EXHIBIT 2(c)
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EXECUTION COPY
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STOCK PURCHASE AGREEMENT
AMONG
EXCELL MATERIALS, INC.,
THE STOCKHOLDERS OF
EXCELL MATERIALS, INC.
AND
HARSCO CORPORATION
DATED AS OF
JANUARY 4, 2007
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS....................................................... 1
1.1 Certain Defined Terms................................. 1
1.2 Other Interpretive Provisions.........................11
ARTICLE II PURCHASE AND SALE.................................................11
2.1 Purchase and Sale of the Shares.......................11
2.2 Consideration.........................................11
2.3 The Closing...........................................12
2.4 Deliveries at the Closing.............................12
2.5 Reserved..............................................14
2.6 Purchase Price Adjustment.............................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS.....................17
3.1 Validity and Enforceability...........................17
3.2 Title to Shares.......................................17
3.3 No Conflict...........................................17
3.4 Proceedings...........................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY AND
THE COMPANY SUBSIDIARIES..........................................18
4.1 Organization..........................................18
4.2 Capital Stock of the Company..........................18
4.3 Company Subsidiaries..................................18
4.4 Financial Statements..................................19
4.5 No Conflicts or Approvals.............................19
4.6 Compliance with Law; Governmental Authorizations......20
4.7 Proceedings...........................................21
4.8 Absence of Certain Changes............................21
4.9 Tax Matters...........................................21
4.10 Employee Benefits.....................................24
4.11 Labor Relations.......................................29
4.12 Intellectual Property.................................30
4.13 Contracts.............................................32
4.14 Environmental Matters.................................34
4.15 Insurance.............................................36
4.16 Assets................................................36
4.17 Real Property.........................................36
4.18 Customers and Suppliers...............................38
4.19 Product Liability.....................................38
4.20 Affiliate Transactions................................38
4.21 Accounts..............................................39
4.22 Inventory.............................................39
4.23 Bank Accounts.........................................39
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4.24 No Brokers' or Other Fees.............................39
4.25 Books and Records.....................................40
4.26 Directors and Officers................................40
4.27 Disclosure............................................40
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER.......................40
5.1 Organization..........................................40
5.2 Authorization; Enforceability.........................40
5.3 No Conflicts or Approvals.............................40
5.4 Proceedings...........................................41
5.5 No Brokers' or Other Fees.............................41
5.6 Investment Intent.....................................41
5.7 Financial Ability to Perform..........................41
ARTICLE VI COVENANTS AND AGREEMENTS..........................................41
6.1 Conduct of the Business Prior to the Closing..........41
6.2 Access to Books and Records; Confidentiality..........44
6.3 Tax Returns, Contests and Cooperation.................44
6.4 Section 338...........................................46
6.5 Refunds and Tax Benefits..............................46
6.6 Employees; Benefit Plans..............................46
6.7 Labor Matters.........................................46
6.8 Consents and Competition..............................47
6.9 Insurance.............................................48
6.10 Notice of Events......................................48
6.11 Cooperation...........................................48
6.12 Anti-Sandbag..........................................48
ARTICLE VII CONDITIONS TO CLOSING.............................................49
7.1 Conditions to the Obligations of the Parties..........49
7.2 Conditions to the Obligation of the Sellers...........49
7.3 Conditions to the Obligations of the Buyer............50
ARTICLE VIII TERMINATION......................................................50
8.1 Termination...........................................50
8.2 Effect of Termination.................................51
ARTICLE IX INDEMNIFICATION...................................................51
9.1 Indemnification by the Sellers........................51
9.2 Indemnification by the Buyer..........................52
9.3 Indemnification as Exclusive Remedy...................52
9.4 Survival..............................................52
9.5 Limitations on Indemnification........................53
9.6 Sellers Representative................................55
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ARTICLE X MISCELLANEOUS.....................................................57
10.1 Fees and Expenses.....................................57
10.2 Governing Law.........................................57
10.3 Amendment.............................................57
10.4 Assignment; Third Parties.............................57
10.5 Waiver................................................57
10.6 Notices...............................................57
10.7 Complete Agreement....................................59
10.8 Counterparts..........................................59
10.9 Publicity.............................................59
10.10 Headings..............................................59
10.11 Severability..........................................59
10.12 Further Assurances....................................59
10.13 Service of Process; Waiver of Jury Trial..............59
10.14 Specific Performance..................................60
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EXHIBITS
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Exhibit A Confidentiality Agreement
Exhibit B Form of Escrow Agreement
Exhibit C Form of Release
iv
SCHEDULES
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Schedule A ............2006 Capital Expenditure Budget
Schedule B ............Share Ownership
Schedule 1.1(a).........Debt Obligations
Schedule 1.1(b).........Buyer Knowledge
Schedule 1.1(c).........Company Knowledge
Schedule 1.1(d).........Permitted Liens
Schedule 2.2(b).........Repayment of Debt Obligations
Schedule 2.4(a)(vii)....Consents
Schedule 2.4(a)(viii)...Resignations
Schedule 3.3(b).........Seller Consents
Schedule 4.2............Capitalization of Company
Schedule 4.3............Company Subsidiaries
Schedule 4.4(a).........Financial Statements
Schedule 4.4(b).........Undisclosed Liabilities
Schedule 4.5(a).........No Conflicts
Schedule 4.5(b).........Company Consents
Schedule 4.6............Compliance with Laws
Schedule 4.7............Proceedings
Schedule 4.8............Absence of Certain Changes
Schedule 4.9............Tax Matters
Schedule 4.10(a)........Benefit Matters
Schedule 4.10(b)........Benefit Matters
Schedule 4.10(d)........Benefit Matters
Schedule 4.10(g)........Benefit Matters
Schedule 4.10(h)........Benefit Matters
Schedule 4.10(m)........Benefit Matters
Schedule 4.10(n)........Benefit Matters
Schedule 4.10(o)........Benefit Matters
Schedule 4.11...........Labor Matters
Schedule 4.12...........Intellectual Property
Schedule 4.13...........Contracts
Schedule 4.14...........Environmental Matters
Schedule 4.15(a)........Insurance Policies
Schedule 4.15(b)........Material Insurance Claims
Schedule 4.16...........Assets
Schedule 4.17(a)........Leased Real Property
Schedule 4.17(b)........Owned Real Property
Schedule 4.17(c)........Property Matters
Schedule 4.18...........Customers and Suppliers
Schedule 4.19...........Product Liability
Schedule 4.20...........Affiliate Transactions
Schedule 4.22...........Inventory
Schedule 4.23...........Bank Accounts
Schedule 4.26...........Directors and Officers
Schedule 5.3(b).........Buyer Consents
v
Schedule 6.1............Interim Covenants
Schedule 6.6............Employees
Schedule 6.12...........Anti-Sandbag
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of January 4, 2007, is by
and among the stockholders of Excell Materials, Inc., a Delaware corporation
(the "COMPANY"), as listed on the signature page hereto (each, individually a
"SELLER" and collectively, the "SELLERS"), the Company and Harsco Corporation, a
Delaware corporation (the "BUYER").
