UNITED STATES ASSET PURCHASE AGREEMENT
BETWEEN
PHIBRO-TECH, INC.
AND
NUFARM, INC.
----------
As of May 1, 2001
----------
ARTICLE 1 Purchase and Sale of Assets of the U.S. Agtrol Division......... 1
1.1 Sale of Purchased Assets........................................ 1
1.2 Purchased Assets................................................ 1
1.3 Excluded Assets................................................. 2
ARTICLE 2 Consideration................................................... 4
2.1 Purchase Price.................................................. 4
2.2 Assumed Liabilities; Excluded Liabilities....................... 5
2.3 Certain Closing Prorations and Adjustments...................... 6
2.4 Non-assignability............................................... 6
2.5 Collection of Receivables....................................... 7
2.6 Supply Agreement; License Agreement............................. 8
ARTICLE 3 Closing; Deliveries; Conditions Precedent....................... 8
3.1 Closing......................................................... 8
3.2 Seller's Deliveries............................................. 9
3.3 Buyer's Deliveries.............................................. 9
3.4 Condition Precedent of Buyer and the Seller..................... 10
3.5 Buyer's Conditions Precedent.................................... 10
3.6 Seller's Conditions Precedent................................... 11
ARTICLE 4 Representations and Warranties of the Seller.................... 11
4.1 Organization, Standing and Qualification; Authority............. 11
4.2 No Violation; Qualification..................................... 12
4.3 Financial Statements............................................ 12
4.4 Absence of Undisclosed Liabilities.............................. 13
4.5 Absence of Certain Changes or Events............................ 13
4.6 Tax Liabilities................................................. 13
4.7 Leasehold Interests............................................. 13
4.8 Other Property.................................................. 14
4.9 Registered Patents, Trade Names, Trademarks and Copyrights...... 14
4.10 Title to Assets................................................. 15
4.11 Contracts....................................................... 15
4.12 Compliance with Laws............................................ 15
4.13 Litigation and Claims........................................... 15
4.14 Permits......................................................... 16
4.15 Employees....................................................... 17
4.16 Employment Contracts and Benefits............................... 17
4.17 Fees............................................................ 18
4.18 Environmental Laws.............................................. 18
4.19 Disclosure of Confidential Information to Others;
Restrictive Agreements.......................................... 18
4.20 Books and Records............................................... 19
4.21 Validity of Representations and Warranties...................... 19
ARTICLE 5 Representations and Warranties of Buyer......................... 20
5.1 Organization and Standing....................................... 20
5.2 Authority....................................................... 20
5.3 Litigation...................................................... 20
5.4 Financing....................................................... 20
5.5 No Violation; Qualification..................................... 20
5.6 Brokerage or Finder's Fee....................................... 21
5.7 Investigation................................................... 21
ARTICLE 6 Certain Covenants............................................... 21
6.1 Consents........................................................ 21
6.2 Certain Employee Matters........................................ 22
6.3 Disclosure of Business Secrets.................................. 23
6.4 Non-Competition, Non-Disclosure and Non-Solicitation............ 23
6.5 Bulk Sales Laws................................................. 25
6.6 Transactional Taxes............................................. 25
6.7 Books and Records............................................... 25
6.8 Product Registrations........................................... 26
6.9 Product Rework.................................................. 26
6.10 Stock Sales..................................................... 26
ARTICLE 7 Indemnification................................................. 26
7.1 Seller's Obligation to Indemnify................................ 26
7.2 Buyer's Obligation to Indemnify................................. 27
7.3 Procedure for Satisfaction of Indemnity Claims.................. 27
7.4 Survival and Other Matters...................................... 29
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7.5 Satisfaction of Indemnity Claims................................ 30
7.6 Interest........................................................ 31
ARTICLE 8 Miscellaneous................................................... 31
8.1 Certain Defined Terms........................................... 31
8.2 Certain Understandings.......................................... 35
8.3 Binding Agreement............................................... 36
8.4 Assignment...................................................... 36
8.5 Public Announcements............................................ 36
8.6 Law To Govern................................................... 36
8.7 Notices......................................................... 36
8.8 Entire Agreement................................................ 37
8.9 Waivers......................................................... 38
8.10 Severability.................................................... 38
8.11 Income Tax Position............................................. 38
8.12 Third-Party Beneficiaries....................................... 38
8.13 Time of the Essence............................................. 38
8.14 Waiver of Jury Trial............................................ 38
8.15 Drafting........................................................ 39
8.16 Counterparts.................................................... 39
8.17 Headings........................................................ 39
8.18 Further Assurances.............................................. 39
8.19 Dispute Resolution.............................................. 39
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EXHIBITS
Exhibit A Buyer Note
Exhibit B Supply Agreement
Exhibit C License Agreement
Exhibit D Assignment and Assumption Agreement
SCHEDULES
Schedule 1.2(a) Tangible Personal Property
Schedule 1.2(b) Leasehold Interests
Schedule 1.2(c) Inventory
Schedule 1.2(d) Contracts
Schedule 1.2(e) Intangibles
Schedule 2.5 Receivables
Schedule 3.5(d) Contracts to be Assigned Prior to Closing
Schedule 4.1 Jurisdictions the Seller is Authorized to do Business
Schedule 4.3 Financial Statements
Schedule 4.7 Real Property
Schedule 4.9 Intellectual Property
Schedule 4.10 Title of Assets
Schedule 4.11 Contracts
Schedule 4.13 Litigation
Schedule 4.14 Permits
Schedule 4.15 Employees
Schedule 4.16 Benefit Plans
Schedule 4.19 Disclosure of Confidential Information to Others;
Restrictive Agreements
Schedule 6.2 Employees to be Offered Employment
Schedule 8.2(a) Persons of Seller "with knowledge"
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UNITED STATES ASSET PURCHASE AGREEMENT
This United States Asset Purchase Agreement (this "Agreement"), dated as
of May 1, 2001 (the "Effective Date"), is by and between Phibro-Tech, Inc., a
Delaware corporation (the "Seller"), and Nufarm, Inc., a Delaware corporation
("Buyer").
WHEREAS, the Seller and its Affiliates own and operate, directly and
indirectly, through the Seller, LC Holdings S.A., a French societe anonyme ("LC
Holdings"), Agtrol International S.A., a French societe anonyme, Agtrol
Internacional (Argentina) S.A. ("Agtrol Argentina"), and Agtrol International
(Mexico) S.A. ("Agtrol Mexico"), the division known as Agtrol International,
which division engages in the business of developing, manufacturing and
marketing certain fungicides, bactericides and plant-growth regulators ("Agtrol
International");
WHEREAS, the parties desire (a) that pursuant to this Agreement, the
Seller sells to Buyer the assets of Agtrol International that are utilized by
Agtrol International to conduct its business in and from the United States of
America, including the China office and excluding the operations of the Facility
(the "U.S. Agtrol Division"); and (b) that Buyer purchase such assets of the
U.S. Agtrol Division from the Seller, on the terms and subject to the conditions
set forth herein; and
WHEREAS, defined terms have the meanings stated in Section 8.1.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, and upon the terms and subject
to the conditions set forth herein, the parties hereto hereby agree as follows:
ARTICLE 1
Purchase and Sale of Assets of the U.S. Agtrol Division
1.1 Sale of Purchased Assets. At the Closing, the Seller shall sell,
assign, convey and otherwise transfer to Buyer, and Buyer shall purchase from
the Seller, all right, title and interest of the Seller in and to the Purchased
Assets, free and clear of all Liens, other than Permitted Liens.
1.2 Purchased Assets. At the Closing, the Seller shall sell, assign,
convey and otherwise transfer to Buyer, and Buyer shall purchase from the
Seller, the following properties and assets of the Seller that are used or held
for use primarily by the U.S. Agtrol Division, as such exist on the Closing Date
(the "Purchased Assets"), free and clear of all Liens other than Permitted
Liens:
(a) Tangible Personal Property. All vehicles, machinery, equipment,
office furniture, office equipment, office materials and supplies and
other tangible personal property, all of which is identified on Schedule
1.2(a) (collectively the "Tangible Personal Property").
(b) Leasehold Interests. All leasehold interests in real property
wherever located, all of which are identified on Schedule 1.2(b)
(collectively the "Leasehold Interests").
(c) Inventory. (i) All inventories, wherever located, of finished
Copper Products and finished Non-Copper Products and (ii) all inventories
of raw materials, works in process, supplies and packaging materials to
the extent such raw materials, works in process, supplies and packaging
materials relate to Non-Copper Products, all of which are identified by
location on Schedule 1.2(c) (collectively the "Inventory").
(d) Contracts. All right, title and interest in and to contracts,
agreements, purchase orders, licenses and leases, all of which, other than
purchase orders entered into in the ordinary course of business, are set
forth on Schedule 1.2(d) (all of the foregoing, including purchase orders
entered into in the ordinary course of business, being collectively the
"Contracts").
(e) Intangibles. All right, title and interest in and to (i) all
copyrights, trademarks, trade names, logos, service marks, product
specifications, all governmental registrations, including the
Registrations, and data in support of Registrations (including any right
to any compensation for the use thereof) with respect to Copper Products
and Non-Copper Products and applications for any of the foregoing, (ii)
know-how, trade secrets, technology, software and production and other
processes and formulae related to the formulation or manufacture of
Non-Copper Products, other than the technology licensed under the License
Agreement, (iii) all rights under warranties from suppliers of Inventory
and Tangible Personal Property, (iv) telephone numbers, postal addresses,
domain names, web sites and other intangible proprietary property, (v) all
approvals, consents, licenses, permits, waivers and other authorizations
issued, granted, given or otherwise made available under the authority of
any government or political subdivision thereof or any executive,
judicial, legislative, regulatory or administrative agency, authority or
office, to the extent assignable to Buyer, and (vi) an undivided equal
co-ownership interest with the Seller in and to the know-how, trade
secrets, technology and production and other processes and formulae
related to the formulation or manufacture of Copper Products, all of which
(other than data in support of any governmental registrations) are
identified on Schedule 1.2(e).
(f) Prepaid Items. All right, title and interest of the Seller in
and to all prepaid items relating primarily to any of the other Purchased
Assets or the operation of the U.S. Agtrol Division, but only to the
extent of an adjustment to the Purchase Price therefor is paid to the
Seller in accordance with Section 2.3 (collectively "Prepaids").
(g) Business Records. All right, title and interest in and to all
engineering and production reports, consulting reports, health and safety
data marketing data and reports, forecasts, financial data and reports,
product catalogues, copies of personnel records, mailing lists, vendor and
supplier lists, customer lists and any other similar information in
tangible and/or electronic form (collectively the "Business Records").
(h) Goodwill. All goodwill in and going concern value including the
right to use the name "Agtrol" and any variations thereof and any goodwill
related thereto.
1.3 Excluded Assets. All properties, assets and business of the Seller
anywhere in the world, including the remaining businesses of the Seller other
than the U.S. Agtrol Division, other than the Purchased Assets, shall be
excluded from the Purchased Assets (collectively, the "Excluded Assets"). Such
Excluded Assets include:
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(a) all assets, properties, business and rights pertaining or
relating to any of the businesses owned, operated or managed by the Seller
(other than those which relate primarily to the U.S. Agtrol Division);
(b) all shares of capital stock, and all other equity interests and
securities, of or in the Seller or any of the subsidiaries thereof;
(c) the names Philipp Brothers Chemicals, Inc., Philipp Brothers,
Phibro, Phibro-Tech and any and all variations thereof and all goodwill
related thereto;
(d) all Excess Inventory and all inventories of raw materials, works
in process, supplies and packaging materials for the purpose of the
production of Copper Products;
(e) all cash, cash equivalents and similar type investments of the
Seller, such as certificates of deposit, Treasury bills and other
marketable securities on hand and/or in banks, and unearned insurance
premiums, excluding, however, Prepaids;
(f) all accounts receivable, notes receivable and other receivables
of the Seller, including all intracompany receivables, all of which are
identified on Schedule 1.3(f) (collectively the "Receivables");
(g) all personal effects that are owned by personnel of the U.S.
Agtrol Division and not by the Seller;
(h) all financial and tax reports, ledgers and books and records,
Tax returns and work sheets related to any of the foregoing, to the extent
not related primarily to the U.S. Agtrol Division;
(i) all organizational documents, corporate seals, minute books and
books and records that pertain to the organization, existence and/or
capitalization of the Seller;
(j) any and all policies of insurance, including any and all rights
thereunder, of the Seller;
(k) all rights of the Seller to enforce (i) the obligations of Buyer
to pay, perform or discharge the Assumed Liabilities and (ii) all other
obligations of Buyer under or in connection with, as well as all other
rights of the Seller under or in connection with, this Agreement and/or
any of the other Transaction Documents;
(l) all rights of the Seller to claims for refunds of Taxes;
(m) any and all rights necessary to defend against any and all
debts, liabilities and obligations retained by the Seller, including, but
not limited to, rights of setoff which the Seller may have with respect to
any of such debts, liabilities and obligations;
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(n) any and all claims or causes of action against third parties
that accrue or have accrued against or in favor of the Seller prior to the
Closing Date or that arise or have arisen out of any one or more events,
conditions or circumstances prior to the Closing Date;
(o) any assets of any compensation or benefit plan or arrangement of
the Seller;
(p) an undivided equal co-ownership interest with Buyer in and to
know-how, trade secrets, technology, and production and other processes or
formulae related to the formulation or manufacture of Copper Products;
(q) any and all rights of the Seller to patents related to the
formulation or manufacture of Copper Products, including the provisional
patent and other technology that is licensed pursuant to the License
Agreement, except to the extent licensed under the License Agreement; and
(r) the property, plant and equipment of the Seller, including the
plant located in Sumter, South Carolina (the "Sumter Plant").
