation or warranty made by it contained in this Agreement
that is qualified as to materiality or Company Material Adverse Effect becoming untrue or
inaccurate in any respect or any such representation or warranty that is not so qualified becoming
untrue or inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement; provided, however, that no such notification will affect the
representations, warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
6.04. Employees and Employee Benefits.
(a) Salary and Wages. The Surviving Corporation will cause the Company to
continue the employment effective immediately after the Closing Date of all of the Company’s
employees, including each such employee on medical, disability, family or other leave of absence as
of the Closing Date. All such retained employees of the Company and Company Subsidiaries who are
employed by the Company and Company Subsidiaries immediately following the Closing Date are
referred to as “Retained Employees.” The continued employment immediately following the
Closing Date of each such Retained Employee will be on substantially similar terms and conditions,
and in each case will provide at least the same base wages or annual base salary, annual rate of
bonus potential (determined as a percentage of annual base salary), vacation accrual, vacation
banking and 401(k) match (but excluding any equity plan program or arrangement) provided to each
such Retained Employee on the Closing Date for a period not to extend beyond December 31, 2011;
provided, however, that for the year ending December 31, 2012, each such Retained
Employee will be entitled to receive the equivalent of the greater of (i) the 401(k) match such
Retained Employee would be eligible to receive under the Company’s 401(k) plan or (ii) the amount
payable under the terms of Parent’s Investment and Employee Stock Ownership Plan, as amended and
restated. Nothing in this Section 6.04(a) will obligate Parent, Surviving Corporation or
the Company to continue the employment of any such Retained Employee for any specific period.
(b) Employee Benefits. As of the Closing Date and for a period not to extend
beyond December 31, 2011, Parent will provide, or will cause the Surviving Corporation to provide,
each Retained Employee with employee benefits (excluding any equity based compensation or any
Parent sponsored severance benefit) that are substantially similar in the aggregate to similarly
situated employees of Parent. As of the Closing Date and for a period not to extend beyond
December 31, 2011, in the event that a Retained Employee terminates employment from the Surviving
Corporation after the Closing, Parent will provide, or will cause the Surviving Corporation to
provide, each such Retained Employee with severance benefits, if eligible therefor, equal to those
provided under a Plan in effect as of the date of this Agreement. Notwithstanding anything in this
Agreement to the contrary, Retained Employees will retain after the Closing all benefits under the
Company’s Fifth Amended and Restated Severance Pay
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Plan for a period following the Effective Time until December 31, 2012, which Plan will not be
amended or modified by Parent or the Surviving Corporation until the expiration of such period.
(c) Employee Service Credit. Parent (i) will give, or cause the Surviving
Corporation to give, each Retained Employee service credit granted by the Company prior to Closing
under any comparable Company benefit plan solely for purposes of eligibility to participate and
vesting in eligible benefits provided that Retained Employees will in all events only be eligible
to participate in a Parent employee benefit plan based on benefits available to similarly situated
employees as if hired by Parent as of the Closing Date (which for the avoidance of doubt does not
include service credit for a benefit in any Parent defined benefit pension plan or retiree health
or retiree welfare benefit plan), (ii) will give, or cause the Surviving Corporation to give, each
Retained Employee service credit granted by the Company prior to Closing under any comparable
personnel policies that cover the Retained Employee after the Closing Date, including any vacation
and sick leave, for purposes of entitlement to vacation and sick leave, (iii) will allow such
Retained Employees to participate in each plan providing welfare benefits (including medical, life
insurance, long-term disability insurance and long-term care insurance) in the plan year in which
the Closing occurs without regard to preexisting-condition limitations, waiting periods, evidence
of insurability or other exclusions or limitations not imposed on the Retained Employee by the
corresponding Plans immediately prior to the Closing Date, and (iv) if any of the Welfare Plans are
terminated prior to the end of the plan year that includes the Closing Date, Parent will credit the
Retained Employee with any expenses that were covered by the Plans for purposes of determining
deductibles, co-pays and other applicable limits under any similar replacement plans.
(d) Labor Agreements. As of and after the Closing, the Surviving Corporation or
its relevant Subsidiaries will continue (for so long as such Contracts are in effect) to be bound
by the Collective Bargaining Agreements.
(e) COBRA. The Surviving Corporation will be responsible for providing COBRA to
employees and former employees of the Company and their dependents who are entitled to COBRA under
the terms of the Company’s health plan as of the Closing.
(f) No Third Party Beneficiaries. Nothing in this Agreement will create any right
or obligation which is enforceable by any employee, former employee, Retained Employee or any other
Person with respect to any terms or conditions of employment, including, but not limited to, the
benefits and compensation described in this Section 6.04. For the avoidance of doubt, any
amendments to the Company’s, the Company Subsidiaries’, Parent’s and the Surviving Corporation’s
benefit and compensation plans, programs or arrangements will occur only in accordance with their
respective terms and will be pursuant to action taken by the Company, the Company Subsidiaries,
Parent and the Surviving Corporation which are independent of the consummation of this Agreement or
any continuing obligations hereunder.
6.05. Indemnification, Exculpation and Insurance. (a) From and after the
Effective Time, to the fullest extent permitted by Law, Parent will, and will cause the Surviving
Corporation to, indemnify, defend and hold harmless the current or former directors, officers,
employees or agents of the Company and the subsidiaries of the Company (the “Covered
Persons”) against all losses, claims, damages, liabilities, fees and expenses (including
attorneys’
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fees and disbursements), Judgments, fines and amounts paid in settlement (in the case of
settlements, with the approval of the indemnifying party (which approval will not be unreasonably
withheld)) (collectively, “Losses”), as incurred (payable monthly upon written request
which request will include reasonable evidence of the Losses set forth therein) to the extent
arising from, relating to, or otherwise in respect of, any actual or threatened action, suit,
proceeding or investigation, in respect of actions or omissions occurring at or prior to the
Effective Time in connection with such indemnified party’s duties as an officer or director of the
Company or any of its subsidiaries, as a member of any committee thereof, or serving at the request
of the Company or any of its Subsidiaries as a director, officer, fiduciary, employee or agent of
an employee benefit plan or another corporation, partnership, joint venture, trust or other
enterprise, including in respect of this Agreement, the Merger and the other Transactions.
(b) Parent will, to the fullest extent permitted by Law, cause the Surviving Corporation
to honor all the Company’s obligations to indemnify the Covered Persons for acts or omissions by
such Covered Persons occurring at or prior to the Effective Time (including the advancement of
funds and expenses to the extent provided under the Company Charter, the Company Bylaws or
individual indemnity or other agreements to which such Covered Persons are a party as in effect on
the date hereof subject to the reimbursement provisions thereof), and such obligations will survive
the Merger and will continue in full force and effect in accordance with the terms of the Company
Charter, the Company Bylaws and such individual indemnity agreements from the Effective Time until
the expiration of the applicable statute of limitations with respect to any claims against such
Covered Persons arising out of such acts or omissions. Parent will, to the fullest extent
permitted by Law, cause the Surviving Corporation to advance funds for expenses incurred by Covered
Persons so indemnified in defending a civil or criminal action, suit or proceeding relating to the
indemnification obligations referenced in the immediately preceding sentence in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking made in
accordance with the Company Charter, the Company Bylaws and individual indemnity agreements (unless
otherwise prohibited by Law) by or on behalf of such Covered Person to repay such amount if it will
be ultimately determined that he or she is not entitled to the indemnification referenced in the
immediately preceding sentence.
(c) For a period of six years after the Effective Time, Parent will cause to be maintained
in effect the current policies of directors’ and officers’ liability insurance maintained by the
Company (provided that Parent may substitute therefor policies with reputable and financially sound
carriers of at least the same coverage and amounts containing terms and conditions which are no
less advantageous) with respect to claims arising from or related to facts or events which occurred
at or before the Effective Time; provided, however, that Parent will not be
obligated to make annual premium payments for such insurance to the extent such premiums exceed
300% of the annual premiums paid as of the date hereof by the Company for such insurance (such 300%
amount, the “Maximum Premium”). If such insurance coverage cannot be obtained at all, or
can only be obtained at an annual premium in excess of the Maximum Premium, Parent will maintain
the most advantageous policies of directors’ and officers’ insurance obtainable for an annual
premium equal to the Maximum Premium.
