================================================================================
STOCK PURCHASE AGREEMENT
by and among
PHILIPP BROTHERS CHEMICALS, INC.,
PALLADIUM EQUITY PARTNERS II, L.P.,
PALLADIUM EQUITY PARTNERS II-A, L.P.,
and
PALLADIUM EQUITY INVESTORS II, L.P.
Dated as of November 30, 2000
================================================================================
Table of Contents
Page
ARTICLE 1 AGREEMENT TO SELL AND PURCHASE..........................................................................1
SECTION 1.1. Authorization of Shares...................................................................1
SECTION 1.2. Sale and Purchase.........................................................................2
ARTICLE 2 CLOSING, DELIVERY AND PAYMENT...........................................................................2
SECTION 2.1. Closing...................................................................................2
SECTION 2.2. Delivery..................................................................................2
SECTION 2.3. Adjustments...............................................................................3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................3
SECTION 3.1. Organization, Good Standing and Qualification.............................................3
SECTION 3.2. Subsidiaries..............................................................................3
SECTION 3.3. Capitalization; Voting Rights.............................................................4
SECTION 3.4. Authorization; Binding Obligations........................................................5
SECTION 3.5. SEC Reports; Financial Statements.........................................................6
SECTION 3.6. Undisclosed Liabilities...................................................................6
SECTION 3.7. Material Contracts........................................................................7
SECTION 3.8. Affiliate Transactions....................................................................7
SECTION 3.9. Absence of Material Changes...............................................................8
SECTION 3.10. Title to Properties and Assets; Liens, Condition, Etc....................................8
SECTION 3.11. Intellectual Property....................................................................9
SECTION 3.12. Compliance with Law; Other Instruments...................................................9
SECTION 3.13. Litigation..............................................................................10
SECTION 3.14. Tax Matters.............................................................................10
SECTION 3.15. Employees...............................................................................11
SECTION 3.16. Environmental and Safety Laws...........................................................11
SECTION 3.17. Offering Valid..........................................................................13
SECTION 3.18. Employee Benefit Plans..................................................................13
SECTION 3.19. Permits.................................................................................15
SECTION 3.20. No Broker...............................................................................15
SECTION 3.21. Pfizer Representation and Warranties....................................................15
SECTION 3.22. Disclosure..............................................................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................................16
SECTION 4.1. Requisite Power and Authority............................................................16
SECTION 4.2. Investment Representations...............................................................16
SECTION 4.3. Litigation...............................................................................16
i
SECTION 4.4. No Broker................................................................................16
ARTICLE 5 COVENANTS OF THE COMPANY...............................................................................17
SECTION 5.1. Ordinary Course of Business..............................................................17
SECTION 5.2. Access...................................................................................18
SECTION 5.3. Use of Proceeds..........................................................................18
SECTION 5.4. Further Efforts..........................................................................18
SECTION 5.5. Notification of Certain Matters..........................................................18
SECTION 5.6. Appointment of Directors.................................................................18
SECTION 5.7. Transaction Fee..........................................................................18
ARTICLE 6 CONDITIONS TO CLOSING..................................................................................19
SECTION 6.1. Conditions to Purchasers' Obligation to Purchase the Purchased Shares....................19
SECTION 6.2. Conditions to Obligations of the Company.................................................21
ARTICLE 7 INDEMNIFICATION........................................................................................21
SECTION 7.1. Survival of Representations and Warranties...............................................21
SECTION 7.2. Indemnification..........................................................................22
SECTION 7.3. Indemnification Amounts..................................................................22
SECTION 7.4. Non-Exclusive Remedy.....................................................................23
SECTION 7.5. Certain Limitations......................................................................23
ARTICLE 8 MISCELLANEOUS..........................................................................................23
SECTION 8.1. Other Definitions........................................................................23
SECTION 8.2. Governing Law; Jurisdiction; Waiver of Jury Trial........................................24
SECTION 8.3. Successors and Assigns; Assignment.......................................................24
SECTION 8.4. Entire Agreement; Third Parties..........................................................24
SECTION 8.5. Severability.............................................................................24
SECTION 8.6. Amendment and Waiver.....................................................................25
SECTION 8.7. Delays or Omissions......................................................................25
SECTION 8.8. Notices..................................................................................25
SECTION 8.9. Expenses.................................................................................26
SECTION 8.10. Interpretation..........................................................................26
SECTION 8.11. Termination.............................................................................26
SECTION 8.12. Counterparts............................................................................26
ii
EXHIBITS
Exhibit A Stockholders Agreement
Exhibit B Certificate of Amendment
Exhibit C Legal Opinion
Exhibit D Management and Advisory Services Agreement
COMPANY DISCLOSURE SCHEDULE
Section 3.2(a) Subsidiaries
Section 3.2(b) Other Interests
Section 3.3(c) Rights With Respect to Capital Stock
Section 3.3(d) Rights With Respect to Purchased Shares
Section 3.5(c) Pro Forma Statements
Section 3.6 Undisclosed Liabilities
Section 3.7(a) Contracts
Section 3.7(b) Defaults
Section 3.8(a) Affiliate Transactions
Section 3.8(b) Affiliate Guarantees
Section 3.8(c) Other Affiliate Transactions
Section 3.9(c) Absence of Material Changes
Section 3.11(a) Rights to Intellectual Property
Section 3.14(a) Taxes
Section 3.15 Employee Matters
Section 3.16 Environmental and Safety Laws
Section 3.18(a) Employee Benefit Plans
Section 3.18(c) Retiree Welfare Benefits
Section 3.18(g) Employee Payments
Section 3.20 Brokers
Section 6.1(d) Approvals
Section 6.1(m) Other Financing
iii
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 30, 2000 (this
"Agreement"), by and among PHILIPP BROTHERS CHEMICALS, INC., a New York
corporation (the "Company"), PALLADIUM EQUITY PARTNERS II, L.P., a Delaware
limited partnership ("PEP II"), PALLADIUM EQUITY PARTNERS II-A, L.P., a Delaware
limited partnership ("PEP II-A"), and PALLADIUM EQUITY INVESTORS II, L.P., a
Delaware limited partnership ("XXX XX"and, together with PEP II and PEP II-A,
the "Purchasers").
WHEREAS, the Company has entered into an Asset Purchase Agreement,
dated as of September 28, 2000 (the "Pfizer Agreement"), with Pfizer Inc., a
Delaware corporation ("Pfizer"), and Pfizer's affiliates as identified therein,
pursuant to which the Company will purchase from them certain assets (the
"Pfizer Assets") relating to the manufacture, storage, distribution and sale of
certain feed additive products to the global livestock industry, upon the terms
and conditions set forth therein;
WHEREAS, the Company proposes to issue and sell to the Purchasers,
and the Purchasers propose to purchase from the Company, 25,000 shares of Series
B Redeemable Preferred Shares, par value $100.00 per share, of the Company (the
"Series B Preferred Stock"), for an aggregate purchase price of $25,000,000 (the
"Series B Purchase Price"), and 20,000 shares of Series C Redeemable Preferred
Shares, par value $100.00 per share, of the Company (the "Series C Preferred
Stock"), for an aggregate purchase price of $20,000,000 (the "Series C Purchase
Price" and, together with the Series B Purchase Price, the "Purchase Price"),
upon the terms and conditions set forth herein;
WHEREAS, in order to induce the Purchasers to enter into this
Agreement, the Company and certain stockholders of the Company are entering
concurrently herewith into a Stockholders Agreement in the form of Exhibit A
attached hereto (the "Stockholders Agreement") with the Purchasers;
WHEREAS, the Company intends to use the proceeds from the sale of
Series B Preferred Stock and Series C Preferred Stock to the Purchasers for the
Company's purchase of the Pfizer Assets pursuant to the Pfizer Agreement (such
purchase, the "Pfizer Acquisition");
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
AGREEMENT TO SELL AND PURCHASE
SECTION 1.1. Authorization of Shares.
(a) The Company has authorized (i) the issuance and sale to the
Purchasers of 25,000 shares of Series B Preferred Stock and (ii) the issuance
and sale to the Purchasers of 20,000 shares of Series C Preferred Stock.
1
(b) The Series B Preferred Stock shall have the rights, preferences,
privileges and restrictions set forth in the Certificate of Amendment of the
Company in the form attached hereto as Exhibit B (the "Certificate of
Amendment").
(c) The Series C Preferred Stock shall have the rights, preferences,
privileges and restrictions set forth in the Certificate of Amendment.