A. The Sellers own all of the issued and outstanding shares of
capital stock (the "SHARES") of the Company; and
B. The Sellers desire to sell, and the Buyer desires to purchase,
the Shares, upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:
"ACTIVE COMPANY EMPLOYEES" has the meaning set forth in SECTION
6.6(A).
"AFFILIATE" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any other Person directly or indirectly owning or controlling
ten percent (10%) or more of the outstanding voting equity securities of such
Person or (iii) any officer, director, general partner or trustee of such
Person.
"AFFILIATE CONTRACTS" has the meaning set forth in SECTION 4.20.
"AGREEMENT" means this Stock Purchase Agreement (including the
Schedules and Exhibits), as amended, modified or supplemented from time to time.
"ANNUAL FINANCIAL STATEMENTS" has the meaning set forth in SECTION
4.4(A).
"APPLICABLE RATE" means the "Prime Rate" as set forth from time to
time in THE WALL STREET JOURNAL, Eastern Edition, "Money Rates" column.
"AUTHORIZED CAPITAL EXPENDITURE DEFICIENCY" has the meaning set
forth in SECTION 2.6(D)(III).
"AUTHORIZED CAPITAL EXPENDITURE EXCESS" has the meaning set forth in
SECTION 2.6(D)(III).
"AUTHORIZED CAPITAL EXPENDITURE STATEMENT" has the meaning set forth
in SECTION 2.6(A).
"AUTHORIZED CAPITAL EXPENDITURES" means any reasonable capital
expenditures made by the Company or the Company Subsidiaries prior to the
Closing Date to the extent such capital expenditures relate solely to the G
Plant Project in Canada, the Cement Plant Project (up to an aggregate amount of
$2,700,000) or any other project which benefits periods after 2006 and which is
specifically approved in writing by Buyer as reimbursable, in each case, only to
the extent such capital expenditure disbursements remain within the scope of the
project as initially presented to Buyer.
"BALANCE SHEET" has the meaning set forth in SECTION 4.4(A).
"BENEFIT PLAN" or "BENEFIT PLANS" has the meaning set forth in
SECTION 4.10(A).
"BUSINESS" means the minerals, mill service, and metal processing
business of the Company and the Company Subsidiaries carried out anywhere in the
world as of the date of this Agreement.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or
other day on which banks in New York, New York are required or authorized by Law
to be closed.
"BUYER" has the meaning set forth in the preamble.
"BUYER INDEMNIFIED PERSONS" has the meaning set forth in SECTION
9.1(A).
"CANADIAN COMPANY SUBSIDIARIES" means Recmix, Inc., Melri, Inc. and
Excell Materials G.P.
"CAPITAL EXPENDITURE BUDGET" means the capital expenditure budget
with respect to the Business for the calendar year 2006, as set forth on
SCHEDULE A.
"CASH AND CASH EQUIVALENTS" means, as of any date, the fair market
value (expressed in United States dollars) of all cash and cash equivalents
(including marketable securities and short term investments) of the Company or
any wholly owned Company Subsidiary.
"CLAIM" has the meaning set forth in SECTION 9.5(D)(I).
"CLAIM NOTICE" has the meaning set forth in SECTION 9.5(D)(I).
"CLAIM RESPONSE" has the meaning set forth in SECTION 9.5(D)(I).
"CLOSING" has the meaning set forth in SECTION 2.3.
"CLOSING CERTIFICATE" has the meaning set forth in SECTION
2.4(A)(IX).
"CLOSING DATE" has the meaning set forth in SECTION 2.3.
"CODE" has the meaning set forth in SECTION 2.2(D).
"COMPANY" has the meaning set forth in the preamble.
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"COMPANY EMPLOYEE" has the meaning set forth in SECTION 4.10(A).
"COMPANY MATERIAL ADVERSE EFFECT" means any state of facts, change,
occurrence or development that (i) directly or indirectly prevents or materially
impairs or delays the ability of any Seller to perform his, her or its
obligations hereunder or (ii) has a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties, assets or
Liabilities of the Company and the Company Subsidiaries taken as a whole, but
excludes any effect (a) resulting from general economic conditions (whether as a
result of acts of terrorism, war (whether or not declared), armed conflicts or
otherwise) and (b) impacting companies in the industry in which the Business is
conducted generally.
"COMPANY SUBSIDIARY" has the meaning set forth in SECTION 4.3
"COMPETITION/INVESTMENT LAW" means any Law that is designed or
intended to prohibit, restrict or regulate (a) foreign investment or (b)
antitrust, monopolization, restraint of trade or competition.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement
between the Buyer and the Company, a copy of which is attached as EXHIBIT A.
"CONSENT" means any consent, approval, order, Permit, authorization,
waiver, report or notification required to be obtained from, filed with or
delivered to any Governmental Authority or other third party in connection with
the execution, delivery and performance of this Agreement and the Transaction
Agreements, the consummation of the transactions contemplated hereby and thereby
or compliance by the Sellers, the Company Subsidiaries or the Company with any
of the provisions hereof and thereof.
"CONTRACT" means any contract, agreement, obligation, plan,
indenture, note, bond, loan, instrument, lease (including real property leases),
conditional sale contract, mortgage, license, Permit, franchise, insurance
policy, undertaking, commitment or other enforceable arrangement or agreement,
whether written or oral.
"CPA FIRM" means the firm of Ernst & Young, LLP or, if such firm is
unable or unwilling to serve in such capacity on terms mutually acceptable to
Buyer and Sellers, another nationally recognized independent accounting firm
mutually acceptable to Buyer and Sellers Representative.
"CPA RESOLUTION" has the meaning set forth in SECTION 9.5(E)(II).
"CURRENT TAX MATTER" means any claim, suit, action, audit,
litigation or proceeding relating to Taxes solely in respect of a Pre-Closing
Tax Period that is in progress as of the Closing Date.
