AGREEMENT AND PLAN OF MERGER
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) is entered into as of January 8,
2008, by and among Globe Specialty Metals, Inc., a Delaware corporation (“Buyer”), Solsil
Acquisition Corp., a Delaware corporation (“Buyer Sub”), and Solsil, Inc., a Delaware
corporation (“Company”).
A. The Board of Directors of Company has approved, and deems it fair, advisable and in the
best interests of its stockholders to consummate, the merger of Buyer Sub with and into Company on
the terms set forth herein.
B. The merger is intended to be treated as a “reorganization” within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and similar
provisions of other applicable tax law.
C. Concurrently with the execution of this Agreement, the stockholders of the Company are
entering into an Agreement and Plan for the Recapitalization of Solsil, Inc. and Other Related
Matters (the “Recapitalization Agreement”) with respect to the recapitalization of the
Company described therein to be effected before the merger (the “Recapitalization”) and
certain other matters.
D. Also concurrently with the execution of this Agreement, the stockholders of the Company are
entering into Lock-Up Agreements with respect to the Buyer Stock to be effective upon the merger.
In consideration of the foregoing and the representations, warranties, covenants and
agreements set forth in this Agreement, the parties agree as follows:
1. THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2.1), and subject to
and upon the terms and conditions of this Agreement and the applicable provisions of the General
Corporation Law of the State of Delaware (“Delaware Law”), Buyer Sub shall be merged with
and into Company (the “Merger”), the separate corporate existence of Buyer Sub shall cease,
and Company shall continue as the surviving corporation (the “Surviving Corporation”).
1.2 Effective Time; Closing.
1.2.1 Subject to the provisions of this Agreement, the parties hereto shall cause the Merger
to be consummated by filing a Certificate of Merger (“Certificate of Merger”) with the
Secretary of State of Delaware in accordance with the relevant provisions of Delaware Law (the time
of such filing with the Secretary of State of Delaware or such later time as may be agreed in
writing by Company and Buyer and specified in the Certificate of Merger,
the “Effective Time”) as soon as practicable on or after the Closing Date (as defined
in Section 1.2.2).
1.2.2 Subject to the earlier termination of this Agreement in Section 9 below, the
transactions contemplated hereby shall be consummated by the exchange of documents and instruments
(“Closing”) by mail, courier or telecopy promptly following the satisfaction or waiver of
all conditions to closing set forth in Sections 7 and 8 hereof. The date on which the Closing
occurs is referred to in this Agreement as the “Closing Date.” Concurrently with the
Closing, the Certificate of Merger will be filed in the office of the Delaware Secretary of State.
1.3 Charter Documents.
1.3.1 Certificates of Incorporation. At the Effective Time, the Certificate of
Incorporation of Company, as in effect immediately prior to the Effective Time, shall be amended
and restated in substantially the form attached hereto as Exhibit A, and upon the filing of
the Certificate of Merger and the Amended and Restated Certificate of Incorporation, shall be the
Amended and Restated Certificate of Incorporation of the Surviving Corporation.
1.3.2 Bylaws. At the Effective Time following the Merger, the bylaws of Company, as
in effect immediately prior to the Effective Time, shall remain in effect.
1.4 Board of Directors; Officers.
1.4.1 Board of Directors. The individuals listed on Schedule 1.4.1 shall, from and
after the Effective Time, be the initial directors of the Surviving Corporation until their
successors shall have been duly elected or qualified or until their earlier death, resignation or
removal in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
1.4.2 Officers. The corporate officers of Company immediately prior to the Effective
Time shall continue to be the corporate officers of Company, until their respective successors are
duly elected or appointed (as the case may be) and qualified.
2. EXCHANGE OF SHARES.
2.1 Conversion of Company Stock. By virtue of the Merger, and without any action on
the part of Buyer, Buyer Sub or Company:
2.1.1 At the Effective Time, each share of Company’s Series A Preferred Stock validly issued
and outstanding immediately prior to the Effective Time shall be changed and converted into
6,058.543 shares of Buyer common stock, par value $0.0001 per share (each, a “Buyer
Share”), each share of Company’s Class B Common Stock validly issued and outstanding
immediately prior to the Effective Time shall be changed and converted into 4,039.0287 Buyer
Shares, each share of Company’s Class C Common Stock validly issued and outstanding immediately
prior to the Effective Time shall be changed and converted into 4,008.5864 Buyer Shares, each share
of Company’s Class D Common Stock validly issued and
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outstanding immediately prior to the Effective Time shall be changed and converted into
4,182.1218 Buyer Shares, each share of Company’s Class E Common Stock validly issued and
outstanding immediately prior to the Effective Time shall be changed and converted into 4,442.9315
Buyer Shares and each share of Company’s Class F Common Stock validly issued and outstanding
immediately prior to the Effective Time shall be changed and converted into 4,664.6314 Buyer Shares
(collectively, the “Merger Consideration”).
2.1.2 At the Effective Time, each share of Company’s Class A Common Stock validly issued and
outstanding immediately prior to the Effective Time shall not be changed or converted in the Merger
and shall remain outstanding as a validly issued, fully paid and non-assessable share of Class A
Common Stock of the Surviving Corporation.
2.1.3 At the Effective Time, any shares of the Company’s capital stock held by Company as a
treasury share immediately prior to the Effective Time shall, at the Effective Time, by virtue of
the Merger and without any action on the part of Company, be canceled and retired and cease to
exist without any conversion thereof and no payment shall be made with respect thereto.
2.1.4 No fractional Buyer Shares will be issued in connection with the Merger, but in lieu
thereof each holder of Company Stock (as defined in Section 3.3.1) who would otherwise be entitled
to receive a fraction of a Buyer Share will receive from Buyer, promptly after the Effective Time,
a number of Buyer Shares rounded up to the nearest whole number.
2.1.5 At the Effective Time, each share of Buyer Sub capital stock outstanding immediately
prior to the Effective Time will be changed and converted into 1.23649774 outstanding shares of the
Class A Common Stock of the Surviving Corporation, constituting an aggregate of 1,236.49774 shares
of the Class A Common Stock of the Surviving Corporation.
2.1.6 Immediately following the Effective Time, the Surviving Corporation shall issue 99.59026
shares of the Class A Common Stock of the Surviving Corporation to Buyer as consideration for the
issuance by Buyer of Buyer Shares pursuant to Section 2.7 and for the issuance of restricted Buyer
Shares pursuant to Section 2.3, which actions by Buyer the parties intend to be treated as the
assumption by Buyer of liabilities of Company in the amount of $5,361,878.63.
2.1.7 The number of shares of Class A Common Stock of the Surviving Corporation into which the
capital stock of Buyer Sub is converted pursuant to Section 2.1.4 is based upon the agreement of
the parties that the value of the Company Stock is $83,138,121.37, that the value of the Buyer
Shares issued in exchange for Company Stock cancelled in the Merger is $12.78 per share and that
the value of the Class A Common Stock of the Surviving Corporation immediately after the Merger is
$53,839.39 per share. Additionally, the parties agree that Buyer shall assume certain obligations
of Company as provided in Section 2.1.6, in consideration for which additional shares of Class A
Common Stock of the Surviving Corporation shall be issued to Buyer as set forth in such Section.
If, as provided in Section 2.3, Buyer options are issued in lieu of Buyer Shares, the exchange
ratios included in the Merger
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Consideration (in Section 2.1.1), the exchange ratio for the conversion of Buyer Sub capital
stock into Class A Common Stock of the Surviving Corporation (in Section 2.1.5) and the shares of
Class A Common Stock of the Surviving Corporation to be issued pursuant to Section 2.1.6 shall be
appropriately adjusted to reflect the reduction of the obligations assumed by Buyer pursuant to
Section 2.1.6 by the amount equal to aggregate exercise price of the vested and unvested Company
Options that are exchanged for Buyer options pursuant to Section 2.3.