SECTION 1.2. Sale and Purchase. Subject to the terms and conditions
hereof,
(a) the Company shall issue and sell to PEP II, and PEP II shall
purchase from the Company, 15,362.5 shares of Series B Preferred Stock for an
aggregate purchase price of $15,362,500 and 12,290 shares of Series C Preferred
Stock for an aggregate purchase price of $12,290,000 (such shares of Series B
Preferred Stock and Series C Preferred Stock, collectively, the "PEP II
Purchased Shares");
(b) the Company shall issue and sell to PEP II-A, and PEP II-A shall
purchase from the Company, 6,792.5 shares of Series B Preferred Stock for an
aggregate purchase price of $6,792,500 and 5,434 shares of Series C Preferred
Stock for an aggregate purchase price of $5,434,000 (such shares of Series B
Preferred Stock and Series C Preferred Stock, collectively, the "PEP II-A
Purchased Shares"); and
(c) the Company shall issue and sell to XXX XX, and XXX XX shall
purchase from the Company, 2,845 shares of Series B Preferred Stock for an
aggregate purchase price of $2,845,000 and 2,276 shares of Series C Preferred
Stock for an aggregate purchase price of $2,276,000 (such shares of Series B
Preferred Stock and Series C Preferred Stock, collectively, the "XXX XX
Purchased Shares", and together with the PEP II Purchased Shares and the PEP
II-A Purchased Shares, the "Purchased Shares").
ARTICLE 2
CLOSING, DELIVERY AND PAYMENT
SECTION 2.1. Closing. The closing of the sale and purchase of the
Purchased Shares under this Agreement (the "Closing") shall take place upon the
satisfaction or waiver of the conditions set forth in Section 6, at the offices
of Pfizer Inc. at 000 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
A.M., New York time, or at such other time or place as the Company and the
Purchasers may mutually agree (such date for the purchase of the Purchased
Shares is hereinafter referred to as the "Closing Date").
SECTION 2.2. Delivery. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchasers all of the
Purchased Shares to be purchased in accordance with Section 1.2 at the Closing
by delivery of a certificate or certificates evidencing the Purchased Shares,
free and clear of any Encumbrances (as defined in Section 3.2(a)) (other than
those placed thereon by or on behalf of the Purchasers), and the Purchasers will
make payment to the Company of the aggregate Purchase Price therefor by wire
transfer of immediately available funds at the Closing to an account designated
by the Company prior to the Closing.
2
SECTION 2.3. Adjustments. To the extent not reflected in the
adjustment provisions in the Certificate of Amendment, the applicable purchase
price, redemption, or other applicable provision with respect to the Purchased
Shares shall be adjusted to reflect any stock splits, cash or noncash dividends,
recapitalizations, mergers, combinations, distributions, issuances,
reclassifications, exchanges, substitutions or other similar adjustments with
respect to the capital stock of the Company, in each case consistent with the
adjustment provisions relating to the Purchased Shares in the Certificate of
Amendment.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchasers as follows
without giving effect to the consummation of the Pfizer Acquisition:
SECTION 3.1. Organization, Good Standing and Qualification. Each of
the Company and its Subsidiaries (as defined below) is a corporation or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of incorporation or formation, as the case may be, and has all
requisite corporate or other power and authority to own, lease and operate its
properties and assets and to carry on its business as currently conducted. Each
of the Company and its Subsidiaries is duly qualified and is authorized to do
business and is in good standing as a foreign corporation or other entity in all
jurisdictions in which the character or location of its activities and of the
properties owned or operated by it makes such qualification necessary, except
for those jurisdictions where the failure to be so qualified or authorized would
not, individually or in the aggregate, have a material adverse effect on the
business, operations, properties, assets, liabilities, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole, or
on the ability of the parties hereto to perform their respective obligations
under this Agreement and the Stockholders Agreement and to consummate the
transactions contemplated hereby and thereby (a "Material Adverse Effect"). The
Company has provided to the Purchasers a complete and correct copy of its
Restated Certificate of Incorporation, as in effect on the date hereof (the
"Restated Certificate"), and of its Bylaws, as amended through the date hereof
(the "Bylaws").
SECTION 3.2. Subsidiaries. As used herein, "Subsidiary" means (i)
any corporation of which a majority of the securities entitled to vote generally
in the election of directors thereof, at the time as of which any determination
is being made, is owned by another entity, either directly or indirectly, and
(ii) any joint venture, general or limited partnership, limited liability
company or other legal entity in which an entity is the record or beneficial
owner, directly or indirectly, of a majority of the voting interests or is the
general partner.
(a) Section 3.2(a) of the disclosure schedule delivered by the
Company to the Purchasers concurrently with the execution and delivery of this
Agreement (the "Company Disclosure Schedule") accurately sets forth each
Subsidiary of the Company, including its name, place of incorporation or
formation, and if not wholly owned directly or indirectly by the Company, the
record ownership of all capital stock or other equity interests issued thereby.
Except as set forth in Section 3.2(a) of the Company Disclosure Schedule, all
shares of capital stock or other equity interests of any Subsidiary directly or
indirectly owned by the Company have been duly authorized and validly issued,
are fully paid and nonassessable and are directly or indirectly owned by the
Company free and clear of any Encumbrance and have not been issued
3
in violation of, nor subject to, any preemptive, subscription or other similar
rights. "Encumbrance" means any security interest, pledge, mortgage, lien
(statutory or other), charge, option to purchase, lease or otherwise acquire any
interest or any claim, restriction, covenant, title defect, hypothecation,
assignment, deposit arrangement or other encumbrance of any kind or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement).
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, the Company does not own any capital stock, membership interests,
security or other interest in any Person (as defined in Section 8.1) other than
the Subsidiaries listed in Section 3.2(a) of the Company Disclosure Schedule,
and except as set forth in Section 3.2(b) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries has any written, or to the
knowledge of the Company, oral understanding or agreement to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any other Person.
SECTION 3.3. Capitalization; Voting Rights.
(a) As of November 30, 2000, the capitalization of the Company
consisted of the following:
(i) 16,200 shares of Class A Common Shares, par value $0.10 per
share (the "Class A Common Stock"), are authorized, of which only 12,600
shares are issued and outstanding;
(ii) 14,100 shares of Class B Common Shares, par value $0.10 per
share (the "Class B Common Stock"), are authorized, of which only
11,888.50 shares are issued and outstanding; and
(iii) 155,750 shares of Preferred Shares, par value $100.00 per
share (the "Preferred Stock"), are authorized, of which only 5,207 shares
are designated Series A Preferred Shares, of which only 5,207 shares are
issued and outstanding (the "Series A Preferred Stock"), and the rights,
preferences, privileges and restrictions of the Preferred Stock and Series
A Preferred Stock are as stated in the Restated Certificate.
(b) All issued and outstanding shares of the Company's capital stock
(i) have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, (iii) were issued in compliance with all applicable state and
federal laws concerning the issuance of securities, and (iv) were not issued in
violation of, or subject to, any subscription, rights of first refusal,
preemptive or any other similar rights of any other Person.
(c) Except as set forth in Section 3.3(c) of the Company Disclosure
Schedule, there are no outstanding options, calls, warrants, rights (including
but not limited to any subscription, rights of first refusal, preemptive or any
other similar rights ), proxy or stockholder agreement or any other agreement or
understanding of any kind for:
(i) the purchase or acquisition from the Company or any of its
Subsidiaries of any of their capital stock or similar interests, nor has
the Company or any of its Subsidiaries taken or agreed to take any action
to issue or grant the same;
4
(ii) the voting or transfer of the capital stock or similar
interests of the Company or any of its Subsidiaries, to which the Company
or any of its Subsidiaries or, to the knowledge of the Company, any of its
stockholders, partners or members, is a party or is bound with respect
thereto;
(iii) the repurchase, redemption or any other acquisition of any
capital stock or similar interests of the Company or any of its
Subsidiaries; or
(iv) the registration of equity securities or similar interests of
the Company or any of its Subsidiaries for the public sale thereof under
federal or state securities laws.
(d) Except as set forth in Section 3.3(d) of the Company Disclosure
Schedule, (i) the consummation of the transactions contemplated by this
Agreement and the Stockholders Agreement will not trigger the anti-dilution
provisions or other price adjustment mechanisms of any outstanding options,
calls, warrants, rights (including but not limited to any subscription, rights
of first refusal, preemptive or any other similar rights ), proxy or stockholder
agreement or any other agreement or understanding of any kind under which the
Company is or may be obligated to issue or acquire shares of any of its capital
stock; and (ii) the sale of the Purchased Shares is not and will not be subject
to any subscription, rights of first refusal, preemptive or any other similar
rights that have not been properly waived prior to Closing.
