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Exhibit 10.15
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is made and entered into this 19th
day of August, 1996, by and among The Xxxxxxx-Xxxxxxxx Company, an Ohio
corporation, ("Seller"), Xxxxxx & Xxxxxxx Canada, Inc., a company incorporated
under the laws of the Province of Ontario, Canada ("P & S Canada"), Sovereign
Specialty Chemicals L.P., a Delaware limited partnership ("Sovereign"), and P&S
Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of
Sovereign ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller's directly and indirectly wholly-owned subsidiaries are
engaged in the business of manufacturing, distributing and selling specialty
adhesives and specialty coatings to certain market niches; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, such business as defined in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
(a) The following terms, as used herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such other Person.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in the State of Ohio are authorized by law to
close.
"Business" means the business of manufacturing, distributing and
selling specialty adhesives and specialty coatings in the "paper
converting", "flexible packaging" and "engineered products" product
categories (including the manufacture, distribution and sale of the
Hybond(R) contact adhesives product line and specifically excluding the
wood finishes product category (including the Fabulon(R) and Cablon(R)
product lines)) conducted by the Company and the Subsidiaries.
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"Canadian Business" means the business of distributing and selling
specialty adhesives and specialty coatings in the "paper converting",
"flexible packaging" and "engineered Products" product categories
(including the manufacture, distribution and sale of the Hybond(R) contact
adhesives product line and specifically excluding the wood finishes
product category (including the Fabulon(R) and Cablon(R) product lines))
as conducted in Canada by P&S Canada.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.
"Company" means Xxxxxx & Xxxxxxx Corp., a New York corporation.
"DOJ" means the Antitrust Division of the United States Department
of Justice or any successor governmental agency or body.
"Environmental Laws" means any Law or Order relating to protection
or regulation of the environment, Laws regulating or relating to the
emission, discharge, disposal, treatment, transportation, storage, release
or threatened release of hazardous, toxic or other pollutants,
contaminants, chemicals, materials, substances, wastes or Hazardous
Materials into the environment, including ambient air, surface water,
ground water, land surface or subsurface strata, or otherwise regulating
or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of hazardous, toxic or other
pollutants, contaminants, chemicals, materials, substances, wastes or
Hazardous Materials, and all regulations, rules, codes, plans, decrees,
judgments, injunctions, Orders, notices and demand letters issued,
entered, promulgated or approved thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Facilities" means all of the real property comprising the Buffalo,
New York, Kimberton, Pennsylvania, Carol Stream, Illinois, and Mexico
City, Mexico manufacturing facilities and related buildings and
structures, as are more fully defined and described in Schedule 3.09
together with all improvements and fixtures thereon and all easements and
appurtenances inuring thereto.
"FTC" means the United States Federal Trade Commission or any
successor Governmental Body.
"Governmental Body" means any foreign, Federal, State, county, city,
town, village, municipal or other governmental department, commission,
board, bureau, agency, authority or instrumentality, domestic or foreign.
"Hazardous Materials" means any toxic substance, hazardous
substance, hazardous material, hazardous chemical or hazardous waste
defined, regulated or qualifying as such in (or for the purposes of) any
Environmental Law, or any pollutant or contaminant, and shall
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include, but not be limited to, petroleum, including crude oil or any
fraction thereof which is liquid at standard conditions of temperature or
pressure (60 degrees fahrenheit and 14.7 pounds per square inch absolute),
any radioactive material, including but not limited to any source, special
nuclear or by-product material as defined at 42 U.S.C. Section 2011 et
seq., as amended or hereafter amended, polychlorinated biphenyls and
asbestos in any form or condition.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intellectual Property" means all present and future rights in
patents, copyrights, trademarks, service marks, trade names, logos,
inventions, discoveries, improvements, processes and formulae, trade
secrets, proprietary technical information, technical know-how, research,
computer hardware and software licenses, marketing and other data and
intellectual property rights and applications and registration therefor
used in connection with the Business, including without limitation, the
Intellectual Property listed on Schedule 3.11 hereto.
"Knowledge" means actual knowledge after reasonable investigation.
"Laws" means all laws, statutes, codes, rules, regulations,
ordinances, or Orders of any Governmental Body.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or other similar encumbrance with
respect to such property or asset.
"Material" or "Material Adverse Effect" means a material adverse
effect on the assets, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole immediately upon the
effectiveness of the Closing on the Closing Date.
"Occupational Safety and Health Law" means the Occupational Safety
and Health Act of 1970 and any other Law or Order regulating, relating to
or imposing liability or standards of conduct concerning employee health
and/or safety.
"Order" means any order, writ, injunction, decree, judgment, award,
determination or written direction of any court, arbitrator or
Governmental Body.
"Ordinary Course of Business" means the operation of the business in
a manner, and in accordance with policies and practices, consistent with
past custom and practice (including with respect to quantity and
frequency) in the operation of the Business.
"Permitted Lien" means (i) any Lien for which the underlying
liability is disclosed on the Balance Sheet, (ii) any Lien for taxes not
yet due or being contested in good faith or
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(iii) any Lien which does not materially detract from the value or
materially interfere with the use of any asset as currently used in the
Business by Company or any Subsidiary.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Pre-Closing Tax Period" means any Tax period prior ending to the
Closing Date.
"Product Liability" means the liability of the manufacturer or
seller of an article for injury to persons, damage to property or any
other cost, damage or expense resulting from a manufacturer's defect in or
the condition of such article or the warnings or instructions with respect
to such article, or consequential, punitive or other similar costs or
damages arising as a result thereof, whether payable under the principles
of strict liability, contract, tort or other applicable law excluding,
however, any liability, cost or expense which is a Product Warranty
Liability.
"Product Warranty Liability" means the liability of the manufacturer
or seller of an article to service, repair or replace such article
(including all costs thereof, whether for materials or labor or
otherwise), or to refund the purchase price thereof, pursuant to the terms
of a product warranty given by such manufacturer or seller, or otherwise
arising under or established by Law with respect to such article.
"Products" shall mean that group of products which has been
designed, developed and/or produced or which is presently sold or offered
for sale by the Business, including all of the commercially produced
products itemized by product name and number on Schedule 1(a) hereto.
"Seller Group" means, with respect to federal income Taxes, the
affiliated group of corporations (as defined in Section 1504(a) of the
Code) of which Seller is a member and, with respect to state income or
franchise Taxes, the consolidated, combined or unitary group of which
Seller or any of its Affiliates is a member.
"Shares" means all of the issued and outstanding shares of common
stock, no par value, of the Company.
"Subsidiaries" means (i) Xxxxxx and Xxxxxxx Holding Corporation de
Mexico, S.A. de C.V., a company incorporated under the laws of Mexico,
(ii) Xxxxxx and Xxxxxxx de Mexico, S.A. de C.V., a company incorporated
under the laws of Mexico, and (iii) Xxxxxx and Xxxxxxx Corporation, S.A.
de C.V., a company incorporated under the laws of Mexico.
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"Tax or Taxes" means all taxes, charges, fees, levies, or other
assessments, together with any interest, penalty, addition to tax or
additional amount imposed by any Taxing Authority.
"Tax Asset" means any net operating loss, net capital loss,
deduction, credit or other tax attribute which could reduce Taxes.
"Taxing Authority" means any Governmental Body (domestic or foreign)
responsible for the imposition of any Tax.
"Wood Finishes Business" means all of the assets (including, without
limitation, the real property and manufacturing facility located in Xxxx
Xxxx, Xxxxxxx, Xxxxxx and the parcels of real property adjacent thereto
located at 42 and 00 Xxxxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxx, Xxxxxx, and all
manufacturing equipment, inventory, patents, trade secrets, trademarks,
copyrights, technology, formulas and the like, accounts receivable, books,
records and customer lists) and liabilities related to the business of
manufacturing, distributing and selling specialty coatings to the wood
finishes product category currently conducted by Seller including, without
limitation, the Fabulon(R) and Cablon(R) product lines.
(b) Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
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Assets 2.01(b)
Benefit Arrangements 3.15(b)
Closing 12.01
Closing Date 12.01
Closing Date Balance Sheet 2.03(a)
Company Employee Plans 3.15(a)
Contracts 3.12
Current Employees 7.01
Financial Statements 3.06
Improper Claim 11.03(a)(ii)(C)
Indemnifying Party 11.03(b)
Indemnified Party 11.03(b)
Inventory 2.03(a)
Milpitas Property 5.03(f)
Non-Tendering Party 11.03(a)
PLU Capital Accumulation Plan 7.02(a)
PLU Retirement Plan 7.02(a)
Personal Claim 11.03
Proper Claim 11.03(a)(i)
Purchase Price 2.02
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Purchaser Preamble
Purchaser's 401(k) Plan 7.02(a)
Purchaser's Pension Plan 7.02(a)
Purchaser's Indemnitees 11.01
Purchaser's Losses 11.01
Purchaser's Welfare Benefit Plans 7.02(b)
Real Property 3.09
Seller Preamble
Seller's Indemnitees 11.02
Seller's Welfare Benefit Plans 7.02(a)
Tendering Party 11.03(a)
Third-Party Claim 11.03
ARTICLE II
PURCHASE AND SALE OF SHARES AND ASSETS
2.01 Shares and Assets to be Purchased; Liabilities to be Assumed. On the
Closing Date, Seller shall sell, assign, transfer and deliver to Purchaser
and Purchaser shall purchase, accept, assume and acquire from Seller, all
of Seller's right, title and interest in and to the following:
(a) the Shares;
(b) the following assets related to the Canadian Business (collectively
referred to hereafter as the "Assets"):
(i) all Inventory (as defined in Section 2.04(a) below); and
(ii) all accounts and accounts receivable, trade accounts, notes
and notes receivable, book debts and other debts due or
accruing due to P&S Canada in connection with the Canadian
Business and the full benefit of all security therefor,
including, but not limited to, those listed on Schedule
2.01(b)(ii) (collectively referred to hereafter as the
"Accounts Receivable"); and
(c) the following liabilities related to the Canadian Business
(collectively referred to hereafter as the "Assumed Liabilities"):
(i) bona-fide third party accounts payable, payroll liability,
liability for customer deposits, accrued expenses (other than
accrued expenses for Taxes) and other liabilities of the
Canadian Business, to the extent that such items are reflected
on the liability side of the Closing Date Balance Sheet; and
(ii) liabilities and obligations relating to the Canadian Business
pursuant to all contracts included in the Assets.
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2.02 Purchase Price. The total aggregate purchase price for the Shares and the
Assets ("Purchase Price") shall be Forty-Five Million Seventy-Five
Thousand and 00/100 Dollars ($45,075,000.00), which amount shall be
adjusted: (a) downward at Closing on a dollar-for-dollar basis by one-half
(1/2) of the premium paid or to be paid pursuant to a binding commitment
by Purchaser to procure special indemnity insurance in accordance with
Section 5.16 of this Agreement; provided, however, that in no event shall
such adjustment (i) result in a decrease to the Purchase Price of more
than Three Hundred Thousand and 00/100 Dollars ($300,000.00) or (ii) be
made in the event that Purchaser does not actually procure special
indemnity insurance as contemplated by Section 5.16 of this Agreement; and
(b) upward or downward on a dollar-for-dollar basis, by the amount, if
any, determined pursuant to Section 2.04.
2.03 Payments at Closing. On the Closing Date:
(a) Purchaser shall pay to Seller the amount of Forty-Three Million
Seventy-Five Thousand and 00/100 Dollars ($43,075,000.00) by wire
transfer of immediately available funds to an account designated by
Seller in writing prior to the Closing Date; provided, however, that
such amount shall be further adjusted downward on the Closing Date
in the manner provided in Section 2.02(a) if Purchaser has procured
the special indemnity insurance in accordance with Section 5.16.
(b) Purchaser shall deposit the sum of Two Million and 00/100 Dollars
($2,000,000.00) in escrow with respect to remediation and/or
correction of certain on-site environmental liabilities in the
manner contemplated by the Environmental Protocol Agreement attached
as Schedule 2.03(b)(i) and in accordance with the Environmental
Escrow Agreement attached as Schedule 2.03(b)(ii) ("Environmental
Escrowed Funds").
2.04 Adjustment to Purchase Price.
(a) Within ninety (90) days following the Closing Date, Purchaser shall
prepare and deliver to Seller a balance sheet ("Closing Date Balance
Sheet"), which balance sheet shall set forth, as of the Closing
Date, the total assets, total liabilities and net worth of the
Company. The Closing Date Balance Sheet shall be prepared in a
manner consistent with the manner in which the Company's April 30,
1996 balance sheet ("April 30 Balance Sheet") was prepared;
provided, however, that the parties hereto acknowledge and agree
that the Closing Date Balance Sheet shall reflect: (i) any and all
adjustments as are necessary to reflect all Subsidiaries and
transactions relating thereto; (ii) the transfer of ownership of P&S
Canada, the Milpitas Property and the other transfers and dividends
permitted pursuant to Section 5.03; (iii) the reversal of all
accruals relating to environmental liabilities, product liabilities,
litigation, tax liabilities and any other liability for which Seller
is obligated to indemnify Purchaser pursuant to Section 11.01; and
(iv) the actual accounts payable balance as of April 30, 1996 for
the Canadian Business. In preparing the Closing Date Balance Sheet,
Purchaser shall conduct a physical inventory of all raw materials,
work in process, finished goods, packaging materials and supplies
and containers (collectively, "Inventory") as of the Closing
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Date in accordance with the physical inventory instructions attached
as Schedule 2.04(a). The physical inventory shall be conducted on
the Closing Date. The Inventory and accounts receivable shall be
valued in accordance with the Company's past valuation practices.