"DEBT OBLIGATIONS" means, with respect to any Person as of any date
without duplication, all (a) indebtedness for borrowed money of such Person
(including principal and accrued interest), including under those agreements set
forth on SCHEDULE 1.1(A), (b) except as set forth on SCHEDULE 1.1(A),
obligations of such Person in respect of capitalized leases required to recorded
as such on a balance sheet prepared in accordance with GAAP and obligations of
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such Person for the deferred purchase price of goods or services (other than
trade payables incurred in the ordinary course of business), (c) except as set
forth on SCHEDULE 1.1(A), obligations of such Person in respect of banker's
acceptances or letters of credit issued or created for the account of such
Person, (d) all indebtedness or obligations of any other Person of the types
referred to in the preceding clauses (a) and (b) secured by any Lien on any
assets of such Person, (e) those payments required to be made to Company
Employees set forth on SCHEDULE 1.1(A), (f) guarantees of obligations of any
other Person of the type described in clause (a) above by such Person, and (g)
any payment obligation in respect of interest under any existing interest rate
swap, hedge or similar agreement entered into by any Person with respect to any
indebtedness described in clause (a) above, including under those agreements set
forth on SCHEDULE 1.1(A). With respect to the Company and any Company
Subsidiary, Debt Obligations shall not include any item in (a) through (g)
above, if such item relates solely to an obligation between the Company and one
or more Company Subsidiary or between one Company Subsidiary and another Company
Subsidiary; provided that the aggregate amount of such intercompany Debt
Obligations equals zero on a consolidated basis as of the Closing. If the amount
of intercompany Debt Obligations does not equal zero as of the Closing, then
such excess amount shall constitute Debt Obligations for purposes of SECTION
2.6.
"ENVIRONMENT" means the outdoor or indoor environment, including
soil, surface waters, groundwater, land, stream sediments, surface or subsurface
strata or ambient air or indoor air.
"ENVIRONMENTAL CLAIM" means any written notice, or, to the Knowledge
of the Company, any oral notice, or pending Proceeding, by any Person alleging
Liability or potential Liability relating to any Environmental Losses or in
respect of any Environmental Laws.
"ENVIRONMENTAL LAW" means any Law, including common law, relating to
the protection of the Environment or natural resources or relating to human
health or safety with respect to exposure to Hazardous Materials.
"ENVIRONMENTAL LOSSES" means Losses arising from a Release or
threatened Release of Hazardous Materials or noncompliance with or Liability or
Loss under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any entity that is considered a single
employer with the Company under ERISA Section 4001(b) or part of the same
"controlled group" as the Company for purposes of ERISA Section 302(d)(8)(c).
"ESCROW AGREEMENT" means that certain escrow agreement, dated as of
the Closing Date, by and among the Buyer, the Sellers and PNC Institutional
Investments, in substantially the form attached hereto as EXHIBIT B.
"ESCROW AMOUNT" means $7,000,000.
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"ESTIMATED AUTHORIZED CAPITAL EXPENDITURE AMOUNT" means the total of
all Authorized Capital Expenditures as of immediately prior to the Closing,
prepared in accordance with GAAP applied on a basis consistent with the Annual
Financial Statements, as set forth on the Purchase Price Certificate.
"ESTIMATED NET DEBT" means the Net Debt as of immediately prior to
the Closing, as set forth on the Purchase Price Certificate.
"ESTIMATED NET WORKING CAPITAL" means the Net Working Capital as of
immediately prior to the Closing, prepared in accordance with GAAP applied on a
basis consistent with the Annual Financial Statements, as set forth on the
Purchase Price Certificate.
"ESTIMATED NET WORKING CAPITAL ADJUSTMENT" means the Estimated Net
Working Capital minus the Target Working Capital.
"FINAL STATEMENT OF AUTHORIZED CAPITAL EXPENDITURES" has the meaning
set forth in SECTION 2.6(C).
"FINAL STATEMENT OF NET DEBT" has the meaning set forth in SECTION
2.6(C).
"FINAL STATEMENT OF NET WORKING CAPITAL" has the meaning set forth
in SECTION 2.6(C).
"FINANCIAL STATEMENTS" has the meaning set forth in SECTION 4.4(A).
"FOREIGN BENEFIT PLAN" has the meaning set forth in SECTION 4.10(B).
"FORMER EMPLOYEES" means former employees of the Company and the
Company Subsidiaries.
"GAAP" means United States generally accepted accounting principles.
"GENERAL ENFORCEABILITY EXCEPTIONS" has the meaning set forth in
SECTION 3.1.
"GOVERNMENT SCHEMES" means any mandatory government-sponsored or
maintained agreements, arrangements, customs, practices or obligations under any
Law to which any company contributes in compliance with applicable Law for the
payment of, provision for, or contribution towards, any pensions, allowances,
lump sums or other like benefits on retirement, death, termination of employment
(whether voluntary or not), or during periods of sickness or disablement, which
are for the benefit of an employee or the benefit of persons dependent on any
employee.
"GOVERNMENTAL AUTHORITY" means any government or other political
subdivision (whether federal, state, provincial, local or foreign), or any
agency or instrumentality of any such government or political subdivision,
exercising legislative, judicial, regulatory or administrative duties or any
federal, state, provincial, local or foreign court, tribunal or arbitrator.
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"GOVERNMENTAL ORDER" means any judgment, order, writ, assessment,
injunction, decree or ruling of any Governmental Authority.
"HAZARDOUS MATERIALS" means any pollutant, toxic substance, asbestos
and asbestos-containing materials, hazardous waste, special handling waste,
universal waste, hazardous material, hazardous substance, contaminant,
petroleum, petroleum-containing materials, crystalline silica, radiation and
radioactive materials and polychlorinated biphenyls as defined in, or regulated
by, any Environmental Law and any other material that could result in Liability
under any Environmental Law.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INCOME TAXES" means any Tax imposed on or measured by income.
"INDEMNIFIED PARTY" means a party entitled to indemnification under
this Agreement.
"INDEMNIFYING PARTY" means a party obligated to provide
indemnification under this Agreement.
"INFORMATION SYSTEMS" means all computer hardware, databases and
data storage systems, computer, data, database and communications networks
(other than the Internet), architecture interfaces and firewalls (whether for
data, voice, video or other media access, transmission or reception) and other
apparatus used to create, store, transmit, exchange or receive information in
any form.
"INSURANCE POLICIES" has the meaning set forth in SECTION 4.15(A).
"INTELLECTUAL PROPERTY" means any and all patents and patent
applications; trademarks, service marks, trade names, brand names, trade dress,
slogans, logos and Internet domain names and uniform resource locators, and the
goodwill associated with any of the foregoing; inventions (whether patentable or
not), industrial designs, discoveries, improvements, ideas, designs, models,
formulae, patterns, compilations, data collections, drawings, blueprints, mask
works, devices, methods, techniques, processes, know-how, proprietary
information, customer lists, software, technical information and trade secrets;
copyrights, copyrightable works, and rights in databases and data collections;
moral and economic rights of authors and inventors; other intellectual or
industrial property rights and foreign equivalent or counterpart rights and
forms of protection of a similar or analogous nature to any of the foregoing or
having similar effect in any jurisdiction throughout the world; and
registrations and applications for registration of any of the foregoing,
including any renewals, extensions, continuations (in whole or in part),
divisionals, re-examinations or reissues or equivalent or counterpart thereof;
and all documentation and embodiments of the foregoing.