(d) In the event the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and will not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of
its
- 36 -
properties and assets to any Person, then and in each such case, proper provision will be made
so that such continuing or surviving corporation or entity or transferee of such assets, as the
case may be, will assume all of the applicable obligations set forth in Section 6.04 and
this Section 6.05.
(e) Withholding. Parent or the Surviving Corporation will withhold all required
amounts from payments to terminated employees that are nondeductible under Section 280G of the
Code, in amounts to be specified in a tax opinion given by BDO USA, LLP to both Parent and the
Company (which may be separately delivered to Parent and the Company so long as the opinions
contained in such separate deliveries are identical) based on generally accepted accounting
standards prior to Closing.
(f) Each of Parent, the Company and the Surviving Corporation acknowledges that the
consummation of the Merger and the other transactions contemplated hereby will give each of the
participants under the Company’s Fifth Amended and Restated Key Employee Protection Plan, as
amended, the right to terminate their employment for “Good Reason,” as such term is defined in such
Plan.
(g) The Covered Persons and the participants in the Company’s Fifth Amended and Restated Key
Employee Protection Plan as amended (and their successors and heirs), are intended third party
beneficiaries of this Section 6.05, and this Section 6.05 will not be amended in a
manner that is adverse to the Covered Persons or such participants (including their successors and
heirs) or terminated without the consent of the Covered Persons and such participants (including
their successors and heirs) affected thereby.
6.06. Public Announcements. Parent and Sub, on the one hand, and the Company, on the
other hand, will use commercially reasonable efforts to consult with each other before issuing,
and, to the extent reasonably practicable, provide each other the opportunity to review and comment
upon, any press release or other public statements with respect to the Merger and the other
Transactions and will not issue any such press release or make any such public statement prior to
such consultation, except as may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange.
6.07. Transfer Taxes. All stock transfer, real estate transfer, documentary, stamp,
recording and other similar Taxes (including interest, penalties and additions to any such Taxes)
(“Transfer Taxes”) incurred in connection with the Transactions will be paid by either Sub
or the Surviving Corporation, and the Company will cooperate with Sub and Parent in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes.
6.08. Stockholder Litigation. The Company will give Parent the opportunity to
participate in the defense or settlement of any stockholder litigation against the Company and its
directors relating to any Transaction, and no such settlement may be agreed to without Parent’s
consent, which will not be unreasonably withheld, delayed or conditioned.
6.09. Other Actions by Parent. Parent will not, and will use its commercially
reasonable efforts to cause its Affiliates not to, take any action that would reasonably be
expected to result in any condition to the Merger set forth in Article VII not being
satisfied.
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6.10. Rule 16b-3. Prior to the Effective Time, the Company may take such steps as may
be reasonably requested by any party hereto to cause dispositions of Company equity securities
(including derivative securities) pursuant to the Transactions by each individual who is a director
or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act in
accordance with that certain No-Action Letter dated January 12, 1999 issued by the SEC regarding
such matters.
6.11. Actions with Respect to Existing Debt. (a) Promptly after the Effective Time
but in any event on the same date on which the Effective Time occurs, Parent will (i) deposit, or
cause the Surviving Corporation to deposit, adequate funds to effect satisfaction and discharge on
the Closing Date pursuant to and in accordance with Section 8.02 of the Indenture, on the basis of
arrangements having been made to redeem all issued and outstanding Notes not held by the Company,
pursuant to a notice of redemption, in accordance with the Indenture (a “Redemption
Notice”) mailed commencing on the Closing Date, (ii) cause the Surviving Corporation to prepare
and mail the Redemption Notice pursuant to Article III of the Indenture and pursuant to the related
provisions of the Notes, (iii) elect to redeem (and instruct the Indenture trustee to give notice
of redemption of) all the Notes on the date that is at least 30 days after the Closing Date, and
(iv) take, or cause the Surviving Corporation to take, other such actions as may be necessary so to
redeem the Notes on such redemption date pursuant to Article III of the Indenture and effect a
satisfaction and discharge of the Indenture on the Closing Date pursuant to Section 8.02 of the
Indenture. Effective as of the Effective Time, the Company and the Parent shall have entered into
an irrevocable trust agreement or other instrument with the Indenture trustee so providing for the
matters specified in the previous sentence.
(b) Prior to the Closing Date, the Company, and each of the Parent and Sub, will cooperate and
take such actions, and execute such documents as may be reasonably requested by the trustee under
the Indenture, in order to comply with the provisions of Section 5.01 of the Indenture, including
providing an officer’s certificate and opinion of counsel in a form reasonably acceptable to the
trustee, and to enable Parent to fulfill its obligations under Section 6.11(a) of this Agreement
and to satisfy and discharge the Notes as described therein.
6.12. Closing Statement. No later than three business days before Closing, the
Company will prepare and deliver to Parent and Sub the Closing Statement. The Company, Parent and
Sub agree to be reasonably available at each other’s request to meet and discuss any and all
financial and business matters related to the preparation of the Closing Statement.
6.13. Real Property Holding Corporation Determination. During the period commencing
on the date of this Agreement and continuing thereafter until the Effective Time, the Company will
use commercially reasonable efforts to determine as promptly as practicable whether it or any
Company Subsidiary is or has been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code. If the Company is determined to be a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code, the Company will
provide to Parent all information available to the Company to assist in the determination of the
amount of funds required to be withheld pursuant to Section 879(c)(2) of the Code prior to the
Closing Date.
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VII. CONDITIONS PRECEDENT
7.01. Conditions to Each Party’s Obligation to Effect the Merger. The respective
obligation of each party to effect the Merger is subject to the satisfaction or waiver on or prior
to the Closing Date of the following conditions:
(a) Stockholder Consent. The Company shall have obtained the Stockholder Consent.
(b) Antitrust. The waiting period (and any extension thereof), if any, applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.
(c) No Injunctions or Restraints. No temporary restraining order, preliminary or
permanent injunction or other Order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that prior to asserting this condition, each of the parties
shall have used commercially reasonable efforts to prevent the entry of any such injunction or
other Order and to appeal as promptly as possible any such injunction or other Order that may be
entered.
(d) Closing Statement. Parent shall have approved the Closing Statement (such
approval not to be unreasonably withheld delayed or conditioned); provided, however, that in the
event that the Adjustment Amount shown on such Closing Statement equals or exceeds $1,500,000, this
condition shall be deemed satisfied.
7.02. Conditions to Obligations of Parent and Sub. The obligations of Parent and Sub
to effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of the Company
contained in Section 3.03 shall be true and correct in all respects (except for any de
minimus inaccuracy) both as of the date of this Agreement and as of the Closing Date and all the
other representations and warranties set forth in this Agreement that are qualified as to
materiality or Company Material Adverse Effect shall be true and correct and those not so qualified
shall be true and correct in all material respects, as of the date of this Agreement and as of the
Closing Date as though made on the Closing Date, except to the extent such representations and
warranties expressly related to an earlier date (in which case such representations and warranties
qualified as to materiality or Company Material Adverse Effect shall be true and correct, and those
not so qualified shall be true and correct in all respects, on and as of such earlier date).
Parent shall have received a certificate signed on behalf of the Company by an executive officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have performed in
all material respects all obligations required to be performed by it under this Agreement at or
prior to the Closing Date, and Parent shall have received a certificate signed on behalf of the
Company by an executive officer of the Company to such effect.
(c) Required Consents. The Company shall have obtained the consents set forth in
Section 7.02(c) of the Company Disclosure Letter.