Seller shall be entitled to full access to the relevant records and
working papers of Purchaser and the Company to aid Seller in its
review of the Closing Date Balance Sheet.
(b) The Purchase Price shall be:
(i) increased, on a dollar-for-dollar basis, by the amount, if
any, that net worth of the Company as set forth on the Closing
Date Balance Sheet is greater than Twenty-One Million Six
Hundred Sixty-Two Thousand and 00/100 Dollars
($21,662,000.00);
(ii) decreased, on a dollar-for-dollar basis, by the amount, if
any, that the net worth of the Company as set forth on the
Closing Date Balance Sheet is less than Twenty-One Million Six
Hundred Sixty-Two Thousand and 00/100 Dollars
($21,662,000.00);
(c) The Purchase Price shall be further adjusted as follows:
(i) the Purchase Price shall be increased, on a dollar-for-dollar
basis, by the amount, if any, that current assets of P&S
Canada (excluding cash and prepaid expenses) are greater than
Five Hundred Ninety-Eight Thousand and 00/100 Dollars
($598,000.00); or
(ii) the Purchase Price shall be increased, on a dollar-for-dollar
basis, by the amount, if any, that current liabilities of P&S
Canada are less than Two Hundred Sixty-Seven Thousand and
00/100 Dollars ($267,000.00); provided, however, that for
purposes of determining the adjustment to the Purchase Price
pursuant to this Section 2.04(c)(ii), the current liabilities
of P&S Canada may be increased to an amount not to exceed
Three Hundred Sixty-Seven Thousand and 00/100 Dollars
($367,000.00) to adjust the estimate of the accounts payable
balance as reflected in the April 30 Balance Sheet to the
actual accounts payable balance as of April 30, 1996 for the
Canadian Business.
(d) Seller and its auditors shall be entitled to full access to the
relevant records and working papers of Purchaser and the Company to
aid Seller in its review of the Closing Date Balance Sheet. In the
event Seller and Purchaser are unable to agree on the Closing Date
Balance Sheet (as computed in accordance with this Agreement) within
thirty (30) days following Seller's receipt of the Closing Date
Balance Sheet, either Seller or Purchaser shall be entitled to
demand in writing that such disagreement be submitted to arbitration
to settle any such dispute. Any such arbitration shall be conducted
in the City of Cleveland, State of Ohio, by an arbitrator acceptable
to both Seller and Purchaser, or in the event Seller and Purchaser
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cannot agree on a single arbitrator within ten (10) days of any such
written demand, by three (3) arbitrators, one (1) of whom shall be
appointed by Seller, one (1) of whom shall be appointed by Purchaser
and the third of whom shall be appointed by the first two (2)
arbitrators. The parties agree that any issues involving primarily
financial matters shall be submitted to the public accounting firm
of Xxxxxx Xxxxxxxx LLP and that any issues involving matters other
than financial matters shall be submitted to persons having legal
expertise for arbitration. If either party fails to appoint an
arbitrator within ten (10) days of the written demand for
arbitration identified above, then the arbitrator appointed by the
other party shall arbitrate any such disagreements in accordance
with this Section 2.04. Except as to the manner of selection of
arbitrators as set forth herein, the arbitration proceedings shall
be conducted promptly and expeditiously pursuant to the rules of the
American Arbitration Association; provided, however, that whenever
appropriate and/or applicable in the context of any dispute, the
arbitrator(s) shall apply standards consistent with past practice of
the Company and the April 30 Balance Sheet in reaching a decision.
The decision of the arbitrator(s) shall be final, conclusive and
binding upon Seller and Purchaser. Seller and Purchaser shall share
equally the expenses for a single arbitrator and the arbitration, or
in the event the parties cannot agree upon a single arbitrator, each
party shall bear the expenses of its arbitrator and shall share
equally with the other the expenses of a third arbitrator and the
arbitration.
(e) Within five (5) Business Days after Seller and Purchaser agree upon
any Purchase Price adjustment pursuant to this Section 2.04 or the
Purchase Price adjustment is determined through arbitration:
(i) Purchaser shall pay to Seller the amount of any such increase
to the Purchase Price, together with interest on the amount of
any such increase to the Purchase Price at an annual rate
equal to the prime rate as published by the Wall Street
Journal on the date of payment, which interest shall accrue
beginning on the sixty-first (61st) day following the Closing
Date through and including the date upon which Purchaser
delivers to Seller the Closing Date Balance Sheet; or
(ii) Seller shall pay to Purchaser the amount of any such decrease
to the Purchase Price.
Any amounts paid pursuant to this Section 2.04 shall be paid by wire
transfer of immediately available funds to an account designated by
the recipient.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser the following:
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3.01 Organization, Standing and Authority of Seller.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York. P&S Canada is a
corporation duly organized, validly existing and in good standing
under the laws of the Province of Ontario. Each of Seller and P&S
Canada has all requisite power and authority to execute and deliver
this Agreement and to perform its obligations hereunder.
(b) The execution and delivery of this Agreement by each of Seller and
P&S Canada and the performance by Seller and P&S Canada of the
transactions contemplated herein have been duly authorized by all
necessary corporate action on the part of Seller and P&S Canada.
This Agreement and all documents required to be executed and
delivered by Seller and P&S Canada hereunder constitute legal, valid
and binding obligations of Seller and P&S Canada, as the case may
be, enforceable against Seller and P&S Canada in accordance with
their terms subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and to the application of equitable
principles.
3.02 Organization, Standing and Authority of Company. Company and each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the conduct of its business makes such
qualification necessary, except for those jurisdictions where failure to
be so qualified or in good standing would not have a Material Adverse
Effect.
3.03 Capitalization of Company. The authorized capital stock of Company
consists of two hundred (200) shares of common stock, without par value,
of which shares two hundred (200) are issued and outstanding. The Shares
have been duly authorized and validly issued, fully paid and
nonassessable, and are owned beneficially and of record by Seller, free
and clear of any Liens. There are no outstanding or authorized options,
warrants, rights, contracts, calls, puts, rights to subscribe, conversion
rights, or other agreements to which the Seller or the Company are a party
or which are binding upon the Company providing for the issuance,
disposition or acquisition of any of the Company's capital stock. There
are no outstanding or authorized stock appreciation, phantom stock or
similar rights with respect to the Company.
3.04 Certificate of Incorporation and By-Laws. The copy of the Certificate of
Incorporation and the ByLaws of Company, both of which are attached hereto
as Schedule 3.04, are true and complete copies of such instruments as
amended to the Closing Date, and are in full force and effect.
3.05 Subsidiaries. Company owns or as of the Closing Date will own, directly or
indirectly, one hundred percent (100%) of the issued and outstanding
capital stock of each of the Subsidiaries. There are no outstanding or
authorized options, warrants, rights, contacts, calls, puts, rights to
subscribe, conversion rights, or other agreements to which the Seller, the
Company or any Subsidiary are a
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party or which are binding upon any of the Subsidiaries providing for the
issuance, disposition or acquisition of any capital stock of any of the
Subsidiaries. There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to any of the Subsidiaries.
Except with respect to the Subsidiaries or as set forth in Schedule
3.05(i), the Company does not have any ownership interest in any other
entity. The authorized capital stock and the number of shares of capital
stock outstanding of each Subsidiary are set forth on Schedule 3.05(ii).
3.06 Financial Information. The unaudited income statement and balance sheet of
Company and the Subsidiaries are attached as Schedule 3.06 ("Financial
Statements"). Except as set forth on Schedule 3.06 or on the notes to the
Financial Statements, the Financial Statements were prepared from Seller's
internal accounting records and were prepared in conformity with Seller's
prior accounting practices applied on a consistent basis. In order to
present the Company and the Subsidiaries on a stand-alone operating basis,
certain reasonable allocations were made to centralized support expenses,
SG&A expenses and certain balance sheet assets and liabilities. The
Financial Statements fairly present the financial condition of Company and
the Subsidiaries as of the date thereof and the results of operations for
the period then ended. To the best of Seller's Knowledge, there are no
material obligations or liabilities of the Company and/or the Subsidiaries
relating to the Business other than liabilities (i) reflected or reserved
against on the April 30 Balance Sheet, (ii) disclosed on Schedule 3.06 or
(iii) incurred since April 30, 1996 in the Ordinary Course of Business.
There has been no significant change in the Company's method of accounting
or keeping its books of account or in the accounting practices of Seller
with respect to the Business since January 1, 1996. EXCEPT AS SET FORTH IN
SECTIONS 3.23 AND 3.24 OF THIS AGREEMENT, SELLER MAKES NO REPRESENTATION
OR WARRANTY WITH RESPECT TO ANY FINANCIAL INFORMATION FOR THE COMPANY OR
ANY SUBSIDIARY DELIVERED TO PURCHASER OTHER THAN AS CONTAINED IN THIS
SECTION 3.06. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 3.06 AND IN
SECTIONS 3.23 AND 3.24, SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE FINANCIAL INFORMATION PRESENTED IN
THE FINANCIAL STATEMENTS.
3.07 Absence of Certain Changes or Events. Except as set forth on Schedule
3.07, or as provided in Section 5.03, since April 30, 1996, the Company
and each Subsidiary has operated only in the Ordinary Course of Business
consistent with past practices and there has not been:
(a) any event, condition or occurrence which has had or could reasonably
be expected to have a Material Adverse Effect;
(b) any incurrence, assumption or guarantee by Company or any Subsidiary
of any third party indebtedness from a non-Affiliate for borrowed
money other than in the Ordinary Course of Business and in amounts
and on terms consistent with past practices;
(c) any creation or other incurrence of any Lien other than in the
Ordinary Course of Business consistent with past practices;
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(d) any activity engaged in by Company or any Subsidiary which has
resulted in the acceleration or delay of the collection of accounts
or notes receivable or any delay in the payment of accounts payable,
in each case as compared with its custom and practice in the conduct
of its business immediately prior to December 31, 1995;
(e) any sale, assignment, conveyance, transfer, cancellation or waiver,
other than in the Ordinary Course of Business, of any Material
property, tangible asset, proprietary right or other intangible
asset or right;
(f) any increased benefits or benefit plan costs or changed bonus,
insurance, pension, compensation or other benefit plans or
arrangements made for or with or covering any officers or employees
of the Business outside the Ordinary Course of Business;
(g) any waiver of any right relating to the Business other than in the
Ordinary Course of Business;
(h) any bonus granted or any increase in wages, salary or other
compensation to any employee of the Business, except in the Ordinary
Course of Business;
(i) any damages, destruction or casualty losses which, in the aggregate,
exceed $50,000 (whether or not covered by insurance) to any asset or
property of the Company or any Subsidiary;
(j) any transaction by the Company or any Subsidiary relating to the
Business, other than in the Ordinary Course of Business and
consistent with past practice, or has entered into any other
transaction relating to the Business, whether or not in the Ordinary
Course of Business, which could reasonably be expected to have a
Material Adverse Effect;
(k) any license or sublicense granted of any rights under or with
respect to any Intellectual Property; or
(l) any agreement to do any of the foregoing.
3.08 Government Authorizations. Except for the compliance with any applicable
requirements of the HSR Act, to the best of Seller's Knowledge, no
consent, approval or authorization of, or declaration, filing or
registration with, any federal, state, local or other governmental or
regulatory authority is required in connection with the execution and
delivery by Seller or P&S Canada of this Agreement and the consummation by
Seller or P&S Canada of the transactions contemplated hereby.
3.09 Title to and Condition of Real Property. Schedule 3.09 sets forth all real
property owned or leased by the Company and the Subsidiaries ("Real
Property"). Subject to the Permitted Liens and any Liens disclosed on
Schedule 3.09, each of the Company and the Subsidiaries has good title to,
or in the case of leased Real Property has a valid leasehold interest in,
the Real Property. All leases of Real Property are valid, binding and
enforceable in accordance with their respective terms, neither
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the Company nor any Subsidiary is in material default under any such
leases, and to the best of Seller's Knowledge, there does not exist under
any such lease any material default of any other party or any event which
with notice or lapse of time or both would constitute a material default.
To Seller's Knowledge, the Real Property is in good operating condition
and repair, normal wear and tear excepted, and is free from any defects
that have, or reasonably could have, a Material Adverse Effect. Except as
set forth on Schedule 3.09, to Seller's Knowledge, there are no existing
structural defects in any of the Real Property.
