Execution Copy
ASSET AND SHARE PURCHASE AGREEMENT
Dated
October 29, 1998
By and Among
GENCORP INC.,
SEQUA CORPORATION,
and
SEQUA CHEMICALS, INC.
TABLE OF CONTENTS
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Page
. . . . . . . . . . . . . .
I. Definitions 9
1.01. Definitions . . . 9
II...............Purchase and Sale 9
2.01. Purchase and Sale 9
2.02. Purchased Chemical Assets 12
2.02A Purchased Sequa Assets 13
2.03. Excluded Assets 13
2.04. Assumed Obligations 16
2.05. Retained Liabilities 17
2.06. Purchase Price 19
2.07. Working Capital Adjustment 20
2.08. Capital Spending Adjustment 22
2.09. Allocation of Purchase Price 23
2.10. Closing. . . . . . 23
2.11........Assignment of Assets 26
III.............Representations and Warranties of Buyer 27
3.01. Corporation Organization and Qualification 27
3.02. Authorization of Transaction 27
3.03. Non-Conflict 27
3.04........Finders; Brokers 27
3.05........No Knowledge of Seller Default 28
3.06........Adequate Funds 28
IV...........Representations and Warranties of Sellers 28
4.01. Corporate Organization and Qualification 28
4.02. Authorization of Transaction 28
4.03. Non-Conflict 29
4.04. Investments; Subsidiaries 29
4.05. Financial Statements 30
4.06. Absence of Certain Changes in Events 31
4.07. Taxes. . . . . . . 31
4.08. Accounts Receivable 32
4.09. Inventory 32
. . . . . . . . . . . . . . . Page
. . . . . . . . . . . . . .
4.10. Legal Proceedings 32
4.11........Orders 33
4.12. ......Compliance with Legal Requirements 34
4.13. Permits. . . . . . 34
4.14. Environmental Matters 35
4.15. Title to Properties; Sufficiency of Assets 36
4.16. Real Property 37
4.17. Personal Property 39
4.18. Intellectual Property 40
4.19. Insurance 43
4.20. Employees 44
4.21. Employee Benefit Plans; ERISA 45
4.22. Contracts 46
4.23. Corporate Records and Conduct 49
4.24. Relationships with Related Persons 50
4.25. Significant Customers 50
4.26. Significant Suppliers 51
4.27. Brokers Finders 52
4.28. Disclosure 52
4.29........No Knowledge of Buyer Breach 52
V................Post-Closing Covenants 52
5.01. Interim Use of Sequa Chemicals'
Corporate Name 52
5.02. Restrictive Covenants 53
5.03. Transition and Further Assurances 57
5.04. Cooperation 57
5.05. Administration of Accounts 57
5.06. Access to Former Business Records 57
5.07. Interim Permit Operations 58
5.08. Trademark Covenants 58
5.09. Tax Matters 59
5.10. Certain Conditions 61
5.11. Warwick Services 61
5.12. Xxxx Xxxxxxx 62
5.13. Environmental Response 63
5.14. Burlington Transaction 63
5.15 Certain Inventory 63
VI. Employment Matters 63
. . . . . . . . . . . . . . . Page
. . . . . . . . . . . . . .
6.01. Offers of Employment 63
6.02. Employee Obligations 64
6.03. Internal Revenue Services Forms 65
VII. Buyer's Investigation and Certain Disclaimers 66
7.01. No Additional Representations 66
7.02. Certain Conditions 67
7.03 No Effect on Representations and
Warranties 67
VIII. Remedies. . . . . . . . 67
8.01. Survival 67
8.02. Indemnification by Seller 67
8.03. Indemnification by Buyer 68
8.04. Third Party Claim Procedures 70
8.05. Survival and Limitations 73
8.06. Indemnification for Owned Facilities 74
8.07. Indemnification Based Upon Net Damage 75
8.08. Workers' Compensation 75
IX. Miscellaneous Provisions 75
9.01. Notices 75
9.02. Entire Agreement 76
9.03. Assignment 76
9.04. Captions 77
9.05. Waiver; Consent 77
9.06. No Third Party Beneficiaries 77
9.07. Counterparts 77
9.08. Gender 77
9.09. Governing Law 78
9.10. Interpretation 78
9.11. Blue Pencil 78
9.12. Non-exclusive Remedies 78
9.13. Bulk Transfer Laws 78
9.14. Expenses 79
Upon request, the Registrant will furnish a copy of any of the
following omitted exhibits and schedules:
Exhibit A - Definitions
Exhibit B - Base Line Working Capital Statement
Exhibit C - Accounting Instructions
Exhibit D - Allocation of Purchase Price
Exhibit E - Deeds (Xxxxxxx, South Carolina)
Exhibit E-1 - Deeds (Xxxxxxx, South Carolina)
Exhibit E-2 - Deeds (Xxxxxxx)
Exhibit E-3 - Deeds (Xxxxxxx)
Exhibit E-4 - Special Warranty Deed (Jamestown, North Carolina)
Exhibit F - Xxxx of Sale (Sequa Chemicals, Inc.)
Exhibit F-1 - Xxxx of Sale (Sequa Corporation)
Exhibit G - Assignment of Patents Applications (Sequa
Chemicals, Inc.)
Exhibit G-1 - Assignment of Patents Applications (Sequa
Corporation)
Exhibit H - Assignment of Trademarks and Trademark
Applications (Sequa Chemicals, Inc.)
Exhibit H-1 - Assignment of Trademarks and Trademark
Applications (Sequa Corporation)
Exhibit I - Certificate of Vice President of Sequa Chemicals,
Inc.
Exhibit I-1 - Certificate of Senior Associate General Counsel of
Sequa Corporation
Exhibit J - Assignment and Assumption of Vehicle Leases
Exhibit K - Warwick Services
Exhibit L - Share Transfer Agreement
Exhibit M - Environmental Response Agreement
Exhibit M-1 - Assignment Of Option
Exhibit N - Burlington Agreement
Exhibit N-1 - Jamestown Facility Rights Agreement
Exhibit O - Assumption Agreement
Exhibit P - Certificate Secretary of Buyer
Exhibit Q - State of South Carolina Department of Revenue and
Taxation Resale Certificate (Form ST-8A)
Exhibit R - State of North Carolina Manufacturer's Certificate
Exhibit S - Seller's Knowledge
Exhibit T - Buyer's Knowledge
Exhibit U - Permitted Liens
Disclosure Schedules
Disclosure Schedule Part 2.02(a) Owned Facilities
Disclosure Schedule Part 2.02(b) Leased Facilities
Disclosure Schedule Part 2.02(c) Machinery and Equipment
Disclosure Schedule Part 2.02(e) Listed Permits
Disclosure Schedule Part 2.02(f) Intellectual Property
Disclosure Schedule Part 2.02(g) Assumed Contracts
Disclosure Schedule Part 2.02(l) Certain Lockboxes and SCSA
Accounts
Disclosure Schedule Part 2.02(A)(a) Sequa Real Property
Disclosure Schedule Part 2.02(A)(b) Sequa Real Estate Leases
Disclosure Schedule Part 2.02(A)(c) Sequa Intellectual Property
Disclosure Schedule Part 2.02(A)(d) Sequa Assumed Contracts
Disclosure Schedule Part 2.03(o) Other Excluded Assets
Disclosure Schedule Part 2.05(l) Other Retained Liabilities
Disclosure Schedule Part 4.01 Corporate Organization and
Qualification
Disclosure Schedule Part 4.03 Non-Conflict
Disclosure Schedule Part 4.04(a) Business and Product Line
Acquisitions
Disclosure Schedule Part 4.04(b) Equity Securities and
Subsidiaries
Disclosure Schedule Part 4.05(a) Financial Statements and
Exceptions
Disclosure Schedule Part 4.05(b) Certain Exceptions to
Financial Statements -
Seller Affiliate Services
Disclosure Schedule Part 4.06 Absence of Certain Changes
and Events
Disclosure Schedule Part 4.07 Taxes
Disclosure Schedule Part 4.08 Accounts Receivable
Disclosure Schedule Part 4.09 Inventory
Disclosure Schedule Part 4.10(a) Pending Proceedings
Disclosure Schedule Part 4.10(b) Certain Prior Proceedings
Disclosure Schedule Part 4.11(a) Listed Orders
Disclosure Schedule Part 4.11(c) Certain Prior Orders
Disclosure Schedule Part 4.11(d) Notice of Violation of Orders
Disclosure Schedule Part 4.12 Compliance with Legal
Requirements
Disclosure Schedule Part 4.13(a) Listed Permits
Disclosure Schedule Part 4.13(b) Exceptions to Permits
Disclosure Schedule Part 4.14(a) Environmental - Reports
Disclosure Schedule Part 4.14(b) Environmental - Hazardous
Substances (Discharges and
Migrations)
Disclosure Schedule Part 4.14(c) Environmental - Required
Contributions
Disclosure Schedule Part 4.14(d) Environmental - Underground
Storage Tanks
Disclosure Schedule Part 4.l4(e) Environmental - Exposure to
Hazardous Substances
Disclosure Schedule Part 4.14(f) Environmental - CERCLA
Listings
Disclosure Schedule Part 4.15 Title to Purchased Assets
Disclosure Schedule Part 4.16(a) Real Property - Owned
Facilities and Leased
Facilities
Disclosure Schedule Part 4.16(b) Real Property - Legal
Requirements and Other Matters
Disclosure Schedule Part 4.16(b)(ii) Real Property -
Recommendations of Insurers
Disclosure Schedule Part 4.16(b)(iv) Real Property - Tenants
Disclosure Schedule Part 4.16(b)(vi) Real Property - Access
Restrictions
Disclosure Schedule Part 4.17(a) Personal Property - Certain
Listings
Disclosure Schedule Part 4.17(b) Personal Property - Compliance
with Legal Requirements
Disclosure Schedule Part 4.18(a) Intellectual Property -
Patents, Patent Applications
and Trademarks
Disclosure Schedule Part 4.18(b) Intellectual Property -
Certain Licenses to Sequa
Chemicals
Disclosure Schedule Part 4.18(c) Intellectual Property -
Certain Licenses from Sequa
Chemicals
Disclosure Schedule Part 4.18(d) Intellectual Property - Title
and Ownership
Disclosure Schedule Part 4.18(e) Intellectual Property -
Validity and Enforceability
Disclosure Schedule Part 4.18(f) Intellectual Property -
Infringement
Disclosure Schedule Part 4.18(g) Intellectual Property -
Compliance with Legal
Requirements (Patents and
Patent Applications)
Disclosure Schedule Part 4.18(h) Intellectual Property -
Compliance with Legal
Requirements (Trademarks and
Trademark Applications)
Disclosure Schedule Part 4.18(i) Intellectual Property -
Certain Indemnities
Disclosure Schedule Part 4.18(j) Intellectual Property - Third
Party Indemnities
Disclosure Schedule Part 4.18(k) Intellectual Property -
Computer Hardware and Software
Defects
Disclosure Schedule Part 4.19(a) Insurance - Description or
Listing of Policies
Disclosure Schedule Part 4.19(b) Insurance - Workers'
Compensation Claims
Disclosure Schedule Part 4.19(c) Insurance - Validity and
Enforceability
Disclosure Schedule Part 4.20(a) Employees - Employee Listing
and Remuneration
Disclosure Schedule Part 4.20(b) Employees - Inactive Employees
Disclosure Schedule Part 4.20(c) Employees - Collective
Bargaining Agreements and
Related Matters
Disclosure Schedule Part 4.20(d) Employees - Restrictive
Agreements
Disclosure Schedule Part 4.20(e) Employees - Certain Employee
Resignations
Disclosure Schedule Part 4.21(a) Employee Benefit Plans -
Listings
Disclosure Schedule Part 4.21(e) Employee Benefit Plans -
Medical
Disclosure Schedule Part 4.22(a) Contracts - Certain Listings
Disclosure Schedule Part 4.22(b) Contracts - Validity and
Enforceability
Disclosure Schedule Part 4.22(d) Contracts - Breaches and
Defaults
Disclosure Schedule Part 4.22(e) Contracts - Force Majeure
Disclosure Schedule Part 4.22(f) Contracts - Consents
Disclosure Schedule Part 4.23(b) Corporate Records and Employee
Conduct
Disclosure Schedule Part 4.24(a) Related Party Transactions
Disclosure Schedule Part 4.24(b) Affiliate Transaction
Disclosure Schedule Part 4.25(a) Significant Customers
Disclosure Schedule Part 4.25(b) Significant Customers -
Termination of Relationships
Disclosure Schedule Part 4.25(c) Significant Customers -
Material Claims
Disclosure Schedule Part 4.26(a) Significant Suppliers -
Listing
Disclosure Schedule Part 4.26(b) Significant Suppliers -
Terminations
Disclosure Schedule Part 4.26(c) Significant Suppliers - Claims
and Disputes
Disclosure Schedule Part 4.27 Brokers and Finders
Disclosure Schedule Part 4.28 Miscellaneous and Additional
Disclosures
Disclosure Schedule Part 5.10 Certain Conditions - Jamestown
Facility
Disclosure Schedule Part 5.15 Certain Inventory
Disclosure Schedule Part 7.02 Certain Conditions
ASSET AND SHARE PURCHASE AGREEMENT
THIS ASSET AND SHARE PURCHASE AGREEMENT (the "Agreement")
dated October ___, 1998, is by and among SEQUA CORPORATION, a
Delaware corporation ("Sequa") SEQUA CHEMICALS, INC., a Delaware
corporation ("Sequa Chemicals") (Sequa and Sequa Chemicals
individually a "Seller" and collectively, "Sellers"), and GENCORP
INC., an Ohio corporation ("Buyer").
WHEREAS, Buyer desires to purchase from Sequa Chemicals and
Sequa, and Sequa Chemicals and Sequa desire to sell to Buyer
certain assets and certain shares of capital stock and Sequa
Chemicals and Sequa desire to transfer and Buyer desires to assume
from Sequa Chemicals and Sequa certain obligations of Sequa
Chemicals and Sequa, all on the terms and subject to the conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, Buyer, Sequa Chemicals and Sequa
hereby agree as follows:
ARTICLE I: DEFINITIONS
Section 1.01. Terms used in this Agreement shall have the
meanings ascribed to them by definition in this Agreement or in
Exhibit A.
ARTICLE II: PURCHASE AND SALE
Section 2.01. Purchase and Sale. Upon the terms and subject
to the conditions of this Agreement: (a) Buyer hereby purchases
from Sequa Chemicals and Sequa Chemicals hereby sells, conveys,
grants, transfers, assigns and delivers to Buyer, free and clear of
all Liens except for Permitted Liens, the Purchased Chemical Assets
and the Shares; and (b) Buyer hereby purchases from Sequa and Sequa
hereby sells, conveys, grants, transfers, assigns and delivers to
Buyer, free and clear of all Liens except for Permitted Liens, the
Purchased Sequa Assets.
Section 2.02. Purchased Chemical Assets. "Purchased Chemical
Assets" means all properties, assets and rights of Sequa Chemicals
of every nature,
kind and description, whether tangible or intangible, whether real,
personal or mixed, whether accrued, contingent or otherwise and
wherever located and all of Sequa Chemicals' right, title and
interest therein, other than any of the same which are Excluded
Assets (collectively, the "Purchased Chemical Assets"). The
Purchased Chemical Assets include, without limitation, all of Sequa
Chemicals' right, title and interest in and to the following (other
than any of the following which are Excluded Assets):
(a) The real property described on Disclosure
Schedule Part 2.02(a) along with all appurtenant rights, easements
and privileges appertaining or relating thereto and all buildings,
fixtures and improvements located thereon and therein and all such
items under construction;
(b) All rights to the leased real property described on
Disclosure Schedule Part 2.02(b) along with all appurtenant rights,
easements, and privileges appertaining or relating thereto, to the
extent of Sequa Chemicals' rights therein under the terms,
provisions and conditions of the applicable lease pertaining
thereto;
(c) All machinery, equipment, computers, gauges,
furniture, office equipment, vehicles, and other tangible personal
property (other than Inventory, leased tangible personal property,
and raw material inventory consigned to Sequa Chemicals),
including, without limitation, the items described on Disclosure
Schedule Part 2.02(c) (the "Machinery and Equipment");
(d) All raw materials, supplies, spare parts, stores,
component parts, work-in-process, and finished goods held for use
in or sale by the Business (the "Inventory"), provided that such of
the foregoing, if any, as may be consigned to Sequa Chemicals from
third parties shall be governed by the terms and conditions of the
applicable consignment agreement included within the Assumed
Contracts referred to in Section 2.02(g);
(e) Subject to Section 2.11, all rights under
authorizations, approvals, franchises, orders, consents, licenses,
permits, registrations, waivers, exemptions, abatements and
certificates of or by any Government Authority and all applications
and renewals therefor and all air emission credits or other rights
arising or resulting from any of the foregoing, including, without
limitation, the items listed on Disclosure Schedule Part 2.02(e)
(such items, the "Listed Permits");
(f) All of Sequa Chemicals' rights under all
Intellectual Property including, without limitation, the items
described on Disclosure Schedule Part 2.02(f);
(g) All rights under (i) the executory contracts,
agreements, contract rights, leases, licenses, purchase and sales
orders, consignment agreements, proposals, quotations, bids and
arrangements of Sequa Chemicals or SCSA which are listed on
Disclosure Schedule Part 2.02(g) (the "Listed Contracts") and (ii)
the executory contracts, agreements, contract rights, leases,
licenses, purchase and sales orders, proposals, quotations, bids
and arrangements of Sequa Chemicals or SCSA to the extent of the
terms thereof pertaining to the ongoing Business operations and
which are not required to be disclosed pursuant to Section 4.22
((i) and (ii), together with the items listed on Disclosure
Schedule Part 2.02A(d) collectively, the "Assumed Contracts");
(h) All rights under all accounts receivable, notes
receivable, royalties receivables, rebates receivables, and
employee receivables included in the Closing Working Capital
Statement (the "Receivables") and all rights under all security and
other deposits, advance payments, prepayments and credits included
in the Closing Working Capital Statement (the "Prepaids");
(i) Subject to Section 2.11 and to the extent that such
exist and relate to either the Purchased Assets or Assumed
Obligations, all of Sequa Chemicals' rights, if any, under any
cause of action, judgment, right of recovery, right of set-off,
credit, rebate, indemnity or other claim against other Persons, of
whatever kind or nature, known or unknown, accrued or to accrue,
including, without limitation, to the extent that such exist and
relate to the Purchased Assets or Assumed Obligations all rights of
rescission, replevin and reclamation; all rights and claims in
respect of past infringement of Intellectual Property or against
present and former employees (except in the case of mere negligence
of such employees provided, however, that Sellers and Buyer shall
have rights against employees as a result of negligence in
providing information in connection with the transactions
contemplated hereby as well as any misrepresentation or breach of
warranty by such employee in connection with the transactions
contemplated hereby), agents and consultants; all credits or
rebates due in respect of charges incurred, goods received or
services rendered to Sequa Chemicals; and all rights under any
express or implied warranties, representations or guarantees made
by
suppliers, contractors or others having business dealings with
Sequa Chemicals;
(j) Subject to Section 5.06, all books, records, files,
plans, studies, reports, manuals, handbooks, catalogs, brochures,
correspondence and other materials, whether in hard copy,
electronic or any other form or media, including, without
limitation, any of the same pertaining to accounting, sales, costs,
pricing, marketing, advertising, promotions, suppliers, customers,
personnel, human resources, inventory, engineering, manufacturing,
business plans and strategies and product development ("Business
Records");
(k) Subject to Section 5.06, all minute books, stock
records, corporation records, corporate seals, treasury shares and
copies of tax returns and supporting schedules of SCSA;
(l) The bank accounts and lockboxes of Sequa Chemicals
listed on Disclosure Schedule Part 2.02(l);
(m) All telephone numbers and websites;
(n) All properties, assets and rights reflected on the
Interim Balance Sheet to the extent not sold, transferred, or
disposed of between the date thereof and the Closing Time; and
(o) The Shares.