2.2 Exchange of Certificates.
2.2.1 Exchange Agent. Buyer shall act as exchange agent in the Merger. Prior to the
Closing Date, Buyer shall obtain from Capita Registrars Limited, Buyer’s transfer agent,
certificates representing the Buyer Shares issuable to the holders of the Company Stock pursuant to
this Agreement.
2.2.2 Exchange Procedures. At the Closing upon surrender of certificates representing
Company Stock for cancellation to the Buyer, the holder of such Company Stock shall be entitled to
receive in exchange therefor, and Buyer shall issue and deliver to such holder one or more
certificates representing that whole number of Buyer Shares set forth opposite such holder’s name
on Exhibit B, and the Company Stock so surrendered shall forthwith be canceled. Buyer
shall accept such certificates upon compliance with such reasonable terms and conditions as Buyer
may impose to effect an orderly exchange thereof in accordance with normal exchange practices.
After the Effective Time, there shall be no further transfer on the records of Company of
certificates representing Company Stock, and if such certificates are presented to Company for
transfer, they shall be canceled against delivery of the Merger Consideration to which the holder
of such Company Stock is entitled. If any certificate for such Buyer Shares is to be issued in a
name other than that in which the certificate for the Company Stock surrendered for exchange is
registered, it shall be a condition of such exchange that the certificate so surrendered shall be
properly endorsed, with signature guaranteed, or otherwise in proper form for transfer and that the
person requesting such exchange shall pay to Company any transfer or other taxes required by reason
of the issuance of certificates for such Buyer Shares in a name other than that of the registered
holder of the certificate surrendered, or establish to the satisfaction of Company or its transfer
agent that such tax has been paid or is not applicable. Until surrendered as contemplated by this
Section 2.2.2, each certificate for Company Stock shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger Consideration as
contemplated by Section 2.1.
2.2.3 Distributions with Respect to Unexchanged Company Stock. No (i) dividends or
other distributions declared by Company with a record date after the Effective Time or (ii) Merger
Consideration shall be paid to the holder of any unsurrendered certificate for Company Stock until
the surrender of such certificate in accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such certificate, there shall be paid to the holder of
the certificate representing whole Buyer Shares issued in connection therewith, without interest,
(A) at the time of such surrender, the Merger Consideration to which such holder is entitled
pursuant to Article II and the proportionate amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such whole Buyer Shares, and
(B) at the appropriate payment date, the proportionate amount of dividends or other distributions
with a record date after the Effective Time but prior to such
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surrender and a payment date subsequent to such surrender payable with respect to such whole
Buyer Shares.
2.2.4 No Liability. Neither Buyer or Company shall be liable to any person in respect
of any Buyer Shares (or dividends or distributions with respect thereto) delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law. If any
certificates representing Company Stock shall not have been surrendered prior to one year after the
Effective Time (or immediately prior to such earlier date on which any cash, dividends or
distributions with respect to Buyer Shares, if any, in respect of such certificate would otherwise
escheat to or become the property of any Governmental Entity (as defined below)), any such cash,
dividends or distributions in respect of such certificate shall, to the extent permitted by
applicable law, become the property of Company, free and clear of all claims or interest of any
person previously entitled thereto.
2.3 Stock Options.
2.3.1 Subject to satisfaction of the requirements set forth in Code Section 280G(b)(5)(A)(ii),
including the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II)
and 280G(b)(5)(B), and the applicable regulations thereunder, in a manner sufficient to assure that
receipt by the optionees identified on Schedule 2.3(a) of the Buyer Shares identified on such
Schedule and further described in the following sentence will, pursuant to Code Section
280G(b)(5)(A), not be treated as a parachute payment, Company shall take all actions (including, if
appropriate amending individual option agreements and obtaining optionee consents) that are
necessary such that each vested and unvested Company Option which is outstanding at the Effective
Time shall, by virtue of the Merger, be cancelled immediately following the Effective Time in
exchange for that number of Buyer Shares set forth opposite each such option holder’s name on
Schedule 2.3(a). All of such Buyer Shares upon issuance shall be subject to forfeiture and shall
vest on the terms summarized in Schedule 2.3(a). Such restricted Buyer Shares will be issued to
the grantees solely in consideration of the cancellation of the Company Options held by such
grantees and as compensation for services rendered by them; and none of such restricted Buyer
Shares will be issued for any of the Company’s Series A preferred stock, Class B Common Stock,
Class C Common Stock, Class D Common Stock, Class E Common Stock or Class F Common Stock being
changed and converted to Buyer Shares pursuant to Section 2.1.1. The Company shall make reasonable
efforts to comply with requirements under Code Section 280G(b)(5)(A)(ii) so as to assure that
receipt by the optionees identified on Schedule 2.3(a) of the Buyer Shares described on such
Schedule will, pursuant to Code Section 280G(b)(5)(A), not be treated as a parachute payment; and
none of such optionees shall have a right to receive such Buyer Shares, nor shall any such shares
be awarded to either of them, unless the requirements of Code Section 280G(b)(5)(A)(ii), including
the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) and
280G(b)(5)(B), are satisfied.
2.3.2 If such requirements of Code Section 280G(b)(5)(A)(ii), including the shareholder
approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) and 280G(b)(5)(B), are not
satisfied, (i) Company shall take all actions that are necessary such that each vested and unvested
Company Option which is outstanding at the Effective Time shall, by virtue of the Merger, be
cancelled immediately following the Effective Time in exchange for
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a Buyer option on the terms summarized in Schedule 2.3(b) and (ii) Buyer shall issue Buyer
options in accordance with such actions solely in consideration of the cancellation of such Company
Options and the prior services of such option holders.
2.4 Further Assurances. Company agrees that if, at any time before or after the
Effective Time, Buyer considers or is advised that any further deeds, assignments or assurances are
reasonably necessary or desirable to vest, perfect or confirm in Buyer title to any property or
rights of Company, Buyer and its proper officers and directors may execute and deliver all such
proper deeds, assignments and assurances and do all other things necessary or desirable to vest,
perfect or confirm title to such property or rights in Buyer and otherwise to carry out the purpose
of this Agreement, in the name of Company or otherwise.
2.5 Securities Law Issues.
2.5.1 Based in part on the representations of Company securityholders made in “accredited
investor” questionnaires delivered in accordance with Section 8.14, Buyer Shares to be issued in
the Merger will be issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 under Regulation
D promulgated under the Securities Act and applicable state securities laws.
2.5.2 The Buyer Shares will not have been registered and will be deemed to be “restricted
securities” under federal securities laws and may not be resold without registration under or
exemption from the Securities Act. Each certificate evidencing Buyer Shares will bear the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION WITHOUT EXEMPTION UNDER THE SECURITIES ACT OR AN OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER OF THESE SECURITIES THAT SUCH REGISTRATION IS NOT REQUIRED.