Notwithstanding the foregoing, certain of the Excluded Assets may be acquired by
Buyer and/or its Affiliates as of the date hereof in connection with the
Argentina Stock Sale and/or the Mexico Stock Sale.
ARTICLE 2
Consideration
2.1 Purchase Price.
(a) In consideration of the sale, assignment and transfer of the
Purchased Assets, at the Closing (i) Buyer shall pay to the Seller the sum
of $14,775,000 (the "Cash Amount") and (ii) Buyer shall deliver to Seller
an unsecured promissory note substantially in the form attached as Exhibit
A hereto (the "Buyer Note") in the Aggregate Amount of $1,224,990 (the
"Note Amount," and together with the Cash Amount, as adjusted pursuant to
Sections 2.1(d) and 2.3, the "Purchase Price"). All payments under this
Section shall be by wire transfer of immediately available funds in U.S.
dollars to an account or accounts specified in writing by the Seller prior
to Closing.
(b) Commencing on the Closing Date or such prior date as the parties
hereto may mutually agree, the Seller shall take a physical inventory
count of the Inventory and shall conduct such count in accordance with
GAAP and shall employ counting procedures consistent with previous
physical inventory counts conducted by the U.S. Agtrol Division (the
"Inventory Count"). The Seller shall make its employees available for the
taking of the Inventory Count and Buyer and its representatives shall have
the right, as Buyer reasonably deems appropriate, to participate in the
taking of the Inventory Count. Each party shall be responsible for its
respective costs of the Inventory Count. The Inventory Count shall include
only such Inventory that: (i) is of a quality that is usable or saleable
condition in the ordinary course of business and has a shelf life of at
least (A) three (3) months in the case of antibiotics and (B) twelve (12)
months in all other count products, each calculated from the date of the
Inventory Count; (ii) is in the physical possession or control of
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the Seller at its facilities, at public warehouses, or in transit from its
suppliers; (iii) complies or will comply with all applicable laws, rule,
regulations and other specifications in order to permit the sale of such
Inventory in the ordinary course of business without any addition or other
modification to the physical makeup thereof; (iv) meets industry
standards; and (v) is not materially in excess of the normal stocking
patterns of the Seller based on the seasonal nature of its business.
Promptly after the Closing, the Seller shall prepare a statement setting
forth the U.S. dollar value of such Inventory as of the close of business
on the Effective Date (the "Effective Date Inventory Calculation"), using
the results of the Inventory Count as the basis for such calculation. Any
Inventory not included in the Effective Date Inventory Calculation as a
result of the foregoing shall be referred to herein as "Excess Inventory."
The Effective Date Inventory Calculation shall be prepared in accordance
with GAAP, in a manner consistent with the preparation of the Financial
Statements. The Seller shall use all reasonable efforts to cause the
Effective Date Inventory Calculation to be prepared and delivered to Buyer
within ten (10) days after the Closing. Buyer and its authorized
representatives, at Buyer's expense, shall have the right to review the
Effective Date Inventory Calculation delivered by the Seller to Buyer and
to review any working papers with respect to its preparation. Without
charge by Buyer, Buyer shall cause its employees to cooperate fully and on
a timely basis and to assist the Seller with its preparation of the
Effective Date Inventory Calculation, and shall provide the Seller and its
authorized representatives reasonable access to the books, records and
facilities that constitute part of the Purchased Assets for such purpose.
(c) Buyer shall be deemed to have accepted the Effective Date
Inventory Calculation, unless within ten (10) days after delivery thereof
to Buyer, Buyer gives written notice to the Seller of Buyer's objection to
any item therein, citing the item or principle disputed. If Buyer gives
such written notice of objection and the Seller and Buyer resolve such
dispute, such inventory calculation, as so resolved, shall be the
Effective Date Inventory Calculation. If Buyer gives such written notice
of objection and Buyer and Seller shall attempt to resolve such dispute in
accordance with Section 8.19.
(d) If (i) the Inventory as reflected in the Effective Date
Inventory Calculation exceeds $6,188,000, the Purchase Price shall be
increased by the U.S. dollar amount of such excess (the "Excess Inventory
Amount") and Buyer shall pay to the Seller the amount of such Excess
Inventory Amount and (ii) the Inventory as reflected in the Effective Date
Inventory Calculation is less than $6,188,000, the Purchase Price shall be
reduced by the U.S. dollar amount of such shortfall (the "Inventory Value
Shortfall") and the Seller shall pay to Buyer the amount of such Inventory
Value Shortfall. Any payment required under this Section 2.1(d) shall be
paid within five (5) Business Days after the final determination of the
Effective Date Inventory Calculation by wire transfer of immediately
available funds in U.S. dollars to an account or accounts designated by
the party entitled to such payment.
2.2 Assumed Liabilities; Excluded Liabilities. In addition to the Purchase
Price payable pursuant to Section 2.1, effective as of the Effective Date, Buyer
hereby agrees to assume, pay, perform, discharge and otherwise satisfy promptly
when due, and to indemnify and hold harmless the Seller from and against, only
(a) under the Contracts to the extent arising with respect to the period on or
after the Effective Date and to the extent such liabilities would be the
liabilities of the Seller but for the assignment of the Contract, and (b)
relating to the U.S. Agtrol Division or the use of the Purchased Assets
(including the sale of Inventory by Buyer) on or after the Effective Date,
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including any claims relating to health and safety, environmental, employment
and termination of employment on or after the Effective Date (collectively, the
"Assumed Liabilities"). Except as provided in this Agreement, Buyer shall not
assume or become liable or obligated for or on any contract or agreement of the
Seller or for any of any debt, liability or obligation of the Seller,
whatsoever, whether known or unknown, direct, contingent or otherwise, however
or whenever arising or asserted, including any liability or obligation (i) of
the Seller to its employees, customers, creditors or brokers, or to any
governmental authority, (ii) in respect of the Excluded Assets, or (iii)
relating to the U.S. Agtrol Division or the use of the Purchased Assets prior to
the Effective Date, including any claims relating to health and safety,
environmental, employment and termination of employment prior to the Effective
Date (all such liabilities and obligations of the Seller, herein referred to as
the "Excluded Liabilities"). Buyer shall be solely responsible for satisfying
all of the Assumed Liabilities and the Seller shall have no liability whatsoever
with respect thereto. The Seller shall be solely responsible for satisfying all
of the Excluded Liabilities and Buyer shall have no liability whatsoever with
respect thereto.
2.3 Certain Closing Prorations and Adjustments. All utility charges, real
estate taxes, personal property taxes, rental payments under Leasehold Interests
Leases, rental payments under leases of Tangible Personal Property of the Seller
to be assumed by Buyer pursuant to this Agreement and similar items (to the
extent included in the Purchased Assets), to the extent Buyer realizes any
benefit therefrom on or after the Effective Date, shall be prorated. To the
extent the net amount resulting from the foregoing is in favor of the Seller,
Buyer shall pay to the Seller, on the Closing Date, such net amount; to the
extent the net amount resulting from the foregoing is in favor of Buyer, the
Seller shall pay to Buyer, on the Closing Date, such net amount. In either
event, such payment shall be by wire transfer of immediately available funds in
U.S. dollars to an account or accounts designated by the party entitled to such
payment. If any of the apportionments set forth above are not accomplished as of
the Closing, then, as soon as practicable thereafter, representatives of the
Seller and Buyer shall examine all appropriate books and records in order to
make the determination of said apportionments. Buyer and/or the Seller, as the
case may be, shall make payment in respect thereof by May 18, 2001; provided
that if payments with respect to real or personal property taxes are based in
whole or in part on the previous year's taxes, Buyer and/or the Seller, as the
case may be, shall make payment to reflect the current year's taxes promptly
after the relevant tax amounts are determined. In addition, the Seller shall pay
to Buyer, on the Closing Date, by wire transfer of immediately available funds
in U.S. dollars to an account or accounts designated by Buyer, an amount equal
to all earned or accrued but unpaid sick pay, vacation pay, bonuses and the
like, with respect to Employees hired by Buyer, owing in respect of the period
preceding the Closing Date.
2.4 Non-assignability. From the date hereof and through and after the
Closing Date, the Seller shall use commercially reasonable efforts to obtain,
and Buyer shall cooperate with the Seller to obtain, approvals, consents and
waivers necessary to convey to Buyer each of the Purchased Assets, including
each Contract (including governmental registrations, permits, licenses and other
authorizations) and all claims, rights and benefits arising thereunder or
resulting therefrom (each a "Contract Interest"); provided, however, that the
Seller shall not be obligated to pay any consideration for any approval, consent
or waiver to any third party from whom such approval, consent or waiver is
requested. Notwithstanding anything to the contrary herein, to the extent that
any lease, contract, license, permit, registration, agreement, purchase order,
commitment, property
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interest or other asset or right included in the Purchased Assets (including
without limitation governmental registrations, permits, licenses and other
authorizations), or any claim, right or benefit arising thereunder or resulting
therefrom is not capable of being sold, assigned, transferred or conveyed
without the approval, consent or waiver of the issuer thereof or the other party
or parties thereto, or any other Person (including any government or
governmental regulatory agency or authority), this Agreement shall not, in the
event any such issuer or third party shall object to or not grant approval of
such assignment, constitute a sale, assignment, transfer or conveyance thereof,
or an attempted sale, assignment, transfer or conveyance thereof, absent such
approval, consent or waiver; and the Seller shall not be obligated to sell,
assign, transfer or convey to Buyer any of its rights or obligations in or to
any such Contract Interest without first obtaining all such necessary approvals,
consents or waivers. If any of such approvals, consents or waivers shall not
have been obtained as of the Closing, the Seller shall use commercially
reasonable efforts to cooperate with Buyer in, and to engage in, any reasonable
and lawful arrangement designed to provide the benefits of such Contract
Interests to Buyer and, if required, to hold the benefit of same as bare trustee
for Buyer to the extent permitted by applicable Law and Buyer shall indemnify
the Seller for all damages, losses, costs and liabilities relating to any such
performance occurring on or after the Effective Date. To the extent the Seller
provides the benefit of any Contract as a result of any such arrangement, Buyer
shall perform the obligations under such Contract arising in connection with
such benefits.
2.5 Collection of Receivables.
(a) Attached hereto as Schedule 2.5 is a list of all of the
Receivables. From the Closing Date until August 31, 2001 (the "Collection
Period"), Buyer shall use commercially reasonable efforts to collect for
the benefit of the Seller the Receivables (the "Collections"). All
payments received by Buyer during the Collection Period from account
debtors indebted on account of both the Receivables and accounts
receivable of Buyer arising after the Closing Date shall be applied first
to the indebtedness owed by the account debtor on account of the
Receivables, and then to any indebtedness owed by the account debtor to
Buyer arising subsequent to the Closing Date; provided, however, that
Buyer shall not be obligated to apply any of the Receivables to the extent
the applicable customer otherwise directs.
(b) Within five (5) Business Days after the end of each calendar
month during the Collection Period (i.e. by June 7, 2001, July 9, 2001,
August 7, 2001 and September 10, 2001), Buyer shall deliver to the Seller
a statement or report showing all Collections of Receivables during such
month. On the first Business Day of each week during the Collection
Period, Buyer shall forward to the Seller via overnight courier all
Collections in the form of checks received by Buyer during the prior week.
As of and from September 10, 2001, Buyer shall have no further obligations
with respect to Collections and/or Receivables, except that Buyer shall
promptly remit to the Seller all Receivables received by Buyer after the
Collection Period.
(c) Buyer shall not have any interest in or to any of the
Receivables and shall not agree to any return, settlement, discount,
credit, rebilling or reduction of any of the Receivables without the prior
written consent of the Seller. Buyer shall not assign, pledge or grant a
security interest in any of the Receivables to any third party or claim a
security interest or right in or to any
7
of the Receivables. Buyer shall not be obligated to undertake, to
institute or to join in any legal action to collect any Receivable.
(d) The Seller acknowledges that the maintenance of customer
relations is fundamental to the U.S. Agtrol Division.
(e) Subject to Section 2.5(c), Buyer and the Seller each agree that
they will immediately upon receipt transfer to the other party any cash or
other property received by such party, including in respect of Receivables
and vendor rebates, which rightfully belongs to the other party. In this
regard, if during the twelve (12) month period after the Closing Date
Buyer receives from any customer of the U.S. Agtrol Division as a return
any product purchased from the U.S. Agtrol Division prior to the Closing
Date which product is marketable, Buyer shall promptly pay to the Seller
an amount equal to the value of such returned product, using the value for
such product used to determine the final Effective Date Inventory
Calculation.