Section 2.02A. Purchased Sequa Assets. "Purchased Sequa
Assets" means only the following properties, assets and rights of
Sequa (and no other properties, assets or rights of Sequa) and all
of Sequa's right, title and interest in and to the following
properties, assets and rights:
(a) The real property described on Disclosure Schedule
Part 2.02A(a) along with all appurtenant rights, easements and
privileges appertaining or relating thereto and all buildings,
fixtures and improvements located thereon and therein and all such
items under construction;
(b) All rights to the leased real property described on Disclosure
Schedule Part 2.02A(b) along with all appurtenant rights,
easements, and privileges appertaining or relating thereto, to the
extent of Sequa's rights therein under the terms, provisions and
conditions of the applicable lease pertaining thereto;
(c) All of Sequa's rights under the Intellectual Property described
on Disclosure Schedule Part 2.02A(c);
All of Sequa's rights under the executory contracts,
commitments and agreements described on Disclosure Schedule Part
2.02A(d).
(e) Subject to Section 2.11 and to the extent that such
exist and relate exclusively to the Purchased Sequa Assets, all of
Sequa's rights, if any, under any cause of action, judgment, rights
of recovery, right of set-off, credit, rebate, indemnity or other
claim against other Persons, of whatever kind or nature, known or
unknown, accrued or to accrue and to the extent that such exist and
relate exclusively to the Purchased Sequa Assets all rights of
rescission, replevin and reclamation and all rights and claims in
respect of past infringement of the Intellectual Property described
on Disclosure Schedule Part 2.02A(c);
(f) Subject to Section 5.06, all books, records, files,
plans, studies, reports, manuals, handbooks, catalogs, brochures,
correspondence and other materials, whether in hard copy,
electronic or any other form or media which pertain exclusively to
the Purchased Sequa Assets; and
(g) Subject to Section 2.11, all rights under
authorizations, approvals, franchises, orders, consents, licenses,
permits, registrations, waivers, exemptions, abatements and
certificates of or by any Governmental Authority and all
applications and renewals therefor pertaining exclusively to the
Purchased Sequa Assets.
Section 2.03. Excluded Assets. "Excluded Assets" means the
following properties, assets and rights:
(a) All cash on hand and in banks, cash equivalents and
marketable securities of Sequa Chemicals and SCSA except to the
extent for SCSA those items included on the Closing Working Capital
Statement;
(b) All minute books, stock records, corporation
records, corporate seals, treasury shares and tax returns and
supporting schedules of Sequa Chemicals;
(c) All pension, health care and other employee benefit
plans of Sequa Chemicals or any Sequa Chemicals' Affiliate and all
funds and other assets and records associated with all such benefit
plans, whether held by Sequa Chemicals or any Sequa Chemicals'
Affiliate, in trust or otherwise and refunds of amounts, paid or
prepaid amounts with respect to all such plans and accounts;
(d) All bank accounts, safety deposit boxes, lockboxes
and agreements with banks and other financial institutions of Sequa
Chemicals and any Sequa Chemicals Affiliate (other than SCSA) as
well as all checkbooks and cancelled checks other than the SCSA
bank accounts and lockboxes and the bank accounts lockboxes of
Sequa Chemicals which are listed on Disclosure Schedule Part
2.02(l);
(e) The name and trademark "Sequa" and all trademarks,
product names, tradenames and stylized logos incorporating the name
"Sequa" and any and all variations and adaptations thereof and the
corporate names "Sequa Chemicals, Inc." and "Sequa Chemicals, S.A."
and the rights and interests of any Sequa Chemicals Affiliate in
and to the name "MYKON" (collectively, the "Excluded Marks");
provided, however, that the Excluded Marks shall not include, and
the Purchased Assets shall include the trademarks, tradenames and
product names listed on Disclosure Schedule Part 2.02(f) and
provided further that Buyer shall have the right to use the Sequa
name as provided in Section 5.01 and the rights of Buyer and Sequa
Chemicals and its Affiliates in respect of the MYKON name and
Sequa name (to the extent the Sequa name is included in a
trademark, tradename or product name on Disclosure Schedule Part
2.02(f)) shall be subject to Section 5.08;
(f) All contracts, agreements, contract rights,
equipment and other personal property leases, licenses, purchase
and sales orders, proposals, quotations, bids, arrangements and
understandings of Sequa Chemicals or SCSA which are not Assumed
Contracts;
(g) All refunds of Taxes, including, the benefit of any
credits, loss carry forwards or similar items except to the extent
included on the Closing Working Capital Statement;
(h) All owned real property, all leased or licensed real
property and all other interests in real property, which is not a
Facility;
(i) Any waste or scrap which have been disposed of by
Sequa, Sequa Chemicals or SCSA;
(j) All casualty, liability, workers compensation and
other insurance policies owned by or obtained by or on behalf of
Sequa Chemicals, SCSA and any Sequa Chemicals Affiliates and all
claims, awards or rights, including rights of recovery, under any
such insurance policies, including refunds of insurance premiums
and proceeds thereof, whenever received, and any prepaid insurance
policies;
(k) Subject to Section 5.06, all Business Records to the
extent relating to the Excluded Assets or Retained Liabilities or
to the extent to which Sequa Chemicals or any Sequa Chemicals
Affiliate is required to retain by any Governmental Authority or
Legal Requirement;
(l) (i) All Hazardous Substances which at or prior to
the Closing Time are present or were present in, on or under any
Facility or Former Facility, (ii) all Hazardous Substances which at
or prior to the Closing Time are or were present in, on or under
any Facility or Former Facility and which prior to the Closing Time
Migrated, or after the Closing Time Migrate, from any Facility or
Former Facility and (iii) all Hazardous Substances, whether known
or unknown and wherever located, which were shipped for disposal,
disposed of, or spilled, discharged, leaked, emitted or released to
the environment by Sequa, Sequa Chemicals, any predecessor (other
than Burlington in respect of the Burlington Contamination) to
Sequa or Sequa Chemicals or any other Person (other than Burlington
in respect of the Burlington Contamination) for whose conduct Sequa
or Sequa Chemicals may be held responsible under the Environmental
Laws; provided, however, the Inventory included in Purchased Assets
for use in or sale by the Business shall not be included in (i),
(ii) or (iii) above, and notwithstanding (i), (ii) and (iii) above
the rights and obligations of Sequa, Sequa Chemicals and Buyer in
respect of the Burlington Contamination shall be subject to the
Burlington Agreement;
(m) All amounts due from Sequa Affiliates;
(n) All of Sequa's and Sequa Chemicals' rights under
this Agreement and the Additional Documents;
(o) The rights, assets and properties listed on
Disclosure Schedule Part 2.03(o);
(p) To the extent that such exist and relate to the
Excluded Assets or Retained Liabilities, all rights, if any, under
any cause of action, judgment, right of recovery, right of set-off,
credit, rebate, indemnity or other claim against other Persons, of
whatever kind or nature, known or unknown, accrued or to accrue,
including, without limitation, to the extent that such exist and
relate to the Excluded Assets or Retained Liabilities all rights of
rescission, replevin and reclamation; all rights and claims in
respect of past infringement or against present and former
employees, agents and consultants; all credits or rebates due in
respect of charges incurred, goods received or services rendered to
Sequa Chemicals; all proceeds of accounts receivables not included
in the Closing Working Capital Statement; all deposits, advance
payments, prepayments and credits not included in the Closing
Working Capital Statement; and all rights under any express or
implied warranties, representations or guarantees made by
suppliers, contractors or others having business dealings with
Sequa Chemicals;
(q) All shares of capital stock of Sequa Receivables
Corporation;
(r) The right to receive services from any Sequa
Chemicals' Affiliates except as provided in this Agreement;
(s) Subject to Section 2.02(i), any right or claim of
Sequa and Sequa Chemicals against employees arising out of
providing information in connection with the transactions
contemplated hereby as well as any misrepresentation or breach of
warranty by such employee; and
the inventory described in Section 5.15.
Section 2.04. Assumed Obligations. Upon the terms and subject
to the conditions of this Agreement, at the Closing Time, Buyer
will assume and will thereafter pay, perform or discharge the
following obligations of Sequa Chemicals
or Sequa (collectively, the "Assumed Obligations"):
(a) The payment obligations for the amounts of the
accounts payable (the "Accounts Payable") and the amounts of the
accrued expenses (the "Accrued Expenses") reflected on the Closing
Working Capital Statement and, all payment obligations to
Transferred Employees for salary, wages and payroll taxes from
October 26, 1998 to the Closing Time; for bonuses and incentive
compensation for the period from January 1, 1998 to the Closing
Time; for vacations for the period of January 1, 1998 through
December 31, 1999; and sick pay for the period from January 1, 1998
to the Closing Time;
(b) All performance obligations of Sequa Chemicals or
Sequa, as the case may be, pertaining to the Business under the
terms, conditions and provisions contained in an Assumed Contract
to the extent first becoming due after the Closing Time and arising
exclusively as a result of Buyer's conduct of the Business after
the Closing Time (including conduct by Buyer which is a
continuation of Sellers' conduct prior to the Closing Time) and
including any payment obligations to the extent of goods received
by or services rendered to Buyer after the Closing Time under an
Assumed Contract;
(c) The obligations of Sequa Chemicals to its customers
to replace or refund up to the purchase price of, any product sold
by Sequa Chemicals in the course of the Business prior to the
Closing Time;
(d) All liabilities and obligations under any of the
Listed Permits which have been transferred to Buyer but only to the
extent arising from the operations of Buyer under any such Listed
Permit after the Closing Time; and
(e) The obligation to pay to Transferred Employees
accrued holiday pay and tuition reimbursement under the terms of
the Welfare Plans (even though not reflected on the Closing Working
Capital Statement).
Section 2.05. Retained Liabilities. Notwithstanding anything
to the contrary, except for the Assumed Obligations and except to
the extent of Buyer's obligation to defend, indemnify and hold
harmless Sequa Chemicals pursuant to Section 8.03(d), Buyer does
not assume and Sequa and Sequa Chemicals shall, without any
responsibility or liability of, or recourse to Buyer or any Buyer
Affiliate, retain and pay, perform and discharge all liabilities
and obligations of
any nature of Sequa or Sequa Chemicals, or claims of such liability
or obligation, whether foreseen, unforeseen, accrued, unaccrued,
known, unknown, liquidated or unliquidated, matured or unmatured,
now existing or which may arise in the future, including, without
limiting the generality of the foregoing, any liability, obligation
or claim arising out of or resulting from:
(a) any injury to or disease or death of any person or
damage to or loss of any property to the extent resulting from or
arising out of or any act or omission by Sequa Chemicals or Sequa
regardless of whether such injury, disease, death, damage or loss
occurs prior to, at or after the Closing Time and whether based on
negligence, breach of warranty, breach of contract, products
liability, strict liability, workers compensation or any other
theory;
(b) any violation by Sequa Chemicals or Sequa of any
Legal Requirement, any Permit, any Order or the requirements of any
Governmental Authority;
(c) any qualified or nonqualified, funded or nonfunded
pension, profit sharing, health, welfare, medical insurance or
other employee benefit plan or arrangement established,
participated in, or maintained by Sequa Chemicals or Sequa;
(d) except to the extent included as an Accrued Expense
on the Closing Working Capital Statement, all Taxes for which Sequa
Chemicals or Sequa is responsible under any Legal Requirement;
(e) all liabilities and obligations arising or
resulting: (i) from any breach or default of any Assumed Contract
to the extent occurring prior to the Closing Time or any
performance or non-performance prior to the Closing Time which, by
the lapse of time or delivery of notice (or both), would constitute
a breach or default of any Assumed Contract (including, without
limitation, any breach or default of any warranty (express or
implied) arising with respect to the subject matter of any Assumed
Contract), or (ii) from the termination or cancellation prior to
the Closing Time of any Assumed Contract;
(f) all liabilities and obligations in respect of any
contract, agreements, contract rights, equipment and other personal
property leases, licenses, purchase and sales orders, proposals,
quotations, bids, arrangements and
understandings of Sequa Chemicals, Sequa or SCSA which is not an
Assumed Contract;
(g) except to the extent of the obligations of Sequa
Chemicals assumed by Buyer under Section 2.04(c), products sold or
services performed by Sequa Chemicals or Sequa, including, without
limitation, all liabilities and obligations (i) to any Person other
than Sequa Chemicals' customer, (ii) for personal injury or
property damages, (iii) for consequential, incidental, punitive,
indirect or special damages, and (iv) for any claim in excess of
the purchase price of a product;
(h) any infringement or other violation of Intellectual
Property rights of any Person to the extent arising or resulting
from any act or omission by Sequa Chemicals or Sequa and only with
respect to the period prior to the Closing Time;
(i) (i) any Hazardous Substances which at or prior to
the Closing Time are present or were present in, on or under any
Facility or Former Facility, (ii) any Hazardous Substances which at
or prior to the Closing Time are or were present in, on or under
any Facility or Former Facility at or prior to the Closing Time but
which prior to the Closing Time Migrated, or after the Closing Time
Migrate, from any Facility or Former Facility or (iii) any
Hazardous Substances, whether known or unknown and wherever
located, which were shipped for disposal, disposed of, or spilled,
discharged, leaked, emitted or released to the environment by Sequa
Chemicals, Sequa, any predecessor (other than Burlington in respect
of the Burlington Contamination) to Sequa Chemicals or Sequa or
any other Person (other than Burlington in respect of the
Burlington Contamination) for whose conduct Sequa Chemicals or
Sequa may be held responsible under the Environmental Laws;
provided, however, the Inventory included in the Purchased Assets
for use in or sale by the Business shall not be included in (i),
(ii) or (iii) above, and notwithstanding (i), (ii) and (iii) above
the rights and obligations of Sequa, Sequa Chemicals and Buyer in
respect of the Burlington Contamination shall be subject to the
Burlington Agreement;
(j) all obligations and liabilities of Sequa Chemicals
and Sequa under this Agreement;
(k) any other liability or obligation but only to the
extent arising out
of or resulting from: (i) the ownership, operation, use, or
possession of the Purchased Assets by Sequa Chemicals or Sequa
prior to the Closing Time, (ii) the ownership or operation by Sequa
Chemicals or Sequa of the Business prior to the Closing Time; or
(iii) the ownership or operation by Sequa Chemicals or Sequa of any
business or operations other than the Business, whether prior to or
after the Closing Time;
the contracts, agreements and other matters referred to
in Disclosure Schedule Part 2.05(l)
all amounts due to Sequa Affiliates.
(collectively, the "Retained Liabilities"). For purposes of this
Agreement, the Retained Liabilities shall be deemed to include all
liabilities and obligations described in the previous sentence and
for purposes of this Agreement no such liability or obligation
shall be deemed a liability or obligation of Buyer even if by
operation of law any such liability or obligation is also or
becomes a liability or obligation of Buyer.
Section 2.06. Purchase Price.
(a) Amount. The term "Purchase Price" shall in addition
to Buyer's payment, performance and discharge, as the case may be,
of the Assumed Obligations mean:
(i) One Hundred and Eight Million Dollars
($108,000,000) (the "Base Price");
(ii) plus or minus the Closing Working Capital
Adjustment; and
(iii) plus or minus the Capital Spending
Adjustment.
(b) Payment. Payment of the Purchase Price shall be
made as follows:
(i) The Base Price shall be paid at the Closing
Time in immediately available funds by wire transfer;
(ii) The Closing Working Capital Adjustment shall be
paid as set forth in Section 2.07; and
(iii) The Capital Spending Adjustment shall be
paid as set forth in Section 2.08.
Section 2.07 Working Capital Adjustment. The Closing
Working Capital Adjustment will be determined as follows:
(a) The "Base Line Working Capital Statement", as agreed
upon by Buyer and Sequa Chemicals, is attached hereto as Exhibit B.
The "Base Line Working Capital Amount" is the amount of the current
assets on the Base Line Working Capital Statement minus the amount
of the current liabilities on the Base Line Working Capital
Statement and equals $12,129,000.
(b) As promptly as possible, but in any event within
ninety (90) days following the Closing Time, Buyer shall prepare
and deliver to Sequa Chemicals a closing working capital statement
as of the Closing Time (the "Closing Working Capital Statement")
which shall be prepared in accordance with the accounting
instructions which are attached hereto as Exhibit C (collectively,
the "Accounting Instructions"). Buyer shall provide Sequa
Chemicals with reasonable access to Buyer and/or its auditors work
papers and permit Sequa Chemicals to review and/or audit the same.
(c) The Closing Working Capital Statement shall become
final and binding upon Sequa Chemicals unless on or before the
sixtieth (60th) day after Sequa Chemicals' receipt of the Closing
Working Capital Statement Sequa Chemicals shall deliver to Buyer a
written notice of its objection to any item on the Closing Working
Capital Statement, together with proposed changes thereto and the
reasons for such changes. All matters on which no notice of
objection is given shall be deemed final and binding.
(d) If Sequa Chemicals issues a notice of objection,
Sequa Chemicals and Buyer shall meet and attempt, in good faith
negotiations, to resolve the dispute within thirty (30) days
following Sequa Chemicals' notice of objection. If the parties
resolve all or some of the matters in dispute within such thirty
(30) day period then the parties shall prepare and sign an Adjusted
Closing Working Capital Statement reflecting such agreement which
shall be deemed final and
binding with respect to such resolved matters. As to matters which
remain in dispute after such thirty (30) day period ("Unresolved
Matters"), the Closing Working Capital Statement shall be reviewed
by the Accounting Firm in accordance with the Accounting
Instructions.
(e) Each of Sequa Chemicals and Buyer shall within ten
(10) days after such thirty (30) day period submit a written
statement of its respective position to the Accounting Firm and the
other party which statement shall include an amount for each
Unresolved Matter and an explanation as to why it believes such
amount is consistent with Accounting Instructions. The Accounting
Firm shall consider both written statements as it performs its
duties but shall not have the authority to review any matter except
Unresolved Matters. The parties shall require the Accounting Firm
to complete its review not later than the thirtieth (30th) day
following the submission of the matter to the Accounting Firm and
to render its determination based solely on the Accounting
Instructions.
(f) The Accounting Firm shall prepare a report stating
and explaining any adjustments in respect of any Unresolved Matter
that is required so that such Working Capital Items are reflected
on the Closing Working Capital Statement consistent with the
Accounting Instructions. Promptly after its completion, the
Accounting Firm shall provide such report to Sequa Chemicals and
Buyer and the adjusted amount of such Unresolved Matters contained
in such report shall be deemed incorporated into the Closing
Working Statement prepared by Buyer or the Adjusted Closing Working
Capital Statement, as the case may be, which shall thereupon become
the final Adjusted Closing Working Capital Statement and be binding
upon Buyer and Sequa Chemicals. All fees, costs and expenses of
the Accounting Firm shall be paid by Buyer and Sequa Chemicals in
inverse proportion to the share of the Unresolved Matters decided
in each party's favor.
(g) The "Closing Working Capital Amount" is the amount
of the current SCSA cash, Receivables, Inventory, Prepaids on the
Closing Working Capital Statement or Adjusted Closing Working
Capital Statement, as the case may be, minus the Accounts Payable
and Accrued Expenses as shown on the Closing Working Capital
Statement or the Adjusted Closing Working Capital Statement, as the
case may be. Within ten (10) days after the date the Closing
Working Capital Statement or the Adjusted Closing Working Capital
Statement becomes final in accordance with this Section 2.07 (such
tenth day being referred to herein
as the "Settlement Date"), Sequa Chemicals shall pay to Buyer the
amount, if any,
by which the Closing Working Capital Amount is less than the
Baseline Working Capital Amount or Buyer shall pay to Sequa
Chemicals the amount, if any, by which the Closing Working Capital
Amount is more than the Baseline Working Capital Amount, together
with, in either case, interest from the Closing Time on the amount
paid under this Section 2.07(g) calculated at the Reference Rate
(any amount so paid under this Section 2.07(g) the "Closing Working
Capital Adjustment").
Section 2.08. Capital Spending Adjustment.
(a) The Capital Spending Adjustment Amount shall be the
difference between $5,715,000 (the "Aggregate Capital Amount") and
the actual amount which has, between January 1, 1998 and the
Closing Time, been incurred and either paid by Sequa Chemicals or
accrued in the Closing Working Capital Statement for capital
expenditures which are included within the Purchased Assets (such
amount, the "Actual Capital Amount").