2.6 Tax Free Reorganization. Buyer and Company intend that the Merger will qualify as
a “reorganization” within the meaning of Section 368(a) of the Code and similar provisions of other
applicable tax law and intend to adopt this Agreement as a “plan of reorganization” within the
meaning and for the purposes of Section 368(a) of the Code and Sections 1.368-1(c), 1-368-2(g) and
1.368-3T of the treasury regulations promulgated thereunder and similar provisions of other
applicable tax law. Each of Buyer, Buyer Sub and Company agree that (i) it will not take or cause
to be taken any action, or fail to take any action, which action or failure to take action would
reasonably be expected to cause the Merger not to so qualify and (ii) it will issue such tax
statements and take such other actions as shall be necessary or appropriate to secure such tax
treatment. Notwithstanding the foregoing, except as expressly set forth herein, (a) none of Buyer,
Buyer Sub or Company are required by this Agreement to seek a ruling from the Internal Revenue
Service or any other tax authority regarding the treatment of the Merger under such tax provisions,
(b) Buyer makes no representation or warranty to Company or its stockholders that the merger
qualifies as a reorganization under
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Section 368(a) of the Code, and (c) it shall not be a violation of any undertaking by Buyer,
Buyer Sub or Company hereunder for any of them to effect a transaction in accordance with the
provisions of the letter of intent dated July 25, 2007 between BP Solar International Inc. and
Company, as amended on October 8, 2007, including any sale of interests in Company to BP Solar
International Inc. contemplated thereby.
2.7 Satisfaction of Certain Company Obligations. Immediately after the Effective
Time, Buyer shall satisfy the Company’s obligation to pay a bonus of $200,000 to Xxxx Xxxxxxxxxx by
the issuance of 15,649 Buyer Shares, subject to applicable withholding taxes. Buyer shall be
entitled to receive customary securities law representations from Xx. Xxxxxxxxxx in connection with
the private issuance of such shares.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as set forth on the Company Disclosure Letter (the “Company Disclosure
Schedule”) delivered to Buyer and Buyer Sub herewith, Company hereby represents and warrants to
Buyer and Buyer Sub as set forth in this Section 3. The Company Disclosure Schedule shall be
arranged in Sections and Subsections corresponding to the numbered Sections and Subsections
contained in this Section 3. The disclosures in any Section of the Disclosure Schedule shall
qualify (i) the corresponding Subsection in this Section 3, and (ii) other Subsections in this
Section 3 to the extent it is reasonable from a reading of the disclosure (notwithstanding the
absence of a specific cross reference) that such disclosure is applicable to such other
Subsections.
3.1 Organization and Good Standing. Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation, has the corporate
power and authority to own, operate and lease its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified as a foreign corporation in Ohio.
3.2 Power, Authorization and Validity.
3.2.1 Power and Capacity. Subject to the required approval of the Company’s
stockholders, Company has the right, power, legal capacity and authority to enter into and perform
its obligations under this Agreement, and all agreements to which Company is or will be a party
that are required to be executed pursuant to this Agreement (the “Company Ancillary
Agreements”). The execution, delivery and performance of this Agreement and the Company
Ancillary Agreements have been duly and validly approved and authorized by Company’s board of
directors as required by applicable law and Company’s certificate of incorporation and bylaws.
3.2.2 No Filings. No filing, authorization or approval, governmental or otherwise, is
necessary to enable Company to enter into, and to perform its obligations under, this Agreement and
the Company Ancillary Agreements, except for (a) the filing of the Certificate of Merger with the
Delaware Secretary of State, and the filing of appropriate documents with the relevant authorities
of other states in which Company is qualified to do
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business, if any, and (b) such filings as may be required to comply with federal and state
securities laws.
3.2.3 Binding Obligation. This Agreement and the Company Ancillary Agreements are, or
when executed by Company will be, valid and binding obligations of Company enforceable in
accordance with their respective terms, except as to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally, (b) rules of law
governing specific performance, injunctive relief and other equitable remedies and (c) the
enforceability of provisions requiring indemnification in connection with the offering, issuance or
sale of securities; provided, however, that the Certificate of Merger will not be effective until
filed with the Delaware Secretary of State.
3.3 Capitalization.
3.3.1 Authorized and Outstanding Capital Stock. Immediately following the completion
of the Recapitalization, the authorized capital stock of Company shall consist of Common Stock, of
which no shares shall be issued and outstanding, shares of Class A Common Stock, of which 307.69
shares shall be issued and outstanding, shares of Class B Common Stock, of which 425.2 shares shall
be issued and outstanding, shares of Class C Common Stock, of which 495.85 shares shall be issued
and outstanding, shares of Class D Common Stock, of which 109.65 shares shall be issued and
outstanding, shares of Class E Common Stock, of which 1.8851 shares shall be issued and outstanding
and shares of Class F Common Stock, of which 116.3817 shares shall be issued and outstanding (the
Class A, Class B, Class C, Class D, Class E and Class F Common Stock is collectively referred to as
the “Company Common Stock”), and shares of Preferred Stock, all of which have been
designated as Series A Preferred Stock, of which 81.9588 shares shall be issued and outstanding
(the Company Common Stock and the Series A Preferred Stock is collectively referred to as the
“Company Stock”). To the Company’s knowledge, each of Company stockholders holds good and
marketable title to such Company shares, free and clear of all liens, agreements, voting trusts,
proxies and other arrangements or restrictions of any kind whatsoever (other than normal
restrictions on transfer under applicable federal and state securities laws and as set forth in
Company’s Second Amended and Restated Investors’ Agreement dated as of July 3, 2007 (the
“Rights Agreement”), which shall be terminated on or prior to the Closing Date).
Immediately following the completion of the Recapitalization, all issued and outstanding shares of
Company Stock shall have been duly authorized and validly issued, shall be fully paid and
nonassessable, shall not be subject to any right of rescission, shall not be subject to preemptive
rights by statute, the certificate of incorporation or bylaws of Company, or any agreement or
document to which Company is a party or by which it is bound and have been offered, issued, sold
and delivered by Company in compliance with all registration or qualification requirements (or
applicable exemptions therefrom) of applicable federal and state securities laws.
3.3.2 Options/Rights. Except as disclosed in Section 3.3.2 of the Company Disclosure
Schedule, immediately following the completion of the Recapitalization, there shall be no stock
appreciation rights, options, warrants, calls, rights, commitments, conversion privileges or
preemptive or other rights or agreements outstanding to purchase or otherwise acquire any of
Company’s authorized but unissued capital stock or any securities or debt convertible into or
exchangeable for shares of Company Stock or obligating Company to
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grant, extend or enter into such option, warrant, call, commitment, conversion privileges or
preemptive or other right or agreement.
3.4 Securityholder Lists and Agreements.
3.4.1 Included as Section 3.4.1 of the Company Disclosure Schedule is a true, complete and
correct list of all of Company security holders, including holders of Company preferred stock,
Company Common Stock and Company Options, showing the shares of Company preferred stock, Company
Common Stock or other securities of Company to be held by each such security holder immediately
following the Recapitalization, and the number of shares of Company Stock into which such
securities are convertible or exercisable.
3.4.2 Except as provided in Company’s Certificate of Incorporation, as amended, this
Agreement, the Company Disclosure Schedule, the Recapitalization Agreement or the Stockholders
Agreement to be entered in connection with the Closing, there are no agreements, written or oral,
between Company and any holder of its securities or among any holders of Company’s securities
relating to the acquisition (including without limitation rights of first refusal, anti-dilution or
pre-emptive rights), disposition, registration under the Securities Act or voting of the capital
stock of Company.
3.5 Subsidiaries. Company does not have any subsidiaries or any interest, direct or
indirect, in any corporation, partnership, joint venture or other business entity.