3.10 Sufficiency of Personal Property. Except as set forth on Schedule 3.10,
the Company and each Subsidiary has good and marketable title to all
machinery, equipment, furniture, fixtures, tooling, dies, leasehold
improvements and all other tangible personal property owned by the Company
and the Subsidiaries and used in the Business ("Personal Property") free
and clear of any Liens. To Seller's Knowledge, the Personal Property is in
good operating condition and repair, normal wear and tear excepted, and is
free from any defects that have, or reasonably could have, a Material
Adverse Effect. Except as set forth on Schedule 3.10, the Company and each
Subsidiary owns, leases or otherwise has the legal right to use all of the
assets, whether Real Property or Personal Property, necessary to carry on
the operations of the Business as the same is presently conducted and has
been conducted during the twelve (12) month period immediately preceding
the Closing. EXCEPT AS OTHERWISE STATED IN THIS SECTION 3.10, SELLER MAKES
NO OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
SAID TANGIBLE PERSONAL PROPERTY.
3.11 Proprietary Rights.
(a) Schedule 3.11(a) lists U.S. and Foreign Intellectual Property owned
or utilized by Company and the Subsidiaries.
(b) Except as set forth on Schedule 3.11(b), no proceedings have been
instituted or are pending or, to the best of Seller's Knowledge,
threatened, which challenge the validity of the ownership or use by
Company or the Subsidiaries of the Intellectual Property.
(c) Except as set forth on Schedule 3.11(c), none of Seller, the Company
or any Subsidiary is infringing on any Intellectual Property Rights
of others and Seller has no Knowledge of the infringement of any of
its Intellectual Property by any other person.
(d) Except for Intellectual Property which is licensed or leased from a
third party, the Company is the owner of all Intellectual Property,
free and clear of all Liens and free from any contractual
restrictions. Except as described on Schedule 3.11 hereto, the
Company and each Subsidiary has a valid and enforceable license or
lease (as against the licensor or lessor) to use or to license, all
such Intellectual Property, without the payment of any royalty or
similar payment, except as specified in the applicable agreements.
No contract, agreement or understanding between the Company and any
party exists which would impede or prevent the continued use of the
Intellectual Property by the Company following the Closing. The
Intellectual Property listed on Schedule 3.11(a) represents all of
the Intellectual Property
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necessary to conduct the Business as the Business was conducted
immediately prior to Closing.
3.12 Material Contracts. Schedule 3.12 sets forth a list of all written
contracts and agreements (collectively, "Contracts") to which the Company
or any Subsidiary is bound which:
(a) have a remaining obligation in excess of One Hundred Thousand
Dollars and 00/100 ($100,000.00);
(b) are partnership, joint venture or other similar cooperative
arrangements; or
(c) are agency, dealer, sales representative, marketing or other similar
agreements that are not terminable on not more than ninety (90) days
notice.
All Contracts listed on Schedule 3.12 are valid, existing and enforceable
in accordance with their terms and in full force and effect. Seller has
provided to Purchaser a true and complete copy of all written Contracts
with all amendments and modifications thereto. Neither the Company or any
Subsidiary nor, to the best of Seller's Knowledge, any other party to any
of the foregoing have violated or breached any material provision of, any
Contracts, nor, to the best of Seller's Knowledge, does there exist any
event or condition which, with the giving of notice, the lapse of time, or
both, would become a default under any Contracts. Each of the Contracts
identified on Schedule 3.12 were entered into by the Company or any
Subsidiary in the Ordinary Course of Business.
3.13 Compliance with Laws. Except as set forth on Schedules 3.13, 3.16 and
3.17, the Company and each Subsidiary has substantially complied with and
is in substantial compliance with all federal, state, local and foreign
Laws and judicial and/or administrative decisions applicable to the
Business, except for any non-compliance which does not have, individually
or in the aggregate, a Material Adverse Effect.
3.14 Litigation. Except as set forth on Schedule 3.14, there is no suit, claim,
action, arbitration, proceeding or investigation, pending or, to the best
of Seller's Knowledge, threatened, against the Company or any Subsidiary
which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
3.15 Employee Benefits.
(a) Schedule 3.15(a) lists each material "employee benefit plan", as
such term is defined in Section 3(3) of ERISA, which (i) is subject
to any provision of ERISA, (ii) is maintained, administered or
contributed to by Company or any of its Affiliates and (iii) covers
any Current Employee (collectively, "Company Employee Plans"). With
respect to each Company Employee Plan, Seller has provided or made
available to Purchaser a true and complete copy of such plan
document (or an accurate summary description of such Company
Employee Plan).
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(b) Schedule 3.15(b) lists each material employment, severance or
similar contract, arrangement or policy (exclusive of any such
contract which is terminable within 30 days without liability to the
Company or any Subsidiary), and each material plan or arrangement
providing for severance, insurance coverage (including any
self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or
other forms of incentive compensation or post-retirement insurance,
compensation or benefits that (i) is not a Company Employee Plan,
(ii) is entered into, maintained or contributed to by Company or any
of its Affiliates and (iii) covers any Current Employee
(collectively, "Benefit Arrangements").
(c) To the best of Seller's Knowledge, neither the Company nor any
Affiliate has incurred, or reasonably expects to incur prior to the
Closing Date, any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial
withdrawal from, any plan covered or previously covered by Title IV
of ERISA that could become a liability of the Purchaser or any of
its Affiliates after the Closing Date.
(d) Except as set forth in Schedule 3.15(d), there is no unfair labor
practice claim against the Company or any Subsidiary before the
National Labor Relations Board with respect to the Business, or any
strike, dispute, slowdown, or stoppage pending or, to the Knowledge
of Seller, threatened against or involving the Business, and none
has occurred.
(e) Except as set forth in Schedule 3.15(e), there are no collective
bargaining agreements between the Company or any Subsidiary and any
labor union representing any employees of the Company or any
Subsidiary in respect of the Business governing the terms of
employment of any such employees.
3.16 Environmental Matters. Except as described on Schedule 3.16, the Company,
each Subsidiary and each property, operation and facility that the Company
or any Subsidiary may "own," "operate" or "control" (as each such term is
defined by applicable Environmental Laws and other Laws and case law as
the same apply to environmental matters) with respect to the Business, (a)
is not subject to any judicial or administrative proceeding alleging the
violation of or liability under any Environmental Law or Occupational
Safety and Health Law; (b) has not received any written notice (i) that it
is in violation of or otherwise liable under any Environmental Law or
Occupational Safety and Health Law, (ii) threatening the commencement of
any proceeding relating to allegedly unlawful, unsafe or unhealthy
conditions, (iii) alleging that it is responsible for any response,
cleanup, or corrective action or related costs or expenses, including but
not limited to any remedial investigation/feasibility studies, under any
Environmental Law or Occupational Safety and Health Law, or (iv) seeking
information under Section 104 of CERCLA or any other Environmental Laws;
(c) is not the subject of any federal or state investigation evaluating
whether any investigation, remedial action or other response is needed to
respond to a spillage, disposal, release or threatened release into the
environment of any Hazardous Material or other hazardous, toxic waste,
substance or constituent, or other substance at or in connection with the
Real Property or the conduct of the
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Business or (ii) any allegedly unsafe or unhealthful condition under
Occupational Safety and Health Law; (d) has not filed any notice under or
relating to any Environmental Law or Occupational Safety and Health Law
indicating or reporting (i) any past or present spillage, disposal or
release into the environment of, or treatment, storage or disposal of, any
Hazardous Material or other hazardous or toxic waste, substance or
constituent, or other substance or (ii) any potentially unsafe or
unhealthful condition under Occupational Safety and Health Law; (e) has
obtained and has substantially complied with all permits, licenses,
consents, Orders or other authorizations required under any Environmental
Laws to conduct any operations or activities in connection with the Real
Property and the Business except where such failure to obtain or comply
would not have a Material Adverse Effect on the Business; and (f) has no
contingent Material liability in connection with any actual or potential
spillage, discharge, disposal or release into the environment or otherwise
with respect to, any Hazardous Material or other hazardous, toxic or
dangerous waste, substance or constituent, or other substance, whether on
any premises owned or occupied by the Company or any Subsidiary or any
other property. To the best of Seller's Knowledge and except as otherwise
disclosed on Schedule 3.16, there are no Hazardous Materials on, in or
under any property of Facilities "owned," "operated" or "controlled" (as
each such term is defined by applicable Environmental Laws) by the Company
or any Subsidiary or non-owned disposal sites with respect to the
Business, including but not limited to such Hazardous Materials that may
be contained in underground storage tanks, but excepting such Hazardous
Materials used in accordance with all applicable Laws. The Company and the
Subsidiaries are not in violation of any permits, licenses, consents,
Orders or other authorizations set forth in this Section 3.16, other than
violations which would not have a Material Adverse Effect. No additional
license, certificate, or permit is required from any Governmental Body in
connection with the conduct of the Business which license, certificate or
permit, if not obtained, would have a Material Adverse Effect.
3.17 Tax Matters. Except as set forth in the Financial Statements, on Schedule
3.17 or where the failure do so would not have a Material Adverse Effect:
(a) all Tax returns required to be filed with any Taxing Authority by or
with respect to the Business prior to the Closing Date with respect
to any Pre-Closing Tax Period have been filed or will be filed on or
before the Closing Date in accordance with all applicable laws;
(b) all amounts shown as due and payable on the Tax returns that have
been filed have been timely paid;
(c) the provisions and reserves for Taxes of the Company and its
Subsidiaries reflected on the Financial Statements are adequate to
cover the Tax liabilities accruing through the date thereof;
(d) there is no action, suit, proceeding, investigation, audit or claim
now proposed or pending against or with respect to the Company or
any Subsidiary in respect of any Tax; and
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(e) Seller is not subject to withholding under Section 1445 of the Code
with respect to any transaction contemplated hereby.
3.18 Brokerage. No broker, finder or agent has acted directly or indirectly for
Seller and/or the Company in connection with this Agreement or with the
transactions contemplated hereby.
3.19 Authorization; Non-contravention. The execution, delivery and performance
by Seller and P&S Canada of this Agreement are within Seller's and P&S
Canada's corporate authority and power, and, except as set forth in
Schedule 3.19: (i) require no consent, approval or authorization of any
Governmental Body or official; (ii) do not contravene or constitute a
default under any material provision of applicable Law; and (iii) will not
result in the creation or imposition of any Lien on any of the assets of
the Business. The execution and delivery of this Agreement by Seller and
P&S Canada do not, and the consummation by Seller and P&S Canada of the
transactions contemplated hereby will not, violate any provision of the
articles of incorporation or bylaws of Seller and P&S Canada or violate or
result (with or without the giving of notice or the lapse of time or both)
in a violation of any provision of, or result in the acceleration of or
entitle any party to accelerate (whether after the giving of notice or the
lapse of time or both) any obligation under, or result in the creation or
imposition of any Lien of any kind upon the property or assets of the
Company or any Subsidiary pursuant to any provision of, any mortgage,
Lien, lease, agreement, license, instrument or Law to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary or any
of their properties or assets are bound.
3.20 Governmental Permits. Except for any permits, licenses, certificates,
approvals and authorizations relating to Environmental Laws or
Occupational Health and Safety Law, all Material governmental permits,
licenses, certificates, approvals and authorizations required to conduct
the Business at the Facilities are set forth in Schedule 3.20, all of
which have been obtained by the Company, and such items are valid and in
full force and effect in all material respects. The Business is not in
violation of any such permits, licenses, certificates, approvals or
authorizations set forth in Schedule 3.20, other than violations which
would not in the aggregate have a Material Adverse Effect. No additional
license, certificate, or permit is required from any Governmental Body in
connection with the conduct of the Business which license, certificate or
permit, if not obtained, would have a Material Adverse Effect.
3.21 ERISA Compliance.
(a) Employee Welfare Benefit Plans. With respect to each Material
"employee welfare benefit plan" as such term is defined in Section
3(i) of ERISA of the Company or any Subsidiary (each a "Plan"): (i)
the Plan is in substantial compliance with ERISA; (ii) the Plan has
been administered substantially in accordance with its governing
documents; (iii) neither the Plan, nor any fiduciary with respect to
the Plan, has engaged in any "prohibited transaction" as defined in
Section 406 of ERISA other than any transaction subject to a
statutory or administrative exemption; (iv) except for the
processing of routine claims in the ordinary course of
administration, there is no Material litigation, arbitration or
disputed claim
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outstanding; and (v) all premiums due on any insurance contract
through which the Plan is funded have been paid.