"INTERIM FINANCIAL STATEMENTS" has the meaning set forth in SECTION
4.4(A).
"IRCA" has the meaning set forth in SECTION 4.11(C).
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"IRS" has the meaning set forth in SECTION 4.10(C).
"KNOWLEDGE OF THE BUYER" means the actual knowledge of the
individuals listed on SCHEDULE 1.1(B) after reasonable inquiry.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge of each of the
individuals listed on SCHEDULE 1.1(C) after reasonable inquiry.
"LAW" means any law, statute, code, ordinance, treaty, Governmental
Order, rule or regulation of any Governmental Authority.
"LEASED REAL PROPERTY" has the meaning set forth in SECTION 4.17(A).
"LIABILITIES" means any obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether or not due or
to become due or asserted or unasserted).
"LIEN" means any adverse claim, mortgage, pledge, security interest,
or other similar encumbrance.
"LOSSES" means any and all claims, Liabilities, losses, damages,
fines, penalties, judgments and costs (in each case including reasonable
out-of-pocket expenses).
"MATERIAL CONTRACTS" has the meaning set forth in SECTION 4.13(A).
"MAXIMUM AMOUNT" has the meaning set forth in SECTION 9.1(B).
"NET DEBT" shall mean the excess of Debt Obligations over the Cash
and Cash Equivalents of the Company and the Company Subsidiaries immediately
prior to the Closing, determined on a consolidated basis in accordance with
GAAP.
"NET DEBT DEFICIENCY" has the meaning set forth in SECTION
2.6(D)(I).
"NET DEBT EXCESS" has the meaning set forth in SECTION 2.6(D)(I).
"NET DEBT STATEMENT" has the meaning set forth in SECTION 2.6(A).
"NET WORKING CAPITAL" means, as of immediately prior to the Closing,
the amount by which (a) the aggregate sum of the Company's accounts receivable
trade, other current assets, inventory, prepaid expenses and sales tax
receivable exceeds (b) the aggregate sum (excluding all Debt Obligations) of the
Company's accounts payable and accrued liabilities, and salaries and benefits
payable, all as determined on a consolidated basis in accordance with GAAP, but
excluding all non-xxxx xxxx-to market adjustments for transactions hedging the
results of operations of the Company and the Company Subsidiaries for fiscal
2007 or thereafter.
"NET WORKING CAPITAL DEFICIENCY" has the meaning set forth in
SECTION 2.6(D)(II).
"NET WORKING CAPITAL EXCESS" has the meaning set forth in SECTION
2.6(D)(II).
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"NET WORKING CAPITAL STATEMENT" has the meaning set forth in SECTION
2.6(A).
"NLRB" has the meaning set forth in SECTION 4.11(A).
"ORDINARY COURSE OF BUSINESS" means, in all material respects, the
usual, regular and ordinary course of a business consistent with the past
practice thereof.
"ORGANIZATIONAL DOCUMENT" means, as to any Person, its certificate
or articles of incorporation, its regulations or by-laws or any equivalent
documents under the Law of such Person's jurisdiction of incorporation or
organization.
"OUTSIDE DATE" has the meaning set forth in SECTION 8.1(B).
"OWNED INTELLECTUAL PROPERTY" means all Intellectual Property owned
(in whole or in part) by the Company or the Company Subsidiaries.
"OWNED REAL PROPERTY" has the meaning set forth in SECTION 4.17(B).
"PBGC" has the meaning set forth in SECTION 4.10(D).
"PERMITS" has the meaning set forth in SECTION 4.6.
"PERMITTED LIENS" means (a) Liens arising under the Debt Obligations
as set forth on SCHEDULE 1.1(D), (b) Liens for Taxes, assessments and other
charges of Governmental Authorities not yet due and payable or being contested
in good faith by appropriate proceedings, (c) mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other like Liens arising or incurred
in the ordinary course of business or by operation of Law if the underlying
obligations are not delinquent, (d) with respect to the Real Property (i) any
conditions that may be shown by a current, accurate survey, (ii) easements,
encroachments, restrictions, rights of way and any other non-monetary title
defects; and (iii) zoning, building and other similar restrictions; provided
none of the foregoing described in clause (d) will individually or in the
aggregate materially impair the value or continued use and operation of the
property to which they relate in the Business as presently conducted.
"PERSON" means any individual, sole proprietorship, partnership,
firm, corporation, association, trust, unincorporated organization, joint
venture, limited liability company, Governmental Authority or other legal
entity.
"POST-CLOSING TAX PERIOD" means a taxable period (or in the case of
a Straddle Period, the portion thereof) ending after the Closing Date.
"PRE-CLOSING TAX PERIOD" means a taxable period (or in the case of a
Straddle Period, the portion thereof) ending on or before the close of business
on the Closing Date.
"PROCEEDING" means any claim, action, suit, proceeding, audit,
investigation, inquiry, administrative enforcement proceeding or arbitration
proceeding before any Governmental Authority.
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"PURCHASE PRICE" has the meaning set forth in SECTION 2.2(A).
"PURCHASE PRICE CERTIFICATE" has the meaning set forth in SECTION
2.2(A).
"REAL PROPERTY" means the Owned Real Property and the Leased Real
Property.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping, or
disposing of a Hazardous Material into the Environment (including, without
limitation, the abandonment or discarding of barrels, containers and other
receptacles containing any Hazardous Material), and any condition that results
in the exposure (in excess of applicable concentrations, limits or amount set
forth in Environmental Laws) of a Person to a Hazardous Material.
"RESPONSE PERIOD" has the meaning set forth in SECTION 9.5(D)(I).
"RESPONSIBLE PARTY" has the meaning set forth in SECTION
9.5(D)(II)(B).
"RESTRAINT" has the meaning set forth in SECTION 7.1(A).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SELLER FILED TAX RETURNS" has the meaning set forth in SECTION
6.3(B).
"SELLER INDEMNIFIED PERSONS" has the meaning set forth in SECTION
9.2.
"SELLER RELEASES" has the meaning set forth in SECTION 2.4(A)(IV).
"SELLERS" or "SELLER" has the meaning set forth in the preamble.
"SELLERS OBJECTION" has the meaning set forth in SECTION 2.6(B).
"SELLERS REPRESENTATIVE" means Xxxxxx Xxxxxxx.