(f) During the Collection Period, the Seller may request Buyer to
contact debtors indebted on account of the Receivables in order to collect
such Receivables. Upon such request, Buyer, in its sole option, shall
promptly either perform such request or inform the Seller that the Seller
may perform such request itself. In the event such request (either by the
Seller or by Buyer on behalf of the Seller) does not result in the prompt
full payment of such Receivable, the Seller may contact such defaulting
account debtor.
2.6 Supply Agreement; License Agreement. At the Closing, the Seller and
Buyer shall enter into (a) a supply agreement, dated as of the Effective Date,
for the provision by the Seller to Buyer of products from the Sumter Plant,
substantially in the form of Exhibit B hereto (the "Supply Agreement") and (b)
an exclusive license agreement, dated as of the Effective Date, providing for
the licensing by the Seller to Buyer of that certain patent of the Seller for
the continuous process for the manufacture of granular fungicide products,
substantially in the form of Exhibit C hereto (the "License Agreement").
ARTICLE 3
Closing; Deliveries; Conditions Precedent
3.1 Closing.
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of XxXxxxxxx, Will &
Xxxxx, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local
time, on May 4, 2001 (the "Closing Date"). The effective date of this
Agreement shall be the Effective Date and all transactions contemplated
herein or in any other Transaction Document shall be deemed to have
occurred as of the Effective Date unless otherwise specifically provided
to the contrary.
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(b) All proceedings to be taken and all documents to be executed and
delivered by the parties at the Closing shall be deemed to have been taken
and executed simultaneously and no proceedings shall be deemed taken and
no documents executed or delivered until all have been taken, executed and
delivered.
3.2 Seller's Deliveries. At the Closing, the Seller shall deliver or cause
to be delivered to Buyer:
(a) a certificate of good standing or other appropriate evidence of
existence with respect to the Seller, as of a then recent date, issued by
the Secretary of State of the State of Delaware;
(b) the certificate described in Section 3.5(c) and copies of all
resolutions of the board of directors and stockholders, if applicable, of
the Seller authorizing the execution and delivery of this Agreement and
the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby by the Seller, certified by the corporate
secretary or assistant secretary thereof;
(c) duly authorized assignments by the Seller of the Contracts or
novations of the Contracts between Buyer and the other party thereto in
replacement of any such Contract incapable of assignment, such novated
Contract to be on the same terms and conditions as between the Seller and
such other party;
(d) bills of sale and such other instruments of assignment and
conveyance as may be requested by Buyer in order effectively to transfer
to Buyer title to the Purchased Assets as herein provided, all in form
reasonably requested by Buyer, executed by the Seller;
(e) the Supply Agreement, executed by the Seller;
(f) the License Agreement, executed by the Seller;
(g) any amount to be paid at Closing by the Seller to Buyer under
Section 2.3;
(h) an opinion of Golenbock, Eiseman, Assor & Xxxx, in form and
substance reasonably satisfactory to Buyer; and
(i) all other documents required by the terms of this Agreement or
the other Transaction Documents to be delivered by the Seller to Buyer at
the Closing, including evidence of termination of Liens on Purchased
Assets.
3.3 Buyer's Deliveries. At the Closing, Buyer will deliver to the Seller:
(a) the Cash Amount by wire transfer of immediately available funds
to such account(s) as the Seller shall specify;
(b) the Buyer Note, executed by Buyer;
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(c) an assumption agreement, substantially in the form of Exhibit D
hereto, executed by Buyer;
(d) the Supply Agreement, executed by Buyer;
(e) the License Agreement, executed by Buyer;
(f) the certificate described in Section 3.6(c) and a copy of
resolutions of Buyer authorizing the execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby by Buyer, certified by the
corporate secretary or assistant secretary of Buyer;
(g) a certificate of good standing with respect to Buyer, issued as
of a then recent date, by the Secretary of State of the State of Delaware;
(h) any amount to be paid at Closing by Buyer to the Seller under
Section 2.3;
(i) an opinion of XxXxxxxxx, Will & Xxxxx, in form and substance
reasonably satisfactory to the Seller; and
(j) all other documents required by the terms of this Agreement or
the other Transaction Documents to be delivered by Buyer to the Seller at
the Closing.
3.4 Condition Precedent of Buyer and the Seller. The obligations of each
of Buyer and the Seller under this Agreement to proceed with the Closing are
subject to the fulfillment or waiver by the affected party at or prior to the
Closing of the condition that no governmental authority or regulatory agency or
commission or court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, injunction or
other order which is in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise restraining or prohibiting
consummation of such transactions; provided, however, that the affected party
shall have used its best efforts to have any such order or injunction vacated.
3.5 Buyer's Conditions Precedent. The obligations of Buyer under this
Agreement to proceed with the Closing are subject to the fulfillment or waiver,
at the option of Buyer, of the following conditions at or prior to the Closing:
(a) The representations and warranties of the Seller contained in
this Agreement and each certificate delivered by the Seller at the Closing
pursuant to this Agreement shall be true and correct in all material
respects when made, and shall also be true and correct in all material
respects at the time of the Closing with the same force and effect as
though such representations and warranties were made at that time except
that representations and warranties made as of a specific, indicated date
shall be true and correct in all material respects as of such specified
date.
(b) Each covenant, agreement and obligation required by the terms of
this Agreement to be complied with and performed by the Seller at or prior
to the Closing shall have been complied with and performed, in all
material respects.
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(c) The Seller shall have delivered to and for the benefit of Buyer
a certificate of the Seller executed on the Closing Date certifying that
the conditions set forth in subsections (a) and (b) of this Section 3.5
have been fulfilled.
(d) All consents from Persons to any Contract listed on Schedule
3.5(d) that may be required in connection with this Agreement or to assure
that such contracts continue in full force and effect after the
consummation of the transactions contemplated hereby without giving any
contracting Person the right to terminate or modify any such Contract
shall have been obtained either by duly authorized assignment or novation
thereof.
3.6 Seller's Conditions Precedent. The obligations of the Seller under
this Agreement to proceed with the Closing are subject, to the fulfillment or
waiver, at the option of the Seller, of each of the following conditions at or
prior to the Closing:
(a) The representations and warranties of Buyer contained in this
Agreement and each certificate delivered by it at the Closing pursuant to
this Agreement shall be true and correct in all material respects when
made, and shall also be true and correct in all material respects at the
time of the Closing with the same force and effect as though such
representations and warranties were made at that time except that
representations and warranties made as of a specific, indicated date shall
be true and correct in all material respects as of such specified date.
(b) Each covenant, agreement and obligation required by the terms of
this Agreement to be complied with and performed by Buyer at or prior to
the Closing shall have been complied with and performed, in all material
respects.
(c) Buyer shall have delivered to and for the benefit of the Seller
a certificate of Buyer executed on the Closing Date certifying that the
conditions set forth in subsections (a) and (b) of this Section 3.6 have
been fulfilled.
ARTICLE 4
Representations and Warranties of the Seller
Except as otherwise set forth in the disclosure schedule delivered by the
Seller to Buyer on the date of the execution by Buyer of this Agreement (the
"Disclosure Schedule"), the Seller hereby represents and warrants to Buyer as
follows:
4.1 Organization, Standing and Qualification; Authority.
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Seller is
duly qualified to do business and is in good standing as a foreign
corporation under the laws of each jurisdiction where the failure to be so
qualified would result in a Material Adverse Effect and each such
jurisdictions is listed on Schedule 4.1. The Seller has the requisite
corporate power and corporate authority to own and lease its assets and
properties, including the Purchased Assets, and to carry on its business
in the places such assets and properties are now owned or leased and where
such business is presently conducted.
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(b) The Seller has all requisite corporate power and corporate
authority to execute and deliver this Agreement, the Supply Agreement, the
License Agreement and all other documents executed and/or delivered in
connection herewith (collectively the "Transaction Documents") to which it
shall be a signatory and to carry out the transactions contemplated hereby
and thereby. This Agreement has been duly executed by, and constitutes the
legal, valid and binding obligation of, the Seller and each of the other
Transaction Documents, when executed and delivered by the Seller, shall
constitute the legal, valid and binding obligation of the Seller, in each
case enforceable against it in accordance with their respective terms
subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles. All corporate proceedings required to be
taken by the Seller relating to the execution, delivery and performance of
this Agreement and the other Transaction Documents, and the consummation
of the transactions contemplated hereby and thereby, have been duly taken.
4.2 No Violation; Qualification. Except as may be caused or made necessary
by facts relating solely to Buyer: (a) the execution, delivery and performance
of this Agreement and the other Transaction Documents by the Seller and the
consummation by it of the transactions contemplated by this Agreement and by the
other Transaction Documents will not (i) conflict with or violate any provision
of the certificate of incorporation or bylaws of the Seller, (ii) with or
without the giving of notice or the passage of time, or both, result in a breach
of, or violate, or be in conflict with, or constitute a material default under,
or permit the termination of, or cause or permit acceleration under, any
material agreement, instrument, debt or obligation to which the Seller is a
party or to or by which it is subject or bound, or (iii) violate any law, rule
or regulation or any order, judgment, decree or award of any court, governmental
authority or arbitrator to or by which the Seller is subject or bound, except as
would not reasonably be expected to have a material adverse effect on the
ability of the Seller to consummate the transactions contemplated by this
Agreement and by the other Transaction Documents; and (b), except as provided
herein, no material consent, approval or authorization of, or declaration,
filing or registration with, or notice to, any governmental or regulatory
authority or any other third party is required to be obtained or made by the
Seller in connection with the execution, delivery and performance of this
Agreement and the other Transaction Documents or the consummation of the
transactions contemplated by this Agreement and by the other Transaction
Documents, other than those consents that are the obligation of Buyer to obtain.
4.3 Financial Statements. Attached as Schedule 4.3 are true and complete
copies of the following financial statements (the "Financial Statements"):
unaudited balance sheets of the U.S. Agtrol Division as of June 30, 1999 and
June 30, 2000 and, in each case, the related statements of income and cash flow
for the fiscal years then ended prepared by management of the U.S. Agtrol
Division and the unaudited balance sheet of the U.S. Agtrol Division as of March
31, 2001 prepared by management of the U.S. Agtrol Division (the "Balance
Sheet"). The Financial Statements fairly present in all material respects the
financial position of and the results of operations of the U.S. Agtrol Division
in accordance with GAAP, consistently applied, as of the respective dates
thereof and for the fiscal years covered thereby, subject to the absence of
footnotes and, in the case of all interim period Financial Statements, to
reasonable year-end adjustments.
4.4 Absence of Undisclosed Liabilities. The Seller has no material debt or
material liability relating to the U.S. Agtrol Division that would be required
in accordance with U.S. generally
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accepted accounting principles ("GAAP") to be set forth or reserved against on a
balance sheet of the U.S. Agtrol Division that has not been set forth on the
Balance Sheet, except for (i) those incurred after the date of the Balance Sheet
in the ordinary course of business consistent with past practice, (ii) covered
by insurance, indemnification or comparable arrangements or (iii) which would
not reasonably be expected to have a Material Adverse Effect.
4.5 Absence of Certain Changes or Events. Since the date of the Balance
Sheet, there has been no change that, individually or in the aggregate, would
have a material adverse effect on the U.S. Agtrol Division, whether or not
covered by insurance, and the Seller has no knowledge of any such change that
could reasonably be expected to occur, nor has there been any damage,
destruction or loss that could, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the U.S. Agtrol Division, whether
or not covered by insurance other than as a result of downturn suffered
generally by the Seller's industry. Except as expressly contemplated or
permitted by this Agreement, since the date of the Balance Sheet: (a) there has
not been any increase in the rate or terms of salary or bonus payable by the
Seller to any of the key employees of the U.S. Agtrol Division, except increases
occurring in the ordinary course of business in accordance with past practice;
(b) the Seller has not entered into any agreement or transaction relating to the
U.S. Agtrol Division, outside the ordinary course of business, consistent with
past practice, (c) the Seller has not materially changed its accounting methods,
principles or practices in respect of the U.S. Agtrol Division, including its
payables and receivables practices, other than as required by changes in GAAP,
(d) the Seller has not sold, transferred, leased to others or otherwise disposed
of any of the assets or properties relating primarily to the U.S. Agtrol
Division, except in the ordinary course of business, consistent with past
practice, (e) the Seller has not experienced any labor union organizing
activity, had any actual or threatened employee strike, work stoppage, slow down
or lockout, or had any change in its relations with its employees as a group, in
each case relating to the U.S. Agtrol Division, (f) the Seller has complied in
all material respects with each law, rule or regulation applicable to the
conduct of the U.S. Agtrol Division, and (g) the Seller has not entered into any
agreement to effect any of the foregoing or otherwise conducted the business of
the U.S. Agtrol Division other than in the ordinary course of business,
consistent with past practice.