(b) Employee Pension Benefit Plans. Except as set forth in Schedule
3.21, with respect to each "employee pension benefit plan" relating
to employees, as such term is defined in Section 3(s) of ERISA of
the Company or any Subsidiary (each a "Plan"): (i) the Plan is
qualified under Section 401(a) of the Code, and any trust through
which the Plan is funded meets the requirements to be exempt from
federal income tax under Section 501(a) of the Code; (ii) the Plan
is in Material compliance with ERISA; (iii) the Plan has been
administered substantially in accordance with its governing
documents as modified by applicable law; (iv) the Plan has not
suffered an "accumulated funding deficiency" as defined in Section
412(a) of the Code; (v) the Plan has not engaged in, nor has any
fiduciary with respect to the Plan engaged in, any "prohibited
transaction" as defined in Section 406 of ERISA or Section 4975 of
the Code other than a transaction subject to statutory or
administrative exemption; (vi) the Plan has not been subject to a
"reportable event" (as defined in Section 4043(b) of ERISA), the
reporting of which has not been waived by regulation of the Pension
Benefit Guaranty Corporation; (vii) no termination or partial
termination of the Plan has occurred within the meaning of Section
411(d)(3) of the Code; (viii) all contributions required to be made
to the Plan or under any applicable collective bargaining agreement
have been made to or on behalf of the Plan; (ix) there is no
Material litigation, arbitration or disputed claim outstanding; and
(x) all applicable premiums due to the Pension Benefit Guaranty
Corporation for plan termination insurance have been paid in full on
a timely basis.
(c) Miscellaneous. Except as disclosed in Schedule 3.21, there are no
Liens on the assets of such Plans, and favorable determination
letters with respect to the employee pension benefit plans have been
obtained from the Internal Revenue Service for such Plans evidencing
their compliance with applicable provisions of the Code.
3.22 Warranties. Except as disclosed in Schedule 3.22, there is no outstanding
claim, action or investigation against the Company or any Subsidiary and,
to Seller's Knowledge, no threatened claim, action or investigation
against the Company or any Subsidiary for Product Liability or for breach
of Product Warranty Liability to any customer of the Business.
3.23 Accounts Receivable. All accounts receivable that have been recorded on
the books of the Company and each Subsidiary are bona fide and represent
amounts validly due for goods sold or services rendered in the Ordinary
Course of Business and, as of July 31, 1996, are collectible in the
Ordinary Course of Business, subject to bad debt experiences consistent
with past practices.
3.24 Inventory. All Inventory in "O" categories on the books of the Company and
each Subsidiary is, in all material respects, usable by the Business and
saleable at the value reflected on the books.
3.25 Insurance. Schedule 3.25 contains an accurate and complete list of all
policies of fire, liability, keyman life insurance, workers' compensation,
products liability and other forms of insurance owned
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or held by or beneficially for the Company or any Subsidiary. All such
policies are in full force and effect, no premiums with respect thereto
are past due and no notice of cancellation or termination has been
received by Seller, the Company or any Subsidiary with respect to any such
policy. Schedule 3.25 also identifies all risks for which the Company and
any Subsidiary are self-insured.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TO THE PURCHASER
Purchaser hereby represents and warrants to Seller and P&S Canada
the following:
4.01 Organization, Good Standing and Authority of Purchaser.
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of State of Delaware. Purchaser has all
requisite power and authority to execute and deliver this Agreement
and to perform its obligations hereunder.
(b) The execution and delivery by Purchaser and the performance by
Purchaser of the transactions contemplated herein have been duly
authorized by all necessary corporate action on the part of
Purchaser. This Agreement and all documents required to be executed
and delivered by Purchaser hereunder constitute legal, valid and
binding obligations of Purchaser enforceable against Purchaser in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and to the
application of equitable principles.
4.02 No Conflict. Neither the execution and delivery of this Agreement nor the
Purchaser's performance of the transactions contemplated herein will
violate or conflict with any provisions of Purchaser's Partnership
Agreement.
4.03 Broker's or Finder's Fees. Except for Chemquest Group, no broker, finder
or agent has acted directly or indirectly for Purchaser in connection with
this Agreement or with the transactions contemplated by this Agreement.
4.04 Financing. Purchaser has, or will have, at or prior to Closing, sufficient
cash, available lines of credit or other sources of immediately available
funds to enable it to purchase the Shares and pay any other amounts to be
paid by it hereunder.
4.05 Litigation. There is no action, suit, investigation or proceeding pending,
or to the Knowledge of Purchaser threatened, against Purchaser before any
court or arbitrator or any Governmental Body, agency or official which in
any manner challenges or seeks to prevent, enjoin, alter or Materially
delay the transactions contemplated hereby.
ARTICLE V
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COVENANTS
5.01 Access to Records. From the date hereof to the Closing Date, Seller shall
allow, and shall cause Company and the Subsidiaries to allow, Purchaser
and Purchaser's counsel, accountants and other representatives, access to
the properties, books and records of the Business at reasonable hours. Any
investigation pursuant to this Section 5.01 shall be conducted in such a
manner as to not interfere unreasonably with the conduct of the Company's
and Subsidiaries' businesses. Notwithstanding anything in this Section
5.01 to the contrary and except as may be permitted in the event the
Company or any Subsidiary is authorized and/or able to obtain a
confidentiality agreement, Seller, the Company and the Subsidiaries shall
have no obligation to provide Purchaser with any properties, books and/or
records which contain information which could (i) violate any federal,
state, local or foreign Law, rule or regulation, or (ii) result in a
breach of any contract or agreement to which Seller, the Company or any
Subsidiary is a party.
5.02 Conduct of the Business. Except as otherwise provided in this Agreement,
from the date hereof until the Closing Date, the Company and the
Subsidiaries shall continue to operate the Business in the ordinary course
and in a manner consistent with past practices. Without limiting the
generality of the foregoing and except as otherwise provided in this
Agreement, from the date hereof to the Closing Date, neither Seller, P&S
Canada, the Company nor any Subsidiary will take any of the following
actions with respect to the Business without the prior written consent of
Purchaser:
(a) (i) declare, set aside or pay any dividends on or make other
distributions in respect of any of its capital stock, or (ii) split,
combine or reclassify any of its capital stock or issue or authorize
or propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock;
(b) issue, grant, deliver, sell, pledge or otherwise encumber any shares
of its capital stock of any class, or any securities convertible
into, or any rights, warrants, calls, subscriptions or options to
acquire, any such shares, or convertible securities;
(c) amend or propose to amend its Certificate of Incorporation, as
amended, or By-Laws, as amended, or any other organizational and/or
charter documents;
(d) directly or indirectly, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest
in or a substantial portion of the assets of, or by any other
manner, any Person or acquire or agree to acquire any assets other
than in the Ordinary Course of Business and consistent with past
practices;
(e) except in the Ordinary Course of Business and consistent with past
practices, and except as otherwise provided for in this Agreement,
sell, lease, license, encumber or otherwise dispose of any of their
assets, other than as may be required by law or to consummate the
transactions contemplated hereby;
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(f) agree or commit to do any of the foregoing;
(g) take or agree or commit to take any action that would make any
representation and warranty of Seller hereunder inaccurate in any
Material respect at the Closing Date; or
(h) make any other change required to be disclosed on Schedule 3.07
hereof.
5.03 Permitted Transfers and Dividends. At or at any time prior to the Closing,
Seller, the Company, P&S Canada and the Subsidiaries shall have the right
to do each of the following:
(a) sell, assign or otherwise transfer the Wood Finishes Business to
Seller or any of Seller's Affiliates;
(b) dividend or otherwise transfer to Seller or any of Seller's
Affiliates all proceeds resulting from the sale, assignment or
transfer of the Wood Finishes Business pursuant to Section 5.03(a);
(c) change the corporate name of Xxxxx & Xxxxxxx de Mexico S.A. de C.V.
to Xxxxxx & Xxxxxxx Holding Corporation de Mexico S.A. de C.V.;
(d) transfer ownership of the capital stock of Xxxxx & Xxxxxxx de Mexico
S.A. de C.V. from Seller to the Company;
(e) dividend or otherwise transfer to Seller or any of Seller's
Affiliates all assets from the Company and the Subsidiaries which
are not directly related to the operations of the Business as it is
currently conducted which are set forth on Schedule 5.03(e);
(f) dividend or otherwise transfer real property located at 000 Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx ("Milpitas Property") from the
Company to Seller;
(g) merge P&S Subsidiary, Inc. into the Company;
(h) dividend or otherwise transfer to Seller ownership of the issued and
outstanding capital stock of P&S Canada from the Company to Seller;
and
(i) dividend or otherwise transfer to Seller all of the cash.
5.04 Accounts. On and after the Closing Date, Seller shall, within thirty (30)
days of receipt, forward to Purchaser any monies received by Seller with
respect to any goods and/or services delivered and/or performed by Company
or any Subsidiary after the Closing Date.
5.05 Reasonable Efforts; Further Assurances. Subject to the terms and
conditions of this Agreement, Purchaser and Seller will each use its
reasonable efforts to take, or cause to be taken, all actions and
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to do, or cause to be done, all things necessary (i) to satisfy their
respective conditions precedent set forth in Articles VIII and IX and (ii)
under applicable laws and regulations, to consummate the transactions
contemplated by this Agreement. Seller and Purchaser each agree to execute
and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable
in order to consummate the transactions contemplated by this Agreement and
to vest in Purchaser good title to the Shares.
5.06 HSR Act Filings. Purchaser and Seller will use reasonable efforts to file
or cause to be filed with the FTC and the DOJ, as promptly as practicable
but in no event later than five (5) Business Days after the execution of
this Agreement, the Notification and Report Form and related Material
required to be filed in connection with the transactions contemplated in
this Agreement pursuant to the HSR Act, and to promptly file any
additional information requested by the FTC or the DOJ as soon as
practicable after receipt of a request therefor. In addition, Purchaser
shall use its best efforts to take or cause to be taken all actions
necessary, proper or advisable to obtain any consent, waiver, approval or
authorizations relating to the HSR Act that is required for the
consummation of the transactions contemplated by this Agreement, which
efforts shall include, without limitation, the proffer by Purchaser of its
willingness to accept an order providing for the divestiture by Purchaser
of such of the assets relating to the Business (or, in lieu thereof,
assets and businesses of the Purchaser having an approximate equivalent
value) as are necessary to fully consummate the transactions contemplated
by this Agreement, and an offer to hold separate such assets and
businesses pending such divestiture. In the event that the FTC or the DOJ
requires the divestiture or the holding separate by Purchaser of any of
the assets relating to the Business, no adjustment shall be made to the
Purchase Price and Purchaser shall be required to hold such assets
separate, or to divest them, as the case may be, following the Closing.
5.07 Access.
(a) On and after the Closing Date, Purchaser will afford promptly to
Seller and its agents reasonable access to the Company's and
Subsidiaries' properties, books, records, employees and auditors to
the extent necessary to permit Seller to determine any matter
relating to its rights and obligations hereunder or to determine any
matter relating to its rights and obligations with respect to any
event occurring or period ending on or before the Closing Date;
provided that any such access by Seller shall not unreasonably
interfere with the conduct of the Business.
(b) Without limiting the provisions of paragraph (a) above, at all
reasonable times on and after the Closing Date, Purchaser will
afford promptly to Seller and its agents such access, including,
copies as applicable, as is reasonably required to the Company's and
Subsidiaries' database, testing equipment, properties, books,
records, and employees to the extent necessary to permit Seller to
determine matters relating to its rights and obligations under the
indemnity provisions of Section 11.01 or otherwise with respect to
claims arising in connection with the Company's Hybond
100NF(R)product line. To facilitate the settlement or other
disposition of claims relating to the Company's Hybond
100NF(R)product line,
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Purchaser agrees to maintain in force the Company's existing
agreement with Xxx Xxxxx Consulting Inc. to perform laboratory
testing services with respect to claims alleging failure of test
samples of Hybond 100NF(R).
5.08 Confidentiality. Prior to the Closing Date and after any termination of
this Agreement, Purchaser and its Affiliates will hold and not disclose to
any Person, and will cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold
and not disclose to any Person, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of
Law, all information concerning the Company, Subsidiaries or Seller
furnished to Purchaser or its employees, agents or representatives in
connection with the transactions contemplated by this Agreement and any
notes, analyses, studies or other documents prepared by or on behalf of
Purchaser or its employees, agents or representatives, except to the
extent that such information can be shown to have been (a) previously
known on a nonconfidential basis by Purchaser, (b) in the public domain
through no fault of Purchaser or (c) later lawfully acquired by Purchaser
from sources other than Seller or its Affiliates; provided that Purchaser
may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents on a need-to-know
basis in connection with the transactions contemplated by this Agreement
and to its lenders on a need-to-know basis in connection with obtaining
any financing for the transactions contemplated by this Agreement so long
as such Persons are informed by Purchaser of the confidential nature of
such information and are directed by Purchaser to treat such information
confidentially. If this Agreement is terminated, Purchaser and its
Affiliates will, and will cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to,
deliver to Seller, upon request, all documents and other materials, and
all copies thereof, obtained or prepared by or on behalf of Purchaser or
its employees, agents or representatives in connection with this Agreement
that are subject to such confidence.
5.09 Disclosure. Prior to the Closing Date, neither party to this Agreement
will issue any press release or make any other public disclosures
concerning this transaction or the contents of this Agreement without the
prior consent of the other party. The content of any such release or
disclosure shall be mutually agreed upon between the parties.