"SELLING EXPENSES" means all costs, fees and expenses of outside
professionals incurred by the Company or the Company Subsidiaries relating to
the process of selling the Company and the Company Subsidiaries, whether
incurred in connection with this Agreement or otherwise, including, without
limitation, legal, accounting, tax and investment banking fees and expenses.
"SHARES" has the meaning set forth in the recitals.
"STRADDLE PERIOD" means any taxable period which begins before and
ends after the Closing Date.
"SUBSIDIARY" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there is no such voting
9
interest, 50% of the equity interests of which) is owned directly or indirectly
by such first Person, by one or more of its subsidiaries, or by such Person and
one or more of its subsidiaries.
"TARGET WORKING CAPITAL" means $13,000,000.
"TAX" or "TAXES" means (a) any foreign, United States federal, state
or local net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added (including goods and services),
transfer, franchise, profits, capital (including large corporations), license,
withholding, payroll (including, as relating to the Canadian Subsidiaries,
employment and health insurance contributions or premiums), employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest, penalty, addition
to tax or additional amount imposed by any Law or Taxing Authority, whether
disputed or not, (b) any liability for the payment of any amounts of any of the
foregoing as a result of being a member of an affiliated, consolidated,
combined, unitary or similar group, or being a party to any agreement or
arrangement whereby liability for payment of such amounts was determined or
taken into account with reference to the liability of any other Person, (c) any
liability for the payment of any amounts as a result of being a party to any tax
sharing agreements or arrangements (whether or not written) or with respect to
the payment of any amounts of any of the foregoing as a result of any express or
implied obligation to indemnify any other Person, and (d) any liability for the
payment of any of the foregoing types as a successor or transferee.
"TAX CLAIM" has the meaning set forth in SECTION 9.5(E)(I).
"TAX RETURN" means any and all returns (including amended returns),
filings, statements or similar reports relating to Taxes, including any
schedules and amendments thereto.
"TAXING AUTHORITY" means any Governmental Authority responsible for
the administration or imposition of any Tax whether of the United States, or any
state, country, local or foreign government or subdivision or agency thereof.
"THIRD PARTY CLAIM" has the meaning set forth in SECTION
9.5(D)(II)(A).
"TRANSACTION AGREEMENTS" means the Escrow Agreement and the Seller
Releases.
"TRANSFER TAXES" has the meaning set forth in SECTION 6.3(C).
"TRANSITION PERIOD" has the meaning set forth in SECTION 6.6(B).
"TREASURY REGULATIONS" means the Treasury Regulations promulgated
under the Code.
"U.S. BENEFIT PLAN" has the meaning set forth in SECTION 4.10(B).
"WARN ACT" has the meaning set forth in SECTION 4.11(A).
10
1.2 OTHER INTERPRETIVE PROVISIONS. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement refer to
this Agreement as a whole (including any Schedules and Exhibits hereto) and not
to any particular provision of this Agreement, and all Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified. The words "include," "includes" and "including" will be deemed to be
followed by the phrase "without limitation." The meanings given to terms defined
herein will be equally applicable to both the singular and plural forms of such
terms. Whenever the context may require, any pronoun includes the corresponding
masculine, feminine and neuter forms. Except as otherwise expressly provided
herein, all references to "dollars" or "$" will be deemed references to the
lawful money of the United States of America.
ARTICLE II PURCHASE AND SALE
2.1 PURCHASE AND SALE OF THE SHARES. On the Closing Date and subject
to the terms and conditions set forth in this Agreement, Sellers shall sell,
convey, assign, transfer and deliver to the Buyer and the Buyer will purchase
and acquire, all of Sellers' right, title and interest in and to the Shares, in
each case, free and clear of all Liens.
2.2 CONSIDERATION. (a) On the Closing Date and subject to the terms
and conditions set forth in this Agreement, the Buyer will pay to Sellers, in
consideration of the sale, conveyance, assignment, transfer and delivery of the
Shares, the aggregate sum of $200,000,000 in cash plus the Estimated Authorized
Capital Expenditure Amount plus (i) the Estimated Net Debt (if a negative
number) and (ii) the Estimated Net Working Capital Adjustment (if a positive
number), minus (i) the Estimated Net Debt (if a positive number), (ii) the
Estimated Net Working Capital Adjustment (if a negative number), (iii) any and
all Selling Expenses that remain unpaid at the time of Closing and (iv) the
Escrow Amount, which shall be payable to the escrow agent pursuant to the terms
of the Escrow Agreement (as adjusted pursuant to this Agreement, the "PURCHASE
PRICE"). Such amount shall be paid, in the proportion set forth on SCHEDULE B,
to the applicable Seller on the Closing Date by means of one or more wire
transfers of immediately available funds to an account or accounts designated in
writing by each Seller at least one Business Day prior the Closing Date. At
least three Business Days prior to the Closing Date, Sellers shall deliver to
the Buyer a certificate (the "PURCHASE PRICE CERTIFICATE") of the chief
financial officer of the Company, in a form and substance reasonably acceptable
to Buyer, setting forth in sufficient detail Sellers' good faith estimate of
Estimated Working Capital, Estimated Net Debt and the Estimated Authorized
Capital Expenditure Amount. Any amount used in determining the Purchase Price as
provided in this SECTION 2.2(A) or the adjustments to the Purchase Price
provided in SECTION 2.6 below not denominated in U.S. Dollars shall be converted
to U.S. Dollars at the exchange rate in effect one Business Day before the date
of delivery of the Purchase Price Certificate or the date of determination of
such adjustment, as the case may be, in each case, as set forth in THE WALL
STREET JOURNAL, Eastern Edition.
(b) On the Closing Date, Buyer shall pay or cause to be paid (A) to
the Persons entitled thereto, all of the Debt Obligations set forth on SCHEDULE
2.2(B), in the amounts set forth in the Closing Certificate; and (B) to the
Persons entitled thereto, all of the Selling Expenses to the extent unpaid at
the time of the Closing.
(c) Reserved.
11
(d) Notwithstanding anything in this Agreement to the contrary, if
any of the Sellers fails to provide the Buyer with the certification provided in
SECTION 2.4(A)(VI) in whole or in part, the Buyer shall be entitled to withhold
the requisite amount from the Purchase Price in accordance with Section 1445 of
the Internal Revenue Code of 1986, as amended (the "CODE") and the Treasury
Regulations promulgated thereunder or other applicable Law.
2.3 THE CLOSING. Unless this Agreement is terminated pursuant to
ARTICLE VIII, the closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place at the offices of Xxxxx Day, 000 Xxxxxxxx Xxx.,
Xxxxxxxxx, Xxxx 00000, not later than the third Business Day following the
satisfaction or waiver of the conditions set forth in ARTICLE VII hereof (other
than those conditions that are to be satisfied at the Closing), or at such other
place and on such other date or time as may be agreed upon by the Sellers and
the Buyer (the "CLOSING DATE"). The Closing shall be effective as of 12:01 a.m.
on the Closing Date.