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(d) Company Material Adverse Effect. There shall not have been or occurred any event,
change, occurrence or circumstance that, individually or in the aggregate with any such events,
changes, occurrences or circumstances, has had or which could reasonably be expected to have a
Company Material Adverse Effect since December 31, 2010.
(e) Acknowledgments. The Company shall obtain written statements executed by each of
Xxxx X. Xxxxxx, Xxxxx Xxxxxxx and Xxxxxxx X. Xxxx acknowledging that if a Transaction Fee (as
defined in that certain Amended and Restated Employment Agreement dated June 16, 2009 between Xxxx
X. Xxxxxx and the Company, as amended (the “Genova Agreement”)) is paid to any person
(including but not limited to Xxxx X. Xxxxxx) in connection with a Change of Control (as defined in
the Genova Agreement), notwithstanding any provision in the Company’s Long-Term Incentive Plan to
the contrary, all issued and outstanding performance units awarded to him under the terms of the
Company’s Long-Term Incentive Plan shall immediately lapse and have no present or future value
whether or not he individually receives a payment of any amount of the Transaction Fee.
7.03. Conditions to Obligation of the Company. The obligation of the Company to
effect the Merger is further subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and
Sub in this Agreement that are qualified as to materiality or Parent Material Adverse Effect shall
be true and correct and those not so qualified shall be true and correct in all material respects,
as of the date of this Agreement and on the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality or Parent Material Adverse
Effect shall be true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). The Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall have performed
in all material respects all obligations required to be performed by them under this Agreement at
or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.
VIII. TERMINATION, AMENDMENT AND WAIVER
8.01. Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after receipt of the Stockholder Consent:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before October 31, 2011 (the “Outside
Date”), unless the failure to consummate the Merger is the result of a willful and
material breach of this Agreement by the party (or Sub in the case of Parent) seeking to
terminate this Agreement; provided, however, that the passage of such period
will be tolled for any part thereof during which any party will be subject to a nonfinal
Order,
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decree, ruling or Action restraining, enjoining or otherwise prohibiting the
consummation of the Merger; or
(ii) if any Governmental Entity issues an order, decree or ruling or takes any other
action permanently enjoining, restraining or otherwise prohibiting the Merger and such
Order, decree, ruling or other Action has become final and nonappealable;
(c) by Parent, if the Company breaches or fails to perform in any material respect any of its
representations, warranties or covenants contained in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in Section 7.02(a) or
7.02(b) and (ii) cannot be or has not been cured by the Outside Date (provided that neither
Parent nor Sub is then in material breach of any representation, warranty or covenant contained in
this Agreement);
(d) by Parent, prior to the date that is 40 days following the date of this Agreement or such
later date to which such 40-day period has been extended pursuant to Section 5.02(c), if
(i) the Company Board has publicly withdrawn its approval or recommendation of this Agreement or
the Merger or has publicly recommended to the stockholders of the Company any Acquisition Proposal,
or (ii) a tender or exchange offer, that if successful, would result in any Person or group
becoming the beneficial owner of 20% or more of the outstanding Company Stock, has been commenced
(other than by Parent or any Affiliate of Parent) and the Company Board fails to recommend that the
stockholders of the Company not tender their shares in such tender or exchange offer within ten
business days of such commencement, or (iii) a Representative of the Company or any subsidiary of
the Company takes any action that would constitute a willful material breach of this Agreement by
the Company pursuant to Section 5.02(d);
(e) by the Company, prior to the date that is 40 days following the date of this Agreement or
such later date to which such 40-day period has been extended pursuant to Section 5.02(c),
in order to concurrently enter into a definitive agreement with respect to a Superior Proposal,
provided that the Company will have complied in all material respects with the terms of Section
5.02;
(f) by Parent, if the Stockholder Consent has not been executed and delivered to the Company
and Parent within one business day after the date of this Agreement; or
(g) by the Company, if Parent or Sub breaches or fails to perform in any material respect any
of its representations, warranties or covenants contained in this Agreement, which breach or
failure to perform (i) would give rise to the failure of a condition set forth in Section
7.03(a) or 7.03(b) and (ii) cannot be or has not been cured by the Outside Date
(provided that the Company is not then in material breach of any representation, warranty or
covenant in this Agreement).
8.02. Effect of Termination. In the event of termination of this Agreement by either
the Company or Parent as provided in Section 8.01, this Agreement will forthwith become
void and have no effect, without any liability or obligation on the part of Parent, Sub or the
Company, other than the last sentence of Section 6.02, Section 6.06, Section
8.02, Section 8.03 and Article IX, which provisions will survive such
termination, and except to the extent that such
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termination results from the willful, knowing and intentional material breach by a party (or
Sub in the case of Parent) of any representation, warranty or covenant set forth in this Agreement.
In the event of termination of this Agreement by either the Company or Parent as provided in
Section 8.01, the Stockholder Consent will be deemed automatically and immediately revoked
and void and will have no further force or effect.
8.03. Fees and Expenses. (a) Except as provided in this Section 8.03, all
fees and expenses incurred in connection with the Merger and the other Transactions will be paid by
the party incurring such fees or expenses, whether or not the Merger is consummated.
(b) The Company will pay to Parent the Termination Fee if:
(i) | Parent terminates this Agreement pursuant to Section 8.01(d) or 8.01(f); or | ||
(ii) | the Company terminates this Agreement pursuant to Section 8.01(e). |
(c) The term “Termination Fee” means $3,750,000. Any Termination Fee due under
Section 8.03(b) will be paid by wire transfer of same-day funds on the effective date of
termination of this Agreement. The Company acknowledges that the agreements contained in
Section 8.03(b) are an integral part of the Transactions, and that, without these
agreements, Parent would not enter into this Agreement. It is expressly acknowledged that in no
event will the Company be required to pay the Termination Fee on more than one occasion.
(d) If this Agreement is terminated by the Company pursuant to Section
8.01(f) after July 11, 2011 and the Company has not given written notice to BASF of
its decision to permanently close the Esters Unit (as defined in the BASF Contract) on or before
July 10, 2011, then, in addition to all other rights and remedies of the Company, Parent will pay
the Company $2,637,048.
8.04. Amendment. Subject to Section 9.09, this Agreement may be amended by
the parties at any time before or after receipt of the Stockholder Consent; provided,
however, that after the effectiveness of the Stockholder Consent, there will be made no
amendment that by Law requires further approval by the stockholders of the Company without the
further approval of such stockholders. Subject to Section 9.09, this Agreement may not be
amended except by an instrument in writing signed on behalf of each of the parties.
8.05. Extension; Waiver. At any time prior to the Effective Time, the parties may (a)
extend the time for the performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties contained in this Agreement or in
any document delivered pursuant to this Agreement, or (c) subject to the proviso of Section
8.04, waive compliance with any of the agreements or conditions contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver will be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise will not constitute a
waiver of such rights.
8.06. Procedure for Termination, Amendment, Extension or Waiver. A termination of
this Agreement pursuant to Section 8.01, an amendment of this Agreement pursuant to
Section
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8.04 or an extension or waiver pursuant to Section 8.05 will, in order to be
effective, require in the case of Parent or Sub, action by its Board of Directors or, to the extent
permitted by Law, the duly authorized designee of its Board of Directors, and in the case of the
Company, action by the Company Board (after consultation with the Special Committee and its
advisors) or, to the extent permitted by Law, its duly authorized designee.