Notwithstanding the above, nothing in this Section 5.09 will preclude
either party from making any disclosures required by law or regulation or
necessary and proper in conjunction with the filing of any Tax return or
other document required to be filed with any federal, state or local
governmental body, authority or agency in which case the party making such
determination will, if practicable under the circumstances, use reasonable
efforts to allow the other party reasonable time to comment on such
release or disclosure in advance of its issuance.
5.10 Plant Closing Notification. Purchaser shall be responsible for providing
any notice of layoff or plant closing required with respect to any
manufacturing facility of Company pursuant to the Federal Worker
Adjustment and Retraining Notification Act of 1988, any successor federal
law and any applicable state or local plant closing notification statute,
for any such layoffs or plant closings which will commence effective on or
subsequent to the Closing Date.
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5.11 Intercompany Items. Seller shall, as of the date immediately preceding the
Closing Date, by appropriate documentation and accounting entries,
contribute to the paid in capital of the Company, any intercompany
payables, receivables and/or indebtedness to Seller arising prior to the
Closing Date.
5.12 Corporate Services. On the Closing Date, Purchaser and Seller shall
execute and deliver a corporate services agreement, in the form attached
as Schedule 5.12, pursuant to which Seller shall make available to
Purchaser certain administrative support services which are currently
being provided to the Business on a basis, and for a price, substantially
consistent with Seller's and the Company's recent historical practices
including, without limitation, computer and data processing services,
accounting services, human resource benefits administration services, the
use of warehouse facilities and related site services, and distribution
services.
5.13 Lease Agreement. On the Closing Date, Purchaser and Seller shall execute
and deliver a lease agreement, in the form attached as Schedule 5.13, for
the real property located in Milpitas, California for purposes of
warehousing finished goods. The term of such lease agreement shall
continue until December 31, 1996 and shall be renewable thereafter on a
month-to-month basis.
5.14 Use of Materials With Certain Trademarks and Names.
(a) For a period of six (6) months after the Closing Date, Seller hereby
grants to Purchaser, the Company and the Subsidiaries a
non-exclusive, non-assignable and royalty-free license to use the
trademark "Xxxxx & Xxxxxxx" and the names "Xxxxx & Xxxxxxx United"
and "Xxxxx & Xxxxxxx United, Inc." (hereafter in this Section 5.14,
individually or collectively, the ("P&L Trademark/Name") on any and
all packaging materials for products sold in the Business and on any
and all copyrighted and non-copyrighted promotional and sales
materials, office supplies and product literature being purchased
and sold hereunder on which the P&L Trademark/Name appears on the
Closing Date ("P&L Materials"). A stock of P&L Materials shall be in
the Business' possession on the Closing Date and neither Purchaser,
the Company nor any Subsidiary shall reorder any P&L Materials
bearing the P&L Trademark/Name at any time on or after the Closing
Date. Any P&L Materials bearing the P&L Trademark/Name not used
within six (6) months after the Closing Date may not thereafter be
used by Purchaser unless the P&L Trademark/Name is completely
obliterated therefrom. Any P&L Materials which remain shall be
destroyed at Purchaser's sole expense. Purchaser shall provide to
Seller a notarized affidavit, signed by an officer of Purchaser,
certifying that all P&L Materials have been used or destroyed within
seven (7) months after the Closing Date.
(b) For a period of six (6) months after the Closing Date, Purchaser
hereby grants to Seller and its Affiliates a non-exclusive,
non-assignable and royalty-free license to use the trademark "Xxxxxx
& Xxxxxxx" and the names "Xxxxxx & Xxxxxxx" and Xxxxxx & Xxxxxxx
Corp. (hereafter in this Section 5.14, individually or collectively,
the "P&S Trademark/Name") on any and all packaging materials for
products sold in the Wood Finishes Business on any and all
copyrighted and non-copyrighted promotional and sales materials,
office supplies and
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product literature on which the P&S Trademark/Name appears on the
Closing Date ("P&S Materials"). A stock of P&S Materials shall be in
the Wood Finishes Business' possession on the Closing Date and
neither Seller nor any of its Affiliates shall reorder any P&S
Materials bearing the P&S Trademark/Name at any time on or after the
Closing Date. Any P&S Materials bearing the P&S Trademark/Name not
used within six (6) months after the Closing Date may not thereafter
be used by Seller unless the P&S Trademark/Name is completely
obliterated therefrom. Any P&S Materials which remain shall be
destroyed at Seller's sole expense. Seller shall provide to
Purchaser a notarized affidavit, signed by an officer of Seller,
certifying that all P&S Materials have been used or destroyed within
seven (7) months after the Closing Date.
5.15 Distribution Agreement. On the Closing Date, Purchaser and Seller shall
execute and deliver a distribution agreement, in the form attached as
Schedule 5.15, pursuant to which Seller shall supply to Purchaser
specified quantities of Cablon(R) for sale in connection with the sale of
products from the Hybond(R) product line.
5.16 Purchase and Maintenance of Additional Indemnity Insurance. Purchaser
agrees to procure from or through a reputable insurance broker or company
a binding commitment to issue an insurance policy, effective as of the
Closing Date, to provide additional excess insurance coverage for the
Company with respect to certain environmental liabilities, set forth on
Schedule 5.16, certain product liability claims (excluding claims relating
to Hybond 100NF(R)) set forth on Schedule 5.16, incurred but not filed
disability claims and other litigation arising prior to the Closing Date
and set forth on Schedule 5.16. Any such insurance policy or arrangement
shall include a waiver of any and all subrogation rights which the insurer
may have against Seller, its subsidiaries and Affiliates (but not against
any other third party) arising from or relating to the claims submitted
thereunder. Purchaser agrees to maintain such insurance policy or
arrangement until at least the later of (i) the seventh (7th) anniversary
of the Closing Date, or (ii) the expiration of any period during which a
claim for indemnification pursuant to Section 11.01(c) may exist. In the
event that Purchaser cancels such insurance policy or arrangement and is
entitled to a refund, Purchaser promptly shall notify Seller of that fact
and Seller shall be entitled to receive the lesser of (i) one-half (1/2)
of the amount of such refund or (ii) a percentage of such refund equal to
the percentage of the aggregate premiums paid by Seller.
5.17 Waiver of Rights Respecting Seller's Insurance. Purchaser agrees that it
hereby waives any and all rights whatsoever to protection under, or the
ability to claim directly against, any insurance policy of Seller or any
of Seller's Affiliates in connection with any claim or other event for
which Purchaser is entitled to indemnity from Seller pursuant to Article
XI; provided, however, that such waiver shall not apply with respect to
any insured claim for which Purchaser has exceeded the limitations as to
amount of indemnification set forth in Section 11.06. Purchaser further
agrees that with respect to claims arising from or related to Hybond
100NF(R), Purchaser promptly will (i) notify Seller or its designee of any
and all claims involving or relating to the alleged failure of any Hybond
100NF(R) product and (ii) refer any and all such claims to Seller or its
designee for appropriate disposition. Notwithstanding the foregoing,
except as set forth in the preceding sentence, Purchaser shall
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continue to have access to Seller's insurance policies with respect to
worker's compensation and disability insurance for claims incurred but not
filed on or prior to the Closing Date.
5.18 License Agreement. On the Closing Date, Purchaser and Seller shall execute
and deliver a license agreement, in the form attached as Schedule 5.18,
pursuant to which Purchaser shall grant to Seller a license to
manufacture, use and sell products currently identified and/or sold under
the Proxpeel designation and to use the Proxpeel trademark.
5.19 Guarantee by Sovereign.
(a) Sovereign hereby irrevocably and unconditionally guarantees the
prompt and complete payment and performance by Purchaser of all
obligations of Purchaser described in this Agreement and in any
Schedule attached hereto. This guarantee is a primary obligation
enforceable by Seller, its successors and assigns, before or after
proceeding against Purchaser and regardless of any insolvency,
receivership or bankruptcy of Purchaser or any discharge, reduction,
extension or other modification of any of Purchaser's indebtedness
and/or obligations under this Agreement or any Schedule attached
hereto. This guarantee shall survive and be binding following any
merger, reorganization, consolidation or other change in the
structure, personnel, business or affairs of Purchaser.
(b) Sovereign waives any claim or defense to this guarantee based upon
lack of consideration, and Sovereign irrevocably waives presentment,
demand, protest or other notice of any kind including, without
limitation, notice of acceptance of this guarantee and notice of any
claim or demand upon Purchaser or Sovereign. Sovereign agrees that
no act or omission on the part of Seller, or any employee, agent,
successor or assignee of Seller, will diminish or adversely affect
this guarantee. Without notice to Sovereign, Seller may extend the
time for any payment under this Agreement, extend the term of this
Agreement, modify, supplement or amend this Agreement, and otherwise
agree in any manner with Purchaser.
(c) This guarantee is for the benefit of Seller, and its successors and
assigns, and is binding upon Sovereign, its successors and assigns,
except that Sovereign may not assign or transfer any of its
obligations under this guarantee, whether by operation of law or
otherwise, without the prior written consent of Seller which consent
may be unreasonably withheld at the sole and absolute discretion of
Seller. Any modifications, amendments or supplements to this
Agreement will not diminish or adversely affect any obligation of
Sovereign under this guarantee. Sovereign will reimburse Seller for
any expenses incurred by Seller in enforcing this guarantee
including, without limitation, reasonable attorney fees.
ARTICLE VI
TAX MATTERS
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6.01 Tax Covenants.
(a) Section 338(h)(10) Election. Seller and Purchaser shall join in
making a timely election (but in no event later than sixty (60) days
following the Closing) under Section 338(h)(10) of the Code
(including the prerequisite election under Section 338 of the Code)
and any similar state law provisions in all applicable states, with
respect to the sale and purchase of the Shares pursuant to this
Agreement, and each party shall provide to the other all necessary
information to permit such elections to be made. Purchaser and
Seller shall, as promptly as practicable following the Closing Date,
take all actions necessary and appropriate (including filing such
forms, returns, schedules and other documents as may be required) to
effect and preserve timely elections. All Taxes attributable to the
elections made pursuant to this Section 6.01(a) shall be the
liability of Seller. In connection with such elections, within sixty
(60) days following the Closing Date, Purchaser and Seller shall act
together in good faith to determine and agree upon the "deemed sale
price" to be allocated to each asset of Purchaser in accordance with
Treasury Regulation Section 1.338(h)(10)-1(f) and the other
regulations under Section 338 of the Code. Notwithstanding the
generality of the immediately preceding sentence, Purchaser and
Seller agree that the "deemed sale price" shall be allocated to (i)
the monetary assets at their fair market value as of the Closing
Date as determined as part of the determination of the net worth of
the Company in accordance with Section 2.03(b) hereof; provided in
Schedule 6.01(a); (ii) the fixed assets of the Company at their
appraised fair market value as provided in Schedule 6.01(a); and
(iii) the balance of the "deemed sale price" shall be allocated to
good will and other intangible assets of the Company. Both Purchaser
and Seller shall report the tax consequences of the transactions
contemplated by this Agreement consistently with such allocations
and shall not take any position inconsistent with such allocations
in any Tax Return or otherwise. Seller shall be liable for, and
shall indemnify and hold Purchaser and the Company harmless against,
any Taxes or other costs attributable to a failure on the part of
Seller to take all actions required of them under this Section
6.01(a).
(b) Purchaser shall promptly pay or shall cause prompt payment to be
made to Seller of any refund of Taxes received by Purchaser, any
affiliate of Purchaser or Company, attributable to any Pre-Closing
Tax Period or Seller Taxes paid pursuant to Section 6.02(b) except
to the extent such refunds relate to Taxes paid or assumed by
Purchaser.
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6.02 Return Filings and Payment of Tax.
(a) Seller shall prepare and file or cause to be prepared and filed on a
timely basis all Tax returns of or with respect to the Business with
respect to all Pre-Closing Tax Periods, and shall pay or cause to be
paid to the appropriate Taxing Authority the Taxes shown to be due
on such returns.
(b) Purchaser shall prepare or cause to be prepared in a manner
consistent with applicable Laws, and shall file or cause to be filed
on a timely basis, all Tax returns with respect to all Tax periods
beginning before and ending on or after the Closing Date. Purchaser
shall timely pay or cause to be timely paid to the appropriate
Taxing Authority the Taxes shown to be due on such returns.
(c) All transfer, documentary, sales, use, stamp, registration and other
such Taxes incurred in connection with this Agreement (including any
New York State real property transfer and gains taxes and any
similar tax imposed in other states or subdivisions) shall be borne
and paid by Purchaser, and Purchaser will, at its own expense, file
all necessary Tax returns and other documentation with respect to
all such Taxes and, if required by applicable law, Seller will, and
will cause its Affiliates to, join in the execution of any such
returns and other documentation.