3.6 Company Financial Statements. Attached as Section 3.6 of the Company Disclosure
Schedule are true, complete and correct copies of the following financial statements (collectively,
the “Company Financial Statements”): (i) Company’s audited balance sheet as of June 30,
2007 and June 30, 2006 and income statement and statement of cash flows for the years then ended
and (ii) Company’s unaudited balance sheet (the “Company Balance Sheet”), statement of cash
flows and income statement each dated as of September 30, 2007. The Company Financial Statements
(a) are in accordance with the books and records of Company, (b) fairly present the financial
condition of Company at the date therein indicated and the results of operations for the period
therein specified and (c) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except that the Company Balance Sheet lacks footnotes and
other presentation items and is subject to normally-recurring year-end audit adjustments). Except
as set forth on the Company Disclosure Schedule, Company has no material debt, liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to
become due, that is not reflected or reserved against in the Company Balance Sheet, except for
expenses incurred in connection with the transactions contemplated by this Agreement and those that
may have been incurred after the date of the Company Balance Sheet in the ordinary course of its
business, consistent with past practice and that are not material in amount either individually or
collectively.
3.7 Absence of Certain Changes. Since the date of the Company Balance Sheet, there
has not been with respect to Company:
(a) any Material Adverse Effect;
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(b) any contingent liability incurred thereby as guarantor or otherwise with respect to the
obligations of others;
(c) any mortgage, pledge, encumbrance or lien placed on any of the material properties or
assets, tangible or intangible, thereof;
(d) any material obligation or liability incurred thereby other than obligations and
liabilities incurred in the ordinary course of business;
(e) any purchase or sale or other disposition, or any agreement or other arrangement for the
purchase, sale or other disposition, of any of the properties or assets thereof other than in the
ordinary course of business;
(f) any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties, assets or business thereof;
(g) except for the Recapitalization, any declaration, setting aside or payment of any dividend
on, or the making of any other distribution in respect of, the capital stock thereof, any split,
combination or recapitalization of the capital stock thereof or any direct or indirect redemption,
purchase or other acquisition of the capital stock thereof;
(h) any payment or discharge of a material lien or liability thereof which lien was not either
shown on the Company Balance Sheet or incurred in the ordinary course of business thereafter;
(i) any agreement to do any of the foregoing.
For purposes of this Agreement, the term “Material Adverse Effect” when used in
connection with an entity means any change, event or effect whether or not such change, event or
effect is caused by or arises in connection with a breach of a representation, warranty, covenant
or agreement of such entity in this Agreement that is or is reasonably likely to have a materially
adverse effect on the business, assets (including intangible assets), capitalization, financial
condition, operations or results of operations of such entity taken as a whole, except to the
extent that any such change, event, circumstance or effect solely results from (i) changes in
general economic conditions, (ii) changes affecting the industry generally in which such entity
operates (provided that such changes do not affect such entity in a substantially disproportionate
manner) or (iii), with respect to Company, any changes as a result of action taken by Globe
Metallurgical, Inc., a wholly owned subsidiary of Buyer (“GMI”) pursuant to the Operating
Agreement between Company and GMI.
3.8 No Violation. Neither the execution and delivery of this Agreement nor any
Company Ancillary Agreements, nor the consummation of the transactions contemplated hereby, will
conflict with, or (with or without notice or lapse of time, or both) result in a termination,
breach, impairment or violation of (a) any provision of the certificate of incorporation or bylaws
of Company, as currently in effect, (b) in any material respect, any material instrument or
contract to which Company is a party or by which Company is bound, or (c) any federal, state, local
or foreign judgment, writ, decree, order, statute, rule or regulation applicable to Company or its
assets or properties.
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3.9 Litigation. There is no action, proceeding, claim or investigation pending
against Company before any court or administrative agency that if determined adversely to Buyer may
reasonably be expected to have a Material Adverse Effect with respect to Company, nor, to Company’s
Knowledge, has any such action, proceeding, claim or investigation been threatened.
For purposes of this Agreement the term “Knowledge” means with respect to a party
hereto, with respect to any matter in question, that any of the officers of such party has actual
knowledge of such matter.
3.10 Insurance. Company maintains insurance policies (collectively, the “Company
Insurance Policies”) which are of the type and in amounts which it believes are reasonably
necessary to conduct its business. All of the material Company Insurance Policies are in full
force and effect and there is no material default with respect to any provision contained in any
such policy by Company. To Company’s knowledge, there are no claims by Company pending under any
of the Company Insurance Policies as to which coverage has been questioned, denied or disputed by
the underwriters of such policies other than such claims as have not had and could not reasonably
be expected to have a Material Adverse Effect with respect to Company.
3.11 Taxes and Tax Returns.
3.11.1 All material Tax Returns required to be filed by or with respect to Company have been
duly and timely filed. Such Tax Returns (i) were prepared in the manner required by applicable
law, (ii) are true, correct, and complete in all material respects, and (iii) accurately reflect
the liability for Taxes of Company in all material respects. Company has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, officer, director, stockholder or other third party, and all
forms W-2 and 1099 required with respect thereto have been properly completed and filed. For the
purposes of this Agreement “Tax” or “Taxes” shall mean all present or future taxes,
levies, imposts, duties, deductions, withholdings, social security and unemployment taxes,
assessments, fees or other charges imposed by any Tax authority, including any interest, additions
to tax or penalties applicable thereto and “Tax Return” shall mean all returns, statements,
filings, attachments and other documents or certifications required to be filed in respect of
Taxes.
3.11.2 Company has timely paid all Taxes due as of the Closing Date, or has established an
adequate reserve therefor in its financial statements and such reserve has been properly determined
in accordance with United States generally accepted accounting principles (“GAAP”). The
unpaid Taxes of Company, as of the date of the Company Balance Sheet, did not exceed the reserves
for Tax liability (rather than any reserve for deferred taxes established to reflect timing
differences between book and Tax income) set forth on the face thereof (rather than in any note
thereto) and will not exceed that reserve as adjusted for operations and transactions through the
Closing Date in accordance with the past practice of Company in filing its Tax Return.
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3.11.3 No Tax deficiencies have been claimed, proposed or assessed against Company in writing
by any Taxing or other governmental authority. Except as might otherwise be the case with respect
to GMI and members of its affiliated group, Company does not have any liability for income Taxes of
any person other than itself under Treasury Regulations Section 1.1502-6 or any other similar
provision of state, local or foreign law, as a transferee or successor, by contract or otherwise.
3.11.4 There are no pending or, to Company’s knowledge, threatened audits, investigations or
claims for or relating to any liability of Company in respect of Taxes, and there are no matters
under discussion between Company and any governmental authority with respect to Taxes. None of the
Tax Returns of Company has been or is currently being examined by the Internal Revenue Service or
any state, local or foreign Taxing authorities.
3.11.5 Company has not entered into a closing agreement pursuant to Section 7121 of the Code
or any similar provision of state, local, or foreign law with any taxing authority.
3.11.6 There are no liens upon or other security interests in any property or assets of
Company for or relating to Taxes, except for liens for real and personal property Taxes not yet due
and payable.
3.11.7 There are no outstanding requests, agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment of any Taxes or deficiencies against
Company.
3.11.8 Company has not constituted either a “distributing corporation” or a “controlled
corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the
Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution which
would otherwise constitute part of a “plan” or “series of related transactions” (within the meaning
of Section 355(e) of the Code) in conjunction with the Merger.
3.11.9 Company is not a party to any agreement, contract, arrangement or plan that has
resulted or would result, separately or in the aggregate, in the payment of any “excess parachute
payment” within the meaning of Code Section 280G (or any corresponding provision of state, local or
foreign tax law).
3.11.10 Company is not, and has not been, a “United States real property holding corporation”
within the meaning of Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
3.12 No Brokers. No action has been taken by Company that would give rise to any
valid claim against Buyer or Buyer Sub or any of their respective affiliates for a brokerage
commission, finder’s fee or other like payment with respect to the transactions contemplated by
this Agreement.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth on the Buyer Disclosure Letter delivered to Company (the “Buyer
Disclosure Schedule”), Buyer hereby represents and warrants, as set forth in this Section 4.