2.4 DELIVERIES AT THE CLOSING. (a) At or prior to the Closing, the
Sellers shall deliver or cause to be delivered to the Buyer:
(i) stock certificates evidencing the Shares to be sold by each
Seller, accompanied by stock powers duly executed in blank and requisite
transfer tax stamps, if any, as may be necessary or desirable to effect
the transactions described in SECTION 2.1;
(ii) a receipt from each Seller, in form and substance reasonably
acceptable to Buyer, acknowledging receipt by such Seller of the portion
of the Purchase Price paid to such Seller;
(iii) the Escrow Agreement, duly executed by each Seller and the
escrow agent thereunder;
(iv) releases, in substantially the form attached hereto as EXHIBIT
C, duly executed by each of the Sellers and the employees receiving
payments pursuant to SCHEDULE 1.1(A) (the "SELLER RELEASES");
(v) copies of the resolutions of the boards of directors (or
equivalent governing body) of each of the Sellers that is not an
individual, authorizing and approving this Agreement and the Transaction
Agreements and the transactions contemplated hereby and thereby,
certified by the respective corporate secretaries (or equivalent) of the
applicable Sellers to be true and complete and in full force and effect
and unmodified as of the Closing Date;
(vi) certificates in form and substance satisfactory to the Buyer,
duly executed and acknowledged by each Seller to the extent required
under applicable Law, certifying that the transactions contemplated
hereby are exempt from withholding under Section 1445 of the Code and
other applicable Law;
(vii) the Consents listed on SCHEDULE 2.4(A)(VII);
12
(viii) the resignations of the officers, as corporate officers, and
directors of the Company and the Company Subsidiaries set forth on
SCHEDULE 2.4(A)(VIII);
(ix) a certificate (the "CLOSING CERTIFICATE") of the chief
financial officer of the Company, dated as of the Closing Date and in a
form and substance reasonably acceptable to Buyer, setting forth in
sufficient detail the aggregate amount of (i) those Debt Obligations set
forth on SCHEDULE 2.2(B) outstanding immediately prior to the Closing and
(ii) any and all Selling Expenses that remain unpaid immediately prior to
the Closing;
(x) all minute books, stock record books (or similar registries) and
corporate (or similar) records and seals of each of the Company and the
Company Subsidiaries not already in the possession of the Company or the
Company Subsidiaries;
(xi) a copy of the certificate of incorporation (or equivalent
document) of the Company and each Company Subsidiary, certified by the
secretary of state or similar Governmental Authority of its jurisdiction
of incorporation or organization, and a copy of the bylaws (or equivalent
document) of the Company and each Company Subsidiary, certified by an
officer of the Company;
(xii) a reasonably current good standing certificate (or equivalent
document if available) for the Company and each Company Subsidiary issued
by the secretary of state or similar Governmental Authority of its
jurisdiction of incorporation or organization;
(xiii) payoff letters and appropriate termination statements under
the Uniform Commercial Code and other instruments as may be requested by
the Buyer to extinguish all Debt Obligations of the Company and each
Company Subsidiary and all security interests related thereto to the
extent directed by Buyer;
(xiv) a list of the signatories on each of the bank accounts set
forth on SCHEDULE 4.23; and
(xv) stock certificates (or local legal equivalents) evidencing the
capital stock of each Company Subsidiary.
(b) At or prior to the Closing, the Buyer shall deliver or cause to
be delivered to the respective Sellers the following:
(i) the Purchase Price by wire transfer of immediately available
funds to an account or accounts designated by Sellers as provided in
Section 2.2(a);
(ii) a receipt evidencing the Buyer's receipt of the Shares and the
payment of the amounts set forth in SECTION 2.2(B);
(iii) copies of the resolutions of the board of directors of the
Buyer authorizing and approving this Agreement and all other transactions
and agreements contemplated hereby, certified by the corporate secretary
of the Buyer to be true and complete and in full force and effect and
unmodified as of the Closing Date; and
(iv) the Escrow Agreement, duly executed by the Buyer and the escrow
agent thereunder.
13
2.5 Reserved.
2.6 PURCHASE PRICE ADJUSTMENT.
(a) Within 90 calendar days after the Closing Date, Buyer will
prepare, or cause to be prepared, and deliver to the Sellers Representative
(along with relevant supporting documentation) a statement containing a
calculation of the Net Debt (the "NET DEBT STATEMENT"), which shall be prepared
in accordance with the definition of Net Debt. Within 90 calendar days after the
Closing Date, Buyer will prepare, or cause to be prepared, and deliver to
Sellers Representative (along with relevant supporting documentation) a
statement of Net Working Capital (the "NET WORKING CAPITAL STATEMENT"), which
shall be prepared in accordance with the definition of Net Working Capital. Also
within 90 calendar days after the Closing Date, Buyer will prepare, or cause to
be prepared, and deliver to Sellers Representative (along with relevant
supporting documentation), a statement of Authorized Capital Expenditures (the
"AUTHORIZED CAPITAL EXPENDITURE STATEMENT").
(b) The Sellers Representative shall, within 60 calendar days after
the delivery by the Buyer of the Net Debt Statement, the Net Working Capital
Statement and the Authorized Capital Expenditure Statement, complete its review
of the Net Debt Statement, the Net Working Capital Statement and the Authorized
Capital Expenditure Statement. In the event that the Sellers Representative
determines that any of the Net Debt Statement, the Net Working Capital Statement
or the Authorized Capital Expenditure Statement has not been prepared on a basis
consistent with the requirements of SECTION 2.6(A), the Sellers Representative
shall, on or before the last day of such 60-day period, inform the Buyer in
writing (the "SELLERS OBJECTION"), setting forth a specific description of the
basis of the Sellers Objection, the adjustments to the Net Debt Statement, the
Net Working Capital Statement and/ or the Authorized Capital Expenditure
Statement which the Sellers Representative believes should be made, and the
Sellers Representative's calculation of the Net Debt, Net Working Capital or
Authorized Capital Expenditures, as the case may be, and the Sellers
Representative shall be deemed to have accepted any items not specifically
disputed in the Sellers Objection. Failure to so notify the Buyer on or before
the last day of such 60-day period shall constitute acceptance and approval of
the Buyer's calculation of the Net Debt, Net Working Capital and the Authorized
Capital Expenditures, which shall be conclusive and binding upon the Sellers and
Buyer.