6.03 Cooperation on Tax Matters. Purchaser and Seller agree to furnish or cause
to be furnished to each other, upon request, as promptly as practicable,
such information (including access to books and records) and assistance
relating to the Business as is reasonably necessary for the filing of any
return, for the preparation for any audit, and for the prosecution or
defense of any claim, suit or proceeding relating to any proposed
adjustment. Purchaser and Seller agree to retain or cause to be retained
all books and records pertinent to the Business (such books and records
not limited solely to tax accounting books, records and work papers) until
the applicable period for assessment under applicable law (giving effect
to any and all extensions or waivers) has expired, and to abide by or
cause the abidance with all record retention agreements entered into with
any Taxing Authority. Purchaser agrees, and after the Closing shall cause
Company, to give Seller reasonable notice prior to transferring,
discarding or destroying any such books and records and, if Seller so
requests, Purchaser shall, or shall cause Company to, allow Seller to take
possession of such books and records. Purchaser and Seller shall cooperate
with each other in the conduct of any audit or other proceedings involving
Company for any Tax purpose and each shall execute and deliver such powers
of attorney and other documents as are necessary to carry out the intent
of this Section 6.03.
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ARTICLE VII
EMPLOYEE MATTERS
7.01 Employment. Schedule 7.01 lists all of the employees of the Business
("Current Employees"). For a period of one year after the Closing Date,
Purchaser agrees that it will not substantially reduce the base salary or
wage rate in effect immediately prior to the Closing Date of any Current
Employee.
7.02 Employee Benefit Plans. From and after the Closing Date, Purchaser shall
be the plan sponsor for each and every employee benefit plan, as defined
in Section 3(3) of ERISA and such other plans, programs, policies and
arrangements of Company or its Subsidiaries and shall assume or retain all
related trusts, insurance contracts, other assets and documents that have
been maintained by the Company or its Subsidiaries or Seller for the
benefit of employees or former employees of Company or its Subsidiaries;
provided, however, that with respect to:
(a) Pension Benefits Provided by Seller. Prior to the Closing Date or
within a reasonable period of time thereafter, Seller shall have
established or designated a defined contribution retirement plan of
the Company with a Code Section 401(k) arrangement ("Purchaser's
401(k) Plan") and shall have transferred to Purchaser's 401(k) Plan
all of the assets and liabilities pertaining to employees and former
employees of the Company from the Xxxxx & Xxxxxxx United Capital
Accumulation Program ("PLU Capital Accumulation Plan"). Seller shall
establish Purchaser's 401(k) Plan on terms substantially equivalent
to the PLU Capital Accumulation Plan. Effective as of the Closing
Date, Purchaser shall assume sponsorship of Purchaser's 401(k) Plan.
With respect to notes evidencing plan loans, the PLU Capital
Accumulation Plan will assign such notes to the Purchaser's 401(k)
Plan. The interests transferred to Purchaser's 401(k) Plan shall be
fully vested. All other retirement or pension benefits of the Seller
and its Affiliates (including the assets and liabilities thereunder)
shall remain the responsibility of Seller, including, without
limitation, the Xxxxx & Xxxxxxx United Retirement Plan (the "PLU
Retirement Plan"). Purchaser will assume all of the Company's plans
listed on Schedule 3.15(a) (to the extent such plans relate solely
to the Company and the Subsidiaries).
(b) Welfare Benefits Provided By Seller. Effective as of (i) the Closing
Date, Purchaser shall establish or designate a plan or plans to
provide HMO coverage, long-term disability, life insurance and
accidental death & dismemberment insurance (but not retiree medical
or life insurance) for the Company's employees and (ii) January 1,
1997, Purchaser shall establish or designate a plan or plans to
provide medical, dental and prescription drug benefits currently
self-insured by Seller for the Company's employees (collectively,
the "Purchaser's Welfare Benefit Plans"). The Purchaser's Welfare
Benefit Plans shall be reasonably similar to the benefits provided
under the welfare benefits plans, as such term is defined in Section
3(1) of ERISA, provided to employees or former employees of the
Company by plans, programs or policies of Seller ("Seller's Welfare
Benefit Plans"). Purchaser shall cause Purchaser's Welfare Benefit
Plans to (i) waive any waiting period and any restrictions or
limitations for pre-existing conditions with respect to Current
Employees already eligible
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under such plans and (ii) take into account expenses incurred by any
Current Employee or his/her dependents under Seller's Welfare
Benefit Plans after December 31, 1995 and prior to the Closing Date
or January 1, 1997, as the case may be, for purposes of determining
deductibles and out of pocket limits. Pursuant to the Corporate
Services Agreement attached hereto as Schedule 5.12, Seller shall
continue to administer all of Purchaser's medical, dental and
prescription drug welfare benefits claims through December 31, 1996
and all run-out claims through March 31, 1997. Notwithstanding the
foregoing, all medical, dental, prescription drug and other welfare
benefits claims incurred before the Closing Date (whether or not
actually filed prior to such date) shall be the responsibility of
Seller.
7.03 Back Service Credit. Service of each Current Employee from the service
date set forth in Schedule 7.01 shall be recognized by Purchaser's Pension
Plan, Purchaser's 401(k) Plan and Purchaser's Welfare Benefit Plans for
all purposes, including, without limitation, vesting, benefit accrual,
eligibility for benefits, level of benefits and optional forms of payment.
7.04 Seller's Pension Plans. Effective as of the Closing Date or as otherwise
provided pursuant to the applicable plan, Current Employees shall cease to
accrue benefits under the PLU Capital Accumulation Plan. Service with
Purchaser after the Closing Date will not be counted by either plan for
any purpose, including, without limitation, benefit accrual. Seller will
cause the PLU Pension Plan and the PLU Capital Accumulation Plan to vest
fully all Current Employees in their benefits under each plan, determined
as of the Closing Date.
7.05 Disability/Workers' Compensation. Purchaser and its plans shall assume all
responsibility for unpaid workers' compensation, short-term disability and
long-term disability claims made by a Current Employee made after the
Closing Date. With respect to any Current Employee on short-term
disability on the Closing Date, Purchaser shall, at its expense, continue
short-term disability coverage substantially similar to that provided by
Seller.
7.06 Severance Policy. Purchaser shall establish and maintain, for the period
commencing on the Closing Date and terminating not less than one (1) year
following the Closing Date, a severance policy for the Company and the
Subsidiaries which provides severance benefits to the Current Employees
which are substantially similar to the severance benefits described on
Schedule 7.06.
7.07 Special Severance Agreements. Purchaser shall assume, effective as of the
Closing Date, the obligations, responsibilities and liabilities of Seller
with respect to the Special Severance Agreements of the Current Employees
identified on Schedule 7.07. In addition, Purchaser agrees that the
Special Severance Agreements shall continue in effect for a period of not
less than two (2) years following the Closing Date. Seller shall cause to
be accrued on the Closing Date Balance Sheet the liabilities with respect
to the severance arrangements of Messrs. Fitch and Xxxxxxxxxxxx.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to Seller's satisfaction,
or written waiver by Purchaser, on or prior to the Closing Date, of each
of the following conditions:
8.01 Accuracy of Representations and Warranties and Performance of Obligations.
All representations and warranties made by Seller and P&S Canada in this
Agreement and in any other document delivered pursuant hereto shall be
true and correct in all Material respects on and as of the Closing Date.
Seller and P&S Canada shall have substantially performed or complied with
all covenants, agreements and conditions contained in this Agreement,
which are on its part required to be performed or complied with, at or
prior to the Closing.
8.02 Consents. All authorizations, permits, consents and approvals of any
Governmental Body and third parties required to be obtained by Seller and
P&S Canada, or which are necessary to consummate the transactions
contemplated in this Agreement, shall have been obtained and shall be in
full force and effect. All approvals of the Board of Directors and
shareholders of Seller and P&S Canada necessary for the consummation of
this Agreement and the transactions contemplated hereby shall have been
obtained.
8.03 No Contrary Judgment. The Closing shall not violate any order, decree or
judgment of any court or Governmental Body having competent jurisdiction
and no claim, action, suit, proceeding or investigation shall have been
commenced or threatened which questions the validity of this Agreement or
any action taken, or to be taken, to consummate the transactions
contemplated hereby.
8.04 HSR Act Compliance. All filings under the HSR Act shall have been made and
the applicable time period under the HSR Act shall have expired or been
earlier terminated.
8.05 Material Adverse Change. There has been no Material adverse change since
April 30, 1996 in the condition (financial or other) of the Business,
results of operation, assets, liabilities, customer or employee relations
as they relate to the Business or future prospects of the Business.
8.06 Consent of Collective Bargaining Representative. Purchaser shall have
negotiated in good faith with the collective bargaining representative of
those unionized employees of the Company to obtain a reasonably
satisfactory agreement relating to the rights of collectively bargained
employees following the Closing Date.
8.07 Closing Deliveries. Seller shall have delivered to Purchaser all of the
items required to be delivered pursuant to Section 12.02 hereof.
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ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions
contemplated by this Agreement shall be subject to Purchaser's
satisfaction, or waiver by Seller, on or prior to the Closing Date, of
each of the following conditions:
9.01 Accuracy of Representations and Warranties and Performance of Obligations.
All representations and warranties made by Purchaser in this Agreement and
in any other document delivered pursuant hereto shall be true and correct
in all Material respects on and as of the Closing Date. Purchaser shall
have substantially performed or complied with all covenants, agreements
and conditions contained in this Agreement which are required to be
performed or complied with, at or prior to the Closing.
9.02 Consents. All authorizations, permits, consents and approvals of any
Governmental Body and third parties required to be obtained by Purchaser,
or which are necessary to consummate the transactions contemplated in this
Agreement, shall have been obtained and shall be in full force and effect.
All approvals of the partners of Purchaser necessary for the consummation
of this Agreement and the transactions contemplated hereby shall have been
obtained.
9.03 No Contrary Judgment. The Closing shall not violate any order, decree or
judgment of any court or Governmental Body having competent jurisdiction
and no claim, action, suit, proceeding or investigation shall have been
commenced or threatened which questions the validity of this Agreement or
any action taken, or to be taken, to consummate the transactions
contemplated hereby or which is likely to Materially and adversely affect
the value of Company.
9.04 HSR Act Compliance. All filings under the HSR Act shall have been made and
the applicable time period under the HSR Act shall have expired or been
earlier terminated.
9.05 Closing Deliveries. Purchaser shall have delivered to Seller all of the
items required to be delivered pursuant to Section 12.03 hereof.
ARTICLE X
COVENANT NOT TO COMPETE
10.01 Purchaser's Non-Competition Covenant. In consideration of Seller's
non-competition covenant in Section 10.02 below, Purchaser and Sovereign
agree that neither Purchaser, Sovereign, the Company nor the Subsidiaries,
nor any of their Affiliates (for purposes of this Section 10.01, the term
"Affiliates" shall not be deemed to include Bank of America or its
Affiliates) will, at any time on or before December 31, 2000, participate,
engage in or have any interest in, directly or indirectly, any Person
(whether as an investor, owner, principal, promoter, shareholder,
licensee, agent, creditor, consultant or in any other capacity which calls
for the rendering of services, advice, acts of
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management, operation or control) which engages in any business which
competes with the Wood Finishes Business in the United States of America,
Canada and/or Mexico as currently conducted by the Seller. Provided,
however, that nothing herein shall prevent or prohibit Purchaser,
Sovereign or any of their Affiliates in any way from conducting any
activities other than the Wood Finishes Business or prevent or prohibit
Purchaser, Sovereign or any of their Affiliates from acquiring, investing
in, controlling or otherwise having an interest in any Person engaged in
the wood finishes business so long as not more than fifteen percent (15%)
of such business' sales of such Person (based on its latest annual
audited, or unaudited if audited statements are unavailable, financial
statements) are attributable to the wood finishes business, or from
acquiring, investing in or otherwise having an interest in not more than a
five percent (5%) equity interest or capital stock interest in a business
whose sales are substantially derived from (based on its latest annual
audited, or unaudited if audited statements are unavailable, financial
statements) the wood finishes business.