(e) The Purchased Shares have been duly and validly authorized, and
when the Purchased Shares are issued in accordance with the provisions of this
Agreement, such shares (i) will be duly authorized, validly issued, fully paid
and nonassessable, (ii) will be delivered to the Purchasers free and clear of
all Encumbrances (other than those placed thereon by or on behalf of Purchaser),
and (iii) will have the rights, preferences, privileges and restrictions set
forth in the Certificate of Amendment.
SECTION 3.4. Authorization; Binding Obligations. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and the Stockholders Agreement, to consummate the transactions contemplated
hereby and thereby and to perform its obligations hereunder and thereunder,
including but not limited to the filing of the Certificate of Amendment with the
Secretary of State of the State of New York. All action on the part of the
Company, its officers, directors and stockholders necessary for the execution
and delivery of this Agreement and the Stockholders Agreement, the consummation
of the transactions contemplated hereby and thereby, and the performance of all
obligations of the Company hereunder and thereunder, including but not limited
to the filing of the Certificate of Amendment with the Secretary of State of the
State of New York, has been effectively taken prior to the Closing. This
Agreement and the Stockholders Agreement have been duly executed and delivered
by the Company. This Agreement and the Stockholders Agreement (assuming due
execution and delivery by the other parties thereto) are legal, valid and
binding obligations of the Company enforceable against it in accordance with
their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
5
SECTION 3.5. SEC Reports; Financial Statements.
(a) The Company has filed with the U.S. Securities and Exchange
Commission (the "SEC") all forms, reports, schedules, proxy statements
(collectively, and in each case including but not limited to all exhibits and
schedules thereto and documents incorporated by reference therein and including
but not limited to all registration statements and prospectuses filed with the
SEC, the "SEC Reports") required to be filed by the Company with the SEC since
June 11, 1998. As of the date of filing, each SEC Report complied in all
material respects with the requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder. No SEC
Report contained when filed (except to the extent revised or superceded by a
subsequent filing with the SEC publicly available prior to the date hereof)
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated financial statements (including the
notes thereto) included in the SEC Reports (i) complied as to form, as of its
date of filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, (ii) has been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and (iii) fairly
presents in all material respects the consolidated financial position of Company
and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended, subject
(in the case of unaudited financial statements) to normal year-end adjustments
and any other adjustments described therein or in the notes or schedules thereto
which, individually or in the aggregate, are not material.
(c) Section 3.5(c) of the Company Disclosure Schedule sets forth the
unaudited consolidated balance sheet of the Corporation as of September 30, 2000
pro forma for the Pfizer Acquisition (the "Pro Forma Financial Statements")
certified by the chief financial officer of the Corporation. The Pro Forma
Financial Statements have been prepared on a basis consistent with the Company's
consolidated financial statements (including the notes thereto) included in the
SEC Reports, except as otherwise noted, and give effect to assumptions used in
the preparation thereof on a reasonable basis and in good faith and fairly
presents in all material respects the consolidated financial position of Company
and its consolidated Subsidiaries upon giving effect to the Pfizer Acquisition.
SECTION 3.6. Undisclosed Liabilities. Except as set forth in Section
3.6 of the Company Disclosure Schedule and except for liabilities included or
reserved for in the audited consolidated balance sheet of the Company included
in its Annual Report on Form 10-K for the fiscal year ended June 30, 2000 (the
"Form 10-K"), as filed with the SEC or otherwise disclosed in an SEC Report
filed after the Form 10-K and publicly available prior to the date hereof (the
Form 10-K and such other SEC Reports, the "Recent SEC Reports"), neither the
Company nor any of its Subsidiaries had at June 30, 2000, and since that date
none of them has incurred, liabilities or any other obligations whatsoever that
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, except current liabilities incurred in the ordinary
course of business consistent with past practice.
6
SECTION 3.7. Material Contracts.
(a) Except as disclosed in the Recent SEC Reports, Section 3.7(a) of
the Company Disclosure Schedule sets forth the agreements, contracts or
commitments that are material to the business of the Company and its
Subsidiaries (collectively, the "Contracts"), including but not limited to the
following:
(i) all "material contracts" within the meaning of Item 601 of
Regulation S-K of the SEC;
(ii) all those restricting the Company or any of its Subsidiaries
from engaging in any line of business or competing with any Person or in
any geographical area;
(iii) all those restricting the payments of dividends or other
distributions upon, or the redemption, exercise or conversion of, the
capital stock of the Company or any of its Subsidiaries, including but not
limited to the Purchased Shares;
(iv) all those relating to the indebtedness of the Company or any of
its Subsidiaries, including but not limited to indentures and credit
agreements, in each case in excess of $500,000;
(v) all those relating to any merger, consolidation, combination, or
acquisition or disposition of any assets in excess of $500,000 of the
Company or any of its Subsidiaries outside the ordinary course of
business;
(b) Neither the Company nor any of its Subsidiaries is in, nor to
the Company's knowledge is any other party to any Contract in, material default
under, or in material breach or material violation of, any Contract and, to the
knowledge of the Company, no event has occurred which, with the giving of notice
or passage of time or both would constitute a material default by the Company or
any other party under any Contract. Other than Contracts which have terminated
or expired in accordance with their terms, each of the Contracts is in full
force and effect and (assuming due execution and delivery by the counterparties
thereto) is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
SECTION 3.8. Affiliate Transactions.
(a) Except as disclosed in the Recent SEC Reports or otherwise set
forth in Section 3.8(a) of the Company Disclosure Schedule, there are no
agreements, contracts, commitments, understandings or proposed transactions
between the Company or any Subsidiary, on the one hand, and, on the other hand,
any of its officers, directors, stockholders, or employees or any family member
or Affiliate thereof that is or would be required to be disclosed pursuant to
Item 404 of Regulation S-K of the SEC.
(b) Except as disclosed in the Recent SEC Reports or otherwise set
forth in Section 3.8(b) of the Company Disclosure Schedule, neither the Company
nor any Subsidiary is
7
indebted to or has guaranteed or indemnified, directly or indirectly, any of
their respective officers, directors, stockholders, or employees or to any
family member or Affiliate thereof, in any amount, other than for normal travel
advances or reimbursement for normal business expenses; and none of such
officers, directors or stockholders or any family member or Affiliate thereof is
indebted to the Company or any Subsidiary.
(c) Section 3.8(c) of the Company Disclosure Schedule sets forth a
description of all transactions since June 30, 2000, between the Company and any
of its officers, directors, stockholders, or employees or any family member or
Affiliate thereof in which such persons had a direct or indirect material
interest, (including without limitation, the purchase, sale, lease or exchange
of any property, or rendering of any service or modification or amendment of any
existing agreement or arrangement), except for any transaction or series of
transactions that involve obligations, individually or in the aggregate, as the
case may be, of less than $50,000 or employment agreements that are disclosed
elsewhere in a schedule hereto.
SECTION 3.9. Absence of Material Changes.
(a) Except as disclosed in the Recent SEC Reports, since September
30, 2000, no event, change or circumstance has occurred which has had, or would
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.
(b) Except as disclosed in the Recent SEC Reports, since September
30, 2000, the Company and its Subsidiaries have carried on their respective
businesses only in the ordinary and usual course consistent with their past
practices.
(c) Except as disclosed in the Recent SEC Reports or otherwise set
forth in Section 3.9(c) of the Company Disclosure Schedule, since September 30,
2000, the Company has not taken any action or omitted to take any action and
there has not occurred any event which, if it had taken place following the date
hereof and prior to the Closing, would not have been permitted by Section 5.1 of
this Agreement without the prior consent of the Purchaser.
SECTION 3.10. Title to Properties and Assets; Liens, Condition, Etc.
Except as disclosed in Section 3.10 of the Company Disclosure Schedule:
(a) The Company and each of its Subsidiaries have good and
marketable title to their respective properties and assets, and good title to
their respective leasehold estates, in each case subject to no Encumbrance,
other than (i) liens for current taxes not yet due and payable, (ii) possible
minor Encumbrances which do not in any case materially detract from the value of
the property subject thereto or materially impair the operations of the Company
and its Subsidiaries, and which have not arisen other than in the ordinary
course of business consistent with past practice, and (iii) Encumbrances
relating to vendor or installation purchases, so long as such Encumbrances
extend only to the properties or other assets whose purchase was so financed.