IX. GENERAL PROVISIONS
9.01. Nonsurvival of Representations and Warranties. None of the representations and
warranties in Article IV of this Agreement will survive the Effective Time. This
Section 9.01 will not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
9.02. Notices. All notices, requests, claims, demands and other communications under
this Agreement will be in writing and will be deemed given upon receipt by the parties at the
following addresses (or at such other address for a party as will be specified by like notice):
(a) | if to Parent or Sub, to: |
||
Xxxxxxx Chemical Company X.X. Xxx 000 Xxxxxxxxx, XX 00000-0000 Fax: (000) 000-0000 Email: xxxxxxxxxxxx@xxxxxxx.xxx Attention: Xxxxx Xxxxxxxxxx |
|||
with a copy (which will not constitute notice) to: |
|||
Xxxxx Day 0000 Xxxxxxxxx Xxxxxx, X.X. Xxxxx 000 Xxxxxxx, Xxxxxxx 00000-0000 Fax: (000) 000-0000 Email: xxxxxxxxxx@xxxxxxxx.xxx Attention: Xxxxxxxx X. Xxxxxxxxx, Xx. |
|||
(b) | if to the Company, to: | ||
Sterling Chemicals, Inc. 000 Xxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000-0000 Attention: General Counsel Fax: (000) 000-0000 Email: xxxxx@xxxxxxxxxxxxxxxxx.xxx |
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with copies (which will not constitute notice) to: | |||
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 Attention: Xxxxx X. Xxxx, III Fax: (000) 000-0000 Email: xxxxx@xxxxxxxx.xxx |
|||
and |
|||
Xxxxxx & Bird LLP 00 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx Xxxxxx Fax: (000) 000-0000 Email: xxxxx.xxxxxx@xxxxxx.xxx |
9.03. Definitions. For purposes of this Agreement:
“Action” has the meaning set forth in Section 3.08.
“Acquisition Proposal” has the meaning set forth in Section 5.02(a).
“Adjustment Amount” means in the event that there is a Cash Balance Deficit as of the
Closing Date, the sum of (a) to the extent such Cash Balance Deficit is due to an Operational
Deficit, 50% of the Operational Deficit up to a maximum of $1,000,000 and (b) to the extent such
Cash Balance Deficit is due to a Transaction Cost Deficit, 50% of the Transaction Cost Deficit, up
to a maximum amount of $500,000; provided, however, that (i) if there is no Cash
Balance Deficit (even if there is an Operational Deficit and/or a Transaction Cost Deficit), the
Adjustment Amount will be zero and (ii) in no event will the Adjustment Amount be greater than
$1,500,000 in the aggregate.
“Affiliate” of any Person means another Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control with, such first
Person.
“Aggregate Common Stock Consideration” means an amount equal to the product of (a) the
Common Stock Consideration and (b) the number of shares of Company Common Stock issued and
outstanding.
“Agreement” has the meaning set forth in the Introductory Paragraph.
“BASF” has the meaning set forth in Section 3.09.
“BASF Contract” has the meaning set forth in Section 3.09.
“Book-Entry Shares” has the meaning set forth in Section 2.02(a).
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“BP Receivable Amount” means an amount, as reasonably estimated by the Company, equal
to the accounts receivable related to the Acetic Acid Profit Sharing Account owing by BP Amoco
Chemical Company to the Company as of the Closing Date.
“Cash Balance Deficit” means the amount, as set forth on the Closing Statement, by
which (a) the sum of (i) the aggregate principal amount of the issued and outstanding Notes not
held by the Company plus accrued and unpaid interest thereon plus (ii) accrued and unpaid
Transaction Costs exceeds (b) the sum of (i) the aggregate amount of cash and cash equivalents of
the Company and its wholly owned subsidiaries (including cash and cash equivalents pledged to
secure obligations of the Company related to outstanding letters of credit) plus (ii) the BP
Receivable Amount. If the Cash Balance Deficit is an amount less than zero, a Cash Balance Deficit
will not exist for any purposes of this Agreement.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended.
“Certificate of Merger” has the meaning set forth in Section 1.03.
“Certificates” has the meaning set forth in Section 2.02(a).
“Closing” has the meaning set forth in Section 1.02.
“Closing Date” has the meaning set forth in Section 1.02.
“Closing Statement” means a statement prepared by the Company in accordance with GAAP
and the accounting principles and policies used in connection with the preparation of the financial
statements in the Filed Company SEC Documents, which presents the Company’s reasonable estimate as
of the date of its delivery of the Closing Statement to Parent of: (a) the aggregate amount of cash
(including restricted cash) and cash equivalents of the Company, (b) the BP Receivable Amount, (c)
the aggregate principal amount of the issued and outstanding Notes not held by the Company and the
accrued interest thereon, (d) the Transaction Costs and (e) whether a Cash Balance Deficit,
Transaction Cost Deficit or Operational Deficit exist. For illustrative purposes, attached as
Exhibit A of the Disclosure Letter is a sample Closing Statement.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act.
“Code” has the meaning set forth in Section 2.02(g).
“Collective Bargaining Agreements” has the meaning set forth in Section 3.13.
“Common Stock Consideration” has the meaning set forth in Section 2.01(c).
“Commonly Controlled Entity” has the meaning set forth in Section 3.12(a).
“Company” has the meaning set forth in the Introductory Paragraph.
“Company Board” has the meaning set forth in the Recitals.
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“Company Bylaws” has the meaning set forth in Section 3.03.
“Company Capital Stock” has the meaning set forth in the Recitals.
“Company Charter” has the meaning set forth in Section 3.03.
“Company Common Stock” has the meaning set forth in the Recitals.
“Company Disclosure Letter” has the meaning set forth in Article III.
“Company Intellectual Property” means any and all Intellectual Property the use of
which is material to the business of the Company and the Company Subsidiaries, taken as a whole,
used to produce esters for BASF pursuant to the Third Amended and Restated Plasticizers Production
Agreement of April 1, 2008 as conducted during the time that agreement was in effect.
“Company Material Adverse Effect” means a material adverse effect on (a) the financial
condition or results of operations of the Company and the Company Subsidiaries, taken as a whole,
other than any event, change, effect, development, condition or occurrence arising out of or
relating to (i) general economic or political conditions in the United States of America, (ii)
conditions generally affecting industries in which any of the Company or the Company Subsidiaries
operates, (iii) any act of terrorism or outbreak of hostilities or war, in the United States or
elsewhere, (iv) changes in Law, (v) earthquakes, hurricanes, floods or other natural disasters,
(vi) changes in interest rates, (vii) changes in the capital markets, (viii) any failure of the
Company to meet any internal or external projections, forecasts or estimates of revenues, earnings
or operating performance for any period, (ix) changes in the market price or trading volume of the
Company Common Stock, (x) the announcement or pendency of this Agreement or the matters
contemplated hereby or the compliance by any party with the provisions of this Agreement; provided
further, however, (A) that in the case of clauses (vi) through (ix), any change or failure will not
prevent or otherwise affect a determination that any effect underlying such change or failure has
resulted in, or contributed to, a Company Material Adverse Effect and (B) that, in the case of
clauses (i), (ii), (iii), (iv) or (v), the impact on the Company is not disproportionately adverse
as compared to others in the industry or (b) the ability of the Company to consummate the Merger
and the other Transactions to be performed or consummated by the Company.
“Company SEC Documents” has the meaning set forth in Article III.
“Company Stock Plan” means the Second Amended and Restated 2002 Stock Plan of the
Company.
“Company Subsidiaries” has the meaning set forth in Section 3.01.
“Confidentiality Agreement” means the confidentiality agreement, dated September 23,
2010 between the Company and Parent.
“Consent” has the meaning set forth in Section 3.05(b).
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“Contract” means a contract, lease, license, indenture, note, bond, agreement,
mortgage, deed of trust, permit, concession, franchise or other instrument.
“Covered Persons” has the meaning set forth in Section 6.05(a).
“DGCL” has the meaning set forth in the Recitals.
“Dissenting Shares” has the meaning set forth in Section 2.01(d).
“Dissenting Stockholder” has the meaning set forth in Section 2.01(d).
“Effective Time” has the meaning set forth in Section 1.03.
“Environment” means soil, soil vapor, surface water, groundwater, land, sediment,
surface or subsurface structures or strata, ambient air, or indoor air.
“Environmental Authority” means any department, agency, or other body or component of
any Governmental Entity that lawfully exercises jurisdiction under any Environmental Law.