4.6 Tax Liabilities. The Seller has paid all material liabilities relating
to the U.S. Agtrol Division for federal, state and local taxes or similar
charges imposed by any taxing authority, including federal, state, local and
foreign income, sales, use, excise, franchise, value added, withholding,
transfer, real property and personal property taxes (collectively, "Taxes") due
and payable by the Seller with respect to the period prior to the Closing Date.
The Seller has timely filed, or shall timely file all required returns, reports
and other instruments relating to any and all such Taxes. There are no liens for
Taxes upon any of the Purchased Assets.
4.7 Leasehold Interests.
(a) Schedule 4.7 identifies all real property interests of the
Seller, including fee interests, leasehold interests and easements
necessary to conduct or primarily used in the operation of the U.S. Agtrol
Division.
(b) The Seller is the holder of valid, enforceable and subsisting
interests as lessee under the leases of Leasehold Interests attached to
Schedule 4.7 (the "Leases"). The copies of the
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Leases set forth on Schedule 4.7 are complete, accurate, true and correct.
Except as set forth on Schedule 4.7: (i) each of the Leases is in full
force and effect and has not been modified, amended, or altered, in
writing or otherwise; (ii) to the Seller's knowledge, (A) all material
obligations of the landlord or lessor under the Leases which have accrued
have been performed, other than any lease for Leasehold Interests in
China, and (B) no party is in material default under any Lease, other than
any lease for Leasehold Interests in China; (iii) all obligations of the
Seller under the Leases which have accrued have been performed; and (iv)
the Seller is not in default in any material respect under any Lease and
no circumstance presently exists which, with notice or the passage of
time, or both, would give rise to a default by the Seller.
(c) Subject to obtaining the consent of the applicable landlord, the
Seller has full legal power and authority to assign its rights under the
Leases to Buyer in accordance with this Agreement.
(d) The Seller has the right to use the Leasehold Interests for the
operations currently conducted thereon. The Seller has not received any
notice of any pending or threatened real estate Tax deficiency or
reassessment or condemnation of all or any portion of any of the Leasehold
Interests.
4.8 Other Property. The books and records of the Seller reflect in all
material respects the Tangible Personal Property. No Tangible Personal Property
is held under any lease, security agreement, conditional sales contract or other
title retention or security arrangement, or is located other than in the
possession or under the control of any of the Seller. The Tangible Personal
Property is in good operating condition, reasonable wear and tear excepted; to
the Seller's knowledge, conforms with all applicable laws; and has been
maintained by the Seller in the ordinary course. All items constituting the
Tangible Personal Property shall be delivered at the Closing with all
documentation in the Seller's possession or under its control for Buyer to
obtain all permits, licenses and registrations required for their operation.
4.9 Registered Patents, Trade Names, Trademarks and Copyrights. Schedule
4.9 sets forth a list of all registered patents, trade names, trademarks,
service marks and copyrights, and all applications in respect of the foregoing,
owned, registered or licensed by the Seller that are used primarily in
connection with the U.S. Agtrol Division. To the knowledge of the Seller, there
is no infringement or alleged infringement of any such patent, trade name,
trademark, service xxxx or copyright. To the knowledge of the Seller, the Seller
is not infringing on any patent, trade name, trademark, service xxxx or
copyright of any other Person relating primarily to the U.S. Agtrol Division.
Except as otherwise set forth herein, the Seller is not a party to any license
agreement or arrangement, whether as licensor, licensee, franchisor, franchisee
or otherwise, with respect to any patent, trademark, service xxxx, trade name or
copyright relating primarily to the U.S. Agtrol Division.
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4.10 Title to Assets. At the Closing, the Seller will have, and will,
subject to any requisite consents, approvals and re-registrations, convey to
Buyer, good and valid title to the Purchased Assets, free and clear of any Lien
other than Permitted Liens. Except as set forth on Schedule 4.10, the Purchased
Assets constitute all of the assets used by the Seller primarily in connection
with the U.S. Agtrol Division and are adequate for the conduct of the U.S.
Agtrol Division as presently conducted by the Seller (excluding the property
related to general, administrative and other services supplied by the Seller or
an Affiliate thereof, the property to be licensed to Buyer pursuant to the
License Agreement and certain of the benefits of the Facility under the Supply
Agreement).
4.11 Contracts. To the knowledge of the Seller, all of the Contracts are
in full force and effect. As of the Closing Date, the Seller shall have paid in
full all amounts due as of the Closing Date under each Contract and will have
satisfied in full or provided for all of its obligations thereunder due or to be
performed as of the Effective Date in the ordinary course of business. Neither
the Seller nor, to the knowledge of the Seller, any other party to any Contract
is in material breach thereof or in default thereunder in any material respect
and no fact, event or circumstance exists with respect to any Contract that,
with the giving of notice or lapse of time, would constitute such a breach or
default, except for such breaches, defaults and events as to which requisite
waivers or consents have been obtained. Except as specifically identified on
Schedule 4.11, no approval or consent of, or notice to or filing with, any
Person is required under the terms of any Contract in order that such Contract
continues in full force and effect for the benefit of Buyer following the
consummation of the transactions contemplated by this Agreement. Schedule 4.11
sets forth a list of all Contracts.
4.12 Compliance with Laws. At all times since January 1, 1999: the Seller
has used, and is presently using, the Purchased Assets, and the Purchased Assets
have been used, in compliance in all material respects with all federal, state
and local laws, statutes, rules, regulations, ordinances, orders and other
requirements of law ("Laws") applicable to the Seller and the Purchased Assets
including matters relating to anti-competitive practices, discrimination,
employment, zoning, land-use concerns, and health and safety practices and
requirements. The Seller is not subject to any judicial, governmental or
administrative order, judgment or decree and is not presently charged with or
under any governmental or administrative investigation, or, to the Seller's
knowledge, threatened with any such investigation or proceeding, in any case
relating to the U.S. Agtrol Division. The Seller has not received any notice of
any uncorrected violation of any Law asserted by any governmental agency or
authority with respect to the U.S. Agtrol Division.
4.13 Litigation and Claims.
(a) Except as set forth on Schedule 4.13, there is not pending, nor,
to the knowledge of the Seller, threatened, any suit, action, arbitration,
or legal or administrative proceeding, against the Seller, arising out of
the operations of the U.S. Agtrol Division, or in connection with the
transactions contemplated by this Agreement or the other Transaction
Documents, in each case which is reasonably expected to have a Material
Adverse Effect or a material adverse effect on the ability of Buyer or the
Seller to consummate the transactions contemplated by this Agreement or
any other Transaction Document including any claims by (i) any past or
present employee of the U.S. Agtrol Division for compensation or otherwise
arising out of his or her employment with the Seller, (ii) any customer or
other Person relating to any products sold
15
or provided by the U.S. Agtrol Division, whether pursuant to any warranty
(express or implied), whether due to injury to persons or property
suffered by any Person as a result of the sale of any such product by the
Seller or otherwise, or (iii) any supplier of the U.S. Agtrol Division.
Seller has not received notice of any action, arbitration or proceeding or
of any claim of default or non-performance by the Seller asserted by any
Person under any contract or other agreement with the Seller that could
have a Material Adverse Effect or could have a material adverse effect on
the ability of Buyer or the Seller to consummate the transactions
contemplated in this Agreement or the other Transaction Documents. The
Seller is not in violation in any material respect of any order, writ,
injunction, decree or settlement agreement of or with any federal, state,
local or foreign court, department, agency or instrumentality with respect
to the U.S. Agtrol Division.
(b) Set forth on Schedule 4.13 are true, complete and correct copies
of all written product and service warranties and guarantees, and
descriptions of all unwritten product and service warranties and
guarantees, in each case given, made or agreed to by the Seller in respect
of the U.S. Agtrol Division in connection with the sale of products,
services or otherwise, other than those set forth on Seller's standard
form of confirmation attached to Schedule 4.13. Schedule 4.13 sets forth
each pending claim against the Seller for more than $10,000 by any
customer of the U.S. Agtrol Division or any other Person to return
products to the U.S. Agtrol Division, by reason of alleged overshipments,
defective products or otherwise, and every such claim made, resolved or
settled since January 1, 1999 for more than $10,000. Except as set forth
on Schedule 4.13, there are no claims for more than $10,000 against the
Seller in respect of the U.S. Agtrol Division to return products, by
reason of alleged overshipments, defective products or otherwise.
(c) Schedule 4.13 lists (i) all product recalls and all liabilities,
obligations and damages of any kind for death, disease or injury to
Persons, business or property relating to products of the U.S. Agtrol
Division arising with respect to any period after January 1, 1999
involving amounts in excess of $10,000 (and all product recalls with
regard to the amount involved) (each a "Product Liability Matter") and
(ii) all product warranty claims relating to any products of the U.S.
Agtrol Division arising with respect to any period after January 1, 1999
involving amounts in excess of $10,000 (each a "Product Warranty Matter").
4.14 Permits. Schedule 4.14 lists all governmental (including federal,
state and local governments and political subdivisions thereof and regulatory or
administrative agencies, authorities and offices) authorizations, licenses,
franchises, waivers and permits necessary for the operation of the Purchased
Assets and the conduct of the business of the U.S. Agtrol Division as currently
operated and conducted, including all registrations issued in respect of the
U.S. Agtrol Division by the U.S. Environmental Protection Agency under FIFRA or
otherwise (the "Registrations") and by state agencies under state law, rule,
regulation or ordinance with respect to such Copper Products and Non-Copper
Products or the active ingredients therein, excluding the conduct of business in
China (collectively, the "Permits"). Schedule 4.14 lists all of the Copper
Products and the Non-Copper Products. The Seller has obtained all Permits and
all such Permits are presently in full force and effect. The Seller is
conducting the U.S. Agtrol Division in compliance in all material respects with
all Permits and no action, proceeding or claim is pending, or to the knowledge
of the Seller, threatened to revoke, modify, terminate or invalidate any Permit
in any material respect.
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4.15 Employees.
(a) Schedule 4.15 attached hereto contains the names and addresses
of all employees of the U.S. Agtrol Division or of the Seller who provide
substantially all of their services to or for the benefit of the U.S.
Agtrol Division (the "Employees"), the job designations of each such
employee, and the compensation (including bonus) paid to each such
employee, presently and for calendar year 2000. Such Schedule also sets
forth information concerning any disciplinary proceeding or action taken
with respect to any such employees, including any information concerning
positive drug tests during the three (3) years prior to the Closing Date.
(b) Schedule 4.15 sets forth (i) all outstanding employment
agreements or commitments and a description of any oral employment
agreements or commitments to which the Seller is a party or by which the
Seller is bound relating to U.S. Agtrol Division, (ii) all outstanding
consulting, retainer or service agreements or arrangements for the
rendition of services to the Seller or to which the Seller is a party or
by which the Seller is bound relating to the U.S. Agtrol Division, (iii)
any agreement, policy or practice that requires the Seller to pay
termination or severance pay in respect of the U.S. Agtrol Division and
(iv) any conciliation agreement, consent decree or settlement between the
Seller and any of its employees in respect of the U.S. Agtrol Division.
(c) Schedule 4.15 attached hereto sets forth a list of any former
management or sales employees and other key employees of the U.S. Agtrol
Division who left the employ of the U.S. Agtrol Division since July 1,
2000 for any reason, including the job designation of each such employee
and the reason such employee left the Seller's employ.
4.16 Employment Contracts and Benefits.
(a) The Seller is not a party to any contract or agreement with any
labor organization, and the Seller has not agreed to recognize any union
or other collective bargaining unit, and no union or other collective
bargaining unit has been certified as representing any of the employees of
the U.S. Agtrol Division. The Seller has no knowledge of any
organizational effort currently being made or threatened by or on behalf
of any labor union with respect to employees of the U.S. Agtrol Division.
No unfair labor practice charges are pending, or to the Seller's
knowledge, threatened, against the Seller with respect to the U.S. Agtrol
Division. No strikes or arbitration proceedings by employees of the Seller
involving labor matters affecting the U.S. Agtrol Division are pending or,
to the Seller's knowledge, threatened. The Seller has not experienced any
strikes, work stoppage or other material labor difficulties of any nature
with respect to the employees of the U.S. Agtrol Division in the past five
(5) years.
(b) With respect to the U.S. Agtrol Division, the Seller has
complied in all material respects with all Laws relating to the employment
of labor, including those Laws relating to safety, health, wages, hours,
collective bargaining, unemployment insurance, workers' compensation,
equal employment opportunity and payment and withholding of taxes.
(c) Schedule 4.16 sets forth a complete and correct list of all
employee benefit plans, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all
employment, compensation, bonus, stock option, stock purchase,
17
restricted stock, incentive, deferred compensation, retiree medical or
life insurance, supplemental retirement, severance, change of control or
other benefit plans, programs or arrangements, in each case, that is
maintained, contributed to or sponsored by the Seller on behalf of current
or former employees of the U.S. Agtrol Division (collectively, the
"Benefit Plans").
(d) With respect to each Benefit Plan, the Seller has furnished
Buyer with a complete and accurate copy of (i) the plan document or other
governing contract, as amended and (ii) the most recently distributed
summary plan description and summary of material modifications.
(e) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in
any payment becoming due to any current or former employee of the U.S.