(c) Subject to SECTION 2.6(D)(IV):
The Buyer shall have 30 calendar days following the date it receives the Sellers
Objection to review and respond to the Sellers Objection. If the Sellers
Representative and the Buyer are unable to resolve all of their disagreements
with respect to the determination of the foregoing items by the 30th day
following the Buyer's response thereto, after having used their good faith
efforts to reach a resolution, they shall refer their remaining differences to
the CPA Firm, which shall determine on a basis consistent with the requirements
of SECTION 2.6(A), and only with respect to the specific remaining accounting
related differences so submitted, whether and to what extent, if any, the
Authorized Capital Expenditure Statement, the Net Working Capital Statement
and/or the Net Debt Statement, as applicable, requires adjustment. The Sellers
Representative and the Buyer shall request the CPA Firm to use its best efforts
to render its determination within 45 calendar days. The CPA Firm's
determination shall be conclusive and
14
binding upon the Sellers and the Buyer. The Sellers Representative and the Buyer
shall make reasonably available to the CPA Firm all relevant books and records,
any work papers (including those of the parties' respective accountants) and
supporting documentation relating to the Authorized Capital Expenditure
Statement, the Net Working Capital Statement and/or the Net Debt Statement, as
applicable, and all other items reasonably requested by the CPA Firm. The "FINAL
STATEMENT OF NET DEBT" shall be (i) the Net Debt Statement in the event that (x)
no Sellers Objection is delivered to the Buyer during the initial 60-day period
specified above or (y) the Sellers Representative and the Buyer so agree, (ii)
the Net Debt Statement, adjusted in accordance with the Sellers Objection, in
the event that (x) Buyer does not respond to the Sellers Objection during the
30-day period specified above following receipt by the Buyer of the Sellers
Objection or (y) the Sellers Representative and the Buyer so agree or (iii) the
Net Debt Statement, as adjusted pursuant to the agreement of the Buyer and the
Sellers Representative or as adjusted by the CPA Firm together with any other
modifications to the Net Debt Statement agreed upon by Sellers Representative
and the Buyer. The "FINAL STATEMENT OF NET WORKING CAPITAL" shall be (i) the Net
Working Capital Statement in the event that (x) no Sellers Objection is
delivered to the Buyer during the initial 60-day period specified above or (y)
the Sellers Representative and the Buyer so agree, (ii) the Net Working Capital
Statement, adjusted in accordance with the Sellers Objection, in the event that
(x) Buyer does not respond to the Sellers Objection during the 30-day period
specified above following receipt by the Buyer of the Sellers Objection or (y)
the Sellers and the Buyer so agree or (iii) the Net Working Capital Statement,
as adjusted pursuant to the agreement of the Buyer and the Sellers
Representative or as adjusted by the CPA Firm together with any other
modifications to the Net Working Capital Statement agreed upon by Sellers
Representative and the Buyer. The "FINAL STATEMENT OF AUTHORIZED CAPITAL
EXPENDITURES" shall be (i) the Authorized Capital Expenditure Statement in the
event that (x) no Sellers Objection is delivered to the Buyer during the initial
60-day period specified above or (y) the Sellers Representative and the Buyer so
agree, (ii) the Authorized Capital Expenditure Statement, adjusted in accordance
with the Sellers Objection, in the event that (x) Buyer does not respond to the
Sellers Objection during the 30-day period specified above following receipt by
the Buyer of the Sellers Objection or (y) the Sellers Representative and the
Buyer so agree or (iii) the Authorized Capital Expenditure Statement, as
adjusted pursuant to the agreement of the Buyer and the Sellers Representative
or as adjusted by the CPA Firm together with any other modifications to the
Authorized Capital Expenditures Statement agreed upon by Sellers Representative
and the Buyer. All fees and disbursements of the CPA Firm shall be shared
equally by the Sellers Representative on behalf of the Sellers, on the one hand,
and the Buyer, on the other hand.
(d) Subject to SECTION 2.6(D)(IV):
(i) if the calculation of the Net Debt contained in the Final
Statement of Net Debt is less than the Estimated Net Debt, the Buyer
shall pay an amount in cash equal to the amount of such deficiency (such
amount, the "NET DEBT DEFICIENCY"), plus interest computed at the
Applicable Rate for the period from the Closing Date to the date of such
payment on the Net Debt Deficiency, in immediately available funds to the
Sellers Representative, for the benefit of the Sellers, within five (5)
Business Days after the ultimate determination of the Final Statement of
Net Debt as provided in this SECTION 2.6. If the calculation of the Net
Debt contained in the Final Statement of Net Debt is greater than the
Estimated Net Debt, the Sellers, jointly and severally, shall pay an
amount in
15
cash equal the amount of such excess (such amount, the "NET DEBT
EXCESS"), plus interest computed at the Applicable Rate for the period
from the Closing Date to the date of such payment on the Net Debt Excess,
in immediately available funds to the Buyer, within five (5) Business
Days after the ultimate determination of the Final Statement of Net Debt
as provided in this SECTION 2.6.
(ii) if the calculation of the Net Working Capital contained in the
Final Statement of Net Working Capital is less than the Estimated Net
Working Capital, the Sellers, jointly and severally, shall pay an amount
in cash equal to the amount of such deficiency (such amount, the "NET
WORKING CAPITAL DEFICIENCY"), plus interest computed at the Applicable
Rate for the period from the Closing Date to the date of such payment on
the Net Working Capital Deficiency, in immediately available funds to the
Buyer within five (5) Business Days after the ultimate determination of
the Final Statement of Net Working Capital as provided in this SECTION
2.6. If the calculation of the Net Working Capital contained in the Final
Statement of Net Working Capital is greater than the Estimated Net
Working Capital, the Buyer shall pay an amount in cash equal to the
amount of such excess (such amount, the "NET WORKING CAPITAL EXCESS"),
plus interest computed at the Applicable Rate for the period from the
Closing Date to the date of such payment on the Net Working Capital
Excess, in immediately available funds to the Sellers Representative, for
the benefit of Sellers, within five (5) Business Days after the ultimate
determination of the Final Statement of Net Working Capital as provided
in this SECTION 2.6.
(iii) if the calculation of the Authorized Capital Expenditures
contained in the Final Statement of Authorized Capital Expenditures is
less than the Estimated Authorized Capital Expenditure Amount, the
Sellers, jointly and severally, shall pay an amount in cash equal to the
amount of such deficiency (such amount, the "AUTHORIZED CAPITAL
EXPENDITURE DEFICIENCY"), plus interest computed at the Applicable Rate
for the period from the Closing Date to the date of such payment on the
Authorized Capital Expenditure Deficiency, in immediately available funds
to Buyer, within five (5) Business Days after the ultimate determination
of the Final Statement of Authorized Capital Expenditure as provided in
this SECTION 2.6. If the calculation of the Authorized Capital
Expenditures contained in the Final Statement of Authorized Capital
Expenditures is greater than the Estimated Authorized Capital Expenditure
Amount, the Buyer shall pay an amount in cash equal the amount of such
excess (such amount, the "AUTHORIZED CAPITAL EXPENDITURE EXCESS"), plus
interest computed at the Applicable Rate for the period from the Closing
Date to the date of such payment on the Authorized Capital Expenditure
Excess, in immediately available funds to the Sellers Representative, for
the benefit of the Sellers, within five (5) Business Days after the
ultimate determination of the Final Statement of Authorized Capital
Expenditures as provided in this SECTION 2.6.