(b) As promptly as possible, but in any event within
ninety (90) days following the Closing Time and no earlier than the
date on which Buyer delivers the proposed Closing Working Capital
Statement to Sequa Chemicals as provided in Section 2.07(b), Buyer
shall prepare and deliver to Sequa Chemicals a statement which
shall consist of the Actual Capital Amount (the "Capital Spending
Statement") together with reasonable supporting documentation. The
Capital Spending Statement shall be prepared in accordance with the
Accounting Instructions. Buyer shall provide Sequa Chemicals with
reasonable access to Buyer and/or its auditors work papers and
permit Sequa Chemicals to review and/or audit the same.
(c) The Capital Spending Statement shall become final
and binding upon Sequa Chemicals unless on or before the sixtieth
(60th) day after Sequa Chemicals' receipt of the Closing Capital
Spending Statement, Sequa Chemicals shall deliver to Buyer a
written notice of its objection to the amount of any item on the
Capital Spending Statement, together with proposed changes thereto
and the reasons for such changes. All matters on which no notice
of objection is given shall be deemed final and binding. If Sequa
Chemicals delivers an objection then a dispute shall be resolved
consistent with Section 2.07 (d), (e) and (f). Within ten (10) days
after the date the Capital Spending Statement becomes final in
accordance with this Section 2.08, Sequa Chemicals shall pay to
Buyer the amount, if any, by which the Aggregate Capital Amount is
greater than the Actual Capital Amount (subject to a maximum
payment by Sequa Chemicals of One Million five Hundred Thousand
Dollars ($1,500,000)) or Buyer shall pay to Sequa Chemicals the
amount, if any, by which the Aggregate Capital Amount is less than
the Actual Capital Amount, together with, in either case, interest
from the Closing Time on the amount paid under this Section 2.08(c)
calculated at the Reference Rate (any amount so paid under this
Section 2.08(c) the " Capital Spending Adjustment").
Section 2.09. Allocation of Purchase Price. Not later than
ninety (90) days after the Closing, Buyer shall provide to Sequa
Chemicals proposed statements prepared by a nationally recognized
appraisal firm, at Buyer's sole cost and expense, (the "Allocation
Statements") setting forth a proposed allocation, in accordance
with Section 1060 of the Code, the total of the Purchase Price and
the book amount of the Assumed Obligations, to the different items
of Purchased Assets and to the Assumed Obligations hereunder in
accordance with the methodology set forth in Exhibit D. Buyer
shall furnish to Sequa Chemicals, at no cost to Sequa Chemicals, a
copy of any appraisals used by Buyer to propose such allocation.
Buyer and Sequa Chemicals respectively agree to file all income,
franchise and other Tax returns, and execute such other documents
as may be required by any Taxing Authority, in a manner consistent
with the Allocation Statements and to refrain from taking any
position inconsistent with such Allocation Statements with any
Taxing Authority unless otherwise required by a Legal Requirement.
Section 2.10. Closing.
(a) Closing Time. The closing of the transactions
contemplated by this Agreement shall take place simultaneously with
the execution and delivery hereof at the offices of Sequa
Chemicals at the Xxxxxxx Facility, or at such other place or date
as may be agreed upon from time to time in writing by Sequa
Chemicals and Buyer. The "Closing" shall mean the making of the
deliveries to be made by Buyer, Sequa Chemicals and Sequa
respectively pursuant to Section 2.10 (b) and (c) and shall be
deemed to have occurred for all purposes under this Agreement at
11:59 p.m. on the day immediately preceding the Closing (the
"Closing Time").
(b) Deliveries at the Closing by Sequa Chemicals and
Sequa: At the Closing Sequa Chemicals and Sequa will deliver to
Buyer the following which shall be duly executed:
(1) The deeds in the form of Exhibits E, E-1, E-2,
E-3 and E-4;
(2) A general conveyance, assignment and xxxx of
sale for the Purchased Assets other than the Owned Facilities in
the form of Exhibit F and Exhibit F-1;
(3) Assignments of the Patents and Patent
Applications in the form of Exhibit G and Exhibit G-1 ;
(4) Assignments of all registered Marks and all
applications for registration of any Xxxx in the form of Exhibit H
and Exhibit H-1;
(5) Motor vehicle certificates of title and
registrations for all titled vehicles included in the Purchased
Assets;
(6) A certificate in the form of Exhibit I of the
Vice President and Assistant Secretary of Sequa Chemicals and in
the form of Exhibit I-1 of the Senior Associate General Counsel of
Sequa Corporation;
(7) Resignation of all directors and officers of
SCSA;
(8) An affidavit and indemnity against unfiled
mechanics' and materialmen's liens against the Owned Facilities and
an affidavit of non-foreign ownership;
(9) The Consents of Burlington, Xxxxxxx Xxxxxxxx,
BASF, Nippon Mektron, Nashua, Xxxxxxxxxxxx & Vose, Oliphant, Wood
Coatings Research, Highland Industries and Simtek, Inc.;
(10) Assignment and Assumption of Vehicle Leases in
the form of Exhibit J;
(11) An assignment of the Shares in the form of
Exhibit L;
(12) The Environmental Response Agreement in the
form of Exhibit M;
(13) The Burlington Agreement in the form of Exhibit
N;
An assignment of the Option in the form of Exhibit M-1;
(15) The Jamestown Facility Rights Agreement in the
form of Exhibit N-1; and
(16) Such other separate instruments of sale,
assignment, transfer or conveyance, in form and substance
reasonably satisfactory to Buyer and provided that such are
consistent with the terms and conditions and limitations of this
Agreement, that Buyer may reasonably deem necessary or appropriate
in order to perfect, confirm or evidence title in accordance with
Agreement to all or any part of the Purchased Assets or to
otherwise carry out the purpose of this Agreement.
(c) Delivery at the Closing by Buyer. At the
Closing, Buyer will deliver to Sequa Chemicals and Sequa the
following which shall be duly executed:
(1) The Purchase Price in accordance with Section
2.06;
(2) An Assumption Agreement with respect to the
Assumed Obligations in the form of Exhibit O;
(3) A certificate in the form of Exhibit P of the
Secretary of Buyer;
(4) Assignment of Vehicle Leases in the form of
Exhibit J;
(5) A duly executed and completed State of South
Carolina Department of Revenue and Taxation Resale Certificate
(Form ST-8A) in the form of Exhibit Q;
(6) A duly executed and completed State of North
Carolina Manufacturer's Certificate in the form of Exhibit R;
(7) The Environmental Response Agreement in the
form of Exhibit M;
The Burlington Agreement in the form of Exhibit N;
(9) The Jamestown Facility Rights Agreement in the
form of Exhibit N-1; and
(10) Such other separate instruments of assumption,
in form and substance reasonably satisfactory to Sequa Chemicals
and provided that such are consistent with the terms and conditions
and limitations of this Agreement, that Sequa Chemicals may
reasonably deem necessary or appropriate in order to perfect,
confirm or evidence Buyer's assumption of the Assumed Obligations
in accordance with this Agreement, or to otherwise carry out the
purpose of this Agreement.
Section 2.11. Assignment of Assets.
(a) Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute a sale,
assignment, transfer or conveyance (a "Transfer") or an agreement
to Transfer any Assumed Contract or Permit, or any claim, right or
benefit arising thereunder or resulting therefrom (collectively,
the "Interests") if an attempted Transfer thereof, without the
consent, waiver, confirmation, novation or approval (a "Consent")
of a third party, would constitute a breach or other contravention
thereof, be ineffective or in any way adversely affect any rights
thereunder, unless and until such Interest can be effectively
Transferred without such breach, contravention or adverse effect,
at which time each such Interest shall be deemed to be so
Transferred. Until such Transfer, all such Interests shall be held
in trust by Sequa or Sequa Chemicals for the sole benefit of Buyer.
(b) To the extent any Consents necessary to Transfer any
Interest have not been obtained or are not in effect as of the
Closing Time, Sequa Chemicals, Sequa and Buyer shall, during the
remaining term of such Interest, use all reasonable efforts to (i)
cooperate in any reasonable and lawful arrangements designed to
provide the benefits of such Interest to Buyer, in which case Buyer
shall pay or satisfy the corresponding obligations for the
enjoyment of such benefits to the extent Buyer would have been
responsible therefor if such Consent
had been obtained and such Interest had been transferred to Buyer;
and (ii) enforce, at the request of Buyer and at Buyer's sole cost
and expense, any rights of Sequa Chemicals arising from such
Interest against the issuer thereof or the other party or parties
thereto (including the right to elect to terminate any such
Interest in accordance with the terms thereof with the consent of
Buyer).
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sequa Chemicals and
Sequa that:
Section 3.01. Corporate Organization and Qualification.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, and has
all requisite corporate power and authority to own, lease and
operate its property and otherwise conduct its business as now
being conducted. Buyer is duly qualified to do business and in
good standing in each jurisdiction in which the nature of its
business, the property it owns, leases or operates requires such
qualifications. Buyer has not received any written notice or
assertion from any Governmental Authority of any jurisdiction to
the effect that Buyer is required to be qualified or otherwise
authorized to do business therein, in which Buyer has not qualified
or obtained such authorization.
Section 3.02. Authorization of Transaction. Buyer has full
corporate power and authority to enter into this Agreement, perform
its obligations hereunder and consummate the transactions
contemplated hereby, including, without limitation, the execution
and delivery of this Agreement and the other documents and
instruments specified in Section 2.10(c). All necessary and
appropriate corporate action has been taken by Buyer with respect
to the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby. This
Agreement constitutes a valid and binding obligation of Buyer,
enforceable in accordance with its terms.
Section 3.03. Non-Conflict. Neither the execution and
delivery of this Agreement nor the consummation of any of the
transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time): (i) contravene, conflict
with, or result in a violation of any provision of the Articles of
Incorporation or Code of Regulations of Buyer, or any resolution
adopted by the board of directors or the shareholders of Buyer; or
(ii) contravene, conflict with, or result in a violation of any
Legal Requirement or any Order to which
Buyer is or may be subject or (iii) require any consent, approval
or authorization of, or notice to, or declaration, filing or
registration with, any Governmental Authority or other Person.
Section 3.04. Finders; Brokers. Buyer is not a party to any
agreement with any finder or broker, or in any way obligated to any
finder or broker for any commissions, fees or expenses, in
connection with the origin, negotiation, execution or performance
of this Agreement.
Section 3.05. No Knowledge of Seller Default. Buyer has no
Knowledge that Sequa Chemicals or Sequa is in breach of any of its
representations, warranties and covenants contained in this
Agreement or in any Additional Document.
Section 3.06. Adequate Funds. Buyer has sufficient funds
without necessity of third party financing (other than under
Buyer's existing credit lines) to enable it to consummate the
transactions contemplated by this Agreement.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF SEQUA CHEMICALS
AND SEQUA
Sequa and Sequa Chemicals hereby jointly and severally
represent and warrant to Buyer that:
Section 4.01. Corporate Organization and Qualification. Each
of Sequa, Sequa Chemicals and SCSA is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite corporate
power and authority to own, lease and operate its property and
otherwise conduct its business as now being conducted. Each of
Sequa Chemicals and SCSA is duly qualified to do business and is in
good standing in each jurisdiction listed on Disclosure Schedule
Part 4.01, and is not qualified to do business in any other
jurisdiction. Except as set forth on Disclosure Schedule Part
4.01, neither Sequa Chemicals nor SCSA has received any written
notice or assertion from any Governmental Authority of any
jurisdiction to the effect that it is required to be qualified or
otherwise authorized to do business therein, in which it has not
qualified or obtained such authorization.
Section 4.02. Authorization of Transaction. Sequa and Sequa
Chemicals
has full corporate power and authority to enter into this
Agreement, perform its
obligations hereunder and consummate the transactions contemplated
hereby, including, without limitation, the execution and delivery
of this Agreement and the other documents and instruments specified
in Section 2.10(b). All necessary corporate and shareholder action
has been taken by Sequa, Sequa Chemicals and SCSA with respect to
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This
Agreement constitutes a valid and binding obligation of Sequa and
Sequa Chemicals, enforceable in accordance with its terms.
Section 4.03. Non-Conflict. Except as set forth in
Disclosure Schedule Part 4.03, neither the execution and delivery
of this Agreement nor the consummation of any of the transactions
contemplated hereby by Sequa, Sequa Chemicals or SCSA will,
directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with, or result in a violation of any
provision of the Certificate of Incorporation, By-Laws or other
constitutive document of Sequa, Sequa Chemicals or SCSA, or any
resolution adopted by the board of directors or stockholders of
Sequa, Sequa Chemicals or SCSA; (b) contravene, conflict with, or
result in a violation by Sequa, Sequa Chemicals or SCSA of any
Legal Requirement or any Order to which Sequa, Sequa Chemicals,
SCSA, any of the Purchased Assets or the rights, properties or
assets of SCSA are or may be subject; (c) subject to obtaining any
necessary Consent to transfer the same to Buyer, contravene,
conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Permit
held by Sequa, Sequa Chemicals or SCSA; (d) subject to obtaining
any necessary Consent to transfer the same to Buyer, contravene,
conflict with, or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any contract, lease, contract,
agreement or other instrument, commitment or obligation to which
Sequa, Sequa Chemicals, SCSA, any Purchased Assets, Assumed
Contracts or any rights, property, or assets of SCSA are or may be
bound or affected; (e) result in the imposition or creation of any
Lien upon or with respect to any of the Purchased Assets or the
rights, property or assets of SCSA except for Permitted Liens and
except as otherwise provided by the express terms and conditions of
any such Assumed Contract; or (f) require
(other than in respect of the transfer to Buyer of an Assumed
Contract or Listed Permit) any consent, approval or authorization
of, or notice to, or declaration, filing or registration with, any
Governmental Authority or other Person.
Section 4.04. Investments; Subsidiaries.
(a) Except as set forth in Disclosure Schedule Part
4.04(a), Sequa Chemicals and SCSA are engaged in the Business and
except as described on Disclosure Schedule Part 4.04(a) since
January 1, 1998 Sequa Chemicals has not engaged in any other
business or activities except as incidental to the Business and the
activities of SCSA since its formation have been limited to the
distribution of products purchased from Sequa Chemicals and
activities incidental thereto. Except as set forth on Disclosure
Schedule Part 4.04(a), since December 31, 1996, neither Sequa
Chemicals nor SCSA has acquired from any other Person any ongoing
business or product line which as of the date hereof is a part of
the Business.
(b) Disclosure Schedule Part 4.04(b) completely and
accurately sets forth the authorized, issued and outstanding equity
securities of SCSA and the ownership of the outstanding equity
securities of SCSA. Except as set forth on Disclosure Schedule
Part 4.04(b): (i) all outstanding equity securities of SCSA have
been validly issued in compliance with all applicable Legal
Requirements and are fully paid, non-assessable and free of
preemptive rights; (ii) all issued equity securities and all
outstanding equity securities of SCSA are owned by Sequa Chemicals
free and clear of all Liens, other than Permitted Liens, (iii)
there are no shareholder agreements, voting trusts or other
agreements or understandings with respect to the business or
operations of SCSA or voting of SCSA equity securities to which
Sequa Chemicals is a party or by which Sequa Chemicals or SCSA is
bound, and (iv) there is no subscription, option, warrant, call,
right, contract, commitment, understanding or arrangement relating
to the issuance, sale or transfer of any equity securities of SCSA,
including any right of conversion or exchange under any outstanding
security or other instrument. Sequa Chemicals has heretofore
delivered to Buyer complete and correct copies of the charter,
certificates, articles, by-laws or code of regulations (which terms
shall be deemed to also include comparable governing instruments
with different names) of SCSA and each other item described in
(iii) and (iv) above, as amended and presently in effect and, to
Sequa Chemicals' Knowledge, SCSA is not in default in the
performance, observation or fulfillment of its charter, articles,
by-laws or code or regulations or any such item. Except for SCSA
and as otherwise disclosed on
Disclosure Schedule Part 4.04(b), Sequa Chemicals neither owns nor
has any interest in any other equity securities or any
subscription, option, warrant, call, right, contract, commitment,
understanding or arrangement relating to the issuance, sale or
transfer of any equity securities.
Section 4.05. Financial Statements.
(a) Disclosure Schedule Part 4.05(a) includes: (i) the
consolidated unaudited balance sheets of Sequa Chemicals which
includes SCSA (after June 1, 1996) as at December 31 in each of the
years 1995 through 1997, and the related unaudited consolidated
statements of income, and cash flow for each of the fiscal years
then ended, (the "Year-End Financials"), and (ii) an unaudited
consolidated balance sheet of Sequa Chemicals which includes SCSA
(after June 1, 1996) as at September 30, 1998 (the "Interim Balance
Sheet") and the related consolidated unaudited statements of income
and cash flow for the nine (9) months then ended (the "Interim
Financial Statements") ((i), (ii) collectively, the "Financial
Statements"). Except as set forth on Disclosure Schedule Part
4.05(a) the Financial Statements have been prepared from the books
and records of Sequa Chemicals and SCSA and fairly present, in all
material respects, the financial condition and results of
operations, and cash flow of Sequa Chemicals and SCSA as at the
respective dates of and for the periods referred to in the
Financial Statements, all in accordance with GAAP consistently
applied. Except as expressly noted therein, the statements of
income included in the Financial Statements do not include any
items which would be treated as extraordinary income or expense
pursuant to GAAP.
(b) Except as set forth on Disclosure Schedule Part
4.05(b), the Financial Statements include a reasonably allocable
charge for all services provided to Sequa Chemicals and SCSA by
Sequa Chemicals Affiliates.
(c) Disclosure Schedule Part 2.02(l) sets forth a
complete and accurate list of all bank accounts and lockboxes held
or used by Sequa Chemicals exclusively and not in conjunction with
any Sequa Chemicals Affiliate and all bank accounts and lockboxes
held or used by SCSA.
Section 4.06. Absence of Certain Changes in Events. To Sequa
Chemicals' Knowledge, except as set forth on Disclosure Schedule
Part 4.06, since September 30, 1998 there has not occurred any
event which has materially adversely effected,
or may reasonably be expected so to materially adversely effect,
Sequa Chemicals or SCSA or the Purchased Assets or condition
(financial or otherwise) of Sequa Chemicals or SCSA including,
without limitation, any material loss of or material damage to any
of the Purchased Assets or the rights, property or assets of SCSA,
or any material loss or material adverse change in relationship
with a Significant Customer or Significant Supplier (such effect,
a "Material Adverse Effect").
Section 4.07. Taxes. In respect of Sequa Chemicals, SCSA,
the Purchased Assets and the rights, properties, and assets of SCSA
and except as set forth on Disclosure Schedule Part 4.07: (i) all
Tax Returns required to be filed with any Taxing Authority have, to
Sequa Chemicals' Knowledge, been filed in accordance with all Legal
Requirements; (ii) as of the time of such filing, such Tax Returns
as to SCSA were prepared in accordance with the appropriate books
and records and correctly reflect in all material respects the
facts regarding the income, business, assets, operations,
activities and status of the Business, and any other information
required to be shown therein; (iii) all Taxes owed for which
payment was due as shown on any such Tax Return have been paid;
(iv) there is no agreement or consent under Section 341(f) of the
Code or any foreign equivalent thereof; (v) there are no Liens for
Taxes upon the Purchased Assets or right, property or assets of the
SCSA except Permitted Liens; (vi) no deficiency for any Tax or
claim for additional Taxes by any Taxing Authority has been
assessed or is pending, or to the Knowledge of Sequa Chemicals, is
threatened; (vii) there is no extension or waiver of the limitation
period applicable to any Tax or Tax Return for SCSA; and (viii)
there is no Tax abatement, Tax exemption or similar Tax benefit in
favor of Sequa Chemicals or SCSA which is not of general
application.
Section 4.08. Accounts Receivable. All trade accounts
receivable of Sequa Chemicals or SCSA (collectively, the "Trade
Accounts Receivable") represent or will represent valid obligations
arising from sales actually made or services actually performed in
the ordinary course of Business. Except as set forth on Disclosure
Schedule Part 4.08, there is no pending, or to Sequa Chemicals'
Knowledge, threatened in writing contest, claim, or right of set-
off, (other than claims for return and/or replacement of products
or refund of purchase price for products in the ordinary course of
Business), with any obligor of a Trade Accounts Receivable relating
to the amount or validity of such Trade Accounts Receivable.
Disclosure Schedule Part 4.08 contains a complete and accurate list
of all Trade Accounts Receivable as of August 31, 1998, which list
also sets forth the aging of
such Trade Accounts Receivable.