Agtrol Division, (ii) increase any benefits under any Benefit Plan, or
(iii) result in the acceleration of the time of payment, vesting or other
rights with respect to any such benefits.
4.17 Fees. The Seller is not obligated to pay any fee or commission to any
broker, finder or investment banker in connection with the transactions
contemplated by this Agreement, other than the Seller's responsibility for the
fees of Young & Partners LLC incurred by the Seller in connection with this
Agreement. The Seller shall promptly pay such fees as and when due.
4.18 Environmental Laws. The Seller has conducted and currently conducts
the business and operation of the U.S. Agtrol Division in compliance in all
material respects with all Environmental Laws. The Seller has obtained all
material environmental permits and authorizations necessary for the operation of
the Purchased Assets and the business of the U.S. Agtrol Division, and all such
permits are in full force and effect and the Seller is in compliance in all
material respects with the terms and conditions of all such permits. The Seller
has not received any written notice, or is aware, of any current administrative
or judicial investigation, proceeding, order, or action with respect to
violations, alleged or proven, of Environmental Laws by the U.S. Agtrol Division
or otherwise involving the Leasehold Interests or the operations of the
Purchased Assets and the business of the U.S. Agtrol Division conducted thereat.
No Hazardous Substance that presents any risk to human health or the environment
that requires remediation or removal under Environmental Laws is present at the
Leasehold Interests, and no amount of Hazardous Substance is present at the
Leasehold Interests as a result of any action or inaction of the Seller in
violation of Law. "Environmental Laws" means all applicable local, state and
federal statutes and regulations relating to the protection of human health and
the environment, including the Federal Insecticide, Fungicide, and Rodenticide
Act ("FIFRA") and the regulations adopted thereunder.
4.19 Disclosure of Confidential Information to Others; Restrictive
Agreements.
(a) Schedule 4.19 sets forth a true and complete list of all Persons
(other than Buyer, Buyer's agents and representatives and employees of the
U.S. Agtrol Division) to whom the Seller has disclosed all or any material
portion of the Business Secrets during the last two (2) years prior to the
Effective Date, including the name and address of each such Person and a
copy of any non-disclosure or other agreement executed by such Person with
respect to the disclosed information. Except as set forth on Schedule
4.19, no other Person has had possession of or access to, whether with or
without the Seller's consent, the customer list of the U.S. Agtrol
Division or any other
18
Business Secret during the two (2) years prior to the Effective Date. The
disclosure of Business Secrets by the Seller to the employees of the U.S.
Agtrol Division was solely for the purpose of allowing such employees to
conduct the business of the U.S. Agtrol Division on behalf of the Seller;
the Seller has given no such employee the right to use the Business
Secrets for any other purpose; and the Seller is hereby transferring to
Buyer all of its rights against any Person who has in the past or may in
the future violate such limited use rights. For the purposes of the this
Agreement, "Business Secrets" means any of the following information and
materials pertaining or relating to the U.S. Agtrol Division and/or the
Purchased Assets, to the extent the Seller reasonably deemed such
information to be confidential: customer lists, sales and marketing
strategies, sales and gross profit data, cost data, contract information,
know-how (other than Copper Product know-how) and the terms of this
Agreement, excluding information readily available to the public, whether
or not in written form and whether or not the Seller has possession
thereof.
(b) Schedule 4.19 contains all currently existing and effective
contracts, agreements or arrangements of any kind, or if oral, a
description thereof, to which the Seller is a party or by which the Seller
is otherwise bound and which restrict the Seller or any of its Affiliates
from engaging in any line of business or from competing with any other
Person anywhere in the world with respect to the business of the U.S.
Agtrol Division as currently conducted or contemplated.
(c) Schedule 4.19 contains all non-disclosure or similar such
agreements to which the Seller is a party that bind the Seller with
respect to information provided or made available to the Seller in
connection with the U.S. Agtrol Division.
4.20 Books and Records. The Seller maintains only one set of books and
records with respect to the U.S. Agtrol Division, which books and records are
maintained in the ordinary course; all such books and records are in all
material respects an accurate reflection of all transactions entered into by the
Seller with respect to the U.S. Agtrol Division. Neither the Seller nor anyone
acting on its behalf has made any payments or otherwise provided any benefits,
direct or indirect, to any customer, supplier, governmental agency or otherwise,
or to any employee or agent thereof, in connection with the U.S. Agtrol Division
for the purpose of acquiring purchase or sales relationships of the business of
the U.S. Agtrol Division or otherwise, that (a) are be unknown or undisclosed to
the employers of the persons who received any such payments; (b) are unlawful,
in any respect; or (c) are not fully disclosed as such on the books and records
of the Seller.
4.21 Validity of Representations and Warranties. No representation or
warranty of the Seller and no statement, report, or certificate furnished or to
be furnished by or on behalf of the Seller or any of its respective employees,
representatives or agents in connection herewith, contains or will contain any
untrue statement of a material fact or omits, or will omit, to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.
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ARTICLE 5
Representations and Warranties of Buyer
Buyer represents and warrants to the Seller that:
5.1 Organization and Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Buyer has all requisite corporate power and corporate authority to own and lease
its assets and properties and to carry on its business as and in the places such
assets and properties are now owned or leased and where such business is
presently conducted.
5.2 Authority. Buyer has all requisite corporate power and corporate
authority to enter into this Agreement, the other Transactions Documents and the
Buyer Note and to carry out the transactions contemplated hereby and thereby.
This Agreement has been duly executed by Buyer constitutes, and each other
Transaction Document and the Buyer Note, when executed and delivered by Buyer,
will constitute, the legal, valid and binding obligations of Buyer, in each case
enforceable against it in accordance with their respective terms subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. All corporate proceedings and actions required to be taken by Buyer
relating to the execution, delivery and performance of this Agreement, the other
Transaction Documents and the Buyer Note, and the consummation of the
transactions contemplated hereby and thereby, have been duly taken.
5.3 Litigation. There is no action, suit, proceeding, arbitration or
investigation pending, or, to the knowledge of Buyer, threatened, against Buyer
or any of its Affiliates, and there is not outstanding any order, writ,
injunction, award or decree of any court or arbitrator or any federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality to which Buyer or any of its Affiliates is subject, in either
case that could reasonably be expected to affect materially adversely the
ability of Buyer to consummate the transactions contemplated by this Agreement
and by the other Transaction Documents.
5.4 Financing. At the Closing, Buyer will have all funds necessary to
consummate the transactions contemplated by this Agreement and by the other
Transaction Documents.
5.5 No Violation; Qualification. Except as may be caused or made necessary
by facts relating solely to the Seller: (a) the execution, delivery and
performance of this Agreement and the other Transaction Documents by Buyer and
the consummation by it of the transactions contemplated by this Agreement and by
the other Transaction Documents will not (i) conflict with or violate any
provision of the certificate of incorporation or bylaws of Buyer, (ii) with or
without the giving of notice or the passage of time, or both, result in a breach
of, or violate, or be in conflict with, or constitute a material default under,
or permit the termination of, or cause or permit acceleration under, any
material agreement, instrument, debt or obligation to which Buyer is a party or
to or by which it is subject or bound, or (iii) violate any law, rule or
regulation or any order, judgment, decree or award of any court, governmental
authority or arbitrator to or by which Buyer is subject or bound, except as
would not reasonably be expected to have a material adverse effect on the
ability of Buyer
20
to consummate the transactions contemplated by this Agreement and by the other
Transaction Documents; and (b) no material consent, approval or authorization
of, or declaration, filing or registration with, or notice to, any governmental
or regulatory authority or any other third party is required to be obtained or
made by Buyer in connection with the execution, delivery and performance of this
Agreement and the other Transaction Documents or the consummation of the
transactions contemplated by this Agreement and by the other Transaction
Documents, other than those consents that are the obligation of the Seller to
obtain.
5.6 Brokerage or Finder's Fee. No Person is entitled to any brokerage
commissions or finder's fees in connection with the transactions contemplated by
this Agreement as a result of any action taken by Buyer, any of its Affiliates
or any of its or their officers, directors or employees.
5.7 Investigation.
(a) Buyer has made its own inquiry and investigation into, and,
based thereon, has formed an independent judgment concerning, the U.S.
Agtrol Division and the Purchased Assets to the extent permitted by the
information provided by the Seller.
(b) In connection with Buyer's investigation of the U.S. Agtrol
Division and the Purchased Assets, Buyer has received from the Seller
certain projections and other forecasts, plans and budgets and has made
its own investigation thereof. Buyer acknowledges that there are
uncertainties inherent in attempting to make such projections, forecasts,
plans and budgets, that Buyer is familiar with such uncertainties. Buyer
is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections, forecasts, plans and
budgets so furnished to it. Buyer agrees that it shall be estopped from
making any claim against the Seller for breach of representation or
warranty to the extent that Buyer knew such representation or warranty to
be inaccurate or untrue at Closing.
ARTICLE 6
Certain Covenants
6.1 Consents. The Seller shall use commercially reasonable efforts to
obtain all consents required of third persons in connection with the
transactions contemplated by this Agreement, including consents in respect of
Contracts, either by assignment or novation thereof, and Buyer shall provide to
the Seller reasonable cooperation in connection therewith. Without limiting the
generality of the foregoing, Buyer (a) shall provide such financial statements
and other financial information with respect to Buyer as may reasonably be
requested, and (b) shall use commercially reasonable efforts, at no cost to
Buyer, and shall assist the Seller in its efforts, at no cost to Buyers, to
obtain for the benefit of the Seller, from the other party or parties thereto,
the release of the Seller from all liabilities and obligations under the
Contracts accruing or arising with respect to the period on or after the
Effective Date. The provisions of this Section 6.1 shall survive the Closing.
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6.2 Certain Employee Matters.
(a) Buyer shall offer employment to all of the employees employed by
the Seller exclusively for the U.S. Agtrol Division in the United States
listed on Schedule 6.2 (the "U.S. Employees") as of June 1, 2001
("Employment Date"); provided, however, that Buyer may condition such
offer of employment on (i) any such U.S. Employee's continuing to be a
U.S. Employee on the Employment Date and (ii) the Seller's not having
given notice to such U.S. Employee prior to the Employment Date that such
U.S. Employee's employment shall be terminated; provided, further, that no
U.S. Employee who is on layoff or leave of absence (including disability)
on the Employment Date shall be deemed a U.S. Employee unless and until
such employee returns to active employment with the U.S. Agtrol Division.
Each such offer of employment shall be at the same salary and with
substantially the same medical and health insurance benefits as in effect
immediately prior to the Employment Date. To the extent that service is
relevant for eligibility and vesting under any retirement or employee
benefit plan, program or arrangement established or maintained by Buyer or
any of its Affiliates for the benefit of U.S. Employees, such plan,
program or arrangement shall credit all U.S. Employees for eligibility and
vesting service on or prior to the Employment Date with the Seller or any
Affiliate or predecessor thereof. Buyer shall cause to be waived all
limitations on benefits relating to any pre-existing conditions and
recognize, for purposes of annual deductible and out-of-pocket limits
under its medical and dental plans, deductible and out-of-pocket expenses
paid by U.S. Employees and their dependents under the medical and dental
plans in which they participate in the calendar year of the Employment
Date. Each U.S. Employee who accepts his or her continuation of employment
offer shall be, as effective as of the Employment Date, an "at will"
employee of Buyer, unless Buyer and such U.S. Employee shall enter into a
written employment agreement to the contrary. Nothing herein shall
restrict Buyer's ability to change or terminate the benefits or benefit
plans provided to any U.S. Employees or to change the "at will" status of
such employees. The Seller shall remain responsible for, as an Excluded
Liability, and shall pay, any severance claims, costs and causes of
action, of all U.S. Employees with respect to the period on or prior to
the Effective Date and with respect to the Seller's severance policies.
(b) Neither the Seller nor Buyer is planning or contemplating, or
has made or taken, and neither the Seller nor Buyer shall make or take,
any decisions or actions concerning the U.S. Agtrol Division's employees
that would require the service of notice under the U.S. Worker Adjustment
and Retraining Act of 1988, as amended (the "WARN Act"), or the service of
notice, making of a filing or receipt of any other approval under any
employee or similar notice, filing or approval provision of applicable
foreign, federal, state or local Law, including any decision not to offer
employment to any employees of the U.S. Agtrol Division that would cause a
violation of the WARN Act or any such similar foreign, federal, state or
local Law.
(c) This Section 6.2 shall operate exclusively for the benefit of
the parties to this Agreement (and their permitted assigns) and not for
the benefit of any other Person.
(d) Buyer shall not assume any Benefit Plan or liability or
obligation under any plan, contract, payroll practice or other arrangement
that the Seller sponsors, contributes to, or participates in, or under
which the Seller has or may have any liability or obligation, whether or
not disclosed under this Agreement or in any Schedule.