(b) The Company and each of its Subsidiaries are in compliance with
all material terms of each lease to which they are a party or are otherwise
bound.
(c) All material properties, equipment and systems of the Company
and its Subsidiaries are in good repair, working order and condition and are in
material compliance with
8
all applicable standards and rules imposed (i) by any governmental agency or
authority of any jurisdiction in which such properties, equipment and systems
are located, and (ii) under any agreements with customers.
SECTION 3.11. Intellectual Property.
(a) Except as disclosed in Section 3.11(a) of the Company Disclosure
Schedule, (i) the Company and all of its Subsidiaries own or have the right to
use all the Intellectual Property (as defined below) necessary or advisable for
the Company and its Subsidiaries to conduct their business as is currently
conducted, consistent with past practice, or as proposed to be conducted; (ii)
all of the Intellectual Property owned, held, used, or proposed to be used by
the Company or its Subsidiaries ("Company IP") is valid, enforceable and
unexpired, is free of Encumbrances, and has not been abandoned; (iii) to the
Company's knowledge, the Company IP does not infringe or otherwise impair the
Intellectual Property of any third party and is not being infringed or impaired
by any third party; (iv) no judgment, decree, injunction, rule or order has been
rendered or, to the best knowledge of the Company, is threatened by any
governmental entity which would limit, cancel or question the validity of (or
the Company or any Subsidiary's right to own or use) any Company IP; (v) the
Company takes all reasonable steps to protect, maintain and safeguard the
Company IP, including executing all appropriate confidentiality agreements, and
has made all filings and executed all agreements necessary or desirable in
connection therewith; (vi) no party to a license, sublicense, consent-to-use
agreement and other agreement concerning Company IP to which the Company or any
of its Subsidiaries is a party ("IP Licenses") is, or is alleged to be, in
material breach or default thereunder; (vii) the transactions contemplated by
this Agreement and the Pfizer Agreement shall in no way materially impair or
limit the rights of the Company or any of its Subsidiaries under any IP License,
or cause any payments to be due thereunder.
(b) For purposes of this Agreement, the term "Intellectual Property"
means all U.S., state and foreign intellectual property, including without
limitation all (i) (w) inventions, discoveries, processes, designs, techniques,
developments, technology, and related improvements and know-how, whether or not
patented or patentable; (x) copyrights and works of authorship in any media,
including computer programs, software, databases and related items, graphics,
artwork, photography, advertising and promotional materials (including graphics
and text), designs, proprietary or copyrightable elements of pictorial, graphic
or sculptural works, functional or utilitarian objects, and all other authors'
rights, including "moral rights"; (y) trademarks, service marks, trade names,
brand names, corporate names, domain names, logos, trade dress and all elements
thereof, the goodwill of any business symbolized thereby, and all common-law
rights relating thereto; (z) trade secrets and other confidential information;
(ii) all registrations, applications, recordings, and licenses or other
agreements related thereto; (iii) all rights to obtain renewals, extensions,
continuations, continuations-in-part, reissues, divisions or similar legal
protections related thereto; and (iv) rights to bring an action at law or in
equity for the infringement or other impairment of the foregoing before the
Closing Date, including the right to receive all proceeds and damages therefrom.
SECTION 3.12. Compliance with Law; Other Instruments. Except as
disclosed in the Recent SEC Reports:
(a) Neither the Company nor any of its Subsidiaries is in violation
or default of (i) the Restated Certificate or Bylaws or the organizational
documents of any Subsidiary or (ii)
9
any judicial or administrative judgment, decision, decree, order, settlement,
injunction, writ, stipulation, determination or award (each, an "Order") or any
statute, law, ordinance, rule or regulation (each, a "Law") and has received no
notice of, and to the knowledge of the Company, no investigation or review is in
process or threatened by any governmental authority with respect to, any
violation or alleged violation of any Order or Law except, in the case of any
Order or Law, where such violation or default would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement and
the Stockholders Agreement, and the consummation of the transactions
contemplated hereby and thereby, including but not limited to the filing of the
Certificate of Amendment with the Secretary of State of the State of New York,
will not result in (x) (i) any violation, or be in conflict with or constitute a
default (with or without notice or lapse of time or both) under the Restated
Certificate or Bylaws or the organizational documents of any Subsidiary, (ii)
any violation, or be in conflict with or constitute a default (with or without
notice or lapse of time or both) under, any term or provision of, or any right
of termination, cancellation or acceleration arising under any Contract or cause
any liabilities or additional fees to be due thereunder, or (iii) any violation
under any Order or Law applicable to the Company or any of its Subsidiaries,
their business or any of their properties or (y) result in the imposition of any
Encumbrance on the business or properties of the Company or any of its
Subsidiaries.
(c) None of the execution and delivery of this Agreement and the
Stockholders Agreement, the consummation of the transactions contemplated hereby
and thereby, or the performance of the obligations of the Company hereunder and
thereunder, including but not limited to the filing of the Certificate of
Amendment with the Secretary of State of the State of New York, will result in
the suspension, revocation, impairment, forfeiture or nonrenewal of any Permit
(as defined in Section 3.19) applicable to the Company or any of its
Subsidiaries, its business or operations or any of its assets or properties.
SECTION 3.13. Litigation. Except as disclosed in the Recent SEC
Reports, there is no legal action, suit, arbitration or other legal,
administrative or other governmental investigation, inquiry or proceeding
pending (collectively, an "Action") or, to the best knowledge of the Company,
threatened against or affecting the Company or its Subsidiaries which, if
determined adversely to the Company or its Subsidiaries, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.14. Tax Matters.
(a) Except as set forth in Section 3.14(a) of the Company Disclosure
Schedule, (i) all material Tax Returns that are required to be filed by or with
respect to the Company and its Subsidiaries have been duly filed, (ii) all
material Taxes of the Company and its Subsidiaries due and payable, whether or
not shown on the Tax Returns referred to in clause (i), have been paid in full,
(iii) the Tax Returns referred to in clause (i) are not currently being audited,
or to the knowledge of the Company threatened to be audited, by the Internal
Revenue Service or the appropriate state, local or foreign taxing authority,
(iv) all material deficiencies asserted or assessments made as a result of such
examinations have been paid in full, (v) no material issues that have been
raised by the relevant taxing authority in connection with the examination of
any of the Tax Returns referred to in clause (i) are currently pending, (vi) no
waiver of statutes of limitation have been given by or requested with respect to
any Taxes of the
10
Company or its Subsidiaries, (vii) there are no liens for Taxes on any asset of
the Company or any of its Subsidiaries other than for current Taxes not yet due
and payable, or if due, (A) not delinquent or (B) being contested in good faith
by appropriate proceedings, and (viii) no consent has been filed relating to the
Company or any of its Subsidiaries pursuant to Section 341(f) of the Internal
Revenue Code of 1986, as amended (the "Code").
(b) For purposes of this Agreement, the term (i) "Taxes" means all
taxes, charges, fees, levies, penalties or other assessments imposed by any
United States or foreign federal, state, local or foreign taxing authority,
including, but not limited to, income, excise, property, sales and use,
transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto, and (ii)
"Tax Return" means any return, report, information return or other document
(including any related or supporting information) filed or required to be filed
with any taxing authority with respect to Taxes.
SECTION 3.15. Employees. Except as disclosed in Section 3.15 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any collective bargaining agreements with any of its employees. There is no
labor union organizing activity pending or, to the knowledge of the Company or
any of its Subsidiaries, threatened with respect to the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is aware that any
officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company or any of its Subsidiaries, nor does
the Company or any of its Subsidiaries have a present intention to terminate the
employment of any officer, key employee or group of key employees. No employee
of the Company or its Subsidiaries is bound by any contract, agreement or
covenant that would interfere or conflict with or restrict in any way its full
provision of services thereto, including any of the foregoing relating to trade
secrets, confidential information or other Intellectual Property.
SECTION 3.16. Environmental and Safety Laws.