Section 4.09. Inventory. Except as set forth on Disclosure
Schedule Part 4.09, to Sequa Chemicals' Knowledge all inventory
which is obsolete or defective or of below standard quality has
been written off or written down to estimated net realizable value
in the Interim Balance Sheet. Except as set forth on Disclosure
Schedule Part 4.09 no inventory has been pledged as collateral or
is held by Sequa Chemicals or SCSA on consignment from others.
Section 4.10. Legal Proceedings. (a) Except as set forth
on Disclosure Schedule Part 4.10(a) and except for claims for
return and/or replacement of products and refunds of purchase price
for products in the ordinary course of Business: there is no
pending or, to the Knowledge of Sequa Chemicals, threatened,
claims, demands, notices of violation, arbitrations, third party
audits, grievances, hearings, third party investigations,
litigation, or suits (whether civil, criminal, administrative,
investigative, or informal) (collectively, a "Proceeding") by or
against Sequa Chemicals or SCSA or any director or officer of Sequa
Chemicals or SCSA or which are in respect of the Business, the
Purchased Assets or the rights, properties or assets of SCSA. Sequa
Chemicals has delivered or otherwise made available to Buyer
correct and complete copies of all pleadings, material non-
privileged correspondence, and other documents in Sequa Chemicals'
possession relating to each Proceeding listed in Disclosure
Schedule Part 4.10(a).
(b) Disclosure Schedule Part 4.10(b) lists each
Proceeding to which Sequa Chemicals or SCSA has been a party since
December 31, 1996 that: (i) involved a judgment or settlement in
excess of $100,000 or the granting or obtaining of injunctive or
other equitable relief and (ii) (A) involved an alleged violation
of any Legal Requirement (including, without limitation, any
Environmental Law), (B) involved personal injury or property damage
alleged to have resulted from products sold by Sequa Chemicals or
SCSA or any Hazardous Substances disposed of, used or released by
Sequa Chemicals or SCSA, (C) involved an allegation of
infringement, misappropriation, or violation of or conflict with
the Intellectual Property rights of any Person, (D) involved an
allegation that Sequa Chemicals or SCSA has a liability or
obligation in respect of any Hazardous Substances shipped for
disposal, disposed of or spilled, discharged, leaked, emitted or
released to the environment, (E) involved injuries or illnesses to
Employees, or (F) involved a fine or penalty imposed or sought to
be imposed by a Governmental Authority.
Section 4.11. Orders.
(a) Except for Orders of general application, Disclosure
Schedule Part 4.11(a) sets forth each order, decree, award,
decision, injunction, judgment, ruling, subpoena, or verdict of any
Governmental Authority or arbitrator (an "Order") to which Sequa
(in respect of the Business), Sequa Chemicals, SCSA, any of the
Purchased Assets, or any rights, property or assets of SCSA is
currently subject (a "Listed Order") and, to the Knowledge of Sequa
Chemicals, no additional Order is threatened.
(b) To the Knowledge of Sequa Chemicals, no officer,
director, employee, agent or consultant of Sequa Chemicals or SCSA
is subject to any Order that prohibits such officer, director,
employee, agent or consultant from engaging in or continuing any
conduct, activity, or practice.
(c) Except as disclosed on Disclosure Schedule Part
4.11(c), to the Knowledge of Sequa Chemicals, Sequa Chemicals,
Sequa and SCSA are, and at all times since December 31, 1996, have
been in material compliance with all of the terms and requirements
of each Order excluding any noncompliance as to which the remedy,
to the Knowledge of Sequa Chemicals, could reasonably be expected
to involve less than $100,000.
(d) Except as disclosed on Disclosure Schedule Part
4.11(d), neither Sequa Chemicals nor SCSA has, since December 31,
1997, received any written notice from any Governmental Authority
or any other Person regarding any actual or alleged violation by
Sequa Chemicals, Sequa or SCSA of any Order.
Section 4.12. Compliance with Legal Requirements. To the
Knowledge of Sequa Chemicals, except as set forth on Disclosure
Schedule Part 4.12:
(a) Sequa Chemicals, Sequa (in respect of the Business),
SCSA and each Facility is in compliance in all material respects
with applicable Legal Requirements and since December 31, 1997
there has not been any recurring material noncompliance with any
applicable Legal Requirement;
(b) Neither Sequa Chemicals, Sequa (in respect of the
Business), nor SCSA has received since December 31, 1997 any
written notice from any Governmental Authority or any other Person
regarding (i) any actual, alleged, or
potential violation of, or failure to comply by Sequa Chemicals or
SCSA with, any Legal Requirement, or (ii) any actual, alleged, or
potential obligation on the part of Sequa Chemicals, Sequa (in
respect of the Business), or SCSA to undertake, or to bear all or
any portion of the cost of, any Legal Requirement compliance which
has not been completed; and
(c) Neither Sequa Chemicals, Sequa (in respect of the
Business), nor SCSA, has paid since December 31, 1997, and there
is no pending or, to the Knowledge of Sequa Chemicals, threatened
fine or penalty imposed against Sequa Chemicals, Sequa (in respect
of the Business), or SCSA by any Governmental Authority.
Section 4.13. Permits.
(a) Disclosure Schedule Part 4.13(a) contains a complete
and accurate list of each Permit held by Sequa Chemicals or SCSA
(the "Listed Permits"). Sequa Chemicals has delivered to Buyer
correct and complete copies of all Listed Permits.
(b) To the Knowledge of Sequa Chemicals except as set
forth in Disclosure Schedule Part 4.13(b), (i) No Permit other than
the Listed Permits is necessary to lawfully conduct the Business in
the manner presently conducted; (ii) Each Listed Permit is valid
and in full force and effect; (iii) each of Sequa Chemicals, Sequa
(in respect of the Business), and SCSA is, and at all times since
December 31, 1997 has been, in compliance in all material respects
with the terms and requirements of each Listed Permit; (iv) Neither
Sequa Chemicals, Sequa (in respect of the Business), nor SCSA has
received since December 31, 1997 any written notice from any
Governmental Authority or any other Person regarding: (A) any
actual, alleged, or potential violation by Sequa Chemicals, Sequa
(in respect of the Business), or SCSA of any Permit which is or
was held by them, or (B) any actual, proposed, or potential
revocation, withdrawal, suspension, cancellation, termination of,
or modification to any Permit which is or was held by them; (v) All
material filings, notices, reports and other submissions required
to have been made with respect to the Listed Permits have been duly
made on a timely basis with the appropriate Governmental Authority
and all applications and other submissions required to have been
filed for the timely renewal of the Listed Permits or the
acquisition of any additional Permits which, to the Knowledge of
Sequa Chemicals are necessary for the operation of the Business,
have been duly
filed on a timely basis with the appropriate Governmental
Authority; and (vi) Neither Sequa Chemicals, Sequa (in respect of
the Business), nor SCSA has received from any Governmental
Authority any written waiver of compliance with respect to any
Listed Permit since December 31, 1997.
Section 4.14. Environmental Matters.
(a) To the Knowledge of Sequa Chemicals, Disclosure
Schedule Part 4.14(a) contains a complete and accurate list of, and
Sequa Chemicals has delivered to Buyer or otherwise made available
to Buyer true and complete copies of any environmental
investigations, audits, reviews, assessments, studies, analyses,
and tests which are in respect of Hazardous Substances at any
Facility or in respect of any monitoring, clean-up, abatement or
remedial actions undertaken by Sequa Chemicals, Sequa or SCSA at
any Facility excluding any of the same prepared by employees of
Sequa Chemicals, (other than employee investigations in respect of
soil or groundwater contamination not the subject of any other any
environmental investigations, audits, reviews, assessments,
studies, analyses, and tests), provided, however, that with respect
to the Jamestown Facility, such list shall prior to May 28, 1997
only be required to contain those documents specifically disclosed
in the Burlington Documents by Burlington in the Burlington
Transaction.
(b) Except as set forth on Disclosure Schedule Part
4.14(b) and except in respect of Hazardous Substances which have
been fully remedied in compliance with the Environmental Laws, to
the Knowledge of Sequa Chemicals, no Hazardous Substances: (i) are
being or have been disposed of, spilled, discharged, emitted,
leaked or otherwise released in, on or under any surface or
subsurface soil or land strata, any surface or groundwater, or any
building or facility which is included within any Facility, or (ii)
are Migrating or have Migrated onto or from any Facility.
(c) Except as set forth on Disclosure Schedule Part
4.14(c), neither Sequa Chemicals, Sequa nor SCSA in respect of the
Business is under any contractual obligation or has, since December
31, 1997, been requested in writing by a Government Authority or
other Person to participate in, contribute or perform any health
study or any environmental investigation, audit, study, monitoring,
clean-up, abatement or remediation of any Facility.
(d) Except as set forth on Disclosure Schedule Part
4.14(d), to Sequa Chemicals' Knowledge, there are no active or
inactive underground storage tanks, underground piping or trenches,
xxxxx fields, septic systems or waste treatment or disposal
facilities (including, without limitation, incinerators, landfills,
surface impoundments, thermal treatment units, open burning/open
detonation areas) on, under or within any Facility. Disclosure
Schedule Part 4.14(d) is a complete and accurate list, in all
material respects, of any of such items that, to the Knowledge of
Sequa Chemicals, were closed or removed from any Facility. Except
as set forth on Disclosure Schedule Part 4.14(d), to Sequa
Chemicals' Knowledge, there are no polychlorinated biphenyls or
asbestos used, generated, treated, stored, disposed of, or
otherwise located at, in or under any Facility.
(e) Except as set forth on Disclosure Schedule Part
4.14(e), Sequa Chemicals has no Knowledge of any Person, including
any present or former Sequa Chemicals employee that has sustained
injury as the result of any exposure to Hazardous Substances, non-
hazardous substances or hazardous conditions in connection with
providing services to Sequa Chemicals or SCSA at any Facility.
(f) No Facility is listed or, to Sequa Chemicals'
Knowledge, proposed for listing under CERCLA, or on any state
similar list. Except as set forth on Disclosure Schedule Part
4.14(f), there are no pending or to the Knowledge of Sequa
Chemicals, threatened, investigations, enforcement actions,
remedial actions or other Proceedings under the Environmental Laws
against Sequa Chemicals, Sequa or SCSA in respect of any Facility.
Section 4.15. Title to Properties; Sufficiency of Assets.
Except as set forth on Disclosure Schedule Part 4.15:
(a) Sequa Chemicals and SCSA each has good, valid and
marketable title to all assets, properties and rights which it
purports to own (including without limitation, all assets,
properties and rights shown or reflected on the Interim Balance
Sheet which have not been sold, transferred or disposed of since
the date thereof) free and clear of Liens other than Permitted
Liens and by virtue of the deliveries made at the Closing Time,
Buyer will obtain good, valid and marketable title to the Purchased
Chemical Assets and the Shares free and clear of all Liens other
than Permitted Liens. Sequa has good, valid and marketable title
to the Purchased Sequa Assets free and clear of Liens other than
Permitted Liens and by virtue of the deliveries made at the Closing
Time, Buyer
will obtain good, valid and marketable title to the Purchased Sequa
Assets free and
clear of all Liens other than Permitted Liens
(b) Except for the Excluded Assets and the Purchased
Sequa Assets, (i) the Purchased Chemical Assets and the rights,
property and assets of SCSA constitute all of the assets,
properties and rights used or held for use by Sequa Chemicals and
SCSA to conduct the Business as of the date hereof and (ii) there
are no assets, properties or rights used or held for use by Sequa
Chemicals or SCSA to conduct the Business as of the date hereof
that are owned by any Person other than Sequa Chemicals or SCSA
except for assets, properties or rights consigned, leased or
licensed to Sequa Chemicals or SCSA under valid and current lease
or license arrangements which are included in the Purchased Assets
or in the assets, property and rights of SCSA.
Section 4.16. Real Property.
(a) Disclosure Schedule Part 4.16(a) sets forth a
complete and accurate (i) legal description of all land owned by
Sequa Chemicals or SCSA and a legal description of all land owned
by Sequa exclusively for the Business which together constitutes
all real property owned by Sequa Chemicals or SCSA or, by Sequa
exclusively for the Business ("Owned Facilities"), (ii) list of all
real property leased by Sequa Chemicals or SCSA or leased by Sequa
exclusively for the Business, which together constitutes all real
property leased or licensed by Sequa Chemicals or SCSA or by Sequa
exclusively for the Business (collectively, "Leased Facilities"),
and (iii) list of all other real property interests currently held
or used by Sequa Chemicals or SCSA or held or used by Sequa
exclusively for the Business ((i), (ii), and (iii) collectively,
the "Facilities").
(b) Except as set forth on Disclosure Schedule Part
4.16(b):
(i) To Sequa Chemicals' Knowledge, the Facilities
and the use by Sequa Chemicals, Sequa or SCSA thereof is not in
material violation of any recorded covenant or restriction or any
Legal Requirement pertaining to the ownership or use of real
property. To Sequa Chemicals' Knowledge, neither Sequa, Sequa
Chemicals nor SCSA has any pending boundary, water drainage,
nuisance or other pending written claims or disputes with the
owners or lessees of any real property adjacent to any Facility
and, to Sequa Chemicals' Knowledge, no such owner has any pending
written claims or disputes with Sequa, Sequa Chemicals or SCSA;
(ii) Disclosure Schedule Part 4.16(b)(ii) sets forth
copies of written requirements or recommendations any workers
compensation insurance carrier, any property/casualty insurance
carrier or any other insurance carrier board of fire underwriters
or other body exercising similar function, requiring or
recommending any repairs or other work be done on any Facilities
provided to Sequa or Sequa Chemicals in writing in the past two
years;
(iii) To the Knowledge of Sequa Chemicals, there
is no threatened curtailment in any utility service being furnished
to the Facilities;
(iv) The Facilities are used exclusively for the
Business, and neither Sequa, Sequa Chemicals nor SCSA conducts any
other business or operations at any Facility and to Sequa
Chemicals' Knowledge since December 31, 1997 neither Sequa, Sequa
Chemicals or SCSA has conducted any other business or operations at
any Facility. There are no recorded or, to Sequa Chemicals'
Knowledge, unrecorded easements, concessions or options, written
or to Sequa Chemicals' Knowledge, oral which interfere with the use
of the Owned Facilities, grant to any Person a right of use or
occupancy of any portion of the Owned Facilities or grant to any
person the right to purchase all or any portion of any Owned
Facilities or any interest therein. There are no Persons except
Sequa Chemicals and SCSA in possession of, occupying or using any
Facilities, other than tenants under leases disclosed in Disclosure
Schedule Part 4.16(b)(iv) who are in possession of only the space
to which they are entitled under such leases;
(v) There are no taxes or special assessments other
than ordinary real estate taxes pending or payable against the
Owned Facilities; there are no penalties due with respect to real
estate taxes or assessments, and all real estate taxes or
assessments (excepting those for the current year that are not yet
due and payable) with respect to the Owned Facilities have been
paid in full; and the Owned Facilities are not subject to any
exemptions, abatements, or similar benefits (not of general
application) involving any real property tax or assessment; and
(vi) Each Facility abuts on and currently has direct
vehicular access to a public road or currently has access to a
public road benefiting the Facility and, to Sequa Chemicals'
Knowledge, neither Sequa Chemicals, Sequa nor SCSA is in violation
or default of any such right of access and there is no pending, or
to the Knowledge of Sequa Chemicals threatened termination or
alteration of any such right of access. The Xxxxxxx Facility and
the Jamestown Facility each presently have access to railway
transportation and, to the Knowledge of Sequa Chemicals, neither
Sequa Chemicals nor Sequa is in violation or default of any such
right of access and there is no pending, or to the Knowledge of
Sequa Chemicals, except as set forth on Disclosure Schedule Part
4.16(b)(vi) threatened termination or alteration of any such right
of access.
Section 4.17. Personal Property
(a) Disclosure Schedule Part 4.17(a) contains a:
(i) list as of August 31, 1998 of, to Sequa
Chemicals' Knowledge, all items of tangible personal property which
are owned or leased (to the extent accounted for as a capitalized
lease) by Sequa Chemicals or SCSA with an acquisition cost in
excess of $50,000;
(ii) list of all registered vehicles owned or leased
included in the Purchased Assets or in the rights, properties or
assets of SCSA;
(iii) list of all other leases of tangible
personal property which individually involve a rental payment of
more than $10,000 annually; and
(iv) any tangible personal property which is used or
held for use by Sequa Chemicals or SCSA in the Business and which
is not owned or leased by Sequa Chemicals or SCSA other than
inventory referenced in Section 4.09.
(b) Sequa Chemicals has delivered or made available to
Buyer complete and accurate copies of the leases listed in (i),
(ii) and (iii) above. To Sequa Chemicals' Knowledge, except as set
forth on Disclosure Schedule Part 4.17(b), the tangible personal
property included in the Purchased Assets or in the rights,
properties or assets of SCSA, in all material respects, conforms to
all applicable Legal Requirements.
Section 4.18. Intellectual Property.
(a) Disclosure Schedule Part 4.18(a) contains a complete
and accurate list, including all filings, applications and
registrations, of the following Intellectual Property interests:
(i) all unexpired United States and foreign patents (the
"Patents") and patent applications ("Patent Applications") held by
Sequa Chemicals or SCSA describing for each Patent and Patent
Application its title, country of issue or pendency, patent or
application number and filing and issue date; and (ii) all United
States and foreign trademarks, trade names, service marks, service
names, product names, fictitious names, marks, and logos, whether
or not registered, which are presently held or used by Sequa
Chemicals or SCSA (the "Marks") describing for each registered Xxxx
or Xxxx with registration pending its name, country of registration
or application, registration or application number, and filing date
or registration date, if registered. Except for the Excluded
Assets and as set forth on Disclosure Schedule Part 2.02(f) and
2.02(A)(c), Sequa does not own or have any interest in any patents
or trademarks which are used in the Business.
(b) Disclosure Schedule Part 4.18(b) sets forth a
complete and accurate list of:
(i) all computer software used by Sequa Chemicals
or SCSA other than generally available "shrink wrap" personal
computer software; and
(ii) all agreements or other arrangements pursuant
to which Sequa Chemicals or SCSA currently has any Intellectual
Property licensed or sublicensed to it or is otherwise currently
permitted to use any Intellectual Property of any other Person
(through non-assertion, settlement or similar agreements or
otherwise). Sequa Chemicals has delivered or made available to
Buyer complete and accurate copies of the agreements or other
arrangements referred to in this Section 4.18(b)(ii).
(c) Disclosure Schedule Part 4.18(c) contains a complete
and accurate list of all agreements or other arrangements in
respect of which Sequa Chemicals or SCSA is currently licensing or
sublicensing to other Persons any Business IP or is otherwise
permitting other Persons to use Business IP (through non-assertion,
settlement or similar agreements or otherwise).
(d) Subject to the provisions of Section 5.08 and
except for the Excluded Assets described in Section 2.03(e),
Section 2.03(k) and Section 2.03(p), the Purchased Assets and the
rights, properties and assets of SCSA include all Intellectual
Property presently used or held for use by Sequa Chemicals and SCSA
in the conduct of the Business. Except as set forth on Disclosure
Schedule Part 4.18(d), Sequa Chemicals or SCSA exclusively own free
and clear of all Liens other than Permitted Liens or has the
exclusive right to exploit pursuant to an agreement or arrangement
listed on Disclosure Schedule Part 4.18(b), all of the Business IP
and except as set forth on Disclosure Schedule Part 4.18(d) or as
provided by the terms and conditions of such agreements, neither
Sequa, Sequa Chemicals nor SCSA is obligated to pay any royalty,
license fee or other amount to use any Business IP. To the
Knowledge of Sequa Chemicals, except as set forth in Disclosure
Schedule Part 4.18(d), no Person is presently interfering with,
infringing upon, misappropriating or otherwise in conflict with any
Business IP or has, in any material respect, so interfered,
infringed, misappropriated or been in conflict since December 31,
1997.