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(e) Buyer shall not assume, and the Seller shall retain and
indemnify and hold Buyer harmless from and against, all liabilities and
claims brought (i) by current or former employees of the Seller
exclusively for the U.S. Agtrol Division (or their respective dependants
and beneficiaries) in connection with their employment or termination of
employment with the Seller on or prior to the Effective Date, (ii) with
respect to any Benefit Plan, including any liability for payment of any
claim thereunder or that otherwise arose as a result of events or
conditions occurring on or prior to the Effective Date, or (iii) by any
current or former independent contractor of the Seller exclusively for the
U.S. Agtrol Division (or its respective dependents and beneficiaries) in
connection with (A) any challenge to its classification as an independent
contractor or (B) any Benefit Plan, and (iv) any employee benefit plan or
arrangement maintained by the Seller or any ERISA Affiliate of the Seller.
(f) To the extent required by applicable Law, the Seller shall be
responsible for and retain all liability for, as an Excluded Liability,
giving notification of and providing health care continuation coverage to
current or former employees of the U.S. Agtrol Division and their
"qualified beneficiaries" within the meaning of and as required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"), and shall indemnify and hold Buyer harmless against any
liability arising out of any such failure to comply with COBRA; provided,
however, that Buyer shall be responsible and liable for giving notice and
providing COBRA continuation coverage to any U.S. Employee in connection
with Buyer's group medical plan as a result of events occurring on or
after the Employment Date to the extent required by applicable Law.
6.3 Disclosure of Business Secrets. In the event (a) any present or former
employee, agent, representative or independent contractor of the Seller has
disclosed directly or indirectly or used for his own benefit or for the benefit
of another Person any Business Secret learned by such individual while employed
or otherwise working for or acting on behalf of the Seller or (b) any Person to
whom the Seller or any of its Affiliates has disclosed any Business Secrets,
whether pursuant to an non-disclosure agreement or otherwise, discloses or has
disclosed directly or indirectly or uses or has used for its own benefit or for
the benefit of any other Person any Business Secret so disclosed, the Seller
shall, at Buyer's request, and at the Seller's cost and expense, assign to Buyer
any cause of action or other claim that the Seller may have against any present
or former employee, agent, representative or independent contractor for any
actions or omissions prior to or following the Closing. The Seller shall, at its
cost and expense, cooperate with Buyer, as reasonably requested by Buyer, in the
prosecution of such claim. The provisions of this Section 6.3 shall survive the
Closing.
6.4 Non-Competition, Non-Disclosure and Non-Solicitation.
(a) For a period commencing on the Effective Date and ending on (i)
the date that is four (4) years after the Effective Date if on or prior to
such date either party to the Supply Agreement has delivered to the other
party notice of non-renewal of the Supply Agreement in accordance with its
terms or (ii) the date that is five (5) years after the Effective Date if
neither party to the Supply Agreement has delivered to the other party
notice of non-renewal in accordance with its terms (the "Restricted
Period"), the Seller shall not, and the Seller shall ensure that none of
its Affiliates shall, engage, directly or indirectly, in the manufacture,
distribution, marketing, developing, and/or sale of products currently
sold or distributed by the U.S. Agtrol Division,
23
products sold or distributed at any time during the three (3) years prior
to the Effective Date by the U.S. Agtrol Division, products currently in
development by the U.S. Agtrol Division and Substitute Products of any of
the foregoing, but excluding copper sulfate, copper carbonate and copper
oxides and related products (the "Business"), anywhere in the world (the
"Restricted Area") except as may be necessary to comply with the Supply
Agreement and as permitted under the License Agreement. By way of further
definition and explanation of the foregoing, and without limiting the
generality of the foregoing restriction, during such Restricted Period,
neither the Seller nor any of its Affiliates shall acquire, manage,
operate, join, control, participate or become financially interested in,
or be connected with (in any capacity, whether as a partner, stockholder,
investor, consultant, independent contractor, agent, representative or
otherwise), or provide any direct or indirect financial assistance to, any
Person that is engaged, directly or indirectly, in the Business within the
Restricted Area. Nothing contained herein, however, shall prohibit the
Seller or any of its Affiliates (i) from acquiring and owning, for
investment purposes only, up to five percent (5%) of the outstanding
equity securities of a Person engaged in the Business if such equity
securities of any such Person are available to the general public on a
national securities exchange, (ii) from taking action to collect any
Receivable in accordance with Section 2.5 or (iii) from reworking and/or
selling Excess Inventory; provided, however, that the Seller shall first
offer such Excess Inventory for sale to Buyer on conditions in the
aggregate no less favorable than those on which it may ultimately sell
such Excess Inventory.
(b) The Seller hereby acknowledges, covenants and agrees that, from
and after the Closing Date, it will hold any and all items constituting
Business Secrets communicated or transmitted to, or otherwise obtained by,
it in strictest confidence. The Seller shall not, regardless of the reason
therefor, directly or indirectly make use of, exploit, disclose or divulge
any Business Secrets to any other Person (except to the extent such
information is required to be submitted to any federal, state or local
governmental authority or to any other Person pursuant to subpoena or
other court process or as may be permitted herein), or make any false
statement or otherwise commit any act (including contacting any customers
of the U.S. Agtrol Division except to collect Receivables in accordance
with Section 2.5 and/or to sell Excess Inventory in accordance with
Section 6.4(c)(a)) that is intended to be in any way be injurious or
detrimental to the Business or to Buyer's use of the Purchased Assets,
including Buyer's image, business or customer relations.
(c) During the Restricted Period, the Seller shall not, for its own
benefit, or for the benefit of any other Person, or for any reason, accept
any business with respect to the Business from, or intentionally interfere
in any manner with Buyer's business relationship with, any customer of the
U.S. Agtrol Division except to collect Receivables in accordance with
Section 2.5 and/or to sell Excess Inventory in accordance with Section
6.4(c)(a). Without limiting the generality of the foregoing, the Seller
shall not solicit or induce, or attempt to solicit or induce, any business
with respect to the Business (directly or indirectly through any Person)
from any customer of the U.S. Agtrol Division, regardless of the purpose.
Furthermore, nothing contained in this Section 6.4(c) shall be construed
to infer that the Seller is, in any respect whatsoever, retaining any
rights to, or in respect of, the customer list of the U.S. Agtrol
Division, any customer information of the U.S. Agtrol Division or any
other Business Secrets for direct or indirect use after the expiration of
the Restricted Period, it being understood and agreed that pursuant to
this Agreement Buyer is acquiring all of the Seller's rights thereto
without limitation as to time or otherwise.
24
(d) During the Restricted Period, neither Buyer nor the Seller shall
hire, solicit (except for general solicitations made to the public) or
induce, or attempt to hire, solicit or induce (directly or indirectly
through any Person), for employment, or interfere in any manner with the
other party's relationship with, any employee of such other party hereto
or any of its Affiliates.
(e) The Seller acknowledges and agrees that the agreements and
covenants contained in this Section 6.4 are of a unique and valuable
nature and may, if breached, result in irreparable damage to Buyer that
may not be readily susceptible to monetary valuation; and, accordingly, in
the event of the breach of any covenant or agreement contained in this
Section 6.4, Buyer shall be entitled to seek injunctive or other equitable
relief, in addition to any other remedies provided by Law or equity, in
furtherance of the enforcement thereof. In no event shall the amount or
value of any consideration paid or given by Buyer for the covenants and
agreements contained in this Section 6.4, or otherwise in connection with
this Agreement, be used to determine the scope or extent of damages
suffered by Buyer in the event of a breach by the Seller of such covenants
and agreements.
(f) In addition to the consideration allocated to the covenants and
agreements set forth in this Section 6.4, the Seller acknowledges that
Buyer would not have completed the transactions contemplated by this
Agreement and the Transaction Documents absent the covenants and
agreements set forth in this Section 6.4.
(g) The provisions of this Section 6.4 shall survive the Closing.
6.5 Bulk Sales Laws. Buyer hereby waives compliance by the Seller with any
bulk sales law, including Article 6 of the Uniform Commercial Code, that may be
applicable to any of the transactions contemplated by this Agreement.
6.6 Transactional Taxes. The Seller and Buyer shall each bear and satisfy
fifty percent (50%) of any and all sales, transfer, value added, conveyance,
stamp, recording or other similar Taxes or governmental charges or fees imposed
by any taxing or other jurisdiction (other than any federal, provincial and
local Australian Taxes) with respect to the transfer or assignment of the
Purchased Assets or otherwise on account of this Agreement or any of the
transactions contemplated by this Agreement.
6.7 Books and Records.
(a) On reasonable notice from time to time after the Closing Date,
Buyer shall permit the Seller and their successors, and the
representatives thereof, reasonable access, during normal business hours,
for purposes of inspection and/or copying of all correspondence,
contracts, agreements and other books and records pertaining to the U.S.
Agtrol Division that constitute a part of the Purchased Assets. Buyer
shall cause all such materials to be preserved for seven (7) years after
the Effective Date.
25
(b) Without limiting the provisions of Section 6.7(a), for a period
of seven (7) years after the Effective Date, Buyer shall assist and
cooperate with the Seller and its successors, at the Seller's expense, in
collecting and assembling information that constitute a part of the
Purchased Assets.
6.8 Product Registrations. Buyer shall be responsible for preparing
appropriate documentation to transfer from the Seller to Buyer the
Registrations, and all rights to all data supporting such registrations, of the
U.S. Agtrol Division as necessary, in Buyer's sole judgment, to sell and
distribute the Copper Products and the Non-Copper Products. After the Closing
Date, to the extent requested by Buyer in order to comply with applicable Law,
the Seller shall cooperate with and provide commercially reasonable assistance
to Buyer for Buyer to obtain, by transfer or otherwise, any existing
registrations for the Copper Products and the Non-Copper Products or the active
ingredients therein and rights of the Seller and/or its Affiliates to all data
supporting such registrations, held by the Seller in any jurisdiction. The
Seller hereby licenses Buyer to sell and distribute Copper Products and
Non-Copper Products under the Seller's Registrations until Buyer has effective
Registrations for such products.
6.9 Product Rework. If, after the Effective Date, Buyer receives as a
return any product sold or distributed by the U.S. Agtrol Division on or prior
to the Closing Date, which product is no longer marketable, Buyer may use
commercially reasonable efforts to rework such product in order to make it
marketable. Buyer shall be responsible for and shall bear the first $50,000 of
costs it incurs in connection with such rework (the "Rework Costs"). The Seller
shall promptly pay to Buyer, notwithstanding any limitations set forth in
Article 7, all Rework Costs incurred by Buyer in excess of $50,000, upon
delivery to the Seller of reasonable evidence of the incurrence of such Rework
Costs.
6.10 Stock Sales. The parties shall act in good faith to consummate the
sale of all of the issued and outstanding equity interests of Agtrol Argentina
(the "Argentina Stock Sale") and Agtrol Mexico (the "Mexico Stock Sale") from
the Seller to Buyer for aggregate consideration of $10 pursuant to separate
Stock Purchase Agreements that shall substantially replicate the terms and
conditions hereof to the extent applicable and subject to such changes (i) as
may be necessary or desirable under applicable local law or (ii) as may be
reasonable in light of the size and type of the operations of Agtrol Argentina
and Agtrol Mexico.
ARTICLE 7
Indemnification
7.1 Seller's Obligation to Indemnify. From and after the Closing, and
subject to the terms and conditions of this Article 7, the Seller hereby assumes
and agrees to save, indemnify and hold harmless Buyer and its officers,
directors and stockholders (collectively "Buyer Indemnitees") from and against:
(a) any loss, liability or damage suffered or incurred by any Buyer
Indemnitee by reason of any breach by the Seller of any representation or
warranty of the Seller set forth in this Agreement;
26
(b) any loss, liability or damage suffered or incurred by any Buyer
Indemnitee by reason of the non-fulfillment by the Seller of any covenant
or agreement to be performed or complied with by the Seller under or
pursuant to this Agreement;
(c) any loss, liability or damage suffered or incurred by any Buyer
Indemnitee with respect to or in connection with any one or more of the
Excluded Liabilities;
(d) any liability or damage suffered or incurred by any Buyer
Indemnitee arising out of or related to the ownership or use of any of the
Purchased Assets and/or the operations, business or activities of the U.S.
Agtrol Division prior to the Effective Date (other than with respect to
Inventory sold by Buyer or any Affiliate thereof after the Closing Date);
and
(e) any actions, suits, proceedings, judgments, costs and expenses,
including reasonable attorneys' fees, incident to any of the foregoing, or
incurred in enforcing any of the obligations under this Section 7.1.
7.2 Buyer's Obligation to Indemnify. From and after the Closing, and
subject to the terms and conditions of this Article 7, Buyer hereby assumes and
agrees to save, indemnify and hold harmless the Seller and its officers,
directors and stockholders (collectively "Seller Indemnitees") from and against:
(a) any loss, liability or damage suffered or incurred by any Seller
Indemnitee by reason of any breach by Buyer of any representation or
warranty of Buyer set forth in this Agreement;
(b) any loss, liability or damage suffered or incurred by any Seller
Indemnitee by reason of the non-fulfillment by Buyer of any covenant or
agreement to be performed or complied with by Buyer under or pursuant to
this Agreement;
(c) any loss, liability or damage suffered or incurred by any Seller
Indemnitee arising in connection with any Seller Indemnitee for any
Assumed Liabilities;
(d) any loss, liability or damage suffered or incurred by any Seller
Indemnitee arising out of or related to the ownership or use of any of the
Purchased Assets and/or the operations, business or activities of the U.S.