“Environmental Authorization” means any license, permit, Order, approval, consent,
notice, registration, filing or other form of authorization, permission or action required under
any Environmental Law.
“Environmental Law” means any Law relating to pollution (including greenhouse gases)
or the protection of human health, the Environment, natural resources or occupational and worker
health and safety.
“Environmental Liability” means any liability or obligation of any kind or nature
(whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due) arising
under any Environmental Law or Environmental Authorization.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” has the meaning set forth in Section 3.05(b).
“Exchange Fund” has the meaning set forth in Section 2.02(a).
“Filed Company SEC Documents” has the meaning set forth in Section 3.06(c).
“GAAP” has the meaning set forth in Section 3.06(b).
“Genova Agreement” has the meaning set forth in Section 7.02(e).
“Governmental Entity” means any federal, state, local or foreign government or any
court of competent jurisdiction, administrative agency or commission or other governmental entity
or instrumentality, domestic or foreign.
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“Hazardous Substance” means any chemicals, pollutants, contaminants, toxins, wastes or
substances defined or otherwise classified as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous constituents,” “toxic substances,” “contaminants,” or
“pollutants” under any applicable Environmental Law, including asbestos or asbestos containing
material, petroleum and its by-products, polychlorinated byphenyls and urea formaldehyde.
“HSR Act” has the meaning set forth in Section 3.05(b).
“Indenture” means that certain Indenture, dated March 29, 2007, between the Company
and U. S. Bank National Association, as trustee.
“Information Statement” has the meaning set forth in Section 3.05(b).
“Intellectual Property” means any and all domestic and foreign intellectual property,
including any and all (a) patents, patent applications and patent disclosures, together with all
reissues, continuations, continuations-in-part, divisionals, revisions, extensions and
reexaminations thereof (b) trademarks, service marks, logos, trade names, corporate names, domain
names, trade dress, including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (c) copyrights and copyrightable works and all
applications, registrations and renewals in connection therewith, (d) trade secrets and
confidential or proprietary business information, whether or not subject to statutory registration
(including research and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, methods, schematics, technology, technical data, designs, drawings,
flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), and (e) proprietary rights in and to
computer software (including source code, databases and related documentation) (other than
commercially available off-the-shelf software).
“Inventory” means inventories of raw materials and supplies, manufactured and
purchased parts, goods in process and finished goods.
“Judgment” means a judgment, ruling, order, writ, injunction or decree.
“Knowledge” and similar phrases means (a) with respect to the Company and the Company
Subsidiaries, the actual knowledge after reasonable inquiry customary for a person holding such
position of Xxxx X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxx or Xxxxx Xxxxx (it being understood that the Company has
not undertaken, nor will the Company have any duty to undertake, any investigation concerning any
matter as to which a representation or warranty is made as to the Company’s Knowledge) or (b) with
respect to Parent and Sub, the actual knowledge after reasonable inquiry customary for a person
holding such position of the executive officers of Parent and Sub, respectively.
“Law” means any foreign, federal, state or local law (including common law), statute,
code, ordinance, rule, regulation, Order or other requirement.
“Leased Real Property” has the meaning set forth in Section 3.16(c).
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“Liens” has the meaning set forth in Section 3.02(a).
“Long-Term Incentive Plan” means that certain Long-Term Incentive Plan filed as
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2009.
“Losses” has the meaning set forth in Section 6.05(a).
“Maximum Premium” has the meaning set forth in Section 6.05(c).
“Measurement Date” has the meaning set forth in Section 3.03.
“Merger” has the meaning set forth in the Recitals.
“Merger Consideration” has the meaning set forth in Section 2.01(c).
“Moelis” has the meaning set forth in Section 3.19.
“Notes” means the Company’s 10 1/4% Senior Secured Notes issued pursuant to the
Indenture.
“Operational Deficit” means an amount equal to the Cash Balance Deficit less the
amount of any Transaction Cost Deficit.
“Options” means any option to purchase shares of Company Common Stock granted by the
Company to any employee, director, independent contractor or other service provider of the Company
or any subsidiary of the Company.
“Order” has the meaning set forth in Section 3.08.
“Outside Date” has the meaning set forth in Section 8.01(b).
“Owned Real Property” has the meaning set forth in Section 3.16(b).
“Parent” has the meaning set forth in the Introductory Paragraph.
“Parent Disclosure Letter” has the meaning set forth in Article IV.
“Parent Material Adverse Effect” means a material adverse effect on the ability of
Parent or Sub to consummate the Merger and the other Transactions.
“Parent Review Period” has the meaning set forth in Section 5.02(c).
“Parent SEC Documents” has the meaning set forth in Article IV.
“Paying Agent” has the meaning set forth in Section 2.02(a).
“Pension Plan” has the meaning set forth in Section 3.12(a).
- 49 -
“Permits” has the meaning set forth in Section 3.09.
“Person” means any individual, firm, corporation, partnership, company, limited
liability company, trust, joint venture, association, Governmental Entity or other entity.
“Plan” has the meaning set forth in Section 3.12(a).
“PPACA” means the Patient Protection and Affordable Care Act, as amended and the
guidance promulgated there under.
“Preferred Stock” has the meaning set forth in the Recitals.
“Preferred Stock Consideration” has the meaning set forth in Section 2.01(c).
“Redemption Notice” has the meaning set forth in Section 6.11(a).
“Representatives” has the meaning set forth in Section 5.02(a).
“Response” has the meaning set forth in CERCLA.
“Resurgence” has the meaning set forth in the Recitals.
“Retained Employee” has the meaning set forth in Section 6.04(a).
“SEC” has the meaning set forth in Article III.
“Securities Act” has the meaning set forth in Section 3.06(b).
“SOX” has the meaning set forth in Section 3.06(d).
“Special Committee” has the meaning set forth in the Recitals.
“Stockholder Consent” has the meaning set forth in the Recitals.
“Sub” has the meaning set forth in the Introductory Paragraph.
A Person will be deemed to be a “subsidiary” of another Person if the other Person
directly or indirectly owns or purports to own, beneficially or of record: (a) an amount of voting
securities of or other interests in such Person that is sufficient to enable the other Person to
elect at least a majority of the members of such Person’s board of directors or other governing
body; or (b) greater than 50% of the outstanding equity, voting or financial interests in such
Person.
“Superior Proposal” has the meaning set forth in Section 5.02(b).
“Surviving Corporation” has the meaning set forth in Section 1.01.
“Taxes” means all (a) federal, state, local and foreign taxes, assessments, duties or
similar charges of any kind whatsoever, including all corporate franchise, income, sales, use, ad
valorem, receipts, value added, profits, license, withholding, employment, excise, property, net
worth,
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capital gains, transfer, stamp, documentary, social security, payroll, environmental,
alternative minimum, occupation, recapture and other taxes, and including any interest, penalties
and additions imposed with respect to such amounts (b) liability for the payment of any amounts of
the type described in clause (a) as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group or a transferee or successor; and (c) liability for the
payment of any amounts as a result of an express or implied obligation to indemnify any other
Person with respect to the payment of any amounts of the type described in clause (a) or (b).
“Taxing Authority” means any federal, state, local or foreign governmental body
(including any subdivision, agency or commission thereof), or any quasi-governmental body, in each
case, exercising regulatory authority in respect of Taxes.
“Tax Return” means all returns, declarations of estimated tax payments, reports,
estimates, information returns and statements, including any related or supporting information with
respect to any of the foregoing, filed or to be filed with any Taxing Authority in connection with
the determination, assessment, collection or administration of any Taxes.
“Termination Fee” has the meaning set forth in Section 8.03(c).
“Transactions” has the meaning set forth in Section 1.01.
“Transaction Cost Deficit” means the amount, if any, by which the aggregate
Transaction Costs exceed $10,300,000.
“Transaction Costs” means the aggregate amount of the fees and expenses paid or
accrued by the Company as of the Closing Date and employment related payments for the items set
forth on Exhibit B of the Disclosure Letter as determined in accordance with the Closing Statement.