The Buyer Disclosure Schedule shall be arranged in Sections and Subsections corresponding to the
numbered Sections and Subsections contained in this Section 4. The disclosures in any Section of
the Disclosure Schedule shall qualify (i) the corresponding Subsection in this Section 4, and (ii)
other Subsections in this Section 4 to the extent it is reasonable from a reading of the disclosure
(notwithstanding the absence of a specific cross reference) that such disclosure is applicable to
such other Subsections. Unless the context otherwise requires, references in this Section 4 to the
“Buyer” shall include all of Buyer’s direct and indirect subsidiaries.
4.1 Organization and Good Standing. Buyer and Buyer Sub are corporations duly
organized, validly existing and in good standing under the laws of the State of Delaware, and have
the corporate power and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted.
4.2 Power, Authorization and Validity.
4.2.1 Power and Capacity. Subject to the approval of the Agreement and the Buyer
Ancillary Agreements by Buyer’s and Buyer Sub’s board of directors in compliance with applicable
law and the certificate of incorporation and bylaws of Buyer and Buyer Sub, Buyer and Buyer Sub
have the right, power, legal capacity and authority to enter into and perform its obligations under
this Agreement, and all agreements to which Buyer and/or Buyer Sub is or will be a party that are
required to be executed pursuant to this Agreement (the “Buyer Ancillary Agreements”).
Buyer has authorized a sufficient number of shares of its capital stock to effect the terms of the
Merger as described in this Agreement. The transactions contemplated hereby do not require the
approval of the stockholders of Buyer.
4.2.2 No Filings. No filing, authorization or approval, governmental or otherwise, is
necessary to enable Buyer to enter into, and to perform its obligations under, this Agreement and
the Buyer Ancillary Agreements, except for (a) the filing of the Certificate of Merger with the
Delaware Secretary of State, and (b) such filings as may be required to comply with federal and
state securities laws.
4.2.3 Binding Obligations. Subject to the approval of the Agreement and the Buyer
Ancillary Agreements by Buyer’s and Buyer Sub’s board of directors in compliance with applicable
law and the certificate of incorporation and bylaws of Buyer and Buyer Sub, this Agreement and the
Buyer Ancillary Agreements are, or when executed by Buyer and Buyer Sub will be, valid and binding
obligations of Buyer and Buyer Sub enforceable in accordance with their respective terms, except as
to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of
creditors generally, (b) rules of law governing specific performance, injunctive relief and other
equitable remedies and (c) the enforceability of provisions requiring indemnification in connection
with the offering, issuance or sale of securities; provided, however, that the Certificate of
Merger will not be effective until filed with the Delaware of State.
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4.3 Capitalization.
4.3.1 Authorized and Outstanding Capital Stock. The authorized capital stock of Buyer
consists of 150,000,000 shares of Common Stock, of which 57,371,628 shares are issued and
outstanding. All issued and outstanding Buyer Shares have been duly authorized and were validly
issued, are fully paid and nonassessable, are not subject to any right of rescission, are not
subject to preemptive rights by statute, the certificate of incorporation or bylaws of Buyer, or
any agreement or document to which Buyer is a party or by which it is bound and have been offered,
issued, sold and delivered by Buyer in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of applicable federal and state securities laws.
4.3.2 Options/Rights. An aggregate of 5,000,000 Buyer Shares are reserved and
authorized for issuance pursuant to Buyer’s 2006 Employee, Director and Consultant Stock Plan (the
“Buyer Stock Plan”), of which options to purchase a total of 1,320,000 Buyer Shares are
outstanding. An aggregate of 18,946,648 Buyer Shares are reserved and authorized for issuance
pursuant to the exercise of outstanding warrants to purchase Buyer Shares and an aggregate of
5,025,000 Buyer Shares are reserved and authorized for issuance pursuant to the exercise of
1,675,000 outstanding Unit Purchase Options. Except for (i) those options outstanding under the
Buyer Stock Plan and (ii) as disclosed in Section 4.3.2 of the Buyer Disclosure Schedule, there are
no stock appreciation rights, options, warrants, calls, rights, commitments, conversion privileges
or preemptive or other rights or agreements outstanding to purchase or otherwise acquire any of
Buyer’s authorized but unissued capital stock or any securities or debt convertible into or
exchangeable for Buyer Shares or obligating Buyer to grant, extend or enter into such option,
warrant, call, commitment, conversion privileges or preemptive or other right or agreement.
4.4 Buyer Financial Statements. Attached as Section 4.4 of the Buyer Disclosure
Schedule are true, complete and correct copies of the following financial statements (collectively,
the “Buyer Financial Statements”): (i) Buyer’s unaudited balance sheet as of June 30, 2007
(the “Buyer Balance Sheet”) and June 30, 2006 and income statement and statement of cash
flows for the years then ended. The Buyer Financial Statements (a) are in accordance with the
books and records of Buyer, (b) fairly present the financial condition of Buyer at the date therein
indicated and the results of operations for the period therein specified and (c) have been prepared
in accordance with generally accepted accounting principles applied on a consistent basis. Except
as set forth on the Buyer Disclosure Schedule, Buyer has no material debt, liability or obligation
of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become
due, that is not reflected or reserved against in the Buyer Balance Sheet, except for expenses
incurred in connection with the transactions contemplated by this Agreement and those that may have
been incurred after the date of the Buyer Balance Sheet in the ordinary course of its business,
consistent with past practice and that are not material in amount either individually or
collectively.
4.5 Issuance of Buyer Shares. The Buyer Shares have been duly authorized and, when
issued in accordance with this Agreement, will be validly issued, fully paid and non-assessable,
and will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by
or through Buyer. Subject to compliance with Section 8.13, the
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Buyer Shares will be issued in compliance with all applicable state and federal laws
concerning the issuance of securities.
4.6 No Violation. Neither the execution and delivery of this Agreement nor any Buyer
Ancillary Agreement, nor the consummation of the transactions contemplated hereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a termination, breach,
impairment or violation of (a) any provision of the certificate of incorporation or bylaws of Buyer
or Buyer Sub, as currently in effect, (b) in any material respect, any material instrument or
contract to which Buyer or Buyer Sub is a party or by which Buyer or Buyer Sub is bound, or (c) any
federal, state, local or foreign judgment, writ, decree, order, statute, rule or regulation
applicable to Buyer, Buyer Sub or their assets or properties.
4.7 Litigation. There is no action, proceeding, claim or investigation pending
against Buyer or Buyer Sub before any court or administrative agency that if determined adversely
to Buyer or Buyer Sub may reasonably be expected to have a Material Adverse Effect with respect to
Buyer, nor, to Buyer’s Knowledge, has any such action been threatened.
4.8 No Brokers. No action has been taken by Buyer or Buyer Sub that would give rise
to any valid claim against Company or any of its affiliates for a brokerage commission, finder’s
fee or other like payment with respect to the transactions contemplated by this Agreement.
4.9 Ownership of Buyer Sub. Buyer Sub is a wholly-owned subsidiary of Buyer. Buyer
Sub was formed solely for the purpose of engaging in the transactions contemplated by this
Agreement. Buyer Sub has not conducted (nor will it conduct prior to the Merger) any activities
other than in connection with its organization, the negotiation and execution of this Agreement and
the consummation of the transactions contemplated by this Agreement. Buyer Sub owns no equity or
ownership interest in or other security issued by any other person.
5. COMPANY PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective Time, Company covenants
and agrees as follows:
5.1 Advice of Changes. Company will promptly advise Buyer in writing (a) of any event
occurring subsequent to the date of this Agreement that would render any representation or warranty
of Company contained in this Agreement, if made on or as of the date of such event or the Closing
Date, untrue or inaccurate in any material respect and (b) of any Material Adverse Effect with
respect to Company.