Agtrol Division on or after the Effective Date (including the license
under Section 6.8); and
(e) any actions, suits, proceedings, judgments, costs and expenses,
including reasonable attorneys' fees, incident to any of the foregoing, or
incurred in enforcing any of the obligations under this Section 7.2
7.3 Procedure for Satisfaction of Indemnity Claims. The obligations and
liabilities of the parties hereto shall be subject to the following terms and
conditions:
(a) Any party required to indemnify another Person under this
Agreement may be referred to herein as the "Indemnifying Party," and any
Person entitled to indemnification
27
hereunder may be referred to herein as the "Indemnified Party." Any claim
for indemnification made pursuant to this Article 7 is sometimes referred
to as an "Indemnity Claim."
(b) The Indemnified Party shall give prompt written notice to the
Indemnifying Party of any Indemnity Claim after learning of the existence
thereof; provided, however, that the failure to provide such prompt notice
shall in no event impair the rights of the Indemnified Party or limit the
obligations of the Indemnifying Party hereunder except to the extent that
such failure has an adverse effect on the ability of the Indemnifying
Party adequately to defend such claim. In the event of a claim brought by
a third party (a "Third Party Claim") which might give rise to an
Indemnity Claim by the Indemnified Party, such notice of the Indemnity
Claim shall state the nature and basis of said Indemnity Claim and the
amount thereof, to the extent known. In the event of any other Indemnity
Claim, including one for an alleged breach or misrepresentation hereunder,
such notice shall state the nature and basis thereof, the amount of the
asserted damages, and the method by which such alleged damages were
calculated; provided, however, that the Indemnified Party shall in all
events have the right subsequently to revise the basis for such Indemnity
Claim and the amount of damages asserted as well as the method by which
such damages are calculated.
(c) In the event of a Third Party Claim:
(i) Provided that the Indemnifying Party has adequately
evidenced to the Indemnified Party its ability to satisfy such
claim, the Indemnifying Party shall be entitled to contest and to
assume the defense of the claim at the Indemnifying Party's expense,
and further provided that it utilizes reputable counsel reasonably
satisfactory to the Indemnified Party. In the event the Indemnifying
Party gives notice to the Indemnified Party of the Indemnifying
Party's election to assume the contest or defense as aforesaid, then
the Indemnifying Party shall be obligated promptly to defend such
claim. The Indemnified Party shall, at the Indemnifying Party's
expense, make available to the Indemnifying Party and its attorneys,
accountants or other duly designated agents all books and records of
the Indemnified Party relating to any such action, suit or
proceeding, and the parties hereto agree to render to each other
such assistance (at the expense of the Indemnifying Party) as they
may reasonably require of each other in order to ensure the proper
and adequate contest or defense of any such action, suit or
proceeding. The Indemnified Party shall be entitled, with counsel
selected by the Indemnified Party, to participate in (but not to
control), at its own expense, the defense of any claim or litigation
which the Indemnifying Party has, in accordance with the provisions
of this subparagraph (i), elected to defend, and to be kept fully
informed of the status thereof at all stages, including the right to
receive, at the Indemnifying Party's expense, copies of all
pleadings and other material papers in connection with such claim or
litigation. The Indemnifying Party shall not settle any Third Party
Claim without the consent of the Indemnified Party unless (1) the
Indemnifying Party fully indemnifies the Indemnified Party for all
liabilities, damages, losses, costs and expenses in connection with
such settlement of such claim, (2) there is no finding or admission
of any violation of Law by the Indemnified Party not agreeing to the
settlement, and (3) the relief granted in connection therewith
requires no action on the part of, and has no economic or other
adverse effect on, the Indemnified Party.
(ii) If the defense of a Third Party Claim is not assumed by
the Indemnifying Party as provided in subparagraph (i) above, then
the Indemnified Party may (to the extent that the Indemnified Party
determines to do so in its sole discretion) conduct any such
28
proceeding as it deems appropriate utilizing reputable counsel, and
may take whatever action it deems necessary or appropriate, to
resolve or settle such claim or dispute, but shall in no event have
any obligation to defend any such claim or proceeding or to appeal
any adverse finding or determination or to defend the appeal by any
other party to a favorable determination, it being agreed that any
actions taken or omitted with respect to the foregoing shall not
avoid, reduce or mitigate the Indemnifying Party's liability
hereunder. The Indemnifying Party shall nevertheless, at its own
expense, make available to the Indemnified Party and its attorneys
and accountants all books and records of the Indemnifying Party
relating to such proceedings or litigation and shall render to the
Indemnified Party such assistance as may be reasonably requested by
the Indemnified Party. The Indemnifying Party shall be entitled,
with counsel selected by it, to participate in (but not to control),
at its own expense, the defense of any claim or litigation which the
Indemnifying Party has not elected to defend in accordance with the
provisions of subparagraph (i) above. The Indemnified Party shall
not settle any Third Party Claim without first giving notice of the
proposed settlement to the Indemnifying Party (the "Settlement
Notice"). The Indemnifying Party shall have the right, exercisable
within ten (10) Business Days following receipt of the Settlement
Notice, to instruct the Indemnified Party not so to settle such
Third Party Claim; provided that, in such event, the Indemnifying
Party shall be required to assume the defense of any such Third
Party Claim subject to and in accordance with the provisions and
prerequisites of subparagraph (i) above (including those set forth
in the first sentence thereof); provided, further, that the
Indemnified Party shall be entitled to settle such Third Party Claim
regardless of the instructions of the Indemnifying Party to the
contrary if the Indemnifying Party is unable or fails to satisfy the
requirements set forth in clauses (A) and (B) contained in the first
sentence of subparagraph (i) above.
7.4 Survival and Other Matters. Notwithstanding anything to the contrary
contained in this Agreement or any other Transaction Document:
(a) Each representation, warranty, indemnity, covenant and agreement
of the Seller and Buyer shall survive the Closing; provided, however, that
no Indemnified Party shall be entitled to assert any claim against any
Indemnifying Party under Section 7.1(a), 7.1(b) or 7.1(e) (to the extent
related to Section 7.1(a) or 7.1(b)), 7.2(a), 7.2(b) or 7.2(e) (to the
extent related to Section 7.2(a) or 7.2(b)) of this Agreement unless the
Indemnified Party asserting such claim shall notify the Indemnifying Party
in writing of such claim, in reasonable detail, prior to the second
anniversary of the Closing Date, in which case the Indemnified Party's
right to indemnification in respect of such claim will survive.
(b) The Seller shall have no liability under Section 7.1(a), 7.1(b)
and 7.1(e) (to the extent related to Section 7.1(a) and 7.1(b)) and under
any similar indemnification provisions for breach of representation,
warranty, covenant or agreement by the Seller and/or its Affiliates in the
purchase agreements for the French Asset Sale, the Argentina Stock Sale
and the Mexico Stock Sale (collectively the "Foreign Purchase
Agreements"), and Buyer shall have no liability under Section 7.2(a),
7.2(b) and 7.2(e) (to the extent related to Section 7.2(a) and 7.2(b)) and
under any similar indemnification provisions for breach of representation,
warranty, covenant or agreement by Buyer and/or its Affiliates in the
Foreign Purchase Agreements, as the case may be, unless the aggregate
amount of all of such party's liabilities thereunder, but for this Section
7.4(b) exceeds $125,000; provided, however, such limit applies to such
liabilities in the aggregate, and not to each individual liability, such
that once the aggregate of such liabilities exceeds such amount, such
party shall be
29
responsible to indemnify the Indemnified Party fully for all such
liabilities, to the extent such liabilities exceed such amount; provided,
further, that any Rework Costs incurred by Buyer (and not reimbursed by
the Seller) in excess of $25,000 shall be included for purposes of
determining whether Seller's liabilities have exceeded such amount.
Notwithstanding the foregoing, no such monetary limitation shall apply as
to any Third Party Claim or to any claim based on fraud or gross
negligence.
(c) The Seller shall have no liability under Section 7.1(a), 7.1(b)
and 7.1(e) (to the extent related to Section 7.1(a) and 7.1(b)) and under
any similar indemnification provisions for breach of representation,
warranty, covenant or agreement by the Seller and/or its Affiliates in the
Foreign Purchase Agreements, and Buyer shall have no liability under
Section 7.2(a), 7.2(b) and 7.2(e) (to the extent related to Section 7.2(a)
and 7.2(b)) and under any similar indemnification provisions for breach of
representation, warranty, covenant or agreement by Buyer and/or its
Affiliate in the Foreign Purchase Agreements, as the case may be, to the
extent the aggregate amount of such party's liabilities thereunder, but
for this Section 7.4(c), exceeds $18,225,000. Notwithstanding the
foregoing, no such monetary limitations shall apply or to any Third Party
Claim.
(d) The Seller shall not have any liability for any
misrepresentation or breach of warranty, agreement or covenant under this
Agreement if and to the extent that the same is disclosed in any of the
Schedules of the Disclosure Schedule.
(e) The effect of any misrepresentation, breach of warranty,
covenant or agreement of, or any indemnifiable claim against, any party
under this Agreement shall be determined based solely on damages net of
any amounts actually recovered by such party in respect thereof or in
connection therewith under any one or more policies of insurance
maintained by such party or any third party; provided, however, that no
party shall have any obligation to seek any such recovery.
(f) The effect of any misrepresentation, breach of warranty,
covenant or agreement of, or any indemnifiable claim against, any party
under or in respect to this Agreement and any damages resulting therefrom
shall be determined based solely on damages on a net after-tax basis. NO
PARTY SHALL BE HELD LIABLE HEREUNDER FOR INCIDENTAL, INDIRECT, SPECIAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR FOR LOST PROFITS OR LOST OPPORTUNITY
COSTS, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
7.5 Satisfaction of Indemnity Claims. Buyer may not obtain satisfaction of
any Indemnity Claim under Section 7.1, by way of set-off against any amounts
owing by Buyer to the Seller, including amounts owing on account of the
Receivables or owing in respect of the Buyer Note. In all events, and
notwithstanding anything to the contrary contained in this Agreement, the Seller
agrees and acknowledges that the provisions of this Section shall not be
construed as a limitation on the amount or scope of the obligations of the
Seller to indemnify Buyer under this Article 7; it being understood that the
Seller shall remain fully liable hereunder in accordance with the provisions
hereof notwithstanding the unavailability or exhaustion of such payment sources.
30
7.6 Interest. An Indemnifying Party shall pay the an Indemnified Party
interest at the rate of twelve percent (12%) per annum for any indemnifiable
liability from the date such indemnifiable liability was actually paid, incurred
or suffered by the Indemnified Party until paid in full by the Indemnifying
Party.
ARTICLE 8
Miscellaneous
8.1 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" when used with respect to any Person, means any Person
that by means of the majority of shares or otherwise, is controlled by
such Person, is controlling such Person or is under common control with
such Person. A Person shall be regarded as in control of another Person if
it owns or directly or indirectly controls more than fifty percent (50%)
of the voting stock or other ownership interest of the other Person, or if
it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the Person.
"Agreement" has the meaning specified in the preamble of this
Agreement.
"Agtrol Argentina" has the meaning specified in the recitals of this
Agreement.
"Agtrol International" has the meaning specified in the recitals of
this Agreement.
"Agtrol Mexico" has the meaning specified in the recitals of this
Agreement.
"Agtrol S.A." has the meaning specified in the recitals of this
Agreement.
"Argentina Stock Sale" has the meaning specified in Section 6.10.
"Assumed Liabilities" has the meaning specified in Section 2.2.
"Balance Sheet" has the meaning specified in Section 4.3.
"Benefit Plans" has the meaning specified in Section 4.16(c).
"Business" has the meaning specified in Section 6.4(a).
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in
the State of New York.
"Business Records" has the meaning specified in Section 1.2(g).
"Business Secrets" has the meaning specified in Section 4.19(a)
"Buyer" has the meaning specified in the preamble of this Agreement.
31
"Buyer Indemnitees" has the meaning specified in Section 7.1.
"Buyer Note" has the meaning specified in Section 2.1(a).
"Cash Amount" has the meaning specified in Section 2.1(a).
"Closing" has the meaning specified in Section 3.1(a).
"Closing Date" has the meaning specified in Section 3.1(a).
"COBRA" has the meaning specified in Section 6.2(f).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" has the meaning specified in Section 2.5(a).
"Collections" has the meaning specified in Section 2.5(a).
"Contract Interest" has the meaning specified in Section 2.4.
"Contract" has the meaning specified in Section 1.2(d).
"Copper Product" means any product of the U.S. Agtrol Division in
which copper or any copper compound is an active ingredient: (i) currently
sold or distributed by the U.S. Agtrol Division, (ii) sold or distributed
at any time during the three (3) years prior to the Effective Date by the
U.S. Agtrol Division, (iii) currently in development by the U.S. Agtrol
Division or (iv) Substitute Products of any of the foregoing.
"Disclosure Schedule" has the meaning specified in Article 4.