“Transfer Taxes” has the meaning set forth in Section 6.07.
“Unpaid Dividends” has the meaning set forth in Section 2.02(c).
“Voting Company Debt” has the meaning set forth in Section 3.03.
“Welfare Plans” has the meaning set forth in Section 3.12(a).
9.04. Interpretation; Company Disclosure Letter; Parent Disclosure Letter. When a
reference is made in this Agreement to a Section, such reference will be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used
in this Agreement, they will be deemed to be followed by the words “without limitation.” Each
party hereto has participated in the drafting of this Agreement, which each party acknowledges and
agrees is the result of extensive negotiations among the parties. The Company has set forth
information in the Company Disclosure Letter, and Parent and Sub have set forth information in the
Parent Disclosure Letter, that corresponds to the Section of this Agreement to which it relates. A
matter set forth in one Section of the Company Disclosure
- 51 -
Letter need not be set forth in any other Section of the Company Disclosure Letter, and a
matter set forth in one Section of the Parent Disclosure Letter need not be set forth in any other
Section of the Parent Disclosure Letter, so long as its relevance to the latter Section of the
Company Disclosure Letter or the Parent Disclosure Letter, as applicable, is readily apparent on
the face of the information disclosed in the Company Disclosure Letter to Parent or disclosed in
the Parent Disclosure Letter to the Company, as applicable. The fact that any item of information
is disclosed in the Company Disclosure Letter or the Parent Disclosure Letter will not be construed
to mean that such information is required to be disclosed by this Agreement.
9.05. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions
and provisions of this Agreement will nevertheless remain in full force and effect so long as the
economic or legal substance of the Transactions is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the Transactions are fulfilled to the extent possible.
9.06. Counterparts. This Agreement may be executed in one or more counterparts, all
of which will be considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other parties.
9.07. Entire Agreement; No Third-Party Beneficiaries. This Agreement, taken together
with the Company Disclosure Letter and the Parent Disclosure Letter, (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both written and oral, among the
parties with respect to the Transactions (other than, until the Effective Time, the Confidentiality
Agreement) and (b) except for the provisions of Section 6.05, as to which each Covered
Person and each participant in the Company’s Fifth Amended and Restated Key Employee Protection
Plan as amended (and their successors and heirs) will constitute a third party beneficiary and such
section will be enforceable thereby, are not intended to confer upon any stockholder, employee,
director, officer or other Person other than the parties hereto any rights or remedies.
Notwithstanding clause (b) of the immediately preceding sentence, following the Effective Time the
provisions of Article II will be enforceable by holders of Certificates or Book-Entry
Shares.
9.08. Governing Law. This Agreement will be governed by, and construed in accordance
with, the internal Laws of the State of Delaware applicable to agreements made and to be performed
wholly within such state.
9.09. Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement will be assigned, in whole or in part, by operation of Law or
otherwise by any of the parties without the prior written consent of the other parties, except that
Sub may assign, in its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no
such assignment will relieve Sub of any of its obligations under this Agreement. Subject to the
preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
- 52 -
9.10. Specific Performance; Enforcement. 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. It is accordingly agreed that the
parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any Delaware state court or
any federal court located in the State of Delaware, this being in addition to any other remedy to
which they are entitled at Law or in equity. In addition, each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any Delaware state court or any federal court
located in the State of Delaware in the event any dispute arises out of this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (c) agrees that it will not bring any action relating to this
Agreement in any court other than any Delaware state court or any federal court sitting in the
State of Delaware, and (d) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO
OR ARISING OUT OF THIS AGREEMENT.
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IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed this Agreement, all as of
the date first written above.
XXXXXXX CHEMICAL COMPANY |
||||
By: | /s/ Xxxxx X. Xxxxxxxxxx | |||
Name: | Xxxxx X. Xxxxxxxxxx | |||
Title: | Vice President, Assistant General Counsel and Secretary | |||
XXXXXXX XX, INC. |
||||
By: | /s/ Xxxxx X. Xxxxxxxxxx | |||
Name: | Xxxxx X. Xxxxxxxxxx | |||
Title: | Secretary and Vice President | |||
STERLING CHEMICALS, INC. |
||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | President and Chief Executive Officer | |||
[Signature Page to Merger Agreement]
EXHIBIT A
FORM OF CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
FIRST: The name of the corporation is Sterling Chemicals, Inc. (the “Corporation”).
SECOND: The address of its registered office in the State of Delaware is Corporation Service
Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000. The name
of its registered agent at such address is Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware, as it may be amended
from time to time, or any successor law.
FOURTH: The total number of shares of stock which the Corporation shall have authority to
issue is one thousand (1,000). All such shares are to be common stock, par value of $.01 per
share, and are to be of one class.
FIFTH: The Board of Directors is authorized to adopt, amend or repeal the bylaws of the
Corporation, except as otherwise provided therein. Election of directors need not be by ballot.
SIXTH: No director of the Corporation shall be liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any
breach of the director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing violation of law,
(c) under Section 174 of the Delaware General Corporation Law, or (d) for any transaction from
which the director derived an improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Corporation, in addition to the limitation on
personal liability provided herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this section by the stockholders
of the Corporation shall be prospective only and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such repeal or
modification.
SEVENTH: The Corporation reserves the right to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
EXHIBIT B
FORM OF BYLAWS
OF
SURVIVING CORPORATION
ARTICLE I
Meetings of Stockholders
Section 1.1. Annual Meetings. The annual meeting of stockholders for the election of
directors and for the transaction of such other business as may properly come before the meeting
shall be held each year at such date and time, within or without the State of Delaware, as the
Board of Directors shall determine.
Section 1.2. Special Meetings. Special meetings of stockholders for any purpose or
purposes may be called at any time by order of the Board of Directors or by stockholders holding
together at least a majority of all the shares of the corporation entitled to vote at the meeting,
and shall be held at such date and time, within or outside the State of Delaware, as may be
specified by such order. Whenever the directors shall fail to fix such place, the meeting shall be
held at the principal executive office of the corporation.
Section 1.3. Notice of Meetings. Written notice of all meetings of the stockholders,
stating the place (if any), date and hour of the meeting, the means of remote communications, if
any, by which stockholders and proxy holders may be deemed to be present in person and vote at such
meeting, and the place within the city or other municipality or community at which the list of
stockholders may be examined, shall be mailed or delivered to each stockholder not less than ten
(10) nor more than sixty (60) days prior to the meeting. Notice of any special meeting shall state
in general terms the purpose or purposes for which the meeting is to be held.
Section 1.4. Stockholder Lists. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected by any stockholder who
is present.
The stock ledger shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by this section or the books of the corporation, or to vote in
person or by proxy at any meeting of stockholders.
1
Section 1.5. Quorum. Except as otherwise provided by law or the corporation’s
certificate of incorporation, a quorum for the transaction of business at any meeting of
stockholders shall consist of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the corporation entitled to vote at the meeting, present in person
or by proxy. If there be no such quorum, the holders of a majority of such shares so present or
represented may adjourn the meeting from time to time, without further notice, until a quorum shall
have been obtained. When a quorum is once present it is not broken by the subsequent withdrawal of
any stockholder.
Section 1.6. Organization. Meetings of stockholders shall be presided over by the
Chairman, if any, or if none or in the Chairman’s absence the Vice-Chairman, if any, or if none or
in the Vice-Chairman’s absence the President, if any, or if none or in the President’s absence a
Vice-President, or, if none of the foregoing is present, by a chairman to be chosen by the
stockholders entitled to vote who are present in person or by proxy at the meeting. The Secretary
of the corporation, or in the Secretary’s absence an Assistant Secretary, shall act as secretary of
every meeting, but if neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall appoint any person present to act as secretary of the meeting.