5.2 Maintenance of Business. Company will use commercially reasonable efforts to
carry on and preserve its business and its relationships with customers, suppliers, employees and
others in substantially the same manner as it has prior to the date hereof, unless (a) a change is
due to the action or inaction of GMI pursuant to the Operating Agreement or (b) it has obtained the
prior written consent of the Chief Executive Officer of Buyer to do otherwise.
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5.3 Requisite Approval. Company will use commercially reasonable efforts to obtain
the approval of the principal terms of this Agreement (including the terms of Section 2.3) and the
Certificate of Merger by Company stockholders, as required by applicable law and Company’s
certificate of incorporation and bylaws.
5.4 Necessary Consents. Company will use commercially reasonable efforts to obtain
such written consents as are set forth on Schedule 5.4 to the Company Disclosure Schedule and take
such other actions as may be necessary or appropriate to allow the consummation of the transactions
contemplated hereby and to allow Buyer to carry on Company’s business after the Closing.
5.5 Litigation. Company will notify Buyer in writing promptly after learning of any
material actions, suits, proceedings or investigations by or before any court, board or
governmental agency, initiated by or against it, or known by it to be threatened against it.
5.6 Satisfaction of Conditions Precedent. Company will use commercially reasonable
efforts to satisfy or cause to be satisfied all the conditions precedent which are set forth in
Section 8, and Company will use commercially reasonable efforts to cause the transactions
contemplated by this Agreement to be consummated.
5.7 Tax Covenants
5.7.1 Company shall prepare and file or cause to be prepared and timely filed in accordance
with applicable law and past practice all Tax Returns that are required to be filed before the
Closing Date.
5.7.2 Without the written consent of Buyer, which consent shall not be unreasonably withheld
or delayed, Company shall not, do any of the following: (i) make, change or revoke any election in
respect of Taxes, (ii) file any amended Tax Return, (iii) adopt or change any accounting method or
period in respect of Taxes, (iv) enter into any closing agreement, (v) settle any claim or
assessment in respect of Taxes, (vi) change any practice with respect to Taxes, (vii) consent to
any extension or waiver of any statute of limitations applicable to any claim or assessment in
respect of Taxes or (viii) offer or agree to do any of the foregoing or surrender its rights to do
any of the foregoing or to claim any refund in respect of Taxes.
6. BUYER PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective Time, Buyer covenants
and agrees as follows:
6.1 Advice of Changes. Buyer will promptly advise Company in writing (a) of any event
occurring subsequent to the date of this Agreement that would render any representation or warranty
of Buyer contained in this Agreement, if made on or as of the date of such event or the Closing
Date, untrue or inaccurate in any material respect and (b) of any Material Adverse Effect with
respect to Buyer.
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6.2 Maintenance of Business. Buyer will use commercially reasonable efforts to carry
on and preserve its business and its relationships with customers, suppliers, employees and others
in substantially the same manner as it has prior to the date hereof.
6.3 Litigation. Buyer will notify Company in writing promptly after learning of any
material actions, suits, proceedings or investigations by or before any court, board or
governmental agency, initiated by or against it, or known by it to be threatened against it.
6.4 Satisfaction of Conditions Precedent. Buyer will use commercially reasonable
efforts to satisfy or cause to be satisfied all the conditions precedent which are set forth in
Section 7, and Buyer will use commercially reasonable efforts to cause the transactions
contemplated by this Agreement to be consummated.
6.5 AIM Listing. Buyer shall use all reasonable efforts to cause the Buyer Shares
issuable pursuant to the Merger to be approved for listing on the AIM market of the London Stock
Exchange and at least three business day prior to the Closing shall submit to the AIM market of the
London Stock Exchange a final application for the listing of the Buyer Shares issuable pursuant to
the Merger on the AIM market of the London Stock Exchange.
6.6 State Securities Laws. As promptly as practicable after the execution of this
Agreement, Buyer will prepare and file any filings required under the state securities laws of all
jurisdictions which are applicable in connection with the Merger.
7. CONDITIONS TO OBLIGATIONS OF COMPANY
Company’s obligations hereunder are subject to the fulfillment or satisfaction, on and as of
the Closing, of each of the conditions set forth below. Any one or more of the following
conditions may be waived by Company, but only in a writing signed by Company; provided, however,
that if Company proceeds with the Closing, despite having Knowledge that any of the following
conditions have not been fulfilled, then it shall be deemed to have waived such condition.
7.1 Accuracy of Representations and Warranties. The representations and warranties of
Buyer set forth in Section 4 (as qualified by the Buyer Disclosure Schedule) shall be true and
accurate in every material respect on and as of the Closing with the same force and effect as if
they had been made at the Closing, except for changes contemplated by this Agreement and except for
those representations and warranties that address matters only as of a particular date (which shall
remain true and correct as of such particular date), and Company shall receive a certificate to
such effect executed by Buyer’s Chief Executive Officer.
7.2 Covenants. Buyer shall have performed and complied in all material respects with
all of its covenants contained in Section 6 on or before the Closing, and Company shall receive a
certificate to such effect signed by Buyer’s Chief Executive Officer.
7.3 Absence of Material Adverse Change. There shall not have been, in the reasonable
judgment of the Board of Directors of Company, any Material Adverse Effect with respect to Buyer.
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7.4 Certificate of Secretary. Company will have received from the corporate secretary
of Buyer a certificate (i) certifying Buyer’s certificate of incorporation, (ii) certifying the
bylaws of Bylaws, (iii) certifying the resolutions of the board of directors of Buyer approving the
Merger and Merger Agreement, and (iv) attesting to the incumbency of the officers of Buyer.
7.5 Compliance with Law. There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance, which would prohibit or
render illegal the transactions contemplated by this Agreement.
7.6 Government Filings. There shall have been taken such action as may be required to
consummate the Merger by any regulatory authority having jurisdiction over the parties and the
actions herein proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, as amended
(the “HSR Act”).
7.7 Consents. Company shall have received duly executed copies of all material
third-party consents, approvals, assignments, waivers, authorizations and other certificates
contemplated by this Agreement or the Company Disclosure Schedule in form and substance reasonably
satisfactory to Company, except for such consents and approvals as Buyer and Company shall have
agreed shall not be obtained, as contemplated by the Company Disclosure Schedule.
7.8 Board Approval. The execution, delivery and performance of this Agreement and the
Buyer Ancillary Agreements shall have been duly and validly approved and authorized by Buyer’s and
Buyer Sub’s board of directors in compliance with applicable law and the certificate of
incorporation and bylaws of Buyer and Buyer Sub, respectively.
7.9 Opinion of Counsel. Company shall have received a legal opinion of counsel to
Buyer regarding the due authorization and execution of this Agreement by Buyer, the effectiveness
of the Merger in accordance with Delaware law, the absence of required regulatory approvals
applicable to Buyer and the due issuance of the Buyer Shares issuable pursuant to the Merger in
form and substance reasonably acceptable to Company.
7.10 No Litigation. No litigation or proceeding shall be threatened or pending: (i)
against Company or Buyer for the purpose or with the probable effect of enjoining or preventing the
consummation of any of the transactions contemplated by this Agreement, or (ii) against Buyer which
could be reasonably expected to have a Material Adverse Effect with respect to Buyer.
7.11 AIM Listing. The Buyer Shares issuable pursuant to the Merger shall have been
approved for listing on the AIM market of the London Stock Exchange.
7.12 Stockholder Approval. The Company stockholders shall have duly approved the
principal terms of this Agreement and the Certificate of Merger, in accordance with applicable law
and Company’s certificate of incorporation and bylaws.