(a) Except as disclosed in Section 3.16 of the Company Disclosure
Schedule or except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect:
(i) the Company and each of its Subsidiaries complies with all
applicable Environmental Laws (as defined below) and has not violated such
laws, and the Company and each of its Subsidiaries possesses and complies
with all Environmental Permits (as defined below) required under such
Environmental Laws and has not violated such permits;
(ii) to the knowledge of the Company or any of its Subsidiaries,
there are no events, circumstances, practices, plans, or legal
requirements that could reasonably be expected to prevent the Company or
any of its Subsidiaries from (or increase the burden on the Company or any
of its Subsidiaries of) complying with applicable Environmental Laws or
obtaining, renewing, or complying with all Environmental Permits required
under such laws;
(iii) there are and have been no Materials of Environmental Concern
(as defined below), or other conditions, at any property currently or
formerly owned, leased, operated, or otherwise used by the Company or any
of its Subsidiaries now or, to the
11
knowledge of the Company, at any other off-site location (including
without limitation any location used for the storage, disposal, recycling
or other handling of any Materials of Environmental Concern), that could
reasonably be expected to give rise to liability of the Company or any of
its Subsidiaries under any Environmental Law or result in costs to the
Company or any of its Subsidiaries arising out of any Environmental Law;
(iv) none of the Company or any of its Subsidiaries has received any
Environmental Claim (as defined below), and to the knowledge of the
Company or any of its Subsidiaries, there are no threatened Environmental
Claims or any circumstances, conditions or events that could reasonably be
expected to result in an Environmental Claim, against the Company or any
of its Subsidiaries;
(v) none of the Company or any of its Subsidiaries has entered into
any consent decree or other agreement under any Environmental Law, and
none of the Company or its Subsidiaries is subject to any judgment,
decree, order or similar written requirement relating to compliance with
any Environmental Law or to Materials of Environmental Concern;
(vi) to the knowledge of the Company, each of the foregoing
representations and warranties also applies to any Person for which the
Company or any of its Subsidiaries assumed or retained responsibility,
whether by contract or operation of law.
(b) The Company reasonably believes that the matters disclosed in
Section 3.16 of the Company Disclosure Schedule, individually or in any
aggregation, will not have a Material Adverse Effect.
(c) The Company has made available to the Purchasers copies of all
material Environmental Reports in the possession or reasonable control of the
Company or any of its Subsidiaries, which copies are unaltered and complete to
the extent in the possession or reasonable control of the Company or any of its
Subsidiaries.
(d) This Section 3.16 is the exclusive section containing
representations and warranties concerning environmental and health and safety
matters.
(e) For purposes of this Agreement, the terms below are defined as
follows:
(i) "Environmental Claim" means any written or oral notice, claim,
demand, order, action, suit, complaint, proceeding or other communication
by any person alleging liability or potential liability (including without
limitation liability or potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties) arising out of,
relating to, based on or resulting from (A) the presence, discharge,
emission, release or threatened release of any Materials of Environmental
Concern at any location, whether or not owned, leased or operated by the
Company or any of its Subsidiaries, or (B) circumstances forming the basis
of any violation or alleged violation of any Environmental Law or
Environmental Permit, or (C) otherwise relating to obligations or
liabilities under any Environmental Laws.
12
(ii) "Environmental Laws" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other
written legally enforceable requirement (including, without limitation,
common law) of any foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to
or imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety.
(iii) "Environmental Permits" means any and all permits, licenses,
registrations, approvals, exemptions and any other authorization required
under any Environmental Law.
(iv) "Environmental Report" means any report, study, assessment,
audit, or other similar document that addresses any issue of actual or
potential noncompliance with, actual or potential liability under or cost
arising out of, or actual or potential impact on the business arising
under, any Environmental Law or any proposed or anticipated change in or
addition to Environmental Law, that may affect the Company or any of its
Subsidiaries.
(v) "Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances of any kind, that is regulated pursuant to or could give rise
to liability under any Environmental Law.
SECTION 3.17. Offering Valid. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Section 4.2
hereof, the offer, sale and issuance of the Purchased Shares will be exempt from
the registration requirements of the Securities Act and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.
SECTION 3.18. Employee Benefit Plans.
(a) Section 3.18(a) of the Company Disclosure Schedule contains a
true and complete list of each U.S. "employee benefit plan" (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (other than de minimus payroll practices), including, without
limitation, multiemployer plans within the meaning of Section 3(37) of ERISA,
and all stock purchase, stock option, severance, employment, change-in-control,
fringe benefit, bonus, incentive, deferred compensation and other plans,
agreements, programs, policies and arrangements, whether or not subject to
ERISA, (including any funding mechanism therefor now in effect or required in
the future as a result of the transactions contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Company or its Subsidiaries
has any present or future right to benefits and which is maintained or
contributed to by the Company or any of its Subsidiaries or under which the
Company or any of its Subsidiaries has any present or future liability. All such
plans, agreements, programs, policies and arrangements of the Company and its
Subsidiaries, whether U.S. or foreign and whether or not disclosed in Section
3.18(a) of the Company Disclosure Schedule, shall be collectively referred to as
the "Company Plans."
13
(b) With respect to each Company Plan, the Company has provided or
made available to the Purchasers a current, accurate and complete copy (or, to
the extent no such copy exists, an accurate description) thereof and, to the
extent applicable: (i) any related trust agreement or other funding instrument;
(ii) the most recent determination letter, if applicable; (iii) any summary plan
description and other written communications by the Company or its Subsidiaries
to their employees concerning the extent of the benefits provided under such
Company Plan; and (iv) if applicable, for the three most recent years (A) the
Form 5500 and attached schedules, (B) audited financial statements, and (C)
actuarial valuation reports.
(c) (i) Each Company Plan has been established and administered in
accordance with its terms and has complied in all material respects with the
applicable provisions of ERISA, the Code and other applicable laws, rules and
regulations; (ii) to the knowledge of the Company, no event has occurred and no
condition exists that would subject the Company or its Subsidiaries, either
directly or by reason of their affiliation with any member of their "Controlled
Group" (defined as any organization which is a member of a controlled group of
organizations within the meaning of Code Sections 414(b), (c), (m) or (o)), to
any material tax, fine, lien, penalty or other liability imposed by ERISA, the
Code or other applicable laws, rules and regulations; (iii) each Company Plan
which is intended to be qualified within the meaning of Code Section 401(a) is
so qualified and has received a favorable determination letter as to its
qualification, and, to the knowledge of the Company, subsequent to such letter
nothing has occurred, whether by action or failure to act, that could reasonably
be expected to cause the loss of such qualification; and (iv) except as
described in Section 3.18(c) of the Company Disclosure Schedule, no Company Plan
provides retiree welfare benefits and neither the Company nor its Subsidiaries
have any obligations to provide any retiree welfare benefits.
(d) Neither the Company nor any of its Subsidiaries has incurred any
withdrawal liability or termination liability with respect to any such plan that
remains unsatisfied. The Company has not engaged in, and is not a successor or
parent corporation to any Person that has engaged in, a transaction described in
Section 4069 or 4212(c) of ERISA.
(e) With respect to each of the Company Plans that is not a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA but is
subject to Title IV of ERISA, as of the Closing Date, the assets of each such
Company Plan are at least equal in value to the present value of the accrued
benefits (vested and unvested) of the participants in such Company Plan on a
termination and projected benefit obligation basis, based on the actuarial
methods and assumptions indicated in the most recent actuarial valuation
reports.
(f) With respect to any multiemployer plan (within the meaning of
ERISA Section 4001(a)(3)) to which the Company, its Subsidiaries or any member
of their Controlled Group has any liability or contributes (or has at any time
contributed or had an obligation to contribute): (i) none of the Company, its
Subsidiaries or any member of their Controlled Group has incurred any withdrawal
liability under Title IV of ERISA or would be subject to such liability if, as
of the Closing Date, the Company, its Subsidiaries or any member of their
Controlled Group were to engage in a complete withdrawal (as defined in ERISA
Section 4203) or partial withdrawal (as defined in ERISA Section 4205) from any
such multiemployer plan; and (ii) no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in ERISA Sections 4241
and 4245, respectively).
14
(g) Except as set forth in Section 3.18(g) of the Company Disclosure
Schedule, no Company Plan exists that could result in the payment to any present
or former employee of the Company or its Subsidiaries of any money or other
property or accelerate or provide any other rights or benefits to any present or
former employee of the Company or its Subsidiaries as a direct result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code Section 280G. With
respect to the items set forth in Section 3.18(g) of the Company Disclosure
Schedule, the Company has provided to the Purchasers calculations, if any, which
have been prepared with respect to amounts which or might reasonably be expected
to result in a parachute payment within the meaning of Code Section 280G.
(h) The Company is primarily engaged directly or through a majority
owned Subsidiary or Subsidiaries, in the production or sale of a product or
service, other than the investment of capital.