Section 1.7. Voting; Proxies; Required Vote. At each meeting of stockholders, every
stockholder shall be entitled to vote in person or by proxy appointed by instrument in writing,
subscribed by such stockholder or by such stockholder’s duly authorized attorney-in-fact (but no
such proxy shall be voted or acted upon after one (1) year from its date, unless the proxy provides
for a longer period), and shall have one vote for each share of stock entitled to vote registered
in the name of such stockholder on the books of the corporation on the applicable record date fixed
pursuant to these bylaws. At all elections of directors the voting may but need not be by ballot
and a plurality of the votes of the shares present in person or represented by proxy at the meeting
and entitled to vote on the election of directors shall elect. Except as otherwise required by law
or the certificate of incorporation, any other action shall be authorized by the vote of the
majority of the shares present in person or represented by proxy at the meeting and entitled to
vote on the subject matter.
Section 1.8. Record Date for Stockholder Notice and Voting. For purposes of
determining the stockholders entitled to notice of any meeting or to vote, or entitled to receive
payment of any dividend or other distribution, or entitled to exercise any right in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less
than ten (10) days before the date of any such meeting nor more than sixty (60) days before any
other action. If the Board of Directors does not so fix a record date, the record date for
determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at
the close of business on the business day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the business day next preceding the day on which the
meeting is held.
Section 1.9. Action by Written Consent. Any action required or permitted to be taken
at any meeting of stockholders may, except as otherwise required by law or the certificate of
incorporation, be taken without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of record of the issued
2
and outstanding capital stock of the corporation having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and the writing or writings are filed with the
permanent records of the corporation. Prompt notice of the taking of corporate action without a
meeting by less than unanimous written consent shall be given to those stockholders who have not
consented in writing.
Section 1.10. Inspectors. The Board of Directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the meeting or any adjournment
thereof. If an inspector or inspectors are not so appointed, the person presiding at the meeting
may, but need not, appoint one or more inspectors. In case any person who may be appointed as an
inspector fails to appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each inspector, if any,
before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents, hear
and determine all challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of the person presiding
at the meeting, the inspector or inspectors, if any, shall make a report in writing of any
challenge, question or matter determined by such inspector or inspectors and execute a certificate
of any fact found by such inspector or inspectors.
ARTICLE II
Board of Directors
Section 2.1. General Powers. The business of the corporation shall be managed by or
under the direction of the Board of Directors which may exercise all such powers of the corporation
and do all such lawful acts and things which are not by statute or by the certificate of
incorporation or by these bylaws directed or required to be exercised or done by the stockholders,
or prohibited to the Board of Directors.
Section 2.2. Qualification; Number; Term; Remuneration. (a) Each director shall be
at least 18 years of age. A director need not be a stockholder or a resident of the State of
Delaware. The Board of Directors shall consist of one or more members, the number thereof to be
determined from time to time by resolutions of the Board of Directors.
(b) Directors who are elected at an annual meeting of stockholders, and directors who are
elected in the interim to fill vacancies and newly created directorships, shall hold office until
the next annual meeting of stockholders and until their successors are elected and qualified or
until their earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at each meeting of the Board of
3
Directors or a stated salary as director. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation therefore. Members of
special or standing committees may be allowed like compensation for attending committee meetings.
Section 2.3. Quorum and Manner of Voting. Except as otherwise provided by law, a
majority of the entire Board of Directors shall constitute a quorum. A majority of the directors
present, whether or not a quorum is present, may adjourn a meeting from time to time to another
time and place without notice. The vote of the majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
Section 2.4. Place of Meetings. Meetings of the Board of Directors may be held at
any place within or outside the State of Delaware, as may from time to time be fixed by resolution
of the Board of Directors, or as may be specified in the notice of meeting.
Section 2.5. Annual Meeting. Following the annual meeting of stockholders, the newly
elected Board of Directors shall meet for the purpose of the election of officers and the
transaction of such other business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of stockholders at the same place at which
such stockholders’ meeting is held.
Section 2.6. Regular Meetings. Regular meetings of the Board of Directors shall be
held at such times and places as the Board of Directors shall from time to time by resolution
determine. Notice need not be given of regular meetings of the Board of Directors held at times
and places fixed by resolution of the Board of Directors.
Section 2.7. Special Meetings. Special meetings of the Board of Directors shall be
held whenever called by the Chairman of the Board, President or by a majority of the directors then
in office.
Section 2.8. Notice of Meetings. A notice of the place, date and time and the
purpose or purposes of each meeting of the Board of Directors shall be given to each director by
mailing the same at least two (2) days before the special meeting, or by telephoning or emailing
the same or by delivering the same personally not later than the day before the day of the meeting.
Section 2.9. Organization. At all meetings of the Board of Directors, the Chairman,
if any, or if none or in the Chairman’s absence or inability to act the President, or in the
President’s absence or inability to act any Vice-President who is a member of the Board of
Directors, or in such Vice-President’s absence or inability to act a chairman chosen by the
directors, shall preside. The Secretary of the corporation shall act as secretary at all meetings
of the Board of Directors when present, and, in the Secretary’s absence, the presiding officer may
appoint any person to act as secretary.
Section 2.10. Telephonic Meetings. Unless otherwise restricted by the certificate of
incorporation of these bylaws, any member of the Board of Directors or any committee may
participate in a meeting by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at the meeting.
4
Section 2.11. Resignation. Any director may resign at any time upon written notice
to the corporation and such resignation shall take effect upon receipt thereof by the President or
Secretary, unless otherwise specified in the resignation. Any or all of the directors may be
removed, with or without cause, by the holders of a majority of the shares of stock outstanding and
entitled to vote for the election of directors.
Section 2.12. Vacancies. Unless otherwise provided in these bylaws, vacancies on the
Board of Directors, whether caused by resignation, death, disqualification, removal, an increase in
the authorized number of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or by a sole remaining director,
or at a special meeting of the stockholders, by the holders of shares entitled to vote for the
election of directors.
Section 2.13. Action by Written Consent. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if all the directors
consent thereto in writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors.
ARTICLE III
Committees
Section 3.1. Appointment. From time to time the Board of Directors by a resolution
adopted by a majority of the entire Board of Directors may appoint any committee or committees for
any purpose or purposes, to the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
Section 3.2. Procedures, Quorum and Manner of Acting. Each committee shall fix its
own rules of procedure, and shall meet where and as provided by such rules or by resolution of the
Board of Directors. Except as otherwise provided by law, the presence of a majority of the then
appointed members of a committee shall constitute a quorum for the transaction of business by that
committee, and in every case where a quorum is present the affirmative vote of a majority of the
members of the committee present shall be the act of the committee. Each committee shall keep
minutes of its proceedings, and actions taken by a committee shall be reported to the Board of
Directors.
Section 3.3. Action by Written Consent. Any action required or permitted to be taken
at any meeting of any committee of the Board of Directors may be taken without a meeting if all the
members of the committee consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the committee.
Section 3.4. Term; Termination. In the event any person shall cease to be a director
of the corporation, such person shall simultaneously therewith cease to be a member of any
committee appointed by the Board of Directors.
5
ARTICLE IV
Officers
Section 4.1. Election and Qualifications. The Board of Directors shall elect the
officers of the corporation, which shall include a President and a Secretary, and may include, by
election or appointment, one or more Vice-Presidents (any one or more of whom may be given an
additional designation of rank or function), a Treasurer and such assistant secretaries, such
Assistant Treasurers and such other officers as the Board of Directors may from time to time deem
proper. Each officer shall have such powers and duties as may be prescribed by these bylaws and as
may be assigned by the Board of Directors or the President. Any two or more offices may be held by
the same person.
Section 4.2. Term of Office and Compensation. The term of office of all officers
shall be one (1) year and until their respective successors have been elected and qualified, but
any officer may be removed from office, either with or without cause, at any time by the Board of
Directors. Any vacancy in any office arising from any cause may be filled for the unexpired
portion of the term by the Board of Directors. The compensation of all officers of the corporation
may be fixed by the Board of Directors or in such manner as the Board of Directors shall provide.