(e) In respect of the Business IP which is owned by
Sequa, Sequa Chemicals or SCSA, except as otherwise set forth on
Disclosure Schedule Part 4.18(e), to Sequa Chemicals' Knowledge,
there are no acts or failures to act by Sequa, Sequa Chemicals or
SCSA which occurred prior to, during or after any filing,
registration, pendency or issuance of any Patent, Patent
Application, registered Xxxx, or Xxxx registration application,
that would make invalid or result in a finding of inequitable
procurement or negate the right to registration, issuance or
exploitation of any of such items. To Sequa Chemicals' Knowledge
and except as otherwise set forth on Disclosure Schedule Part
4.18(e), no loss or expiration of any Business IP is pending or
threatened except in accordance with its terms.
(f) To Sequa Chemicals' Knowledge, since December 31,
1997, except as set forth on Disclosure Schedule Part 4.18(f),
neither Sequa Chemicals nor SCSA is infringing upon,
misappropriating or otherwise in conflict with the Intellectual
Property rights of any Person and to the Knowledge of Sequa
Chemicals, no machine, composition, process, method or product
currently used, sold or proposed by Sequa Chemicals or SCSA to be
used or sold in the conduct of the Business does or, will so
infringe, misappropriate or conflict with the Intellectual Property
rights of any Person. Except as set forth on Disclosure Schedule
Part 4.18(f), there is no pending, or to the Knowledge of Sequa
Chemicals, threatened, Proceeding against Sequa Chemicals or SCSA
which (i) challenges the rights of Sequa Chemicals or SCSA in
respect of any Business IP or the validity, or unenforceability of
any Business IP, (ii) asserts that Sequa Chemicals or SCSA is
infringing or otherwise in conflict with or violating the
Intellectual Property rights of any Person, or is, required to pay
any royalty, license fee, or other amount with regard to, any
Business IP, or (iii) claims that any material default exists under
any agreement or arrangement listed on Disclosure Schedule Part
4.18(b) or 4.18(c).
(g) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.18(g), all of the Patents and
Patent Applications are currently in material compliance with all
applicable Legal Requirements (including, without limitation,
payment of filing, examination, and maintenance fees), and to Sequa
Chemicals' Knowledge all Patents are validly issued. Except as set
forth on Disclosure Schedule Part 4.18(g), no Patent or Patent
Application has been or is now involved in any interference,
reissue, reexamination, opposition, cancellation, invalidation or
nullification proceeding and, to Sequa Chemicals' Knowledge, no
such proceeding is threatened with respect to any Patent or Patent
Application. To Sequa Chemicals' Knowledge, except as set forth on
Disclosure Schedule Part 4.18(g), there is no interfering patent or
patent application of any other Person with respect to any Patent
or Patent Application.
(h) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.18(h), all registered Marks are
currently in material compliance with all applicable Legal
Requirements (including the timely post-registration filing of
affidavits of use and renewal applications) and, to Sequa
Chemicals' Knowledge, are valid. To the Knowledge of Sequa
Chemicals, except as set forth on Disclosure Schedule Part 4.18(h),
no Xxxx is now involved in any interference, opposition,
invalidation, nullification or cancellation proceeding and, to
Sequa Chemicals' Knowledge, no such proceeding is threatened with
respect to any registered Xxxx or Xxxx for which an application is
pending. To Sequa Chemicals' Knowledge, except as set forth on
Disclosure Schedule Part 4.18(h), there is no interfering trademark
or service xxxx or any application or registration therefore of any
Person with respect to any Xxxx.
(i) Except as set forth on Disclosure Schedule 4.18(i),
to Sequa Chemicals' Knowledge, no employee, consultant or
contractor who is currently providing material services to Sequa
Chemicals or SCSA or, since December 31,
1997, provided such services pertaining to the inventing or
development of Business IP, is supplying any similar services
(whether as an employee, consultant or otherwise) to any competitor
of Sequa Chemicals or SCSA.
(j) Except as set forth in Disclosure Schedule Part
4.18(j) or in the Assumed Contracts, neither Sequa Chemicals nor
SCSA has indemnified any Person in respect of infringement,
interference, misappropriation or other conflict in respect of any
Intellectual Property.
(k) Except as set forth on Disclosure Schedule Part
4.18(k) and as otherwise occasioned from time to time by force
majeure events, no malfunction of the computer hardware and
computer software used by Sequa Chemicals or SCSA has materially
disrupted the business or operations of Sequa Chemicals or SCSA as
a result of defects in the hardware or software since December 31,
1997 and, to Sequa Chemicals' Knowledge, there are no defects in
such hardware or software which are reasonably likely to continue
to cause any such material disruptions.
Section 4.19. Insurance
(a) Disclosure Schedule Part 4.19(a) sets forth a
description of either the types of insurance coverage or types of
all policies of insurance to which Sequa Chemicals or SCSA is a
party or under which Sequa Chemicals or SCSA, has coverage obtained
for it by a Sequa Chemicals' Affiliate.
(b) Disclosure Schedule Part 4.19(b) sets forth with
respect to Sequa Chemicals, by year, for the current policy year
and each of the two preceding policy years: (i) a statement
describing each claim under workers' compensation with respect to
which an amount in excess of $10,000 was paid, which sets forth:
(A) the name of the claimant; and (B) the amount and a brief
description of the claim; and (ii) a complete and accurate listing
of all open workers' compensation claims.
(c) To Sequa Chemicals' Knowledge, except as set forth
on Disclosure Schedule Part 4.19(c):
(i) All policies to which Sequa Chemicals or SCSA
is a party: (A) are valid and enforceable; (B) are issued by an
insurer that is
financially sound and reputable; and (C) are sufficient for
compliance with all Legal Requirements and all Assumed Contracts.
(ii) Neither Sequa Chemicals nor SCSA has received
any written notice which remains pending regarding: (A) any
refusal of coverage, or (B) any notice of cancellation or any other
indication that any insurance policy is no longer in full force or
effect or will not be renewed or that the issuer of any policy is
not willing or able to perform its obligations thereunder; and
Sequa Chemicals, SCSA or a Sequa Chemicals Affiliate
has paid all premiums due, and have otherwise performed all of
their respective material obligations, under each policy to which
Sequa Chemicals or SCSA is a party or that provides coverage to
Sequa Chemicals or SCSA or any director thereof.
Section 4.20. Employees.
(a) Disclosure Schedule Part 4.20(a) contains a complete
and accurate list for Sequa Chemicals of (i) all employees, such
employees' job title, salaries or hourly rates, and bonus plans for
1998, vacation entitlement, benefit plan participation, date of
hire and credited service for purposes of the Welfare Plans or
Pension Plans if other than the period from such date of hire to
the Closing Time, (ii) any employment contract or special
arrangement with any Employee, and (iii) any profit sharing, bonus,
stock option, stock purchase, deferred compensation or severance
agreement which is not a Pension Plan or Welfare Plan, and (iv) all
material personnel policies, manuals, employee handbooks, and
summary plan descriptions pertaining to any Employees. Except as
set forth on Disclosure Schedule Part 4.20(a), there are no other
material forms of compensation paid to any Employee. SCSA does not
have and never had any employees. Sequa Chemicals has delivered or
made available to Buyer complete and accurate copies of the items
described in (ii), (iii) and (iv).
(b) Except as set forth on Disclosure Schedule Part
4.20(b), all Employees are actively at work and no Employee is
currently on a leave of absence, layoff, suspension, sick leave,
workers' compensation, short or long term disability, family leave,
military leave, or other approved leave.
(c) Except as set forth on Disclosure Schedule Part
4.20(c), neither Sequa Chemicals nor SCSA is a party to any
collective bargaining or other labor
contract. Except as set forth on Disclosure Schedule Part 4.20(c),
neither Sequa Chemicals nor SCSA have been since December 31, 1996
or are subject to and there is no existing, or to the Knowledge of
Sequa Chemicals threatened: (i) strike, slowdown, picketing, or
work stoppage, (ii) Proceeding relating to alleged violation of any
Legal Requirement pertaining to labor relations, employment or
employee benefit matters, including any charge or complaint filed
by an employee or union with the National Labor Relations Board,
the Equal Employment Opportunity Commission, Department of Labor,
the Occupational Health and Safety Administration or any similar
local, state, federal or foreign Governmental Authority, (iii)
union organizational or representation activity, or (iv)
application for certification as a collective bargaining agent in
respect of the Business.
(d) Except as set forth on Disclosure Schedule Part
4.20(d), to the Knowledge of Sequa Chemicals, no Employee is a
party to, or is otherwise bound by any confidentiality,
noncompetition, or proprietary rights or similar agreement with any
former employer or other Person that in any way materially
restricts the ability of such Employee to provide services to Sequa
Chemicals in respect of any products, markets, customers or other
areas and to the Knowledge of Sequa Chemicals, no such Employee is
in violation of any such agreement.
(e) Except as set forth on Disclosure Schedule Part
4.20(e), no Employee whose annual W-2 wages exceeded $70,000 has
left the employ of Sequa Chemicals or SCSA since December 31, 1997.
(f) Neither Sequa Chemicals nor SCSA has since December
31, 1997 engaged in any plant closing or mass layoff of employees
as those terms are defined in the Worker Adjustment Retraining and
Notification ("WARN") Act of 1988, as amended, or any similar
state, local or foreign law or regulation.
Section 4.21. Employee Benefit Plans; ERISA.
(a) Disclosure Schedule Part 4.21(a) sets forth a list
of each "employee pension benefit plan" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), covering employees or retirees of Sequa Chemicals or
SCSA (the "Pension Plans"). Disclosure Schedule Part 4.21(a)
hereto also sets forth a list of each "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA) maintained by Sequa
Chemicals or SCSA covering employees or retirees of Sequa Chemicals
or SCSA ("Welfare Plans").
(b) Sequa Chemicals has delivered to or made available
for review by Buyer true and complete copies of the Pension Plans
and Welfare Plans.
(c) Neither Sequa Chemicals nor SCSA has communicated to
its employees in writing with respect to any intention to create
any additional benefit plans or welfare plans or to modify or
change any existing Pension Plan or Welfare Plan except pursuant to
a Legal Requirement. The Pension Plans and Welfare Plans and those
matters referred to in Section 4.20(a) constitute all of the Sequa
Chemicals or SCSA employee benefit plans, including any and all
pension, stock option, stock purchase, savings, retirement, health,
life insurance, disability, severance and other employee benefit or
fringe or welfare benefit plans, whether formal or informal,
maintained currently by Sequa Chemicals or SCSA.
(d) There are no multi employer plans (as defined in
ERISA Section 4001(a)(3)) to which Sequa Chemicals or SCSA is or
has been required to make a contribution or other payment.
(e) Except as provided by the terms of the Pension Plans
and the Welfare Plans, under any Legal Requirement or as otherwise
set forth on Disclosure Schedule Part 4.21(e), neither Sequa
Chemicals nor SCSA has any liability for providing health care or
other benefits to any Employee or any former employee following the
termination of such individual's employment.
(f) The Pension Plans are qualified for federal income
tax purposes under Code section 401(a) and each Pension Plan has
received a favorable determination letter from the Internal Revenue
Service. The trust maintained in connection with each Pension Plan
is exempt from income tax under Code section
501(a). To the Knowledge of Sequa Chemicals, each Pension Plan has
been maintained, operated and administered in compliance with its
terms and in material compliance with all Legal Requirement.
Section 4.22. Contracts.
(a) Disclosure Schedule Part 4.22(a) contains a complete
and accurate list of all executory contracts, agreements, leases,
licenses, purchase and sales orders, bids, quotations, proposals
and commitments to which Sequa Chemicals, Sequa (in respect of the
Business) or SCSA is a party or by which Sequa Chemicals, Sequa
(with respect to the Business) or SCSA is bound (or in respect of
bids, quotations and proposals made by Sequa Chemicals or SCSA,
would be bound if accepted by the Person to whom made) and which
meet any of the following criteria:
(i) not cancelable by Sequa Chemicals, Sequa or
SCSA on 90 or fewer days notice without any liability, penalty or
premium or providing for performance by Sequa Chemicals or SCSA
over a period of more than one year;
(ii) with any Affiliate of Sequa Chemicals or to
Sequa Chemicals' Knowledge with any other Related Person providing
for the purchase or sale of goods or services other than corporate
services provided to Sequa Chemicals or SCSA by Sequa;
(iii) providing for payments or performance to
Sequa Chemicals or SCSA or expenditure or performance by Sequa
Chemicals, Sequa or SCSA having a value of more than $50,000;
(iv) prohibiting Sequa Chemicals, Sequa or SCSA from
entering into any market, selling to any Person or otherwise
limiting Sequa Chemicals' or SCSA's ability to compete;
(v) any distribution, franchise, agency, or sales
representative agreement;
(vi) any consulting agreement;
(vii) any partnership, shareholder, joint
venture or joint
development agreement;
(viii) not entered into in the ordinary course of
business consistent with past practice; providing that no contract
shall be deemed to be out of the ordinary course because of its
pricing or payment terms;
(ix) volume pricing agreement;
(x) providing for any retroactive pricing or
rebate;
(xi) granting a power of attorney;
(xii) any guaranty of the obligations of a third
party, or obligation to indemnify a third party;
(xiii) pursuant to which a security interest or
other Lien (other than Permitted Liens) is granted on any Purchased
Assets or assets, properties or rights of SCSA;
(xiv) pursuant to which Sequa Chemicals or SCSA
purchased from any other Person with the prior three years any
ongoing business or product line which is included in the Business;
(xv) a performance bond, letter of credit or other
financial security or loan, agreement, promissory note or other
financing agreement;
(xvi) with any Governmental Authority, including
without limitation, in respect of any government grant, subsidy,
allowance or assistance program; loan; job creation, retention or
retraining program; or any tax abatement, reduction, exemption or
benefit;
(xvii) pursuant to which any machinery, software,
composition, process, design or method being used by Sequa
Chemicals or SCSA is being researched, developed or invented by or
with any Person;
(xviii) providing for the consignment of any
goods to or from any Person, except as disclosed pursuant to
Section 4.09;
(xix) providing for the lease, license or use of
any real property which is owned by other Persons or the lease,
license or use of by other Persons of real property owned or leased
by Sequa Chemicals, Sequa (in respect of the Business) or SCSA; or
(xx) providing for shipment, treatment, disposal,
investigation, remediation or monitoring of Hazardous Substances.
(b) Sequa Chemicals has delivered or made available to
Buyer complete and accurate copies of the items listed in
Disclosure Schedule Part 4.22(a). To the Knowledge of Sequa
Chemicals and except as set forth on Disclosure Schedule Part
4.22(b), all of the material Assumed Contracts are valid and
binding, in full force and effect (assuming that the other party
thereto in each such case has properly authorized by all requisite
corporate (or, if not a corporation, by all other requisite action)
and has properly executed and delivered such material Assumed
Contracts which, to the Knowledge of Sequa Chemicals, is the case)
and enforceable in accordance with their respective provisions
(except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding
fraudulent conveyances and preferential transfers, and subject to
the limitations imposed by general equitable principles regardless
of whether such enforceability is considered in a proceeding at law
or in equity). Sequa Chemicals has delivered or otherwise made
available to Buyer accurate and complete copies of all Assumed
Contracts including all amendments thereto or a written summary of
the terms of any oral Assumed Contract.
(c) Neither Sequa Chemicals, Sequa nor SCSA has
assigned, mortgaged, pledged, or otherwise encumbered any of its
right, title or interest under any Assumed Contract.
(d) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.22(d), neither Sequa Chemicals,
Sequa nor SCSA is (nor, to the Knowledge of Sequa Chemicals, is any
other party thereto) in material violation or material default of
or has repudiated or disputed any provision of any Assumed Contract
and to the Knowledge of Sequa Chemicals there has not occurred an
event or condition which, with the passage of time or giving of
notice (or both) would constitute a material violation or material
default of any Assumed Contract.
(e) To Sequa Chemicals' Knowledge, except as set forth
in Disclosure Schedule Part 4.22(e) no Assumed Contract is not
being performed or is not in breach or default because of the
applicability of a force majeure clause or a waiver given by any
Person.
(f) To the Knowledge of Sequa Chemicals, except as set
forth in Disclosure Schedule Part 4.22(f), and except as otherwise
provided by the terms, provisions and conditions of the Assumed
Contracts, no Consent of any Person is required under any Assumed
Contract as a result of or in connection with, and the
enforceability of any Assumed Contract will not be affected in any
manner by, the execution, delivery or performance of this Agreement
by Sequa Chemicals or the consummation of the transactions
contemplated hereby.
Section 4.23. Corporate Records and Conduct.
(a) The minute books, stock ledgers of Sequa Chemicals
and SCSA, all of which have been made available to Buyer, are in
all material respects, accurate and complete. Upon the Closing,
Buyer will have possession of all Business Records, except Business
Records relating to the Excluded Assets, Retained Liabilities or
Business Records which Sequa Chemicals is required to maintain by
any Governmental Authority or pursuant to any Legal Requirement.
(a)To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.23(b), neither Sequa Chemicals
nor SCSA, nor any Employee of Sequa Chemicals or SCSA has, since
December 31, 1996, been charged by any Governmental Authority with
making, directly or indirectly, any domestic or foreign bribe,
unlawful political contribution, kickback, gift, payoff, rebate,
influence payment or other questionable or illegal payments
(governmental or commercial).
Section 4.24. Relationships with Related Persons.
(a) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.24(a), no Related Person of
Sequa Chemicals or SCSA: (i) has or since December 31, 1996 has had
any interest in any asset, property or contract or other right or
interest (whether tangible or intangible), used in or
pertaining to the business of Sequa Chemicals or SCSA, (ii) is the
owner of or, since December 31, 1996, has owned (of record or as a
beneficial owner) an equity interest or any other financial or
profit interest in any Person (other than Portfolio Investments in
Public Companies) that: (A) is or has been a customer of Sequa
Chemicals or SCSA or otherwise had business dealings with Sequa
Chemicals or SCSA, (B) had a financial interest in any contract or
other transaction with Sequa Chemicals or SCSA or (C) engaged in
competition with Sequa Chemicals or SCSA. Except as set forth on
Disclosure Schedule Part 4.24(a) no Affiliate of Sequa Chemicals
has any claim against Sequa Chemicals or SCSA.
(b) Set forth on Disclosure Schedule Part 4.24(b), is a
list of each Affiliate of Sequa Chemicals or SCSA that is currently
providing goods, services or support to Sequa Chemicals or SCSA,
together with a brief description of the type of such goods,
services or support so provided.
Section 4.25. Significant Customers.
(a) Disclosure Schedule Part 4.25(a) is a complete and
accurate list of all Significant Customers stating for each such
customer the total revenue received from each such customer during
1997.
(b) Except as set forth on Disclosure Schedule Part
4.25(b), since December 31, 1997, no Significant Customer: (i) has
stated in writing its intention to stop purchasing products from
Sequa Chemicals or SCSA or, to Sequa Chemicals' Knowledge, have
stopped purchasing products form Sequa Chemicals or SCSA, (ii) has
materially reduced or stated in writing any present or future
intention to materially reduce the amount of products it purchases
from Sequa Chemicals or SCSA, or (iii) has otherwise materially
changed or stated in writing any present or future intention to
materially change its relationship or arrangements with Sequa
Chemicals or SCSA.
(c) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.25(c), since December 31, 1997
the products sold by Sequa Chemicals or SCSA have in all material
respects been in conformity with all applicable specifications and
contractual commitments and all Legal Requirements except for
claims for returns and replacements or return of purchase price for
products in the ordinary course of business. Except as set forth
on Disclosure Schedule Part 4.25(c) and except for claims for
returns and
replacements or return of purchase price for products of less than
$50,000 in the aggregate for the same product, neither Sequa
Chemicals nor SCSA has pending any material claim from any customer
that the products purchased by it do not so conform and, to Sequa
Chemicals' Knowledge, except as set forth on Disclosure Schedule
Part 4.25(c), there are no material unresolved disputes with any
Significant Customers except for such incidental claims.
Section 4.26. Significant Suppliers.
(a) Disclosure Schedule Part 4.26(a) is a complete and
accurate list of: (i) all suppliers of products and services to
Sequa Chemicals or SCSA that provided products or services with a
value in excess of $250,000, during 1997, (ii) any products or
services currently used in and material to the Business that are
not available from any source other than the current supplier
except on terms that are materially adverse from those provided by
the current supplier, and (iii) any Person not an employee of Sequa
Chemicals or SCSA who has provided development, technical, design,
engineering or similar services of a material nature during 1997 or
1998 (collectively, "Significant Suppliers").