"Effective Date" has the meaning specified in the preamble of this
Agreement.
"Effective Date Inventory Calculation" has the meaning specified in
Section 2.1(b).
"Employees" has the meaning specified in Section 4.15.
"Employment Date" has the meaning specified in Section 6.2(a).
"Environmental Laws" has the meaning specified in Section 4.18.
"ERISA" has the meaning specified in Section 4.16(c).
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is or has ever been treated as a single employer with
the Seller under Section 414(b), (c), (m) or (o) of the Code.
"Excess Inventory" has the meaning specified in Section 2.1(d).
32
"Excess Inventory Amount" has the meaning specified in Section
2.1(d).
"Excluded Assets" has the meaning specified in Section 1.3.
"Excluded Liabilities" has the meaning specified in Section 2.2.
"Facility" means the Sumter, South Carolina facility of the Seller.
"FIFRA" has the meaning specified in Section 4.18.
"Financial Statements" has the meaning specified in Section 4.3.
"Foreign Purchase Agreements" has the meaning specified in Section
7.4(b).
"French Asset Sale" means the sale contemplated to occur after the
Closing Date between certain Affiliates of the Seller and an Affiliate of
Buyer, pursuant to which such Seller's Affiliates would sell, and such
Buyer's Affiliate would buy, certain of the assets of Agtrol International
used in the conduct of its business in and from France, excluding the
Bordeaux facility.
"GAAP" has the meaning specified in Section 4.4.
"Hazardous Substance" means any and all hazardous or toxic
substances, materials or wastes as may be defined or listed under the
Resource Conservation and Recovery Act, the Toxic Substances Control Act,
the Comprehensive Environmental Response, Compensation and Liability Act
or any comparable state statute or any regulation promulgated under any of
such federal or state statutes.
"Indemnified Party" has the meaning specified in Section 7.3(a).
"Indemnity Claim" has the meaning specified in Section 7.3(a).
"Indemnifying Party" has the meaning specified in Section 7.3(a).
"Inventory" has the meaning specified in Section 1.2(c).
"Inventory Count" has the meaning specified in Section 2.1(b).
"Inventory Value Shortfall" has the meaning specified in Section
2.1(d).
"Laws" has the meaning specified in Section 4.12.
"LC Holdings" has the meaning specified in the recitals of this
Agreement.
"Leasehold Interests" has the meaning specified in Section 1.2(b).
"Leases" has the meaning specified in Section 4.7(b).
"License Agreement" has the meaning specified in Section 2.6.
33
"Lien" means any security interest, mortgage, deed of trust, charge,
pledge, claim, right of Person other than the Seller, lien, restriction or
similar encumbrance.
"Material Adverse Effect" means any materially adverse effect on or
change to the results of operations or the financial condition or
prospects of the U.S. Agtrol Division, except for any such changes or
effects affecting the U.S. economy or the chemical crop protection
industry in general.
"Mexico Stock Sale" has the meaning specified in Section 6.10.
"Non-Copper Products" means a product of the U.S. Agtrol Division in
which neither copper nor any copper compound is an active ingredient.
"Note Amount" has the meaning specified in Section 2.1(a).
"Permits" has the meaning specified in Section 4.14.
"Permitted Liens" means landlords', mechanics' and workmens' liens.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or other entity or
organization of whatever nature.
"Prepaids" has the meaning specified in Section 1.2(f).
"Product Liability Matter" has the meaning specified in Section
4.13(c). "Product Warranty Matter" has the meaning specified in Section
4.13(c).
"Purchase Price" has the meaning specified in Section 2.1(a).
"Purchased Assets" has the meaning specified in Section 1.2.
"Receivables" has the meaning specified in Section 1.2(f).
"Registrations" has the meaning specified in Section 4.14.
"Restricted Area" has the meaning specified in Section 6.4(a).
"Restricted Period" has the meaning specified in Section 6.4(a).
"Rework Cost" has the meaning specified in Section 6.9.
"Seller" has the meaning specified in the preamble of this
Agreement.
"Seller Indemnitees" has the meaning specified in Section 7.2.
"Settlement Notice" has the meaning specified in Section 7.3(c)(ii).
34
"Substitute Products" means products with substantially similar
performance characteristics, efficacy or functionality.
"Sumter Plant" has the meaning specified in Section 1.3(p).
"Supply Agreement" has the meaning specified in Section 2.6.
"Tangible Personal Property" has the meaning specified in Section
1.2(a).
"Taxes" has the meaning specified in Section 4.6.
"Third Party Claim" has the meaning specified in Section 7.3(b).
"Transaction Documents" has the meaning specified in Section 4.1(b).
"U.S. Agtrol Division" has the meaning specified in the recitals of
this Agreement.
"U.S. Employees" has the meaning specified in Section 6.2(a).
"WARN Act" has the meaning specified in Section 6.2(b).
8.2 Certain Understandings. Notwithstanding anything to the contrary
contained in this Agreement:
(a) For purpose of this Agreement, the term "knowledge of the
Seller", and any variation thereof shall be deemed to refer only to the
knowledge the individuals listed on Schedule 8.2(a).
(b) To the extent a representation or warranty in this Agreement
requires the disclosure of any contract or agreement, the applicable
representation or warranty shall be deemed to exclude any agreement under
which the obligations of the parties thereto have been performed.
(c) Certain matters and items disclosed in the Disclosure Schedule
may not be required to be disclosed therein, but may be disclosed therein
for informational purposes only, and no such disclosure shall constitute
an indication or admission of the materiality thereof or create a standard
of disclosure.
(d) The term "including" and all derivatives and variations thereof
shall mean "including, without limitation".
(e) Notwithstanding any cross-referencing which may be undertaken in
the Disclosure Schedule or any Schedule thereof, any matter identified in
any one or more of the Schedules of the Disclosure Schedule shall be
deemed disclosed for purposes of any other Schedule of the Disclosure
Schedule.
8.3 Binding Agreement. All the terms and provisions of this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
35
8.4 Assignment. No party may assign this Agreement or any rights or
obligations hereunder, directly or directly, other than to an Affiliate of such
party, except with the prior written consent of the other party hereto. No
assignment shall relieve the assigning party of any of its obligations
hereunder.
8.5 Public Announcements. Except as may be required to comply with the
requirements of any applicable law or as required under the rules and
regulations of any stock exchange upon which the securities of one of the
parties or its Affiliates are listed, no party to this Agreement shall make any
public announcement in respect of this Agreement or the transactions
contemplated by this Agreement or otherwise communicate with respect thereto
with any news media without prior notification to the other parties. The parties
shall, to the extent practicable, consult with each other as to the timing and
contents of any such press release or public statement.
8.6 Law To Govern. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of New York, without regard to
principles of conflict of laws. Any litigation arising hereunder or related
hereto or under any of the other Transaction Documents may be tried by the
United States District Court for the Southern District of New York, provided
that if such litigation shall not be permitted to be tried by such court then
such litigation may be held in the state courts of New York sitting in New York
City. Each party irrevocably consents to and confers personal jurisdiction on
the United States District Court for the Southern District of New York, or, if
(but only if) the litigation in question shall not be permitted to be tried by
such court, on the state courts of New York sitting in New York City, and
expressly waives any objection to the venue of such court, as the case may be,
and agrees that service of process may be made on such party by mailing a copy
of the pleading or other document by registered or certified mail, return
receipt requested, to its or his addresses for the giving of notice provided for
in Section 8.7 hereof, with service being deemed to be made five (5) Business
Days after the giving of such notice. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
8.7 Notices. All notices shall be in writing and shall be deemed to have
been duly given if telefaxed, transmission confirmed, within one (1) Business
Day after transmission, if delivered personally or sent by overnight courier,
postage prepaid, return receipt requested, upon receipt, or if mailed via
registered or certified mail, return receipt requested, postage prepaid, within
five (5) Business Days after deposit in the mail, to the other party hereto at
the following addresses:
if to the Seller, to:
Phibro-Tech, Inc.
c/o Philipp Brothers Chemicals, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: President
Facsimile: 000 000-0000
36
with a copy to:
Phibro-Tech, Inc.
c/o Philipp Brothers Chemicals, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: General Counsel
Facsimile: 000 000-0000
if to Buyer, to:
Nufarm Limited
000-000 Xxxx Xxxx
Xxxxxxxx Xxxxx 0000
Xxxxxxxx
Xxxxxxxxx
Attn: Group General Manager Operations
Facsimile: 011 613-9282-1007
with a copy to:
Nufarm, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: General Manager
Facsimile: 000-000-0000
or to such other addresses as any such party may designate in writing in
accordance with this Section 8.7.
8.8 Entire Agreement. This Agreement (including all Schedules and Exhibits
hereto) sets forth the entire understanding of the parties hereto in respect of
the subject matter hereof and may not be modified or amended except by a written
agreement specifically referring to this Agreement signed by all of the parties
hereto. This Agreement supersedes all prior agreements and understandings among
the parties with respect to such subject matter. No amendment, modification or
waiver of this Agreement, or any provision hereof, shall be binding unless made
in writing and executed by the parties hereto. In the event of any conflict
between the terms of this Agreement and the terms of any other Transaction
Document, the terms of this Agreement shall prevail.
8.9 Waivers. No failure by any of the parties hereto to insist upon the
strict performance of any covenant, agreement, term or condition of this
Agreement, or to exercise any right or remedy consequent upon a breach thereof,
shall constitute a waiver of any such breach or of such covenant, agreement,
term or condition. No covenant, agreement, term or condition of this Agreement
to be performed or complied with by any party hereto, and no breach thereof,
shall be waived, altered or
37
modified except by a written instrument executed by the other party or parties.
No waiver by any of the parties hereto of any breach of any covenant or
condition hereof on the part of the other party or parties hereto to be kept and
performed shall be considered to be a continuing waiver of such covenant or
provision, or of any subsequent breach thereof, unless otherwise expressly
provided for in such waiver.
8.10 Severability. In case any one or more of the provisions or parts of a
provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision or part of a provision had been limited or
modified (consistent with its general intent) to the extent necessary so that it
shall be valid, legal and enforceable, or if it shall not be possible so to
limit or modify such invalid or illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein.
8.11 Income Tax Position. No party hereto shall take a position for income
Tax purposes which is inconsistent with an express provision of this Agreement.
8.12 Third-Party Beneficiaries. Nothing herein, express or implied, is
intended or shall be construed to or shall confer upon or give to any Person,
other than the parties hereto (and the respective Seller Indemnitees and Buyer
Indemnitees to the extent provided in Article 7), any rights, remedies or other
benefits under or by reason of this Agreement or any documents executed in
connection with this Agreement.
8.13 Time of the Essence. Time is of the essence with respect to each
party's respective obligations under or pursuant to this Agreement.
8.14 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
AGREEMENT OR INSTRUMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY SUCH AGREEMENT OR INSTRUMENT.
38
8.15 Drafting. This Agreement has been drafted and negotiated in the State
of New York. No party shall be deemed to have drafted this Agreement but rather
this Agreement is a collaborative effort of the undersigned parties and their
attorneys.
8.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement.
8.17 Headings. The Section and Schedule headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of such Sections and Schedules.
8.18 Further Assurances. At any time and from time to time following the
Closing, at the request of any party and without further consideration, any
other party hereto shall provide, execute and/or deliver such documents or
instruments, and take such actions, as the requesting party hereto or its
counsel may reasonably deem necessary or desirable in order to consummate or
otherwise to implement the provisions and purposes of this Agreement or to
comply with applicable Laws, including the provision of audited financial
statements, as necessary. The parties hereto agree to cooperate fully in
implementing a smooth and orderly transfer of the business of the U.S. Agtrol
Division and the Purchased Assets from the Seller to Buyer.
8.19 Dispute Resolution.
(a) The parties hereto shall attempt to resolve any dispute or
controversy arising out of or in connection with this Agreement in
accordance with this Section 8.19. The parties shall first refer the
dispute to management-level employees who have oversight of operational
matters to negotiate in good faith during a period of fifteen (15) days
for resolution of the dispute. If such employees are unable to resolve the
dispute, the parties shall refer the dispute to chief executive officer of
the Seller and the chief executive officer of Nufarm Limited to negotiate
in good faith during a period of fifteen (15) days for resolution of the
dispute. No party may bring a claim under or in connection with this
Agreement unless and until it such procedure has been concluded with
respect to such claim. Notwithstanding the foregoing, any party may at any
time seek equitable relief, including an injunction, as a remedy in a
court of law.
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may not or hereafter have to the
laying of venue of any suit, action, or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby in any
New York state or federal court located in the Borough of Manhattan, New
York. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each of the parties hereto hereby irrevocably and
unconditionally consents to service of process in the manner provided for
notices in Section 8.6. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted
by law.
[Remainder of Page Intentionally Left Blank]
39
IN WITNESS WHEREOF, the parties have duly executed this United States
Asset Purchase Agreement as of the date first above written.
PHIBRO-TECH, INC.
By: /s/ W. Xxxxxx Xxxxxx
------------------------------
Name: W. Xxxxxx Xxxxxx
Title: President
NUFARM, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