Section 4.3. Resignation; Removal. Any officer may resign at any time upon written
notice to the corporation and such resignation shall take effect upon receipt thereof by the
President or Secretary, unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a majority of the entire Board of
Directors.
Section 4.4. Chairman of the Board. The Chairman of the Board, if there be one,
shall preside at all meetings of the Board of Directors and shall have such other powers and duties
as may from time to time be assigned by the Board of Directors.
Section 4.5. President and Chief Executive Officer. The President shall be the chief
executive officer of the Corporation, and shall have such duties as customarily pertain to that
office. The President shall have general management and supervision of the property, business and
affairs of the corporation and over its other officers; may appoint and remove assistant officers
and other agents and employees, other than officers referred to in Section 4.1 of this Article IV;
and may execute and deliver in the name of the corporation powers of attorney, contracts, bonds and
other obligations and instruments.
Section 4.6. Vice-President. A Vice-President may execute and deliver in the name of
the corporation contracts and other obligations and instruments pertaining to the regular course of
the duties of said office, and shall have such other authority as from time to time may be assigned
by the Board of Directors or the President.
Section 4.7. Treasurer. The Treasurer shall in general have all duties incident to
the position of Treasurer and such other duties as may be assigned by the Board of Directors or the
President.
6
Section 4.8. Secretary. The Secretary shall in general have all the duties incident
to the office of Secretary and such other duties as may be assigned by the Board of Directors or
the President.
Section 4.9. Assistant Officers. Any assistant officer shall have such powers and
duties of the officer such assistant officer assists as such officer or the Board of Directors
shall from time to time prescribe.
ARTICLE V
Stock
Section 5.1. Certificates; Signatures. The shares of the corporation shall be
represented by certificates, provided that the Board of Directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of its stock shall be
uncertificated shares. Any such resolution shall not apply to shares represented by a certificate
until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder of stock represented by certificates and upon
request every holder of uncertificated shares shall be entitled to have a certificate, signed by or
in the name of the corporation by the Chairman or Vice-Chairman of the Board of Directors, or the
President or Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the corporation, representing the number of shares registered in certificate
form. Any and all signatures on any such certificate may be facsimiles. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. The name of the holder of record of the
shares represented thereby, with the number of such shares and the date of issue, shall be entered
on the books of the corporation.
Section 5.2. Transfers of Stock. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, shares of capital stock shall be
transferable on the books of the corporation only by the holder of record thereof in person, or by
duly authorized attorney, upon surrender and cancellation of certificates for a like number of
shares, properly endorsed, and the payment of all taxes due thereon.
Section 5.3. Lost, Stolen or Destroyed Certificates. The Corporation may issue a new
certificate of stock in place of any certificate, theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the Board of Directors may require the owner of any lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a bond sufficient to
indemnify the corporation against any claim that may be made against it on account of the alleged
loss, theft or destruction of any such certificate or the issuance of any such new certificate.
Section 5.4. Record Date. In order that the corporation may determine the
stockholders of record who are entitled to receive notice of, or to vote at, any meeting of
stockholders or any adjournment thereof or to express consent to corporate action in writing
without a meeting, or
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entitled to receive payment of any dividend or other distribution or allotment of any rights,
or to exercise any rights in respect of any change, conversion, or exchange of stock of for the
purpose of any lawful action, the Board of Directors may fix, in advance, a record date which shall
not be more than sixty (60) nor less than ten (10) days prior to the date of such meeting, nor more
than sixty (60) days prior to the date of any other action. A determination of stockholders of
record entitled to notice or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
ARTICLE VI
Dividends
Section 6.1. Declaration. Dividends upon the capital stock of the corporation,
subject to any restrictions contained in the Delaware General Corporation Law or the provisions of
the certificate of incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting. Dividends may be paid in cash, in property or in shares of capital stock,
subject to the provisions of the certificate of incorporation.
Section 6.2. Reserve. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think conducive to the
interest of the corporation, and the Board of Directors may modify or abolish any such reserve in
the manner in which it was created.
ARTICLE VII
Indemnification
Section 7.1. Right to Indemnification. The corporation shall indemnify any director
or officer of the corporation, and may indemnify any other person (“Covered Person”), who
was or is a party or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in connection with
such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of
nolo
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contendere or its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 7.2. Prepayment of Expenses. The corporation shall to the fullest extent not
prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered
Person in defending any proceeding in advance of its final disposition, provided, however, that, to
the extent required by law, such payment of expenses in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all
amounts advanced if it should be ultimately determined that the Covered Person is not entitled to
be indemnified under this Article VII or otherwise.
Section 7.3. Claims. If a claim for indemnification (following the final disposition
of such action, suit or proceeding) or advancement of expenses under this Article VII is not paid
in full within thirty (30) days after a written claim therefore by the Covered Person has been
received by the corporation, the Covered Person may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim to the fullest extent permitted by law. In any such action the corporation
shall have the burden of proving that the Covered Person is not entitled to the requested
indemnification or advancement of expenses under applicable law.
Section 7.4. Nonexclusivity of Rights. The rights conferred on any Covered Person by
this Article VII shall not be exclusive of any other rights which such Covered Person may have or
hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 7.5. Other Sources. The corporation’s obligation, if any, to indemnify or to
advance expenses to any Covered Person who was or is serving at its request as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, enterprise or
nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification
or advancement of expenses from such other corporation, partnership, joint venture, trust,
enterprise or non-profit enterprise.
Section 7.6. Amendment or Repeal. Any repeal or modification of the foregoing
provisions of this Article VII shall not adversely affect any right or protection hereunder of any
Covered Person in respect of any act or omission occurring prior to the time of such repeal or
modification.
Section 7.7. Insurance. Upon resolution passed by the Board of Directors the
corporation may purchase and maintain insurance on behalf of any person who is or was an agent
against any liability asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article VII.
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Section 7.8. Other Indemnification and Prepayment of Expenses. This Article VII shall
not limit the right of the corporation, to the extent and in the manner permitted by law, to
indemnify and to advance expenses to persons other than Covered Persons when and as authorized by
appropriate corporate action.
ARTICLE VIII
Miscellaneous
Section 8.1. Fiscal Year. The fiscal year of the corporation shall be fixed, and
shall be subject to change, by the Board of Directors. Unless otherwise fixed by the Board of
Directors, the fiscal year of the corporation shall be the calendar year.
Section 8.2. Seal. The corporate seal shall have the name of the corporation
inscribed thereon and shall be in such form as may be approved from time to time by the Board of
Directors.
Section 8.3. Checks. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as the Board of
Directors may from time to time designate.
Section 8.4. Books and Records. The books and records of the corporation may be kept
at such place or places within or outside the State of Delaware as the Board of Directors or the
respective officers in charge thereof may from time to time determine.
Section 8.5. Execution of Corporate Contracts and Instruments. The Board of
Directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or
agent or agents, to enter into any contract or execute any instrument in the name of and on behalf
of the corporation; such authority may be general or confined to specific instances. Unless so
authorized or ratified by the Board of Directors or within the agency power of an officer, no
officer, agent or employee shall have any power or authority to bind the corporation by any
contract or engagement or to pledge its credit or to render it liable for any purpose or for any
amount.
Section 8.6. Notice. Whenever, under the provisions of law or the certificate of
incorporation or these bylaws, notice is required to be given to any director or stockholder it
shall not be construed to mean personal notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his or her address as it appears on the records of
the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to directors may also be
given by telegram or telephone.
Section 8.7. Waiver. Whenever notice is required to be given by these bylaws or by
the certificate of incorporation or by law, a written waiver thereof, signed by the person or
persons entitled to said notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.
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ARTICLE IX
Amendments
The Board of Directors shall have power to adopt, amend or repeal these bylaws. Bylaws
adopted by the Board of Directors may be repealed or changed, and new bylaws made, by the
stockholders, and the stockholders may prescribe that any bylaw made by them shall not be altered,
amended or repealed by the Board of Directors.
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