10.02 Seller's Non-Competition Covenant.
(a) In consideration of Purchaser's non-competition covenant in Section
10.01 above, Seller agrees that it shall not, and it shall cause
each of its Affiliates to not, at any time on or before December 31,
2000, without the prior written consent of Purchaser, anywhere in
the United States of America, Canada and/or Mexico, directly or
indirectly, participate in, engage in, manage, operate, control,
consult, be employed by or assist in any manner or capacity or have
any interest in any Person which is engaged in the Business as
conducted by the Company immediately prior to the Closing Date;
provided, however, that nothing herein shall prevent or prohibit:
(i) the acquisition by Seller or any of its Affiliates of more
than fifty percent (50%) of the voting securities, or
substantially all of the assets of, any Person having not more
than fifteen percent (15%) of its sales (based on its latest
annual audited, or unaudited if audited statements are
unavailable, financial statements) attributable to products
competing directly with the Business in the United States of
America, Canada and/or Mexico;
(ii) the acquisition or holding for investment purposes (A) by any
employee pension fund or other similar Person acting in a
fiduciary capacity with respect to Seller or any of its
Affiliates of up to 15% or (B) by Seller or any of its
Affiliates (other than those described in clause (A) of this
Section 10.02(a)(i) of up to 5%, of the outstanding capital
stock or other ownership interest in any Person having a class
of equity securities listed on any national or international
securities exchange;
(iii) the purchase from any Person (other than an Affiliate of
Seller) and the resale by Seller or any of its Affiliates of
the type of products involved in the Business (but only to the
extent conducted by Seller or any of its Affiliates as of the
Closing Date);
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(iv) the manufacture, marketing, distribution and sale by Seller or
any of its Affiliates of any products under the Proxpeel,
Cablon(R) or Fabulon(R) lines of business, or products derived
from or developed in the future based upon the technology and
formulas related to such lines of business;
(v) the manufacture, marketing, distribution and sale by Seller or
any of its Affiliates of any construction adhesives as
conducted by Miracles Adhesives Corporation;
(vi) the manufacture, marketing, distribution and sale by Seller or
any of its Affiliates of any products based upon formulations
or processes independently developed by Seller or any of its
Affiliates; or
(vii) the manufacture, marketing, distribution and sales by Seller
of any of its Affiliates of any adhesive products marketed as
"all-purpose" adhesives (but only to the extent conducted by
Seller or any of its Affiliates as of the Closing Date).
(b) Notwithstanding anything to the contrary set forth in paragraph (a)
of this Section 10.02, nothing herein shall prevent Seller or any of
its Affiliates from continuing their business activities (other than
any such activities that are also included in the Business as
currently conducted) of the manufacturing, marketing, distributing
and selling adhesives and coatings under technology and/or brand
names owned by Seller or any of its Affiliates.
ARTICLE XI
INDEMNIFICATION
11.01 Seller's Indemnification. Seller agrees to indemnify, defend and hold
Purchaser, its directors, officers, employees, subsidiaries, lenders,
affiliates and the successors and assigns, of any of the foregoing
("Purchaser's Indemnitees") harmless from and against any and all claims,
liabilities, obligations, demands, damages, losses, costs, expenses
(including reasonable attorney's fees), fines, penalties, judgments and
amounts paid in settlement imposed on, asserted against or incurred by
Purchaser's Indemnitees and which arise out of, in connection with, result
from or are incident to any of the following (collectively, "Purchaser's
Losses"):
(a) any misrepresentation or breach of any representation, warranty,
covenant, obligation or agreement of Seller in this Agreement or in
any document or agreement furnished or to be furnished by Seller
under this Agreement;
(b) any claim for breach of Product Warranty Liability or Product
Liability arising from the sale of Products prior to the Closing
Date to the extent not accrued on the Closing Date Balance Sheet;
including, but not limited to, any claim for breach of Product
Warranty Liability or Product Liability arising from or related to
the Hybond 100NF(R) product line;
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(c) all claims, demands, damages, costs, expenses, losses, liabilities,
penalties, fines, suits and proceedings (including attorney's fees)
to the extent not accrued on the Closing Date Balance Sheet arising
or resulting from (i) the violation of or the enforcement by any
Governmental Body or any third party of any Environmental Laws or
the remediation of Hazardous Materials resulting from the operation
of the Business, the sale of Products or activities at the
Facilities prior to the Closing Date; (ii) any liability relating to
the Business or the Company claimed to arise under any Environmental
Law, as now or hereafter enacted, reauthorized or amended, arising
out of facts or circumstances occurring prior to the Closing Date,
or otherwise arising out of or resulting from the operation of the
Business or the sale of Products prior to the Closing Date; (iii)
conditions caused, events occurring or activities at the Facilities
or with respect to the Business prior to the Closing Date which
result in any emission, disposal, deposit, contamination, release or
discharge of Hazardous Materials or regulated substances (whether on
or off of the Real Property) covered or regulated by Environmental
Laws; or (iv) the existence, storage or presence of Hazardous
Materials or other regulated substances in the buildings, structures
and all other improvements at the Facilities prior to the Closing
Date, and the remediation thereof;
(d) any liability for Taxes arising during any Pre-Closing Tax Period;
(e) any claim, action, suit or demand or any legal, administrative or
other proceeding identified on Schedule 3.14 to the extent not
accrued on the Closing Date Balance Sheet with respect to any act or
omission where the initial event or events giving rise to the same
occurred prior to the Closing Date;
(f) any liability arising from employee benefits plans retained by
Seller, worker's compensation or long-term disability claims made on
or prior to Closing; and
(g) any claim or other liability arising from or related to the Wood
Finishes Business or the Milpitas Property;
(h) any claim or other liability arising on or prior to Closing related
to the Assets; and
(i) any brokers' commission, finders' fees or other like payments
incurred or alleged to have been incurred by Seller in connection
with the sale of the Shares and the consummation of the transactions
contemplated by this Agreement.
11.02 Purchaser's Indemnification. Purchaser agrees to indemnify, defend and
hold Seller, its directors, officers, employees, subsidiaries, affiliates
and the successors and assigns of any of the foregoing ("Seller's
Indemnitees") harmless from and against any and all claims, liabilities,
obligations, demands, damages, losses, costs, expenses (including
reasonable attorney's fees), fines, penalties, judgments and amounts paid
in settlement, imposed on, asserted against or incurred by Seller's
Indemnitees and which arise out of, in connection with, result from or are
incident to any of the following:
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(a) misrepresentations or breach of any representation, warranty,
covenant, obligation or agreement of Purchaser in this Agreement or
in any document or agreement furnished or to be furnished by
Purchaser under this Agreement; and
(b) any liabilities and/or obligations of Company and/or either of the
Subsidiaries, regardless of whether the events or circumstances
giving rise to any such liability and/or obligation occurred prior
to, on or after the Closing Date except for matters for which Seller
has provided indemnification pursuant to Section 11.01 hereof other
than benefits retained by Seller pursuant to Article VII.
11.03 Claim for Indemnification. Any party seeking indemnification under the
provisions of this Agreement, within ninety (90) days after the time it
discovers that it has a claim against another party (a "Personal Claim")
or promptly upon receipt of written notice of any claim or the service of
a summons or other initial legal process upon it in any action instituted
against it which relates to this Agreement (a "Third-Party Claim"), shall
give written notice of such claim, or the commencement of such action, to
the party from whom indemnification will be sought hereunder.
(a) Third Party Claim. In the event of a Third-Party Claim, the party
seeking indemnification ("Tendering Party") shall tender the defense
of such Third Party Claim to the party from whom indemnification is
sought ("Non-Tendering Party"). The Non-Tendering Party shall,
within ten (10) days of the receipt thereof, inform the Tendering
Party in writing that the Non-Tendering Party will either:
(i) Accept the Tender of the Defense Without a Reservation of
Rights. If the Non-Tendering Party agrees that the Third Party
Claim is a claim for which indemnification is provided for
pursuant to the terms of this Agreement ("Proper Claim"), the
Non-Tendering Party shall accept the tender of the defense
without a reservation of rights. In such an event the
Non-Tendering Party shall control all aspects of the defense
of such Third Party Claim and shall indemnify the Tendering
Party in accordance with this Article XI.
(ii) Accept the Tender of the Defense With a Reservation of Rights.
If the Non-Tendering Party questions whether the Third Party
Claim is a Proper Claim, the Non-Tendering Party may accept
the tender of the defense with a reservation of rights. In
such an event, the Non-Tendering Party shall submit such Third
Party Claim to arbitration immediately in order to determine
whether it is a Proper Claim. While the arbitration is
pending, the Non-Tendering Party shall control all aspects of
the defense of such Third Party Claim; provided, however, that
the Tendering Party shall have a reasonable right to
participate in decisions with respect to defense of Third
Party Claims during the period the arbitration is pending. If
the decision of the arbitrator(s) is that it is:
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(A) a Proper Claim, and the Third Party Claim is still
pending, the Non-Tendering Party shall continue the
defense of such Third Party Claim and shall defend,
indemnify and hold the Tendering Party harmless in
accordance with this Article XI;
(B) a Proper Claim, but the Third Party Claim has already
been concluded, the Non-Tendering Party shall indemnify
and hold the Tendering Party harmless in accordance with
this Article XI;
(C) a claim for which indemnification is not provided for
pursuant to the terms of this Agreement ("Improper
Claim"), and the Third Party Claim is still pending, the
Non-Tendering Party shall return all aspects of the
defense of such Third Party Claim immediately to the
Tendering Party. In such an event, the Tendering Party
shall assume the control of all aspects of the defense
of such Third Party Claim immediately and shall
reimburse the Non-Tendering Party for all costs and
expenses (including, but not limited to, reasonable
attorneys fees) incurred by the Non-Tendering Party in
the defense of such Third Party Claim; or
(D) an Improper Claim, but the Third Party Claim has already
been concluded, the Tendering Party shall reimburse the
Non-Tendering Party for all costs and expenses
(including, but not limited to reasonable attorneys
fees) incurred by the Non-Tendering Party in the defense
of such Third Party Claim and shall reimburse the
Non-Tendering Party for all amounts paid by the
Non-Tendering Party for judgments or settlements
relating to such Third Party Claim.
(iii) Reject the Tender of the Defense. If the Non-Tendering Party
decides that the Third Party Claim is an Improper Claim, the
Non-Tendering Party shall reject the tender of the defense. In
such an event, the Non-Tendering Party shall submit such Third
Party Claim to arbitration immediately in order to determine
whether it is a Proper Claim. While the arbitration is
pending, the Tendering Party shall control all aspects of the
defense of such Third Party Claim. If the decision of the
arbitrator(s) is that it is:
(A) a Proper Claim, and the Third Party Claim is still
pending, the Tendering Party shall transfer the control
of all aspects of the defense of such Third Party Claim
to the Non-Tendering Party. The Non-Tendering Party
shall assume the defense of such Third Party Claim
immediately and shall reimburse the Tendering Party for
all costs and expenses (including, but not limited to,
reasonable attorneys fees) incurred by the Tendering
Party in the defense of such Third Party Claim and shall
defend, indemnify and hold the Tendering Party harmless
in accordance with this Article XI;
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(B) a Proper Claim, but the Third Party Claim has already
been concluded, the Non-Tendering Party shall indemnify
and hold the Tendering Party harmless in accordance with
this Article XI and shall reimburse the Tendering Party
for all costs and expenses (including, but not limited
to, reasonable attorneys fees) incurred by the Tendering
Party in the defense of such Third Party Claim and shall
defend, indemnify and hold the Tendering Party harmless
in accordance with this Article XI;
(C) an Improper Claim, and the Third Party Claim is still
pending, the Tendering Party shall continue to control
all aspects of the defense of such Third Party Claim; or
(D) an Improper Claim, but the Third Party Claim has already
been concluded, the Tendering Party shall bear all
losses incurred by the Tendering Party relating to such
Third Party Claim.
(b) Personal Claim. In the event of a Personal Claim, the party from
whom indemnification is sought ("Indemnifying Party") shall, within
thirty (30) days of the receipt of the claim for indemnification,
send written notice to the party seeking indemnification
("Indemnified Party") indicating whether the claim is disputed. If
the claim is disputed, the Indemnifying Party shall submit the
matter to arbitration in order to determine if it is a Proper Claim
and, if it is a Proper Claim, to determine the amount of such claim.
To the extent that the arbitrator(s) rules that a Personal Claim is
a Proper Claim and/or to the extent that a Personal Claim is not
disputed, the Indemnifying Party shall promptly indemnify the
Indemnified Party in accordance with this Article XI.
Notwithstanding the foregoing, the Indemnifying Party will not be entitled
to assume control of the defense of any such claim if:
(i) the Indemnified Party reasonably believes that an adverse
determination of such proceeding could be Materially
detrimental to or injure the Indemnified Party's reputation or
future business prospects;
(ii) the Indemnified Party reasonably believes that there exists or
could arise a conflict of interest which, under applicable
principles of legal ethics, could prohibit a single legal
counsel from representing both the Indemnified Party and the
Indemnifying Party in such proceeding; or
(iii) a court of competent jurisdiction rules that the Indemnifying
Party has failed or is failing to prosecute or defend
vigorously such claim.
11.04 Arbitration Procedure. Any arbitration conducted pursuant to this Article
XI shall be conducted in accordance with Section 2.04(c) of this
Agreement. If a party is required to submit a matter to
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arbitration pursuant to Section 11.03, and such party fails or refuses to
do so within ten (10) days, the other party may submit the matter to
arbitration. In any matter which is submitted to arbitration pursuant to
this Article XI, the party seeking indemnification shall bear the burden
of proof. If the prevailing party is the party seeking indemnification,
the prevailing party shall be entitled to receive from the indemnifying
party all sums due under the indemnification provisions plus all costs and
reasonable attorneys' fees incurred by the prevailing party relating to
the arbitration.