(b) Except as set forth on Disclosure Schedule Part
4.26(b), since December 31, 1997, no Significant Supplier has: (i)
stated in writing its present or future intention to stop being a
supplier or has, to Sequa Chemicals' Knowledge, stopped being a
supplier, (ii) reduced or stated in writing any present or future
intention to materially reduce or cease to be a supplier or (iii)
otherwise materially change its relationship or arrangements with
Sequa Chemicals or SCSA or stated in writing any present or future
intention to do so.
(c) To the Knowledge of Sequa Chemicals, except as set
forth on Disclosure Schedule Part 4.26(c), there are no unresolved
material claims against or disputes with any Significant Suppliers.
Section 4.27. Brokers; Finders. Except as set forth on
Disclosure Schedule Part 4.27, the transactions contemplated herein
were not submitted to Sequa Chemicals or SCSA by any broker or
other person entitled to a commission or finder's fee thereon, and
were not with the consent of Sequa Chemicals or SCSA submitted to
Buyer by any such broker or other person. Neither Sequa Chemicals
nor any of its officers, directors or employees, has engaged any
broker or finder or incurred or taken any action which may give
rise to any liability against itself or the Purchased Assets for
any brokerage fees, commissions, finders' fees or
similar fees or expenses and no broker or finder has acted directly
or indirectly for Sequa Chemicals in connection with this Agreement
or the transactions contemplated hereby. No investment banking,
financial advisory or similar fees have been incurred or are or
will be payable by Sequa Chemicals or SCSA in connection with this
Agreement or the transactions contemplated hereby.
Section 4.28. Disclosure. To the Knowledge of Sequa
Chemicals, except as set forth on Disclosure Schedule Part 4.28, no
representation or warranty of Sequa Chemicals or Sequa in this
Agreement or in any Additional Document contains any untrue
statement of material fact or omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
Section 4.29. No Knowledge of Buyer Breach. Neither Sequa
Chemicals nor Sequa has any Knowledge that Buyer is in breach of
any of its representations, warranties or covenants contained in
this Agreement or in any Additional Document.
ARTICLE V. POST-CLOSING COVENANTS
Section 5.01. Interim Use of Sequa Chemicals' Corporate Name.
Buyer may, after the Closing Time, utilize without further
obligation to compensate Sequa Chemicals or Sequa, the trademarks
or trade names "Sequa" in connection with the items described
below, subject to the following terms and conditions and provided
that Buyer will defend, indemnify and hold harmless Sequa Chemicals
in respect of any claim against Sequa Chemicals or Sequa to the
extent resulting from any such usage.
(a) All stationery, forms, labels, product literature,
invoices, purchase orders and other similar documents and supplies
included in the Purchased Assets may be used by Buyer only until
the supply is exhausted; and
(b)All inventory included in the Purchased Assets or the
assets or property of SCSA may be sold or otherwise disposed of by
Buyer without remarking.
Section 5.02. Restrictive Covenants.
(a) Non-Competition Covenant. For a period of three
years after the Closing Time (the "Restricted Period"), Sequa and
Sequa Chemicals shall not engage in, directly or indirectly,
whether by itself or as or through any shareholder, partner, joint
venturer, agent, salesman, consultant, officer and/or director of
any Person or otherwise, any or all of the following activities:
(i) enter into or engage in any business which is directly or
indirectly competitive with the present products or product
applications of Sequa Chemicals or SCSA; (ii) solicit customers,
business, patronage, or orders for, or sell any products, or
perform any services for, that part of any business which is
directly or indirectly competitive with the present products or
product applications of Sequa Chemicals or SCSA; or (iii) promote
or assist, financially, or become financially interested in any
Person engaged in that part of any business which is competitive
with the present products or product application of Sequa Chemicals
or SCSA or (iv) directly or indirectly hire, solicit for
employment, or encourage to leave the employment of Buyer or SCSA
any Transferred Employee who is or becomes employed by Buyer or
SCSA in respect of the Business (provided that general solicitation
through newspaper and other general media shall not be a violation
of this clause iv). In the event of a breach of any provision of
this Section 6.02 (a) the running of the Restricted Period shall be
automatically tolled (i.e., no part of the Restricted Period shall
expire) from and after the date of the first such breach; provided
that the foregoing shall not apply to manufacture or sale of such
products by a business acquired by Sequa Chemicals or a Sequa
Chemicals Affiliate after the Closing Time, if in the year prior to
such acquisition, its net sales of such products were less than 20%
of the net sales of the entire acquired business. Sequa Chemicals
or a Sequa Chemicals Affiliate may also acquire a business that
exceeds the threshold set forth in the immediately preceding
sentence; provided that Sequa Chemicals or the Sequa Chemicals
Affiliate divests the unit of such business manufacturing or
selling such products within one year after its acquisition; and
provided further that if Sequa Chemicals or the Sequa Chemicals
Affiliate shall not have effected such divestment within one year
after its acquisition despite its reasonably diligent efforts Buyer
shall grant Sequa Chemicals or the Sequa Chemicals Affiliate
reasonable extension of the divestment period not to exceed six (6)
months. If Sequa Chemicals or the Sequa Chemicals Affiliate
proposes to sell the unit of the acquired business that
manufactures or sells such products, it shall notify Buyer.
Nothing contained in this Section 5.02(a) shall be deemed to
restrict Warwick International Group Limited or its subsidiaries
(collectively, "Warwick") from distributing any products or from
promoting, selling and using TAED-based products and services in
the detergent, pulp, paper and textile or any other industries.
(b) Confidentiality. Except as required by any Legal
Requirement, and except as relates to the Excluded Assets and
Retained Liabilities, Sequa Chemicals and Sequa hereby covenants
and agrees that at all times from and after the Closing Time, they
shall and shall cause their Affiliates to keep secret and maintain
in strictest confidence and not use for its benefit or for the
benefit of others any confidential or proprietary information
included in the Purchased Assets, including without limitation all
know-how, trade secrets, formulas, bills of material, names of
customers or suppliers, contracts and arrangements with customers,
suppliers, joint venturers, or other third parties, pricing
policies, operational methods, marketing plans or strategies or
product development techniques or plans. In the event that Sequa
Chemicals or Sequa becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any such
confidential or proprietary information Sequa Chemicals or Sequa
will provide Buyer with prompt written notice of such request(s) so
that Buyer may seek, at Buyer's expense, a protective order or
other appropriate remedy and/or waive compliance with the
provisions of this Section 5.02(b). In the event that such
protective order or other remedy is not or cannot be obtained, or
that Buyer waives compliance with the provisions of this Section
5.02(b) Sequa Chemicals or Sequa may furnish without liability
hereunder only that portion of such confidential or proprietary
information which is legally required. For purposes of this
Section 5.02(b) confidential and proprietary information shall not
include information which is or becomes generally available to the
public other than as a result of its disclosure by Sequa Chemicals
or a Sequa Affiliate.
(c) Remedies. It is mutually recognized and agreed that
the business being acquired by Buyer hereunder is conducted in
North America and other parts of the world and that the
geographical scope, the periods of restrictions and restraints
imposed by this Section 5.02 are fair and reasonable and required
for the protection of Buyer and a significant inducement for the
Buyer to enter into this Agreement and the transactions
contemplated hereby. It is further recognized and agreed that
irreparable injury may result to Buyer, its business and properties
in the event of a breach or threatened breach of this covenant by
Sequa Chemicals, Sequa or their Affiliates, that the amount or
extent of a breach or threatened breach of this covenant by Sequa
Chemicals, Sequa or any of their Affiliates, that the amount or
extent of damages would be difficult if not impossible to ascertain
and therefore, that any remedy at law for any breach by any of them
of this covenant will be inadequate. Accordingly, without
prejudice to the rights of Buyer to also seek such damages or other
remedies available to it, Buyer shall be entitled to, and Sequa
Chemicals and Sequa covenants that it will not contest the
appropriateness or availability of, temporary and permanent
injunctive relief without the necessity of proving actual damages
to Buyer by reason of any such breach of threatened breach.
Whenever used herein, Buyer shall be deemed to include any
successor or any other person or entity which may hereafter acquire
all or any portion of the aforesaid business being acquired by
Buyer hereunder during the period of this covenant not to compete.
(d) Severability. If any provision of this Section 5.02
should be adjudicated by a court of competent jurisdiction to be
invalid or unenforceable, such provision shall be deemed deleted
herefrom with respect, and only with respect, to the operation of
such provision in the particular jurisdiction in which such
adjudication was made; provided however, that to the extent any
such provision may be made valid and enforceable in such
jurisdiction by limitations on the scope of the activities,
geographical area or time period covered, Sequa Chemicals, Sequa
and Buyer agree that such provision instead shall be deemed limited
to the extent, and only to the extent, necessary to make such
provision enforceable to the fullest extent permissible under the
laws and public policies applied in such jurisdiction.
(e) Covenants Independent. The covenants contained in
this Section 5.02 shall be construed and enforced independently of
each other and independently of any other provision of this
Agreement or any other understanding or agreement between the
parties, and the existence of any claim or cause of action of Sequa
Chemicals or Sequa against Buyer, of whatever nature, shall not
constitute a defense to the enforcement of the covenants contained
herein against Sequa Chemicals or Sequa.
Section 5.03. Transition and Further Assurances.
(a) Sequa and Sequa Chemicals shall, at any time and
from time to time after the Closing Time, upon the reasonable
request of Buyer and at Sequa's or Sequa Chemicals' expense,
execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered all such further deeds, assignments,
transfers, conveyances, powers of attorney and assurances and take
such other
action as may be reasonably required by Buyer for the better
assigning, transferring, granting, conveying, assuring and
confirming to Buyer, or to its successors and assigns, any of the
Purchased Assets or the Shares or aiding and assisting in
collecting and reducing to possession by Buyer any or all of the
Purchased Assets or the Shares, and to protect the right, title and
interest of Buyer therein and the enjoyment by Buyer thereof, and
otherwise to carry out the purpose and intent of this Agreement, in
all such instances subject to the terms, conditions, provisions and
limitations contained herein. If after the Closing Time Sequa
Chemicals or any Sequa Chemicals Affiliate is in possession of any
rights, properties or assets which are included within the
Purchased Assets or which are rights, properties or assets of SCSA,
Sequa Chemicals and Sequa shall and shall cause any of their
Affiliates to promptly deliver such rights, properties or assets to
Buyer.
(b) Buyer shall, at any time and from time to time after
the Closing Time, upon the reasonable request of Sequa Chemicals or
Sequa and at Buyer's expense, execute, acknowledge and deliver or
cause to be executed, acknowledged and delivered all such further
assumptions and take such other action as may be reasonably
required by Sequa Chemicals or Sequa for the better assuming by
Buyer of any of the Assumed Obligations, and otherwise to carry out
the purpose and intent of this Agreement, in all such instances
subject to the terms, conditions, provisions and limitations
contained herein. After the Closing Time, Buyer will cause its
employees of the Business, upon Sequa Chemicals' reasonable
request, to provide the information pertaining to Sequa Chemicals,
SCSA and the Business requested by Sequa Chemicals for Sequa's 1998
tax packages and year-end financial reporting package.
Section 5.04. Cooperation. After the Closing, each of
Buyer, Sequa and Sequa Chemicals will cooperate with the other, and
cause its directors, officers and employees to cooperate with the
other, in furnishing information, evidence, testimony, and other
assistance as may be reasonably requested by the other party in
connection with: (i) any pending or threatened Proceeding
resulting or arising from the transactions contemplated by this
Agreement or any fact, situation, circumstance, status, condition,
activity, practice, failure to act or transaction relating to Sequa
(in respect of the Business), Sequa Chemicals, SCSA, the Purchased
Assets or the rights, properties or assets of SCSA or (ii)
compliance by the other party with any Legal Requirements
pertaining to Sequa (in respect of the Business), Sequa Chemicals,
SCSA, the Purchased Assets or the rights, properties
or assets of SCSA. Subject to Article VIII, the party requesting
such assistance will pay or reimburse the other party for all
reasonable out of pocket expenses incurred by the party providing
such assistance in connection therewith, including, without
limitation, all travel, lodging, and meal expenses.
Section 5.05. Administration of Accounts.
(a) All payments and reimbursements made in the ordinary
course by any third party in the name of or to Sequa or Sequa
Chemicals to the extent in connection with or arising out of the
Purchased Assets or the Assumed Obligations, received after the
Closing Time shall be held by Sequa or Sequa Chemicals in trust for
the benefit of the Buyer and, promptly upon receipt by Sequa or
Sequa Chemicals of any such payment or reimbursement, Sequa or
Sequa Chemicals shall pay over to Buyer the amount of such payment
or reimbursement without right of set-off.
(b) All payments and reimbursements made in the ordinary
course by any third party in the name of or to the Buyer to the
extent in connection with or arising out of Excluded Assets or the
Retained Liabilities, received after the Closing Time shall be held
by the Buyer in trust for the benefit of Sequa or Sequa Chemicals
and, promptly upon receipt by the Buyer of any such payment or
reimbursement, the Buyer shall pay over to Sequa or Sequa Chemicals
the amount of such payment or reimbursement without right of
set-off.
Section 5.06. Access to Former Business Records. After the
Closing Time, Buyer will afford duly authorized representatives of
Sequa Chemicals reasonable access to financial, tax and other books
and records (including hazardous waste manifests) retained by it
which constitute part of the Purchased Assets for any reasonable
purpose, including, without limitation, litigation, financial and
tax reporting purposes, and will permit such representatives, at
Sequa Chemicals' expense, to make abstracts from, or to take copies
of any of such books and records, or to obtain temporary possession
thereof as may be reasonably required by Sequa Chemicals and will
deliver to Sequa Chemicals, upon request, the originals or copies
of any books and records which are in Buyer's possession to the
extent relating to the Excluded Assets and Retained Liabilities or
to the extent Buyer is required to maintain pursuant to any Legal
Requirement. After the Closing Time, Sequa and Sequa Chemicals
will afford duly authorized representatives of Buyer reasonable
access to financial, tax and other books and
records (including hazardous waste manifests) retained by it which
pertain to the Business, the Purchased Assets or SCSA which are not
included within the Purchased Assets for any reasonable purpose
including, without limitation, litigation and financial and tax
reporting, and will permit such representatives, at Buyer's
expense, to make abstracts from, or to take copies of any of such
books and records, or to obtain temporary possession thereof as may
be reasonably required by Buyer. Each party shall preserve and keep
such books and records for a period of seven years following the
Closing Date, or for any longer period that may be required by any
governmental agency or ongoing litigation; provided that either
party may dispose of any such books and records retained by it at
any time provided that prior to any such disposition within the
seven years after the Closing Time a party desiring to dispose of
any such books and records shall give advance notice to the other
party and afford the other party the opportunity to take possession
or copy such books and records as the other party may select.
Section 5.07. Interim Permit Operations. Subject to any Legal
Requirements or Consent of any Governmental Authority, Buyer shall
have the right to operate the Facilities after the Closing Time
under any Permit held by Sequa Chemicals or Sequa in respect of the
Facilities which was not transferred to Buyer at the Closing Time
and with respect to which notice has been given by Buyer to the
issuing Governmental Authority.
Section 5.08. Trademark Covenants.
(a) Buyer shall (as between Buyer, Sequa Chemicals and
Sequa Chemicals' Affiliates) have the exclusive right in perpetuity
to register and have the use of the xxxx MYKON (alone or in
connection with other letters, numbers, symbols, words, designs or
logos) in Canada, United States, Mexico and Argentina for: "textile
chemicals for use as softeners, lubricants, wetting agents,
leveling agents and emulsifiers". Buyer agrees to limit its use of
the xxxx MYKON to such territory and for such goods. Sequa and
Sequa Chemicals shall not oppose and shall cause all of Sequa
Chemicals' Affiliates not to oppose such registration or use and,
upon Buyer's reasonable request and at Buyer's expense, Sequa and
Sequa Chemicals shall assist and shall cause their Affiliates to
assist Buyer in such registration and in obtaining renewals
thereof.
(b) Buyer agrees in perpetuity not to oppose Sequa
Chemicals and Sequa Chemicals' Affiliates registration or use of
the MYKON xxxx outside of
Canada, United States, Mexico and Argentina for any chemical
preparation and not to oppose the registration or use and to assist
Sequa, Sequa Chemicals and Sequa Chemicals' Affiliates in the
registration of and in obtaining renewals for the MYKON xxxx for
bleach activators for use in the manufacture of detergents and
dishwashing preparations, or other additives for detergents within
Canada, United States, Mexico and Argentina.
(c) Any assignment or license by Buyer or Sequa
Chemicals or any Sequa Chemicals Affiliate of the xxxx MYKON shall
be made or caused to be made by Buyer or Sequa Chemicals, as the
case may be, subject to this Section 5.08.
(d) Buyer shall limit its use of any trademark,
tradename or product name included in the Purchased Assets and
described on Disclosure Schedule Part 2.02(f) or Disclosure
Schedule Part 2.02A(c) which contains the Sequa name to those
products for which such name was used prior to the Closing Time.
Section 5.09. Tax Matters.
(a) Taxable Periods Ending on or Before the Closing
Time. Sequa Chemicals shall prepare and file on behalf of SCSA, in
accordance with applicable Legal Requirements, all Tax Returns for
all taxable periods of SCSA ending on or before the Closing Time,
provided that (i) all such Tax Returns shall be prepared and filed
in a manner consistent with prior Tax Returns of SCSA; (ii) Sequa
Chemicals shall not take any position on such Tax Returns unless
there is "substantial authority" for such position under the
applicable tax laws, and (iii) Sequa Chemicals shall provide copies
of such Tax Returns to Buyer and give Buyer a reasonable
opportunity to review and comment on any such Tax Returns before
Sequa Chemicals files them. Sequa Chemicals shall pay when due all
Income Taxes for tax periods of SCSA ending on or before the
Closing Time.
(b) Taxable Periods Beginning After the Closing Time.
Buyer shall prepare and file on behalf of SCSA or cause to be
prepared and filed, in accordance with applicable Legal
Requirements, all Tax Returns for all taxable periods of SCSA which
begin after the Closing Time. Buyer shall pay or cause SCSA to pay
when due all Income Taxes for taxable periods of SCSA beginning
after the Closing Time.
(c) Taxable Periods Which Include But Do Not End on the
Closing Time. Buyer shall prepare and file or cause to be prepared
and filed all Tax Returns for tax periods of SCSA which include but
do not end on the Closing Time. All such Tax Returns shall be
prepared and filed in a manner consistent with prior Tax Returns of
SCSA, except that if Buyer believes that prior Tax Returns were
incorrectly prepared Buyer may file a Tax Return which is
inconsistent with prior Tax Returns so long as Buyer shall provide
Sequa Chemicals with copies of and a reasonable opportunity to
review and comment on such Tax Return prior to the filing of such
Tax Return. The liability for Income Taxes for tax periods which
include but do not end at the Closing Time shall be prorated
between Sequa Chemicals and Buyer as follows: Sequa Chemicals
shall pay when due, or reimburse Buyer for an amount equal to the
aggregate Income Tax liability for any such period multiplied by a
fraction, the numerator of which is the income of SCSA during such
period prior to the Closing Time and the denominator of which is
the aggregate income of SCSA for such period and Buyer shall pay
when due, or reimburse Sequa Chemicals for, an amount equal to the
aggregate Income Tax liability for any such period multiplied by a
fraction, the numerator of which is the income of SCSA during such
period after the Closing Time and the denominator of which is the
aggregate income of SCSA for such period.