SECTION 3.19. Permits. The Company and its Subsidiaries hold all
licenses, permits, orders, consents, approvals, registrations, authorizations,
qualifications and filings with and under all federal, state, local or foreign
laws and governmental authorities and all industry or other non-governmental
organizations (collectively, "Permits") necessary for the lawful conduct of
their respective businesses as they are presently being conducted, except where
the failure to so hold Permits, individually or in the aggregate, would not have
a Material Adverse Effect. All Permits are in full force and effect, except
where the failure to be in effect would not, individually or in the aggregate,
have a Material Adverse Effect. The Company and its Subsidiaries have complied
with the terms of the Permits, except where the failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect, and there are
no pending modifications, amendments or, to the Company's knowledge, revocations
of any Permits. All fees due and payable from the Company or any of its
Subsidiaries to governmental authorities or other third parties pursuant to the
Permits have been paid. There are no pending or, to the knowledge of the
Company, threatened, suits, actions, proceedings or, to the Company's knowledge,
investigations with respect to the possible revocation, cancellation,
suspension, limitation or nonrenewal of any Permits, which if adversely
determined would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, and, to the Company's knowledge, there has
occurred no event which (whether with notice or lapse of time or both) could
reasonably be expected to result in or constitute the basis for such a
revocation, cancellation, suspension, limitation or nonrenewal thereof.
SECTION 3.20. No Broker. Neither the Company nor any of its
Subsidiaries has employed any broker or finder, or incurred any liability for
any brokerage or finders' fees or any similar fees or commissions in connection
with the transactions contemplated by this Agreement or the Stockholders
Agreement.
SECTION 3.21. Pfizer Representation and Warranties. Each of the
representations and warranties made by Pfizer and the Asset Selling Corporations
(as defined in the Pfizer Agreement) in the Pfizer Agreement are true and
correct as of the date hereof, except that those representations and warranties
that address matters only as of a particular date are true and correct as of
such date.
SECTION 3.22. Disclosure. Neither this Agreement (including all
Exhibits and Schedules hereto) nor any of the other agreements or instruments
contemplated to be executed
15
and delivered by the Company in connection with this Agreement contain any
untrue statement of material fact; and none of such documents omits to state any
material fact necessary to make any of the representations, warranties or other
statements or information contained therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Each Purchaser hereby represents and warrants to the Company as
follows:
SECTION 4.1. Requisite Power and Authority. Such Purchaser has all
requisite power and authority to execute and deliver this Agreement and the
Stockholders Agreement, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. All action on
such Purchaser's part necessary for the execution and delivery of this Agreement
and the Stockholders Agreement, the consummation of the transactions
contemplated hereby and thereby and the performance of all obligations of such
Purchaser hereunder and thereunder has been effectively taken prior to the
Closing. This Agreement and the Stockholders Agreement have been duly executed
and delivered by such Purchaser. This Agreement and the Stockholders Agreement
(assuming due execution and delivery by the other parties thereto) are legal,
valid and binding obligations of such Purchaser, enforceable against it in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
SECTION 4.2. Investment Representations. Such Purchaser acknowledges
that the Purchased Shares have not been registered under the Securities Act or
under any state securities laws. Such Purchaser (a) is acquiring the Purchased
Shares for investment for its own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof,
(b) is an "accredited investor" within the meaning of Regulation D, Rule 501(a),
promulgated by the SEC, (c) acknowledges that the Purchased Shares, if not
redeemed in accordance with their terms, may have to be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from the
registration requirements of the Securities Act is available and (c) represents
that by reason of its business or financial experience, such Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated by this Agreement and the Stockholders Agreement. Such Purchaser
has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management.
SECTION 4.3. Litigation. There is no Action pending, or to such
Purchaser's knowledge, currently threatened against it which, if adversely
determined, would, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Purchaser to perform its
obligations under this Agreement and the Stockholders Agreement and to
consummate the transactions contemplated hereby and thereby.
SECTION 4.4. No Broker. Such Purchaser has not employed any broker
or finder, or incurred any liability for any brokerage or finders' fees or
16
any similar fees or commissions in connection with the transactions contemplated
by this Agreement or the Stockholders Agreement.
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.1. Ordinary Course of Business.
(a) Except as otherwise contemplated by the terms of this Agreement,
during the period from the date of this Agreement to the Closing Date (the
"Pre-Closing Period"), the Company shall use commercially reasonable efforts to
preserve intact its and its Subsidiaries' current business organizations, keep
available the services of their current officers and employees and preserve
their relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with them to the
end that their goodwill and ongoing businesses shall be unimpaired.
(b) Without limiting the generality of the foregoing, during the
Pre-Closing Period and except in accordance with the Pfizer Agreement, each of
the Company and its Subsidiaries shall not, without the prior consent of
Purchaser:
(i) except in the ordinary course of business, approve any new, or
modify any existing (x) executive, officer and director compensation plans
or agreements or (y) other material employee compensation or benefit plan,
agreement or arrangement, offered by the Company or any of its
Subsidiaries, including without limitation, any stock option plan;
(ii) change the number of Directors ("Directors") of the Board of
Directors of the Company (the "Board") or the composition or structure of
the Board or any Board committee or establish any Board committees and
appointments thereto;
(iii) increase or decrease the total number of authorized or issued
shares of any capital stock of the Company;
(iv) authorize, create (by way of reclassification or otherwise) or
issue any capital stock or other securities of the Company;
(v) (A) merge or consolidate with or into any other Person, or
acquire another Person, or sell all or substantially all of the Company's
assets, in each case whether in a single transaction or series of related
transactions, other than acquisitions (by merger, consolidation or
otherwise) for a purchase price of not more than $1,000,000 in the
aggregate or (B) enter into any proposed transaction or series of related
transactions involving a change of control of the Company;
(vi) redeem, acquire or otherwise purchase any share of any capital
stock or other security of the Company;
(vii) sell a Subsidiary's capital stock or other securities to any
third party (other than the Company or any other wholly owned Subsidiary
of the Company);
17
(viii) amend, repeal or alter the Company's Restated Certificate or
Bylaws; or
(ix) enter into any arrangement or contract to do any of the
foregoing.
SECTION 5.2. Access. During the Pre-Closing Period, the Company
shall, and shall cause its Subsidiaries, officers, directors, employees,
auditors and other agents to, (a) afford the officers, employees, auditors and
other agents of Purchaser, during normal business hours reasonable access at all
reasonable times to its officers, employees, auditors, legal counsel,
properties, offices, plants and other facilities and to all books and records,
(b) furnish the Purchasers with all financial, operating and other data and
information as Purchaser, through its officers, employees or agents, may from
time to time reasonably request, and (c) afford the Purchasers the opportunity
to discuss the Company's affairs, finances and accounts with the Company's
officers on a regular basis.
SECTION 5.3. Use of Proceeds. The Company shall use all the proceeds
from the sale of the Purchased Shares hereby to purchase the Pfizer Assets in
accordance with the Pfizer Agreement and to pay for the fees and expenses as
contemplated in Sections 5.7 and 8.9 and for no other purpose.
SECTION 5.4. Further Efforts. Each party hereto agrees to use
commercially reasonable efforts to take any and all actions required in order to
consummate the transactions contemplated in this Agreement and the Stockholders
Agreement. Each of the parties hereto shall use their commercially reasonable
efforts to give such notices and obtain all other authorizations, consents,
orders and approvals of all governmental authorities and other third parties
that may be or become necessary for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement and the Stockholders
Agreement and will cooperate fully with the other parties hereto in promptly
seeking to obtain all such authorizations, consents, orders and approvals.
SECTION 5.5. Notification of Certain Matters. During the Pre-Closing
Period, the Company shall give prompt notice to Purchasers of the occurrence or
non-occurrence of any event known to the Company the occurrence or
non-occurrence of which would reasonably be expected to cause any representation
or warranty contained in Article 3 to be untrue, or the failure of the Company
to comply with or satisfy any covenant or agreement under this Agreement.
SECTION 5.6. Appointment of Directors. Prior to the Closing, the
Company shall take all action necessary to increase the size of the Board to
five Directors and to cause the election of two designees of the Purchasers to
the Board and to allow one designee of the Purchasers to be an observer to the
Board.
SECTION 5.7. Transaction Fee. On a date to be mutually determined by
the Purchasers and the Company, but in any event no later than 45 days after the
Closing, the Company shall pay to Palladium Equity Partners, L.L.C.
("Palladium") a transaction and advisory fee in the amount of $3,250,000 million
in cash. The Company shall pay Palladium the transaction and advisory fee by
wire transfer of immediately available funds to an account designated by
Palladium.