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7.13 Stockholders Agreement. The Company shall have duly executed the Stockholders
Agreement substantially in the form of Exhibit C hereto (the “Stockholders
Agreement”).
8. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the fulfillment or satisfaction on, and as
of the Closing, of each of the conditions set forth below. Any one or more of the following
conditions may be waived by Buyer, but only in a writing signed by Buyer; provided, however, that
if Buyer proceeds with the Closing, despite having Knowledge that any of the following conditions
have not been fulfilled, then it shall be deemed to have waived such condition and provided,
further, that to the extent that the failure of the condition set forth in Section 8.1, 8.2, 8.3,
8.7 or 8.15 below to be fulfilled or satisfied is the result of actions of Buyer or GMI, such
condition shall be deemed satisfied for the purposes of this Agreement.
8.1 Accuracy of Representations and Warranties. The representations and warranties of
Company set forth in Section 3 (as qualified by the Company Disclosure Schedule) shall be true and
accurate in every material respect on and as of the Closing with the same force and effect as if
they had been made at the Closing, except for changes contemplated by this Agreement and except for
those representations and warranties that address matters only as of a particular date (which shall
remain true and correct as of such particular date), and Buyer shall receive a certificate to such
effect executed by Company’s Chief Executive Officer.
8.2 Covenants. Company shall have performed and complied in all material respects
with all of its covenants contained in Section 5 on or before the Closing, and Buyer shall receive
a certificate to such effect signed by Company’s Chief Executive Officer.
8.3 Absence of Material Adverse Change. There shall not have been, in the reasonable
judgment of the Board of Directors of Buyer, any Material Adverse Effect with respect to Company.
8.4 Certificate of Secretary. Buyer will have received from the corporate secretary
of Company a certificate (i) certifying Company’s certificate of incorporation, (ii) certifying the
bylaws of Company, (iii) certifying the resolutions of the board of directors of Company approving
the Merger and Merger Agreement, (iv) certifying the resolutions of the stockholders of Company
approving the Merger and Merger Agreement and (v) attesting to the incumbency of the officers of
Company.
8.5 Compliance with Law. There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance, which would prohibit or
render illegal the transactions contemplated by this Agreement.
8.6 Government Filings. There shall have been taken such action, as may be required
to consummate the Merger by any regulatory authority having jurisdiction over the parties and the
actions herein proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws and the HSR Act.
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8.7 Consents. Company shall have received duly executed copies of all third-party
consents set forth on Schedule 5.4 to the Company Disclosure Schedule in form and substance
reasonably satisfactory to Buyer.
8.8 Board Approval. The execution, delivery and performance of this Agreement and the
Buyer Ancillary Agreements shall have been duly and validly approved and authorized by Buyer’s and
Buyer Sub’s board of directors (including the approval of at least one “disinterested” director) in
compliance with applicable law and the certificate of incorporation and bylaws of Buyer and Buyer
Sub, respectively.
8.9 Fairness Opinion. Buyer shall receive a written opinion from CoView Capital,
Inc., confirming that the Merger Consideration to be paid to Company stockholders upon consummation
of the Merger is fair to the stockholders of Buyer from a financial point of view.
8.10 Opinion of Counsel. Buyer shall have received a legal opinion of counsel to
Company regarding the due authorization and execution of this Agreement by Company and the due
approval of this Agreement and the Merger by the Company’s stockholders in accordance with Delaware
law, in form and substance reasonably acceptable to Buyer.
8.11 No Litigation. No litigation or proceeding shall be threatened or pending: (i)
against Company or Buyer for the purpose or with the probable effect of enjoining or preventing the
consummation of any of the transactions contemplated by this Agreement, or (ii) against Company
which could be reasonably expected to have a Material Adverse Effect with respect to Company.
8.12 Termination of Rights. Except as otherwise set forth in Schedule 8.11, the
rights under the Series A Convertible Preferred Stock Purchase Agreement dated July 3, 2007, the
Rights Agreement, the Amended and Restated Registration Rights Agreement dated as of July 17, 2007
and any other registration rights, rights of refusal, rights to any liquidation preference, or
redemption rights of any security holder of Company shall have been terminated or waived as of the
Closing.
8.13 Resignation of Directors and Officers. Except for those directors listed on
Schedule 1.4.1 already serving as directors of Company, the directors of Company immediately prior
to the Effective Time of the Merger shall have resigned as directors of the Surviving Corporation
effective as of the effectiveness of the Merger.
8.14 Accredited Investor Questionnaire. Each of the Company security holders shall
meet the definition of “accredited investor” within the meaning of Regulation D promulgated under
the Securities Act, which accreditation shall have been determined by the delivery to Buyer of an
“accredited investor” questionnaire prior to the Closing. For purposes of determining the status
of a Company security holder under this Section 8.14, the failure to deliver a completed
“accredited investor” questionnaire shall be deemed the failure of such person to meet the
accreditation requirements under Regulation D promulgated under the Securities Act.
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8.15 AIM Listing. The Buyer Shares issuable pursuant to the Merger shall have been
approved for listing on the AIM market of the London Stock Exchange.
8.16 Recapitalization. The Recapitalization shall have been completed in accordance
with the terms of the Recapitalization Agreement.
8.17 Stockholder Approval. The Company stockholders shall have duly approved the
principal terms of this Agreement and the Certificate of Merger, in accordance with applicable law
and Company’s certificate of incorporation and bylaws.
8.18 Stockholders Agreement. The stockholders named therein shall have duly executed
the Stockholders Agreement.
8.19 FIRPTA Certificate. Buyer shall have received a duly executed certificate, in
form and substance reasonably satisfactory to Buyer, establishing that Buyer is not required to
withhold under Section 1445 of the Code from any of the Merger Consideration (a “FIRPTA
Certificate”).
8.20 SPI Supply Agreement. Company and Solar Power Industries, Inc. (“SPI”) shall
have entered into an amended and restated supply agreement reasonably satisfactory to Buyer. If
Company and SPI have not agreed to the terms of such an agreement within 10 business days after the
date of this Agreement, the parties hereto shall seek in good faith to re-negotiate this Agreement
to remove this condition and to make such other modifications to the terms of the Agreement as the
parties shall agree are appropriate in the circumstances.
9. TERMINATION OF AGREEMENT
9.1 Prior to Closing. This Agreement may be terminated at any time prior to the
Closing by the mutual written consent of each of the parties hereto.
9.2 Outside Date. This Agreement may be terminated and abandoned:
9.2.1 By Buyer if any of the conditions precedent to Buyer’s obligations set forth in Section
8 above have not been fulfilled or waived at and as of February 29, 2008, provided, however, that
the right to terminate this Agreement under this Section shall not be available to Buyer if Buyer’s
action (other than as contemplated in Section 8.8) materially contributed to, or resulted in, the
failure of the Closing to occur on or before February 29, 2008; or
9.2.2 By Company if any of the conditions precedent to Company’s obligations set forth in
Section 7 above have not been fulfilled or waived at and as February 29, 2008, provided, however,
that the right to terminate this Agreement under this Section shall not be available to Company if
Company’s action materially contributed to, or resulted in, the failure of the Closing to occur on
or before February 29, 2008.
Any termination of this Agreement under this Section 9 will be effective by the delivery of notice
of the terminating party to the other parties hereto
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9.3 Effect of Termination. In the event of termination of this Agreement as provided
in Section 9.1 or 9.2, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of any party hereto, other than this Section 9.3 and Section
10.