(d) Tax Audits. Each of Sequa Chemicals and Buyer shall
promptly notify the other in writing upon receipt of notice of any
pending or threatened Tax audit by any Governmental Authority with
respect to SCSA in respect of which indemnity under Article VIII of
this Agreement may be sought. Sequa Chemicals shall have the sole
right to represent the taxpayer's interest in any tax audit (an
"Audit") insofar as such Audit relates solely to Taxes for taxable
periods of SCSA ending on or before the Closing Time and the Buyer
and SCSA shall have the sole right to represent such interests in
any such Audit insofar as it relates solely to Taxes for taxable
periods of SCSA beginning on or after the Closing Time; provided
that Sequa Chemicals shall not settle or otherwise resolve any
matter which is the subject of any such Audit which may affect the
liability of SCSA for Taxes for any period ending subsequent to the
Closing Time without Buyer's consent. In any case in which an Audit
relates to a taxable period beginning before and ending after the
Closing Time or involves claims or items which affect periods for
which Sequa Chemicals is responsible for Taxes and periods for
which Buyer is responsible for Taxes, Buyer will have the sole
right to represent the taxpayer's interest provided that Buyer
shall not settle or otherwise resolve any matter which
is the subject of such audit which may affect the liability of
Sequa Chemicals for Taxes for any period ending on or prior to the
Closing Time without Sequa Chemicals' consent not to be
unreasonably withheld. Actions of SCSA under this paragraph may be
performed by Buyer at Buyer's sole option. In connection with any
Audit, each party will, at the request of the party with sole right
to represent the taxpayer's interest in an Audit, cooperate, and
will cause its Affiliates to cooperate, with that party in the
Audit and the party with such sole right will reimburse the other
for any reasonable out-of-pocket costs or expenses incurred by the
other in rendering such cooperation. Each party shall give the
other an opportunity to review and comment upon a position to be
taken in the course of an Audit when such position might reasonably
be expected to have an effect upon the liability of the other party
for Taxes of or relating to SCSA.
(e) Real Property Taxes. Real Property Taxes applicable
to the Owned Facilities which relate to a period of time within or
during which the Closing occurs shall be apportioned between Buyer
and Sequa Chemicals as of the Closing Time, with Buyer bearing only
the expense of that portion of such Real Property Taxes for the
number of days after Closing Time bears to the total number of days
covered by the period for which such Real Property Taxes are
applicable. The party receiving an apportionment credit from the
other shall be responsible for payment in full of the Real Property
Taxes. Any such charges or payments which relate to a period
entirely after the Closing Time shall be apportioned entirely to,
and paid by, Buyer.
(f) Personal Property Taxes. Personal Property Taxes for
the tax year ending December 31, 1998 shall be prorated in the same
manner as Real Property Taxes except that the amount of Tax to be
prorated shall be the Tax assessed for the tax year ending December
31, 1997. The parties shall fully cooperate to avoid, to the extent
legally possible, the payment of duplicate Personal Property Taxes,
and each party shall furnish, at the request of the other party,
proof of payment of any Personal Property Taxes or other
documentation which is a prerequisite to avoiding payment of a
duplicate tax.
Section 5.10. Certain Conditions. After the Closing Time,
Buyer shall use commercially reasonable efforts to take corrective
action with respect to the matters described on Disclosure Schedule
Part 5.10 (the "Open Conditions"). If any Government Authority
imposes at any time any fine, penalty or other charge on Buyer
(excluding, without limitation, any cost of undertaking any such
corrective action) in respect of the existence of the Open
Conditions, then, provided Buyer has complied with its obligations
under the immediately preceding sentence and Buyer has in good
faith defended against the imposition of any such fine, penalty or
charge, Sequa Chemicals shall promptly after the payment by Buyer
of any such fine, penalty, or charge reimburse Buyer for the amount
so paid. Notwithstanding the foregoing, any fine, penalty or
charge as a result of the existence after the date which is three
months after the Closing Time of any such Open Conditions, shall be
the sole responsibility of Buyer and Sequa Chemicals shall have no
liability or obligation therefore.
Section 5.11. Warwick Services. Sequa will cause Warwick
Benbassat S.A. ("Warwick S.A.") to provide the administrative and
related services listed on Exhibit K hereto and such other
services SCSA and Warwick S.A. may agree to in writing (the
"Services") on the following terms and conditions:
(a) Warwick S.A. will provide the Services to SCSA in
a manner at least equivalent to the quality and timeliness with
which such Services were provided to SCSA prior to the Closing
Time.
(b) Warwick S.A. shall provide the Services for a
period of at least eighteen (18) months following the Closing
Time, and either Warwick S.A. or Buyer shall have the right, with
six (6) months written notice, to cancel the Services, provided,
however, that no such notice may be given until at least twelve
(12) months after the Closing Time.
(c) The price which Warwick S.A. shall charge for the
Services is set forth on Exhibit K, or if no price is specified,
shall be the same price Warwick S.A. charged or passed through to
SCSA for similar services prior to the Closing Time. If the
Services being provided are new and in addition to those provided
before the Closing Time, then such price shall be as SCSA and
Warwick S.A. may mutually agree to in writing.
(d) Warwick S.A. shall invoice SCSA for the Services
on one or more invoices at such intervals as Warwick S.A. shall
determine. Buyer will cause SCSA to pay such invoices thirty
(30) days after the date of invoice.
(e) Warwick S.A. shall maintain all records relating
to the Services provided hereunder for a period of twelve (12)
months after the
termination of the Services, and at SCSA's request, shall
transfer a copy of such records to SCSA.
(f) Warwick S.A. and SCSA agree to keep confidential
any and all information and data received or generated pursuant
to the providing of the Services, except for such disclosures as
are required by law or governmental authority.
(g) During the term of the Services, Warwick S.A. will
not distribute products which are competitive with the products
it is distributing for Buyer or SCSA.
Section 5.12. Xxxx Xxxxxxx. Sequa will cause Warwick
International Limited to continue to provide payroll service for
Xxxx Xxxxxxx'x employment by Buyer after the Closing Time on the
same terms and conditions as Warwick International Limited is
currently providing such payroll service until the earlier of;
(a) December 31, 1998 or (b) notice to Sequa from Buyer that it
no longer desires the payroll services for Xxxx Xxxxxxx. Buyer
shall reimburse Warwick International Limited for all out-of-
pocket costs and expenses incurred by Warwick International
Limited for such payroll service for Xx. Xxxxxxx during such
period.
Section 5.13. Environmental Response. Environmental
testing at the Xxxxxxx Facility has revealed the presence of
certain Hazardous Substances. As the result of such findings and
in contemplation of the transactions contemplated by this
Agreement, Buyer and Sellers are entering into that certain
Environmental Response Agreement in the form of Exhibit M.
Section 5.14. Burlington Transaction. Sellers and Buyer are
entering into the Burlington Agreement in the form of Exhibit N
in respect of the Burlington Transaction and a Jamestown Facility
Rights Agreement in the form of Exhibit N-1.
Section 5.15. Certain Inventory. Sequa Chemicals will,
within ninety days after the Closing Time and at its sole cost
and expense, remove from the Jamestown Facility the items
identified on Disclosure Schedule Part 5.15 .
ARTICLE VI EMPLOYMENT MATTERS
Section 6.01. Offers of Employment.
(a) Except with respect to the Excluded Employees, at or
prior to the Closing Time, Buyer will make offers of employment to
all Active Employees. Such offers of employment shall be on terms
and conditions which are substantially comparable to the terms and
conditions of employment which have been disclosed to Buyer
pursuant to Sections 4.20 and 4.21 including, without limitation,
medical and dental coverage on terms which are substantially
comparable in coverage to that provided by Sequa Chemicals as
disclosed to Buyer pursuant to Section 4.20 and 4.21 with no
exclusion for preexisting conditions in any such medical and dental
plan. Such offers of employment shall terminate, if not accepted,
effective the close of business on the day following the Closing
Time.
(b) After the Closing Time, Buyer will make offers of
employment to each Excluded Employee who meets the following
conditions (except to the extent that such conditions are not
applicable to the reason for an Employee's status as an Excluded
Employee): (i) such Employee is released by his or her physician
to return to active employment and perform the same duties (without
material restrictions) which such employee had previously performed
for Sequa Chemicals; (ii) such Employee presents his or herself to
Buyer to resume active employment promptly upon such release or
promptly after the termination of the reason for his or her absence
from work; and (iii) any such release is prior to such Employee
becoming eligible for long term disability under Sequa Chemicals'
long term disability plan; provided, however, that Buyer shall
have no obligation to offer employment to any Excluded Employee who
does not meet such conditions within one year after the Closing
Time. Offers of employment under this Section 6.01(b) shall be on
the same terms and conditions set forth in 6.01(a). A person who
accepts an offer of employment and becomes employed by Buyer under
Section 6.01(a) or (b) shall be, effective as of the time he or she
becomes an employee of Buyer, a "Transferred Employee".
(c) No assets will be transferred from Sequa or Sequa
Chemicals to Buyer or from trustee to trustee on account of the
Pension Plan and Sequa and Sequa Chemicals will retain sole and
exclusive control and administration of the Pension Plan. Sequa
will vest, at the Closing Time, the accrued pension benefit of each
Employee in the Pension Plan, if not already vested.
(d) No assets will be transferred from Sequa Chemicals
to Buyer
or from trustee to trustee on account of Sequa Chemicals' 401(k)
Plan and Sequa Chemicals will retain sole and exclusive control and
administration of Sequa Chemicals' 401(k) Plan. Sequa Chemicals
will vest, at the Closing Time, the interest of each Employee in
the Sequa Chemicals' 401(k) Plan, if not already vested.
(e) Nothing in this Section 6.01 shall create any
obligation on the part of Buyer to employ any Employee for any
definite period of time or shall prevent Buyer from changing the
terms or conditions of employment, including, without limitation,
amending, modifying or terminating any employee benefit plans, at
any time following the Closing Time.
Section 6.02. Employee Obligations.
(a) Except for the Assumed Obligations and Buyer's
obligations under Section 6.02(c), Sequa and Sequa Chemicals shall
pay any and all other salaries, wages, bonuses, incentive
compensation, vacations, unemployment benefits, medical claims
(including, without limitations, all inpatient hospital stays
commencing prior to the Closing Time), dental claims, sickness and
accident benefits, pension benefits, death benefits, disability
benefits and any other payments or benefits under Sequa or Sequa
Chemicals employee plan, program or arrangement, or otherwise
arising out of or relating to: (i) the employment or termination of
employment of Sequa Chemicals' employees, (ii) the participation in
or accrual of benefits or compensation under, or the failure to
participate in or to accrue benefits or compensation under, any
Sequa or Sequa Chemicals plan, program or arrangement for current
or former Sequa Chemicals employees, or (iii) unpaid salaries,
wages, bonuses, incentive compensation, vacation, sick pay or other
compensation or payment pertaining to any period of employment with
Sequa Chemicals of Sequa Chemicals' employees.
(b) In addition to the Assumed Obligations and Buyer's
obligations under Section 6.02(c), Buyer shall pay any and all
salaries, wages, bonuses, incentive compensation, vacations,
holidays, unemployment benefits, medical claims (excluding, without
limitation, all hospital stays commencing prior to the Closing),
dental claims, sickness and accident benefits, pension benefits,
death benefits, disability benefits and any other payments or
benefits under any Buyer employee plan, program or arrangement, or
otherwise arising out of or relating to (i) the employment or
termination of employment of any Transferred Employee;
(ii) the participation in or accrual of benefits or compensation
under, or the failure to participate in or to accrue benefits or
compensation under, any Buyer plan, program or arrangement for
Transferred Employees; or (iii) accrued but unpaid salaries, wages,
bonuses, incentive compensation, vacation or sick pay or other
compensation or payment pertaining to any period of employment with
Buyer of any Transferred Employee.
(c) Notwithstanding Section 6.02(a), Buyer shall defend,
indemnify and hold harmless Sellers from and against any Employee
claim against Sellers for severance pay and benefits to the extent
payable by Sellers as a result of: (i) a claim of constructive
termination to the extent resulting from Buyer's failure to offer
employment to an Employee pursuant to Sections 6.01(a) and 6.01(b)
on terms and conditions which are substantially comparable to the
terms and conditions of employment, for such Employee which have
been disclosed to Buyer pursuant to Sections 4.20 and 4.21 or (ii)
a claim of constructive termination to the extent resulting from
any reduction by Buyer after the Closing Time in terms and
conditions of employment, for a Transferred Employee below terms
and conditions, which are substantially comparable to the terms and
conditions of employment for such Employee which have been
disclosed to Buyer pursuant to Sections 4.20 and 4.21. Buyer's
obligations under this Section 6.02(c) shall be subject to Sections
8.02(a) and 8.04.
Section 6.03 Internal Revenue Service Forms. Sequa Chemicals
and Buyer agree that, pursuant to the "Alternative Procedure"
provided in Section 5 of Revenue Procedure 84-77, 1984-2 C.B. 753,
with respect to filing and furnishing Internal Revenue Service
Forms W-2, W-3 and 941, respectively: (a) Sequa Chemicals and
Buyer shall report on a "predecessor-successor" basis as set forth
therein; (b) Sequa Chemicals shall be relieved from furnishing
Forms W-2 to Sequa Chemicals' employees who accept employment with
Buyer to whom Sequa Chemicals would have been obligated to furnish
such Forms; and (c) Buyer shall assume Sequa Chemicals' obligation
to furnish such Forms to all such employees for the full 1998
calendar year. Upon Buyer's request, Sequa Chemicals will promptly
provide Buyer with the information relating to periods ending on
the Closing Time necessary for Buyer to prepare and distribute
Forms W-2 to such employees for the year ending December 31, 1998,
which Forms W-2 will include all remuneration earned by such
employees from both Sequa Chemicals and Buyer during the year
ending December 31, 1998.
ARTICLE VII. BUYER'S INVESTIGATION AND CERTAIN DISCLAIMERS
Section 7.01. No Additional Representations. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES IN ARTICLE IV AND IN THE ADDITIONAL
DOCUMENTS DELIVERED BY SEQUA CHEMICALS OR SEQUA TO BUYER AT
CLOSING, NEITHER SEQUA CHEMICALS NOR SEQUA OR ANY AFFILIATE, IS
MAKING ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY
NATURE WHATSOEVER WITH RESPECT TO THE BUSINESS, THE PURCHASED
ASSETS OR THE ASSUMED OBLIGATIONS. WITHOUT LIMITING THE FOREGOING
AND EXCEPT TO THE EXTENT INCLUDED WITHIN THE REPRESENTATIONS OR
WARRANTIES CONTAINED IN ARTICLE IV OR THE ADDITIONAL DOCUMENTS
SEQUA CHEMICALS AND SEQUA MAKES NO REPRESENTATION OR WARRANTY
REGARDING: (a) ANY FINANCIAL STATEMENTS, BUDGETS, LONG RANGE PLANS,
STRATEGIC PLANS, MARKET ANALYSIS, FORECASTS, PROJECTIONS, OPINIONS
AND SIMILAR MATERIALS PREPARED OR FURNISHED BY THE SEQUA CHEMICALS,
SEQUA OR THEIR AFFILIATES REPRESENTATIVES WITH RESPECT TO THE
BUSINESS, THE PURCHASED ASSETS AND THE ASSUMED OBLIGATIONS (b)
FUTURE PROSPECTS, INCOME POTENTIAL, OPERATING EXPENSES, USES,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (c) THE
CONDITION OR SAFETY OF THE OWNED FACILITIES AND THE IMPROVEMENTS
THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING
AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, FOUNDATIONS,
SOILS AND GEOLOGY, LOT SIZE OR SUITABILITY OF THE REAL PROPERTY AND
THE IMPROVEMENTS FOR A PARTICULAR PURPOSE; (d) WHETHER THE
APPLIANCES, IF ANY, PLUMBING OR UTILITIES ARE IN WORKING ORDER; (e)
THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND
THE QUALITY OF ITS CONSTRUCTION; (f) THE FITNESS OF ANY PERSONAL
PROPERTY OR FIXTURE; (g) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY
SOUND OR IN GOOD CONDITION; OR (h) THE IMPACT, FINANCIAL AND
OTHERWISE OF NOT OBTAINING CONSENTS, AS REQUIRED BY THE TERMS AND
CONDITIONS OF THE ASSUMED CONTRACTS.
Section 7.02. Certain Conditions. Buyer shall have no claim
against Seller in respect of any of the costs or expenses described
on Disclosure Schedule Part 7.02 incurred by Buyer after the
Closing Time.
Section 7.03. No Effect on Representations and Warranties.
No provision of Sections 7.01 or 7.02 shall amend, modify, limit,
or abridge in any way the representations and warranties set forth
in Article IV or in any Additional Document delivered by Sequa
Chemicals to Buyer at Closing.
ARTICLE VIII. REMEDIES
Section 8.01. Survival. All representations, warranties,
covenants, and obligations in this Agreement and in any Exhibit
delivered at Closing pursuant to this Agreement (collectively, the
"Additional Documents") will survive indefinitely the execution and
delivery of this Agreement and any Additional Document, the closing
of the transactions contemplated hereby, and any investigation
conducted by or knowledge of any party (except to the extent that
a party has Knowledge of a breach of a representation or warranty
by the other party in which case the party with such Knowledge
shall be deemed to have waived any right to indemnity under Section
8.02(a) or 8.03(a), as the case may be, in respect of the breach of
such representation or warranty to the extent of such Knowledge);
provided, however, that the representations and warranties in this
Agreement shall expire and Section 8.05(c) shall apply five hundred
forty-seven days after the Closing Time except for the
representations and warranties set forth in Sections 3.01, 3.02 and
3.03 and in Sections 4.01, 4.02, 4.03, 4.04 and 4.15 which shall
not expire.
Section 8.02. Indemnification by Seller. Subject to Sections
8.04 and 8.05, Sequa and Sequa Chemicals shall, jointly and
severally, defend Buyer and any Buyer Affiliate (including, after
the Closing Time, SCSA) (the "Buyer Entities") against any and all
claims, actions, suits, proceedings and investigations arising
from, and shall indemnify and hold harmless the Buyer Entities for,
and will pay to the Buyer Entities the amount of, any Damages,
incurred or suffered by a Buyer Entity as a result of:
(a) any misrepresentation in or breach of any
representation or warranty made by Sequa or Sequa Chemicals in this
Agreement or any Additional Document delivered by Sequa or Sequa
Chemicals;
(b) any failure to perform or breach of any covenant or
agreement made by Sequa or Sequa Chemicals in this Agreement or in
any Additional Document delivered by Sequa or Sequa Chemicals; or
(c) any Retained Liability or any liability or
obligation of SCSA which, if it were a liability or obligation of
Sequa or Sequa Chemicals, would be within the definition of
Retained Liability.
Section 8.03. Indemnification by Buyer. Subject to Sections
8.04 and 8.05 and Seller's obligations under Section 8.02, Buyer
shall defend Seller and any Seller Affiliates (excluding, after the
Closing Time, SCSA) (the "Seller Entities") against any and all
claims, actions, suits, proceedings and investigations arising
from, and shall indemnify and hold harmless the Seller Entities
for, and will pay to the Seller Entities the amount of any Damages,
incurred or suffered by a Seller Entity, as a result of:
(a) any misrepresentation in or breach of any
representation or warranty made by Buyer in this Agreement or any
Additional Document delivered by Buyer;
(b) any failure to perform or breach of any covenant or
agreement made by Buyer in this Agreement or in any Additional
Document delivered by Buyer;
(c) any Assumed Obligation or any liability or
obligation of SCSA which, if it were a liability or obligation of
Sequa or Sequa Chemicals, would be within the definition of Assumed
Obligation;
(d) (i) The ownership, operation, use or possession by
Buyer after the Closing Time of the Purchased Assets (other than
the Shares) or (ii) the ownership, operation, use or possession by
SCSA after the Closing Time of its rights, properties or assets or
(iii) the conduct of the Business by Buyer or SCSA after the
Closing Time, but only to the extent under (i), (ii), or (iii) of
any Damages which pertain to the period after the Closing Time and
which are the result of such ownership, operation, use, possession
or conduct by Buyer or SCSA after the Closing Time, including any
of such Damages resulting from:
(i) any injury to or disease or death of any
person, including Transferred Employees or damage to or loss of any
property to the extent occurring after the Closing Time as a result
of such ownership, operation, use or possession by Buyer or SCSA
after the Closing Time (including continuation by Buyer after the
Closing Time of Seller's acts or omissions) to the extent of
Damages caused by Buyer after the Closing Time whether based on
negligence, breach of warranty, breach of contract, products
liability, strict liability, workers compensation or any other
theory including, without limitation, any injury, disease, death,
damage or loss resulting from the sale of Inventory by Buyer after
the Closing Time;
(ii) any breach or default by Buyer or SCSA of any
performance obligation under an Assumed Contract which has been
assumed by Buyer or SCSA to the extent occurring after the Closing
Time or any performance or non-performance after the Closing Time
by Buyer or SCSA of a performance obligation under an Assumed
Contract which has been assumed by Buyer or SCSA which, by the
lapse of time or delivery of notice (or both), would constitute a
breach or default of such performance obligation including any
continuation after the Closing Time by Buyer or SCSA of a breach or
default by Seller or SCSA or non-performance by Seller or SCSA of
any performance obligations which has been assumed by Buyer or SCSA
under an Assumed Contract;
(iii) any violations of Legal Requirements by
Buyer or SCSA to the extent occurring after the Closing Time
including any continuation by Buyer or SCSA of any violation of any
Legal Requirements by Sequa Chemicals or SCSA prior to the Closing
Time;
(iv) any criminal and civil fines, penalties to the
extent pertaining to the period after the Closing Time and
resulting from such ownership, operation, use or possession by
Buyer or SCSA after the Closing Time, including any such fines or
penalties resulting from any continuation by Buyer or SCSA after
the Closing Time of the actions or omissions of Seller prior to the
Closing Time which are subject of such fines or penalties;
(v) any Hazardous Substances (including Hazardous
Substances in Inventory as of the Closing Time) which are shipped
for disposal, disposed of, or spilled, discharged, leaked, emitted
or released to the environment after the Closing Time by Buyer or
SCSA as a result of Buyer's or SCSA's
conduct of the Business after the Closing Time, or by any other
Person after the Closing Time for whose conduct Buyer or SCSA may
be held responsible under the Environmental Laws as a result of
Buyer's or SCSA's conduct of the Business after the Closing Time
(excluding any "continuing" release or Migration of Hazardous
Substances which were spilled, discharged, leaked, emitted or
released prior to the Closing Time and subject to the Burlington
Agreement with respect to the Burlington Contamination); and
(vi) any infringement or other violation of
Intellectual Property rights of any Person occurring after the
Closing Time to the extent arising from or resulting from such
ownership, operation, use or possession by Buyer or SCSA after the
Closing Time, including to the extent occurring after the Closing
Time continuation by Buyer or SCSA of any infringement or other
violation by Seller prior to the Closing Time.