18
ARTICLE 6
CONDITIONS TO CLOSING
SECTION 6.1. Conditions to Purchasers' Obligation to Purchase the
Purchased Shares. The Purchasers' obligation to purchase the Purchased Shares at
the Closing is subject to the satisfaction (or waiver by the Purchasers) of the
following conditions:
(a) Representations and Warranties True; Performance of Obligations.
Each of the representations and warranties of the Company contained in this
Agreement that is qualified as to materiality or Material Adverse Effect shall
be true and correct, and each of the representations and warranties of the
Company contained in this Agreement that is not so qualified as to materiality
or Material Adverse Effect shall be true and correct in all material respects,
in each case as of the Closing Date and assuming and giving effect to the
consummation of the Pfizer Acquisition (except for those representations and
warranties which address matters only as of a particular date, which shall be
true and correct, or true and correct in all material respects, as the case may
be, as of such date). The Company shall have performed in all material respects
all agreements, obligations, covenants and conditions herein required to be
performed or observed by it on or prior to the Closing Date.
(b) Legal Investment. On the Closing Date, there shall not be in
effect any Law or Order directing that the purchase and sale of the Purchased
Shares and the other transactions contemplated by this Agreement and the
Stockholders Agreement not be consummated or which has the effect of rendering
it unlawful to consummate such transactions.
(c) Proceedings and Litigation. No Action shall have been commenced
by any governmental authority against any party hereto seeking to restrain or
delay the purchase and sale of the Purchased Shares or the other transactions
contemplated by this Agreement and the Stockholders Agreement.
(d) Approvals. All approvals, consents, permits and waivers of
governmental authorities and of the third parties listed in Section 6.1(d) of
the Company Disclosure Schedule necessary or appropriate for consummation of the
transactions contemplated by this Agreement and the Stockholders Agreement shall
have been obtained, and no such approval, consent, permit or waiver of any
governmental authority or such other third party shall contain any term or
condition that the Purchasers in their reasonable discretion determine to be
unduly burdensome.
(e) Secretary's Certificate. The Company shall have delivered to
the Purchasers a certificate executed by the Secretary of the Company, dated
such Closing Date, certifying as to (i) the resolutions of the Board evidencing
approval of the execution and delivery of this Agreement and the Stockholders
Agreement and performance of the transactions contemplated hereby and thereby,
including but not limited to the Certificate of Amendment, (ii) the Restated
Certificate, and (iii) the Bylaws.
(f) Legal Opinion. The Purchasers shall have received from legal
counsel to the Company an opinion addressed to them, dated as of such Closing
Date, in the form attached hereto as Exhibit C.
19
(g) Key Man Life Insurance. The Company shall have in effect key man
life insurance on Xxxx X. Xxxxxxxx as specified in Section 4.5 of the
Stockholders Agreement.
(h) Certificate of Amendment. The Certificate of Amendment shall
have been duly filed with and certified by the Secretary of State of the State
of New York.
(i) Stockholders Agreement. The Stockholders Agreement shall have
been executed and delivered by the Company and each of the other parties thereto
(other than the Purchasers).
(j) Board of Directors. The Company shall have taken all actions
required by Section 5.6.
(k) Budget. The Company shall have delivered to the Purchasers a
detailed consolidated and consolidating quarterly budget for the fiscal year
ending June 30, 2001, which shall include a projected income statement and a
projected cash flow statement for each month of such fiscal year and a projected
balance sheet as of the end of each month of such fiscal year.
(l) Pfizer Acquisition. The conditions of the Company to consummate
the transactions in the Pfizer Agreement in Sections 4.1 and 4.2 of the Pfizer
Agreement shall have been satisfied. A waiver by the Company of those sections
in the Pfizer Agreement shall not be deemed to be the satisfaction thereof
without the prior consent of the Purchasers, which consent shall not be
unreasonably withheld or delayed. Moreover, the Pfizer Acquisition shall have
been consummated no later than concurrently with the Closing hereof; provided
that the closing of the Conveyed Assets (as defined in the Pfizer Agreement) in
Belgium, Japan and China may occur after the Closing in accordance with Section
7.3(d) of the Pfizer Agreement.
(m) Other Financing. The Company shall have consummated the receipt
of secured bank financing for not more than $90,000,000 pursuant to Section
6.1(m) of the Company Disclosure Schedule, or upon terms and conditions which
are, in the reasonable judgment of Purchaser, substantially equivalent thereto,
and to the extent that any of the terms and conditions are not set forth in
Section 6.1(m) of the Company Disclosure Schedule, on terms and conditions
reasonably satisfactory to Purchaser.
(n) No Material Adverse Change. There shall have been no material
adverse change in the condition or operations of the Company or the Pfizer
Assets since the date hereof.
(o) Pfizer Seller Note. The note to be issued by the Company to
Pfizer or one of Pfizer's affiliates to purchase the Pfizer Assets shall not, in
the aggregate, exceed $40,000,000.
(p) Debt. The debts and liabilities of the Company at Closing prior
to giving effect to the Pfizer Acquisition shall not exceed $226,833,000.
(q) Financial Information. The Company shall have delivered to the
Purchasers the items specified in Section 2.4(b)(ii) of the Stockholders
Agreement for the full fiscal year.
20
(r) Management and Advisory Services Agreement. The Management and
Advisory Services Agreement in the form of Exhibit D hereto shall have been
executed and delivered by the Company.
SECTION 6.2. Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Purchased Shares at the Closing is subject to
the satisfaction (or waiver by the Company), on or prior to the Closing, of the
following conditions:
(a) Representations and Warranties True. Each of the representations
and warranties of the Purchasers contained in this Agreement that is qualified
as to materiality or material adverse effect shall be true and correct, and each
of the representations and warranties of the Purchasers contained in this
Agreement that is not so qualified as to materiality or material adverse effect
shall be true and correct in all material respects, in each case as of the
Closing Date (except for those representations and warranties which address
matters only as of a particular date, which shall be true and correct, or true
and correct in all material respects, as the case may be, as of such date). The
Purchasers shall have performed in all material respects all agreements,
obligations, covenants and conditions herein required to be performed or
observed by it on or prior to the Closing Date.
(b) Legal Investment. On the Closing Date, there shall not be in
effect any Law or Order directing that the purchase and sale of the Purchased
Shares and the other transactions contemplated by this Agreement and the
Stockholders Agreement not be consummated or which has the effect of rendering
it unlawful to consummate such transactions.
(c) Proceedings and Litigation. No Action shall have been commenced
by any governmental authority against any party hereto seeking to restrain or
delay the purchase and sale of the Purchased Shares or the other transactions
contemplated by this Agreement and the Stockholders Agreement.
ARTICLE 7
INDEMNIFICATION
SECTION 7.1. Survival of Representations and Warranties.
(a) The representations and warranties contained in Section 3.3 of
this Agreement shall survive indefinitely.
(b) All other representations and warranties contained in Article 3
of this Agreement shall survive until the first anniversary of the Closing Date,
with the exception of Section 3.14, which shall survive until the later of (x)
the second anniversary of the Closing Date or (y) three months after the
expiration of the applicable statute of limitations with respect to the subject
matter thereof.
(c) The representations and warranties contained in Article 4 of
this Agreement shall survive until the first anniversary of the Closing Date.
(d) The representations and warranties contained in Article 3 of
this Agreement, and the rights and remedies that may be exercised by any Person
seeking
21
indemnification hereunder, shall not be limited or otherwise affected by or as a
result of any information furnished to, or any investigation made by, any such
Person or its representatives.
(e) For purposes of this Agreement, each statement or other item of
information set forth by the Company on any Schedule hereto shall be deemed to
be a representation and warranty made by the Company in this Agreement.
SECTION 7.2. Indemnification.
(a) From and after the Closing Date and subject to Sections 7.1, 7.3
and 7.5, the Company (the "Purchaser Indemnitor") shall defend, indemnify and
hold harmless the Purchasers and their Affiliates and each director, officer,
member, partner, employee and agent of such Persons (the "Purchaser
Indemnitees") against any loss, damage, claim, liability, judgment or settlement
of any nature or kind, including all costs and expenses relating thereto,
including without limitation, interest, penalties and reasonable attorneys' fees
(collectively "Damages"), arising out of, resulting from or relating to:
(i) the breach of any representation or warranty contained in
Article 3, or any certificate delivered by the Company pursuant hereto;
and
(ii) the breach by the Company of any covenant or agreement (whether
to be performed prior to or after the Closing) contained in this
Agreement, or any certificate delivered by the Company pursuant hereto.