10. MISCELLANEOUS
10.1 Survival of Covenants and Representations. Except for covenants that by their
terms survive for a longer period, all covenants of the parties contained in this Agreement will
remain operative and in full force and effect until the earlier of the termination of this
Agreement or twelve months after the Effective Time. All representations and warranties of the
parties contained in this Agreement will terminate upon the Effective Time except the
representations and warranties set forth in Sections 4.2, 4.3, 4.5 and 4.6, which shall remain
operative and in full force and effect, regardless of any investigation made by or on behalf of the
other parties to this Agreement, until the earlier of the termination of this Agreement or twelve
months after the Effective Time.
10.2 Governing Law. The internal laws of the State of Delaware (irrespective of its
choice of law principles) will govern the validity of this Agreement, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the parties hereto.
10.3 Assignment; Binding Upon Successors and Assigns. None of the parties to this
Agreement may assign any of its respective rights or obligations hereunder without the prior
written consent of the other parties hereto. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns.
10.4 Severability. If any provision of this Agreement, or the application thereof,
will for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement
and application of such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of the void or
unenforceable provision.
10.5 Counterparts. This Agreement may be executed in any number of counterparts, each
of which will be an original as regards any party whose signature appears thereon and all of which
together will constitute one and the same instrument. This Agreement will become binding when one
or more counterparts hereof, individually or taken together, will bear the signatures of both
parties reflected hereon as signatories.
10.6 Amendment and Waivers. Any term or provision of this Agreement may be amended,
and the observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a writing signed by the party to be
bound thereby. The waiver by a party of any breach hereof or default in the performance hereof
will not be deemed to constitute a waiver of any other default or any succeeding breach or default.
No amendment of this Agreement will be made which by
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applicable law requires the further approval of Company stockholders without obtaining such
further approval.
10.7 No Waiver. The failure of any party to enforce any of the provisions hereof will
not be construed to be a waiver of the right of such party thereafter to enforce such provisions.
10.8 Expenses. Each party will bear its respective expenses and legal fees incurred
with respect to this Agreement, and the transactions contemplated hereby.
10.9 Attorneys’ Fees. Should suit be brought to enforce or interpret any part of this
Agreement, the prevailing party will be entitled to recover, as an element of the costs of suit and
not as damages, reasonable attorneys’ fees to be fixed by the court (including without limitation,
costs, expenses and fees on any appeal).
10.10 Notices. Any notice or other communication required or permitted to be given
under this Agreement will be in writing, will be delivered personally or by registered or certified
mail, postage prepaid and will be deemed given upon delivery, if delivered personally, or three
days after deposit in the mails, if mailed, to the following addresses:
(a) | If to Buyer or Buyer Sub: | |||
Globe Specialty Metals, Inc. | ||||
Xxx Xxxx Xxxxx, Xxxxx 0000 | ||||
Xxx Xxxx, XX 00000 | ||||
Attention: Chief Executive Officer | ||||
with a copy to: | ||||
Arent Fox LLP | ||||
0000 Xxxxxxxxxxx Xxxxxx, XX | ||||
Xxxxxxxxxx, XX 00000 | ||||
Attn: Xxxxxxx X. Xxxxxx, Esq. | ||||
(b) | If to Company: | |||
Solsil, Inc. | ||||
X.X. Xxx 000 | ||||
Xxxxxx Xxxx 00 | ||||
Xxxxxxx, XX 00000 | ||||
Attention: Chief Executive Officer | ||||
with a copy to: | ||||
Xxxxxxx XxXxxxxxx LLP | ||||
000 Xxxxxxx Xxxxxx | ||||
Xxxxxx, XX 00000-0000 | ||||
Attention: Xxxxxx X. Xxxxxx, Esq. |
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or to such other address as a party may have furnished to the other parties in writing pursuant to
this Section 10.10.
10.11 Construction of Agreement. This Agreement has been negotiated by the respective
parties hereto and their attorneys and the language hereof will not be construed for or against
either party. A reference to a Section or an exhibit will mean a Section in, or exhibit to, this
Agreement unless otherwise explicitly set forth. The titles and headings herein are for reference
purposes only and will not in any manner limit the construction of this Agreement which will be
considered as a whole.
10.12 Further Assurances. Each party agrees to cooperate fully with the other parties
and to execute such further instruments, documents and agreements and to give such further written
assurances as may be reasonably requested by any other party to evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect the intents and
purposes of this Agreement.
10.13 Limitation of Third Party Beneficiary Rights. No provisions of this Agreement
are intended, or will be interpreted, to provide or create any third party beneficiary rights or
any other rights or remedies of any kind in any client, customer, affiliate, stockholder, partner
or any party hereto or any other person or entity, except that Company’s stockholders are expressly
intended to be third party beneficiaries of the Buyer representations set forth in Sections 4.2,
4.3, 4.5 and 4.6. Except as provided in the foregoing sentence, all provisions hereof will be
personal solely between the parties that are signatories to this Agreement.
10.14 Entire Agreement. This Agreement and the exhibits hereto constitute the entire
understanding and agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto. The express terms
hereof control and supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
10.15 Public Announcements. Buyer and Buyer Sub, on the one hand, and Company, on the
other hand, shall consult with each other before issuing, and provide each other the opportunity to
review and comment upon, any press release or other public statements with respect to the Merger
and the other transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation, except as may be required by
applicable law, court process or by obligations pursuant to any listing agreement with any national
securities exchange.
10.16 Jurisdiction; WAIVER OF JURY TRIAL. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any New York state court, any Federal
court located in the State of New York or the State of Delaware or any Delaware state court in the
event any dispute arises out of this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any such court, (c)
agrees that it will not bring any action relating to this Agreement in any court
24
other than any New York state court, any Federal court sitting in the State of New York or the
State of Delaware or any Delaware state court and (d) WAIVES ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS AGREEMENT.
10.17 Indemnification. From and after the Effective Time, to the fullest extent
permitted by law, Buyer shall, and shall cause the Surviving Corporation to, indemnify, defend and
hold harmless each of the current or former directors and officers of Company (each a “Covered
Person”) against all losses, claims, damages, liabilities, fees and expenses (including
attorneys’ fees and disbursements), judgments, fines and amounts paid in settlement (in the case of
settlements, with the approval of the indemnifying party (which approval shall not be unreasonably
withheld)) (collectively, “Losses”), as incurred (payable monthly upon written request
which request shall include reasonable evidence of the Losses set forth therein) to the extent
arising from, relating to, or otherwise in respect of, any actual or threatened action, suit,
proceeding or investigation, in respect of actions or omissions occurring at or prior to the
Effective Time in connection with such Covered Person’s duties as an officer or director of
Company, or in respect to this Agreement, the Merger, and the other transactions contemplated by
this Agreement, until the expiration of the applicable statute of limitations with respect to any
claims against such Covered Persons arising out of such acts of omissions; provided, however, that
a Covered Person shall not be entitled to indemnification under this Section 10.17 for Losses
arising out of actions or omissions by the Covered Person constituting fraud, willful misconduct,
gross negligence or bad faith.
10.18 Toll Processing Agreement. Promptly following the Closing, Buyer shall cause
GMI and Company to enter into a Toll Processing Agreement with respect to GMI’s processing of the
Company’s inventory following the completion of the Merger, such agreement to be on terms
substantially cost neutral to Company as compared to its current cost of processing inventory.
[Signature Page Next]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
BUYER: | COMPANY: | |||||||||
GLOBE SPECIALTY METALS, INC. | SOLSIL, INC. | |||||||||
By:
|
By: | |||||||||
Its: | Its | |||||||||
BUYER SUB: | ||||||||||
SOLSIL ACQUISITION CORP. | ||||||||||
By: |
||||||||||
Its: |