(e) any Federal, state, local or other Taxes for which
Buyer is responsible under any Legal Requirement as well as Taxes
to the extent included on the Closing Working Capital Statement;
and
(f) any qualified or nonqualified, funded or nonfunded
pension, profit sharing, health, welfare, medical insurance,
severance, bonus or other employee benefit plan or arrangement
established, participated in, or maintained by Buyer.
Nothing contained in Section 8.03(c) or 8.03(d) shall be
interpreted to impose on Buyer any, or release Sequa Chemicals or
Sequa from any, liability or obligation arising or resulting from:
(A) any misrepresentation in or breach of any representation or
warranty made by Sequa Chemicals or Sequa in this Agreement or any
Additional Document delivered by Sequa Chemicals or Sequa or (B)
any Retained Liability or any liability or obligation of SCSA
which, if it were a liability or obligation of Sequa Chemicals or
Sequa would be within the definition of Retained Liability or (C)
for the avoidance of doubt, any Hazardous Substances described in
Section 2.03(l) except to the extent of Buyer's obligations under
the Burlington Agreement or the Environmental Response Agreement.
Section 8.04. Third Party Claim Procedures. If a Buyer
Entity or Seller Entity receives notice of the assertion of any
Third Party Claim in respect of which such party may have a claim
under Section 8.02 or 8.03, then the following shall apply:
(a) The party against whom any such Third Party Claim is
made (the "Indemnified Party"), shall promptly provide written
notice (an "Indemnity Notice") of such Third Party Claim to the
other party (the "Indemnifying Party"). Such Indemnity Notice
shall describe in reasonable detail the nature of the Third Party
Claim and the basis for its claim under Section 8.02 or 8.03;
provided that the failure to provide such notice shall not affect
a party's rights under Section 8.02 or 8.03 except to the extent
the other party is prejudiced by the failure to give such notice or
the delay in giving such notice. An Indemnity Notice by a party
shall not, subject to the time limitations set forth in Section
8.01, preclude such party from giving subsequent Indemnity Notices
with respect to other claims, whether arising before or after the
claims for which prior notice is given.
(b) Upon receipt of an Indemnity Notice, the
Indemnifying Party shall have the right to promptly assume, at its
sole cost and expense, the defense or settlement of such Third
Party Claim with counsel reasonably acceptable to the Indemnified
Party, provided that the Indemnifying Party has agreed in writing,
subject to the provisions and limitations in this Agreement, to
indemnify and hold harmless the Indemnified Party in respect of all
Damages arising or resulting from such Third Party Claim. The
Indemnifying Party shall give prompt written notice to the
Indemnified Party of its intent to enter into such agreement and
assume the defense of any such Third Party Claim and shall conduct
the defense and/or settlement of such Third Party Claim diligently
and in good faith.
(c) Notwithstanding Section 8.04(b), if (i) an
Indemnified Party is obligated to permit an insurer or other Third
Party having liability therefore to assume the defense of a Third
Party Claim, or (ii) the Third Party Claim is from a Governmental
Authority and pertains to the regulation of a Facility in a manner
which may materially and adversely affect the operation of such
Facility in the future other than as a result of the payment of
monetary damages, or (iii) the Indemnifying Party and Indemnified
Party are both named parties in a Third Party Claim and there are
legal defenses available to the Indemnified Party which are
different from or in addition to those available to the
Indemnifying Party or (iii) if the Indemnifying Party fails, after
reasonable notice from the Indemnified Party, to diligently and in
good faith defend such Third Party Claim or (iv) after being
requested to do so by the Indemnified Party, the Indemnifying Party
fails to provide the Indemnified Party with reasonable assurance of
its financial ability to
satisfy its defense and indemnification obligations hereunder,
then, at the option of the Indemnified Party, the Indemnifying
Party shall not have the right to assume the defense of such Third
Party Claim and the Indemnified Party may, by notice to the
Indemnifying Party, retain or reassume the defense of any such
Third Party Claim previously assumed by the Indemnifying Party and
shall conduct the defense and/or settlement of such Third Party
Claim diligently and in good faith. No retention or reassumption
of any such defense by the Indemnified Party shall prejudice any
rights of the Indemnified Party or Indemnifying Party under Section
8.02 or 8.03.
(d) If the Indemnifying Party does not give notice and
assume the defense of such Third Party Claim in accordance with
Section 8.04(b) or is not entitled to assume or retain the defense
thereof, the Indemnified Party shall have full and exclusive
authority to defend and/or settle any such Third Party Claim for
the account of and at the sole risk, cost and expense of the
Indemnifying Party. If the Indemnified Party undertakes the
defense and/or settlement of any such Third Party Claim it shall do
so diligently and in good faith and the Indemnifying Party shall
from time to time, upon the request of the Indemnified Party,
reimburse the Indemnified Party for the costs incurred by the
Indemnified Party in defending and/or settling such Third Party
Claim. The Indemnifying Party shall be bound by settlement entered
into by the Indemnified Party to the extent that such settlement is
commercially reasonable measured in the context of the matter
settled and by any judgment resulting from such Third Party Claim.
If the Indemnifying Party had the right to assume the defense and
settlement of such Third Party Claim and did not do so then, in any
dispute between the Indemnifying Party and Indemnified Party
regarding the defense or settlement of such Third Party Claim, the
Indemnifying Party shall have the burden to prove that the
Indemnified Party did not defend such Third Party Claim diligently
and in good faith and/or settle such claim in a commercially
reasonable manner.
(e) The parties agree that the Indemnified Party may
join the Indemnifying Party in any legal proceeding brought by the
third party asserting such Third Party Claim as to which any right
under Section 8.02 or 8.03 would or might apply, for the purpose of
enforcing any such right.
(f) The Indemnifying Party shall not admit any
liability, settle, compromise, pay or discharge, without the
consent of the Indemnified Party, any Third Party Claim being
defended by it unless with respect to any settlement (i)
the Indemnified Party is not obligated to perform or to refrain
from performing any act under such settlement and there is no
encumbrance on any assets of the Indemnified Party; and (ii) there
is no finding or admission of any violation of any Legal
Requirement, violation of the rights of any Person by the
Indemnified Party or any other liability of the Indemnified Party
to any Person.
(g) The party controlling the defense of a Third Party
Claim shall keep the other party reasonably informed at all stages
of the defense and/or settlement of such Third Party Claim. The
party not controlling the defense of any such Third Party Claim
shall have the right, at its sole cost and expense, to participate
in, but not control, the defense of any such Third Party Claim.
Each party shall reasonably cooperate with the other in the defense
and/or settlement of any such Third Party Claim, including, without
limitation, by furnishing such records, information and testimony
and attending such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in connection
therewith, but the Indemnifying Party will reimburse the
Indemnified Party for any out-of-pocket fees or expenses incurred
by it in so cooperating or acting at the request of the
Indemnifying Party.
(h) To the extent that a provision of the Burlington
Agreement or Environmental Response Agreement conflicts with this
Section 8.04 then the provisions of the Environmental Response
Agreement or the Burlington Agreement, as the case may be, shall
control.
Section 8.05. Survival and Limitations. In addition to the
expiration or waiver of representations and warranties and the
right (subject to Section 8.05(c)) to make claims thereunder as
provided for in Section 8.01, the right to recover Damages under
Sections 8.02 and 8.03 shall be subject to the following; provided
that, for the avoidance of doubt, the limitations contained in
Section 8.01 and the other limitations contained in 8.05(a), (b)
and (c) shall not apply to claims under Section 8.02(b) or (c) or
claims under Section 8.03(b), (c) or (d):
(a) Neither the Buyer Entities nor the Seller Entities
shall be entitled to recover Damages under Sections 8.02(a) or
8.03(a) unless the Buyer Entities collectively or the Seller
Entities collectively, as the case may be, incur Damages in excess
of $750,000 (the "Threshold Amount") in which case the Buyer
Entities or Seller Entities shall have the right to recover only
those Damages which are in excess of the Threshold Amount;
provided, however, that if there is a
misrepresentation or breach of any representation or warranty of
Sellers or Buyer, as the case may be, then all Damages incurred by
Buyer or Sellers (not just the amount of Damages in excess of an
amount which is material) shall be applied toward the Threshold
Amount and, to the extent exceeding the Threshold Amount, shall be
recoverable by either Buyer or Sellers as the case may be.
(b) In no event will Buyer Entities or any Seller
Entities be liable under Sections 8.02(a) or 8.03(a), as the case
may be, for any Damages in excess of 30% of the Purchase Price.
(c) No Buyer Entity or Seller Entity shall be entitled
to recover Damages under Sections 8.02(a) or 8.03(a), as the case
may be, unless it shall make its claim therefor on or prior to the
date on which the relevant representation or warranty shall expire
pursuant to Section 8.01 and if, prior to the expiration of the
representation or warranty, a claim is made then the Buyer Entity
or Seller Entity making such claim shall not be precluded from
pursuing such claim or otherwise in any way prejudiced in respect
of such claim by reason of the expiration of such representation or
warranty.
(d) Any remedy of a Buyer Entity or Seller Entity
hereunder shall be determined without regard to whether or not the
transactions provided for in this Agreement prove generally to be
favorable to a party and without regard to whether or not the facts
and circumstances covered by any representation, warranty or
covenant prove to be more favorable to a party than so represented,
warranted or covenanted.
(e) The parties hereto intend that each representation,
warranty, and covenant contained herein shall have independent
significance. If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that
there exists another representation, warranty or covenant relating
to the same subject matter (regardless of the relative levels of
specificity) which the party has not breached shall not detract
from or mitigate the fact that the party is in breach of the first
representation, warranty or covenant.
(f) All representations, warranties and agreements made
in this Agreement or in any Additional Document shall be deemed to
be material and to have been relied upon by Sellers or Buyer, as
the case may be.
(g) For purposes of this Article VIII, a Buyer Entity or
Seller Entity respectively shall be deemed to have suffered Damages
if the same shall be suffered by any parent, subsidiary or
Affiliate of such Buyer Entity or Seller Entity.
Section 8.06. Indemnification for Owned Facilities.
Notwithstanding anything to the contrary, if there is any
misrepresentation or breach of warranty in this Agreement with
respect to title to the Owned Facilities, then Sellers shall,
subject to the terms, conditions and limitations set forth in this
Agreement, be liable to the Buyer pursuant to Section 8.02(a) on
account of the misrepresentation or breach of warranty contained
herein with respect to title to such Owned Facilities and shall
have only such liability as provided in accordance with the terms
hereof. In the event such Owned Facilities are the subject of
title insurance obtained by or on behalf of Buyer, then Buyer shall
be obligated to use commercially reasonable efforts in pursuing a
claim for title insurance coverage and to pay over to Seller,
forthwith upon receipt thereof, the proceeds (net of all fees,
costs and expenses incurred in collection) received by Buyer from
the title insurance company that has issued the title insurance, to
the extent of the amount theretofore paid to Buyer by Seller under
the provisions of Section 8.02(a) hereof on account of the
misrepresentation or breach of warranty with respect to such title.
Section 8.07. Indemnification Based Upon Net Damage. The
obligation of either Buyer or Sellers to pay Damages to the other
shall be reduced by the net value, after all costs, fees and
expenses of collection, of any proceeds of insurance from or
claims, cross-claims or counterclaims against a third party that is
not an Affiliate, as a direct result of the event giving rise to
the claim for indemnification provided, however, that if any such
proceeds have not been realized at the time Damages are paid then
the party making such payment shall be subrogated, to the extent of
such payment, to the rights of the party receiving such payment
against such third party.
Section 8.08. Workers' Compensation. Notwithstanding Article
VI, Section 8.02(c) and Sections 8.03(c), (d) and (f), Sequa
Chemicals shall be liable for any workers' compensation claim
relating to an occurrence prior to the Closing Time and Buyer shall
be liable for any workers' compensation claim relating to an
occurrence after the Closing Time. If a workers' compensation claim
arises in connection with a "continuing" occurrence before and
after the Closing Time, the
liability of Buyer and Sequa Chemicals for such claim shall be
determined by Legal Requirements or in the absence of applicable
Legal Requirements on an equitable basis, taking into account,
without limitation, the respective period of exposure with Sellers
and Buyer.
ARTICLE IX. MISCELLANEOUS PROVISIONS
Section 9.01. Notices. All notices, demands and other
communications which may or are required to be given to or made by
either party to the other in connection with this Agreement shall
be in writing (including telex, fax or other similar writing) and
shall be deemed to have been duly given or made: (a) if sent by
registered or certified mail, five days after the posting thereof
with first class postage attached, (b) if sent by hand or overnight
delivery, upon the delivery thereof and (c) if sent by telex or
fax, upon confirmation of receipt of such telex or fax, in each
case addressed to the respective parties as follows:
Sequa: Sequa Corporation
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Senior Executive Vice President and
General Counsel
Fax: (000) 000-0000
Sequa Chemicals: Sequa Chemicals, Inc.
c/o Sequa Corporation
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Senior Executive Vice President and
General Counsel
Fax: (000) 000-0000
Buyer: GenCorp Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attn: Secretary
Fax: (000) 000-0000
or to such other address and to the attention of such other persons
as either party hereto may specify from time to time by notice to
the other party.
Section 9.02. Entire Agreement. This Agreement, the
Disclosure Schedule, and the Exhibits hereto embody the entire
agreement and understanding of the parties hereto with respect to
the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, oral or written,
relative to said subject matter including, without limitation, the
Letter of Intent dated July 9, 1998 between the parties and, the
Confidentiality Agreement dated May 11, 1997 between the parties.
Section 9.03. Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be transferred
or assigned (by operation of law or otherwise) by any of the
parties hereto without the prior written consent of the other
party; provided, however, that Buyer shall have the right to assign
its rights hereunder to any Affiliate of Buyer or any Person that
acquires any of the business and assets of Buyer pertaining to the
subject matter of this Agreement; provided, however, that such
assignee must sign a counterpart of this Agreement and that no such
assignment shall relieve Buyer, as primary obligor, of any of its
obligations or liabilities hereunder; and provided further that
nothing contained herein shall limit or restrict any statutory
merger of Sequa or any change in control of Sequa. Any such
assignee subject to the terms, conditions and limitations contained
in this Agreement, may enforce any right or benefit assigned to it
as if it had been named in this Agreement as the Buyer, and in the
case of an assignee which is an Affiliate of the Buyer may recover
thereunder as if it had acquired the Purchased Assets and Shares.
Any transfer or assignment of any of the rights, interests or
obligations hereunder in violation of the terms hereof shall be
void and of no force or effect.
Section 9.04. Captions. The Table of Contents and Article
and Section headings of this Agreement are inserted for convenience
only and shall not constitute a part of this Agreement in
construing or interpreting any provision hereof.
Section 9.05. Waiver; Consent. This Agreement may not be
changed, amended, terminated, augmented, rescinded or discharged
(other than by performance), in whole or in part, except by a
writing executed by the parties hereto, and no waiver of any of the
provisions or conditions of this Agreement or any of the rights of
a party hereto shall be effective or binding unless such waiver
shall be in writing and signed by the party claimed to have given
or consented thereto. Except to the extent that a party hereto may
have otherwise agreed in writing, no waiver by that party of any
condition of this Agreement or breach by the other party of any of
its obligations or representations hereunder shall be deemed to be
a waiver of any other condition or subsequent or prior breach of
the same or any other obligation or representation by the other
party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed
to be a waiver by the first party of its rights and remedies with
respect to such noncompliance or breach.
Section 9.06. No Third Party Beneficiaries. Except in
respect of SCSA, nothing herein is intended or shall be construed
to confer upon or give to any Person including, without limitation,
any Employee, any legal or equitable right, remedy, claim or other
benefit under or by reason of this Agreement.
Section 9.07. Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
Section 9.08. Gender. Whenever the context requires, words
used in the singular shall be construed to mean or include the
plural and vice versa, and pronouns of any gender shall be deemed
to include and designate the masculine, feminine or neuter gender.
Section 9.09. Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the laws
of the State of Delaware exclusive of laws relating to conflicts of
law.
Section 9.10. Interpretation. It is acknowledged by Buyer,
Sequa Chemicals and Sequa that this Agreement has undergone several
drafts with the negotiated suggestions of each and, therefore, no
presumptions shall arise favoring either party by virtue of the
authorship of any provision of this Agreement. Nothing in the
Disclosure Schedules shall be deemed adequate to disclose an
exception to a representation or warranty made herein unless the
Disclosure Schedules identifies the exception with reasonable
particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall
not be deemed adequate
to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the
existence of the document or other item itself).
Section 9.11. Blue Pencil. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of
a court of competent jurisdiction declares that any term or
provisions hereof is invalid or unenforceable such term or
provision shall be enforceable to the greatest extent permitted by
law.
Section 9.12. Exclusive Remedies. With respect to any claim
for breach of any representation, warranty, covenant or agreement
made by Buyer, Sequa Chemicals and Sequa in this Agreement, the
specific remedies under this Agreement are intended to be the
exclusive remedies with respect thereto; provided, however, that
the foregoing shall not be deemed to prohibit or limit either party
from obtaining equitable relief for the failure of the other party
to perform any covenant or agreement contained herein or prohibit
or limit any claim for fraud.
Section 9.13. Bulk Transfer Laws. Notwithstanding any other
provision of this Agreement, the Buyer hereby waives compliance by
Sequa Chemicals and Sequa with the provisions of any so-called bulk
transfer law of any jurisdiction in connection with the
transactions contemplated hereby. Sequa Chemicals and Sequa hereby
indemnifies and agrees to hold Buyer harmless from and against any
and all liabilities, losses, damages, costs and expenses, including
reasonable counsel fees, incurred or sustained by Buyer due to such
non-compliance.
Section 9.14. Expenses. Each of the Buyer, Sequa Chemicals
and Sequa will bear its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby. Sequa Chemicals agrees that
Buyer will not bear any of the costs and expenses of Sequa
Chemicals (including any of its legal fees and expenses any
brokerage, investment banking, financial advisory, finders or
similar fees or commissions, and all related expenses of any
broker, finder, advisor or other Person who
was engaged by it in connection with this Agreement or the
transactions
contemplated hereby) in connection with this Agreement or any of
the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
SEQUA CHEMICALS, INC. GENCORP INC.
By: By:
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Name: Name:---------------------
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Title: Title:-------------------
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SEQUA CORPORATION
By:
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Name:
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Title:
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