11.05 Period of Indemnity.
(a) The indemnities contained in Sections 11.01(a), 11.01(i) and 11.02
of this Agreement shall expire twenty-one (21) months after the
Closing Date, except with respect to Losses as to which notice has
been given pursuant to Section 11.03 within such period, in which
case the indemnification period shall be extended until final
resolution of such Loss;
(b) the indemnities contained in Sections 11.01(b), 11.01(e) and
11.01(f) shall expire on the fifth (5th) anniversary of the Closing
Date; provided, however, that the indemnities contained in Section
11.01(b) relating solely to Hybond 100NF(R) shall have no expiration
date;
(c) the indemnities contained in Section 11.01(c) shall expire on the
seventh (7th) anniversary of the Closing Date;
(d) the indemnities contained in Section 11.01(d) shall expire upon the
expiration of any applicable statute of limitations with respect to
the Tax liabilities in question; and
(e) the indemnities contained in Sections 11.01(g) and 11.01(h) shall
have no expiration date.
11.06 Limitation on Indemnification. With respect to any of Purchaser's Losses,
Purchaser's Indemnities shall not be entitled to indemnification therefor
until the aggregate amount of such Purchaser's Losses exceed a threshold
of One Hundred Thousand and 00/100 Dollars ($100,000.00) whereupon
Purchaser's Indemnitees shall be entitled to indemnification hereunder for
the aggregate amount of such Purchaser's Losses in excess of One Hundred
Thousand and 00/100 Dollars ($100,000.00) up to a maximum liability cap of
Seven Million and 00/100 Dollars ($7,000,000.00); provided, however, that
the following Losses shall not be subject to the minimum threshold or the
maximum liability cap:
(i) Product Liability claims arising from and relating solely to Hybond
100NF(R);
(ii) liability for Taxes arising during any Pre-Closing Tax Period;
(iii) liabilities arising from employee benefits plans retained by Seller,
worker's compensation or long-term disability claims made on or
prior to Closing;
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(iv) liabilities arising from or related to the Wood Finishes Business or
the Milpitas Property; and
(v) liabilities arising on or prior to Closing related to the Assets.
ARTICLE XII
CLOSING
12.01 Closing. The closing of the purchase and sale of the Shares pursuant to
this Agreement ("Closing") shall take place on August ____ , 1996
("Closing Date"), at the offices of The Xxxxxxx-Xxxxxxxx Company, 000
Xxxxxxxx Xxxxxx, X.X., Xxxxxxxxx, Xxxx 00000 or at such other place as may
be mutually agreed upon by the parties. The Closing shall be effective as
of 12:00:01 a.m. on the Closing Date. The parties will in good faith use
all reasonable efforts to achieve the Closing.
12.02 Deliveries of Seller. Seller shall deliver to Purchaser at the Closing:
(a) such certificates representing (i) all of the Shares duly endorsed
in blank or accompanied by stock powers or other instruments of
transfer duly executed in blank in a form acceptable to Purchaser
and (ii) all of the capital stock of each Subsidiary;
(b) resignations duly executed by each officer and director of Company
whose resignations have been required by Purchaser prior to Closing;
(c) certificates of good standing for the Company certified by the
Secretaries of State of New York, Illinois, Pennsylvania and
California and certificates of registration with respect to
Subsidiaries in Mexico;
(d) copies, certified by the Secretary or Assistant Secretary of Seller,
of resolutions of Seller's board of directors authorizing the
execution, delivery and performance of this Agreement and all other
agreements, documents and instruments relating hereto and the
consummation of the transactions contemplated in this Agreement,
which certification shall recite that such resolutions have not been
subsequently amended, modified or rescinded and are in full force
and effect;
(e) the Corporate Services Agreement in the form attached as Schedule
5.12;
(f) the Lease Agreement in the form attached as Schedule 5.13;
(g) the Environmental Escrow Agreement in the form attached as Schedule
2.03(b)(ii);
(h) the Environmental Protocol Agreement in the form attached as
Schedule 2.03(b)(i);
(i) the Distribution Agreement in the form attached as Schedule 5.15;
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(j) the License Agreement in the form attached as Schedule 5.18;
(k) copies of all consents, including, without limitation, all landlord
consents, assignments and waivers necessary for the consummation of
the transaction contemplated by this Agreement;
(l) the General Assignment, Xxxx of Sale and Assumption Agreement
relating to the Assets ("Xxxx of Sale");
(m) the legal opinion of Seller's General Counsel, dated as of the
Closing Date, in a form reasonably satisfactory to legal counsel for
Purchaser; and
(n) such other Closing documents as Purchaser may reasonably request.
12.03 Deliveries of Purchaser. Purchaser shall deliver to Seller at the Closing:
(a) the amount of Forty-Two Million Eight Hundred Twenty-Four Thousand
Six Hundred Sixty-Seven and 50/100 Dollars ($42,824,667.50) as the
Purchase Price in the manner provided in Section 2.03;
(b) copies, certified by the Secretary or Assistant Secretary of
Purchaser, of resolutions of Purchaser's board of directors
authorizing the execution, delivery and performance of this
Agreement and all other agreements, documents and instruments
relating hereto and the consummation of the transactions
contemplated in this Agreement, which certification shall recite
that such resolutions have not been subsequently amended, modified
or rescinded and are in full force and effect;
(c) copies, certified by the General Partner of Sovereign, of
resolutions of Sovereign's partners authorizing the execution,
delivery and performance of this Agreement and all other agreements,
documents and instruments relating hereto and the consummation of
the transactions contemplated in this Agreement, which certification
shall recite that such resolutions have not been subsequently
amended, modified or rescinded and are in full force and effect;
(d) the Lease Agreement in the form attached as Schedule 5.13;
(e) Corporate Services Agreement in the form attached as Schedule 5.12;
(f) the Environmental Escrow Agreement in the form attached as Schedule
2.03(b)(ii);
(g) the Environmental Protocol Agreement in the form attached as
Schedule 2.03(b)(i) ;
(h) the Distribution Agreement in the form attached as Schedule 5.15;
and
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(i) the License Agreement in the form attached as Schedule 5.18;
(j) the Xxxx of Sale;
(k) the legal opinion of Xxxxx, Xxxxxx & Xxxxxx LLP, counsel to
Purchaser, dated as of the Closing Date, in a form reasonably
satisfactory to Seller's General Counsel; and
(l) such other Closing documents as Seller may reasonably request,
including but not limited to a certified copy of the Certificate of
Incorporation of Purchaser as certified by the State of Delaware.
ARTICLE XIII
TERMINATION
13.01 Grounds for Termination. This Agreement may be terminated at any time
prior to the Closing under any one of the following circumstances:
(a) by mutual written consent of the parties hereto;
(b) by Purchaser or Seller, by giving written notice of such termination
to the other party, if (i) any condition (other than as set forth in
Sections 8.04 and 9.04) set forth in Articles VIII or IX shall not
have been satisfied or waived and (ii) the Closing shall not have
occurred prior to August 31, 1996; provided that the terminating
party is not in Material breach of its obligations under this
Agreement;
(c) by Purchaser or Seller, by giving written notice of such termination
to the other party, if (i) the conditions set forth in Sections 8.04
and 9.04 shall not have been satisfied or waived and (ii) the
closing shall not have occurred prior to August 31, 1996; provided
that the terminating party is not in Material breach of its
obligations under this Agreement; and
(d) by Purchaser or Seller if there shall be in effect any law or
regulation that makes the consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if the
consummation of the transactions contemplated hereby would violate
any nonappealable final order, decree or judgment of any court of
governmental body having competent jurisdiction.
13.02 Effect of Termination. Except as set forth in Section 13.03, in the event
this Agreement is terminated as permitted by Section 13.01, this Agreement
shall thereafter become void and have no effect, and, such termination
shall be without liability of either party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to
the other party; provided, that nothing herein will release either party
from liability for any breach of this Agreement prior to such termination.
The provisions of Section 5.08 and Article XIV shall survive any
termination hereof pursuant to Section 13.01.
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13.03 Payments Required Upon Termination in Certain Circumstances. In the event
of a termination of this Agreement by either party in accordance with
Section 13.01(c) or Section 13.01(d) (but only if the law, regulation,
order, decree or judgment referred to in Section 13.01(d) relates to the
HSR Act), other than as a result of Seller's actions or inactions,
Purchaser shall pay to Seller (i) an amount equal to the out-of-pocket
expenses, including fees and disbursements of legal counsel, incurred by
Seller and any of Seller's Affiliates in connection with the transactions
contemplated by this Agreement, upon delivery by Seller to Purchaser of a
reasonable description of such expenses and the amounts thereof, and (ii)
an amount equal to the amount by which the Purchase Price hereunder
exceeds the aggregate value of the consideration received by the Seller as
a result of the disposition of the Business (substantially as an entirety
or otherwise) to another Person or Persons; provided in the case of this
clause (ii) that a binding agreement or agreements for the sale of all or
substantially all of the Business shall have been entered into within 12
months following such termination. The amount to be paid by Purchaser to
Seller pursuant to clause (ii) of the immediately preceding sentence shall
be adjusted to take into account any asset or liability of the Business
retained by Seller in connection with such subsequent sale or sales.
ARTICLE XIV
EXPENSES
Purchaser and Seller will bear their own respective expenses,
including, without limitation, counsel and accountants' fees, in
connection with the preparation and negotiation of, and transactions
contemplated under, this Agreement.
ARTICLE XV
MISCELLANEOUS
15.01 Notices. Any notices, requests, claims, demands, instructions and other
communications to be given hereunder to any party shall be in writing and
delivered in person, sent by certified mail, postage prepaid, return
receipt requested, or by facsimile transmission with a confirmed
telephonic transmission answer back, to the following addresses (or at
such other address or number as is given in writing by one party to the
others pursuant hereto):
If to Seller
or P&S Canada: The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
Attn: Vice President - Corporate Planning and
Development
Telecopy No.: (000) 000-0000
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with a copy to: The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
Attn: Vice President, General Counsel
and Secretary
Telecopy No.: (000) 000-0000
If to Purchaser: P&S Holdings, Inc.
c/o Sovereign Specialty Chemicals L.P.
000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
Telecopy No.: (000) 000-0000
with copies to: First Chicago Equity Capital
Three First Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxx and Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
and
Xxxxx, Xxxxxx & Xxxxxx LLP
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
15.02 Amendments. This Agreement may be amended only upon the mutual written
consent of the parties hereto.
15.03 Duplicates, Originals Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same agreement.
15.04 Entire Agreement. This Agreement, including the Schedules hereto,
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements and
understandings between the parties. There are no representations,
warranties, undertakings or agreements between the parties with respect to
the subject matter of this Agreement except as set forth herein.
15.05 Non-Assignability. Neither of the parties hereto may assign its rights,
interests, obligations or liabilities under this Agreement or delegate its
duties without the prior written consent of the other
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party; provided, however, that without the consent of Seller, Purchaser
may assign its rights (i) under this Agreement to a wholly-owned
subsidiary, or (ii) under Section 11.01 of this Agreement, to Chase
Manhattan Bank, N.A. (or any lender in replacement thereof).
15.06 Headings. The headings contained in this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
15.07 Governing Law. This Agreement shall be governed and construed in
accordance with the Laws of the State of Ohio.
15.08 Severability. In the event any term or provision of this Agreement shall
be deemed to be illegal, invalid or unenforceable for any reason, such
illegality, invalidity or unenforceability will not affect any other term
or provision of this Agreement and the parties shall endeavor to replace
the invalid or null and void provision(s) with such which correspond best
to the intentions of the parties hereto.
15.09 Invalid Provisions. If any provision of this Agreement is deemed or held
to be illegal, invalid or unenforceable, this Agreement shall be
considered divisible and inoperative as to such provision to the extent it
is deemed to be illegal, invalid or unenforceable, and in all other
respects this Agreement shall remain in full force and effect. Should any
provision contained in the Agreement ever be reformed or rewritten by any
judicial body of competent jurisdiction, such provision as so reformed or
rewritten shall be binding upon all parties hereto.
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15.10 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date hereinbefore stated.
WITNESS: THE XXXXXXX-XXXXXXXX COMPANY
/s/ Xxxxx X. Xxxxxxx BY: /s/ / s /
--------------------------- ---------------------------------------
TITLE: Director - Corporate Development
--------------------------- ------------------------------------
WITNESS: XXXXXX & XXXXXXX CANADA, INC.
/s/ Xxxxx X. Xxxxxxx BY: /s/
--------------------------- ---------------------------------------
/s/ TITLE: Director - Corporate Development
--------------------------- ------------------------------------
SOVEREIGN SPECIALTY CHEMICALS, L.P.
BY: SOVEREIGN CHEMICALS CORPORATION,
WITNESS: ITS GENERAL PARTNER
/s/ Xxxxx X. Xxxxxxx BY: /s/ Xxxxxx X. Xxxxxx
--------------------------- ---------------------------------------
/s/ TITLE: President & Chief Executive Officer
--------------------------- ------------------------------------
WITNESS: P&S HOLDINGS, INC.
/s/ Xxxxx X. Xxxxxxx BY: /s/ Xxxxxx X. Xxxxxx
--------------------------- ---------------------------------------
/s/ TITLE: President & Chief Executive Officer
--------------------------- ------------------------------------
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