(b) From and after the Closing Date and subject to Sections 7.1, 7.3
and 7.5, the Purchasers (the "Company Indemnitor" and collectively with the
Purchaser Indemnitor, the "Indemnitors") shall defend, indemnify and hold
harmless the Company and its Affiliates and each director, officer, member,
partner, employee and agent of such Persons (the "Company Indemnitees" and
collectively with the Purchaser Indemnitees, the "Indemnitees") against any
Damages arising out of, resulting from or relating to:
(i) the breach of any representation or warranty contained in
Article 4; and
(ii) the breach by a Purchaser of any covenant or agreement (whether
to be performed prior to or after the Closing) contained in this
Agreement.
(c) The term "Damages" as used in this Article 7 is not limited to
matters asserted by third parties against any Person entitled to be indemnified
under this Article 7, and includes Damages incurred or sustained by any such
Person in the absence of third party claims, and shall take into account such
Person's ownership or investment in the Company.
SECTION 7.3. Indemnification Amounts. (a) An Indemnitor shall not
have liability under Section 7.2 until the aggregate amount of Damages
theretofore incurred by the Purchaser Indemnitees or the Company Indemnitees, as
applicable, exceeds an amount equal to $100,000 (the "Deductible"), in which
case the Purchaser Indemnitees or the Company Indemnitees, as applicable, shall
be entitled to Damages only in the amount by which all Damages exceed the
Deductible.
22
(b) The limitations on the indemnification obligations set forth in
this Article 7, including but not limited to Section 7.3(a), shall not apply to
any covenants or agreements of the parties hereto, including but not limited to
the agreements contained in Sections 5.7 and 8.9, and shall not apply to
breaches of the representations and warranties made in Section 3.3.
(c) Any indemnification payment made pursuant to this Article 7
shall be treated by the Company and the Purchasers for federal, state, local and
foreign tax purposes as an adjustment to the price paid by the Purchasers for
the Purchased Shares.
SECTION 7.4. Non-Exclusive Remedy. The indemnification remedies
provided in this Article 7 shall not be deemed to be exclusive. Accordingly, the
exercise by any Person of any of its rights under this Article 7 shall not be
deemed to be an election of remedies and shall not be deemed to prejudice, or to
constitute or operate as a waiver of, any other right or remedy that such Person
may be entitled to exercise (whether under this Agreement, under any other
contract, under any law or otherwise).
SECTION 7.5. Certain Limitations. The indemnification obligations of
the parties hereto for any breach of a representation and warranty described in
Articles 3 and 4 of this Agreement shall survive for only the period applicable
to such representations and warranties as set forth in Section 7.1 of this
Agreement, and thereafter all such representations and warranties of the
applicable Indemnitor under this Agreement shall be extinguished; provided,
however, that such indemnification obligation shall not be extinguished with
respect to Damages incurred that are the subject of an Action that was
instituted or begun prior to the expiration of the survival period set forth in
Section 7.1 if noticed in writing to the applicable Indemnitor by the applicable
Indemnitee within 30 days of such Indemnitee receiving notice thereof. Subject
to the proviso at the end of the immediately preceding sentence, no claim for
the recovery of such Damages may be asserted by an Indemnitee after such period.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Other Definitions. The following terms as used in this
Agreement shall have the following meanings:
(a) "Affiliate" means, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
(b) "control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
(c) "Group" shall have the meaning assigned to it in Section
13(d)(3) of the Exchange Act.
23
(d) "hereof", "herein", "hereunder" and "hereto" and words of
similar import, when used in this Agreement, refers to this Agreement as a whole
and not to any particular provision or section of this Agreement.
(e) "Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof or any Group comprised of two or more of the
foregoing.
SECTION 8.2. Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. No suit, action or proceeding with respect to this
Agreement may be brought in any court or before any similar authority other than
in a court of competent jurisdiction in the State of New York, and the parties
hereto submit to the exclusive jurisdiction of these courts for the purpose of
such suit, proceeding or judgment. The parties hereto irrevocably waive any
right which they may have to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. Each of the
parties hereto irrevocably and unconditionally waives trial by jury in any legal
action or proceeding in relation to this Agreement and for any counterclaim
therein.
SECTION 8.3. Successors and Assigns; Assignment. Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties hereto, in whole or in part (whether by operation
of law or otherwise), without the prior written consent of the other parties,
and any attempt to make any such assignment without such consent shall be null
and void, except that a Purchaser may assign its rights and obligations
hereunder to any Affiliate or Affiliates. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION 8.4. Entire Agreement; Third Parties. This Agreement, the
Stockholders Agreement, the schedules and exhibits hereto and thereto, and the
other documents delivered in connection herewith, constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof. This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto, and nothing in this Agreement, express or implied, is intended to confer
upon any other Person any right, benefit or remedy of any nature under or by
reason of this Agreement, other than Sections 5.7, 8.9 and 8.11, which are
intended to benefit Palladium.
SECTION 8.5. Severability. If any term or provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
24
SECTION 8.6. Amendment and Waiver. This Agreement may be amended
only by the written consent of all the parties hereto. Any waiver, consent or
approval of any kind by any party hereto of any breach, default or noncompliance
under this Agreement or any waiver by such party of any provision or condition
of this Agreement must be in writing and is effective only to the extent
specifically set forth in such writing.
SECTION 8.7. Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. All
remedies, either under this Agreement, by law, or otherwise afforded to any
party, shall be cumulative and not alternative.
SECTION 8.8. Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (c) five calendar days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d)
one business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications are to be sent to the addresses set forth below:
If to the Company:
Philipp Brothers Chemicals, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx
President
with copies to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxx, Esq.
If to the Purchasers:
c/o Palladium Equity Partners, L.L.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
25
Fax: (000) 000-0000
Attn: Xxxx X. Xxxx
with copies to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxx, Esq.
SECTION 8.9. Expenses. The Company shall pay for its own costs and
expenses with respect to the transactions contemplated by this Agreement and the
Stockholders Agreement. In addition to any fees to be paid to Palladium in
accordance with Section 5.7, on a date to be mutually determined by the
Purchasers and the Company, but in no event later than 45 days after the
Closing, the Company shall pay, against receipt of documentation therefor, for
all the costs and expenses of the Purchasers and Palladium incurred in
connection with the transactions contemplated by this Agreement and the
Stockholders Agreement, including the payment of the fees, disbursements and
expenses payable to consultants, accountants and counsel to the Purchasers and
Palladium.
SECTION 8.10. Interpretation. When a reference is made in this
Agreement to Articles, Sections, Exhibits or Schedules, such reference shall be
to an Article or Section of or Exhibit or Schedule to this Agreement unless
otherwise indicated. The table of contents, titles and headings contained in
this Agreement and the Company Disclosure Schedule are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or the Company Disclosure Schedule. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
SECTION 8.11. Termination. This Agreement may be terminated by (i)
mutual agreement of the parties hereto or (ii) by the Purchasers or the Company
in the event the Closing has not occurred by March 31, 2000; provided, that this
termination right may not be exercised by a party whose nonperformance has
delayed the Closing. If the Company consummates the Pfizer Acquisition and if
the Company elects not to consummate the transactions herein and in the
Stockholders Agreement for any reason, then the Company shall pay Palladium
promptly a breakup fee equal to $5,000,000 in addition to any expenses. Upon
termination of this Agreement pursuant to this Section 8.11, this Agreement
shall be void and of no further force and effect and no party shall have any
liability to any other party under this Agreement, except that nothing herein
shall relieve any party from any liability for the breach of any of the
representations, warranties, covenants and agreements set forth in this
Agreement and for the prompt payment of such breakup fee and such expenses as
contemplated by Section 8.9 and this Section 8.11.
SECTION 8.12. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered.
26
[Signature page to follow]
27
IN WITNESS WHEREOF, the parties hereto have caused this Stock
Purchase Agreement to be executed and delivered by their respective officers
hereunto duly authorized as of the date set forth in the first paragraph hereof.
PHILIPP BROTHERS CHEMICALS, INC.
By: /s/
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
PALLADIUM EQUITY PARTNERS II, L.P.
By: Palladium Equity Partners II, L.L.C.
By: /s/
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Member
PALLADIUM EQUITY PARTNERS II-A, L.P.
By: Palladium Equity Partners II, L.L.C.
By: /s/
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Member
PALLADIUM EQUITY INVESTORS II, L.P.
By: Palladium Equity Partners II, L.L.C.
By: /s/
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Member