(iv) All amounts payable by Buyer or the Sellers Representative, as
the case may be, pursuant to SECTIONS 2.6(D)(I), (II) or (III), as the
case may be, shall be netted against all amounts payable to such party by
the other party pursuant to such sections.
(v) Notwithstanding anything in this Agreement to the contrary,
including SECTION 9.5(C), Buyer may, but is not required to, draw any
amounts payable to Buyer
16
pursuant to SECTIONS 2.6(D)(I), (II) or (III) from the funds subject to
the Escrow Agreement.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller severally represents and warrants to the Buyer as
follows:
3.1 VALIDITY AND ENFORCEABILITY. Such Seller has the capacity or the
requisite power and authority, as the case may be, to execute, deliver and
perform his, her or its obligations under this Agreement and the Transaction
Agreements. This Agreement and the Transaction Agreements have been duly
executed and delivered by such Seller and, assuming due authorization, execution
and delivery by the other parties thereto, represent the legal, valid and
binding obligation of such Seller enforceable against such Seller in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, fraudulent conveyance and other similar
Laws affecting creditors' rights and remedies generally and general equitable
principles (whether considered in a Proceeding in equity or at Law) (the
"GENERAL ENFORCEABILITY EXCEPTIONS"). No further action on the part of such
Seller is or will be required in connection with the transactions contemplated
by this Agreement or the Transaction Agreements.
3.2 TITLE TO SHARES. Such Seller has good and valid title to his,
her or its Shares, free and clear of all Liens. Upon the consummation of the
transactions contemplated by this Agreement, the Buyer will acquire good and
valid title to such Seller's Shares, free and clear of all Liens, voting trusts,
shareholder agreements, proxies or other similar restrictions.
3.3 NO CONFLICT. (a) Neither the execution of this Agreement or the
Transaction Agreements, nor the performance by such Seller of his, her or its
obligations hereunder or thereunder will (i) violate or conflict with (A) in the
case of any Seller that is not a natural person, the organizational documents of
such Seller or (B) any Law or Governmental Order applicable to such Seller or by
which any of his, her or its properties or assets are bound, (ii) violate,
conflict with or result in a breach or termination of, or otherwise give any
Person additional rights or compensation under, or the right to terminate or
accelerate, or constitute (with notice or lapse of time, or both) a default
under the terms of any Contract to which such Seller is a party or by which any
of the assets or the properties of such Seller are bound or (iii) result in the
creation or imposition of any Lien with respect to, or otherwise have an adverse
effect upon, the Shares owned by such Seller.
(b) Except as set forth on SCHEDULE 3.3(B), no Consent is required
to be obtained, filed or delivered by such Seller for the consummation by such
Seller of the transactions contemplated by this Agreement or the Transaction
Agreements.
3.4 PROCEEDINGS. There are no Proceedings pending or, to such
Seller's actual knowledge, threatened (a) against such Seller or (b) that
challenge, or question the validity of, this Agreement, any Transaction
Agreement or any action taken or to be taken by such Seller in connection with,
or which seeks to enjoin or obtain monetary damages in respect of, the
consummation of the transactions contemplated hereby or thereby.
17
ARTICLE IV REPRESENTATIONS AND WARRANTIES
RELATING TO THE COMPANY AND THE COMPANY SUBSIDIARIES
The Company represents and warrants to the Buyer as follows:
4.1 ORGANIZATION. Each of the Company and the Company Subsidiaries
is a corporation duly organized, validly existing and in good standing (to the
extent such concept exists) under the Laws of its jurisdiction of incorporation
or organization. Each of the Company and the Company Subsidiaries has the
requisite corporate power and authority to own, lease and operate its assets and
to carry on its business as now being conducted and is duly qualified,
authorized or licensed to do business and is in good standing (to the extent
such concept exists) in the jurisdictions in which the ownership, lease or
operation of its assets or the conduct of its business requires such
qualification, authorization or license, except where the failure to be so
qualified, authorized or licensed would not reasonably be expected to have a
Company Material Adverse Effect.
4.2 CAPITAL STOCK OF THE COMPANY. SCHEDULE 4.2 sets forth for the
Company (a) its jurisdiction of incorporation, and (b) the number of authorized,
issued and outstanding shares of capital stock, the names of the holders
thereof, and the number of shares of capital stock held by each such holder and,
except as set forth on SCHEDULE 4.2, there are no other authorized, issued or
outstanding shares of capital stock or other equity interests of the Company.
All of the issued and outstanding shares of capital stock of the Company are
owned beneficially and of record by the Sellers, free and clear of any Liens.
All of the shares of capital stock of the Company are duly authorized and
validly issued and are fully paid and nonassessable and have been issued in
compliance with (and since such issuance, have not been transferred except in
compliance with) all applicable federal, state and foreign securities Laws and
any preemptive rights, rights of first refusal or similar rights of any Person.
Except for this Agreement, there are no outstanding subscriptions, options,
warrants, calls, preemptive rights, conversion or other rights, agreements,
commitments, arrangements, trusts, proxies or understandings relating to the
sale, issuance or voting of any shares of the capital stock of the Company, or
of any securities or other instruments convertible into, exchangeable for or
evidencing the right to purchase any shares of capital stock of the Company.
There are no outstanding agreements or commitments obligating the Company to
repurchase, redeem or otherwise acquire any outstanding shares or other equity
interests of the Company.
4.3 COMPANY SUBSIDIARIES. SCHEDULE 4.3 sets forth a list of each
Subsidiary of the Company (the "COMPANY SUBSIDIARIES") and for each of the
Company Subsidiaries (i) its jurisdiction of incorporation, formation or
organization, as applicable, and (ii) the number of authorized, issued and
outstanding shares of each class of its capital stock or other authorized,
issued and outstanding equity interests, as applicable, the names of the holders
thereof, and the number of shares or percentage interests, as applicable, held
by each such holder. Each Company Subsidiary is duly incorporated, formed or
organized, as applicable, validly existing and, where applicable, in good
standing under the Laws of its jurisdiction of incorporation, formation or
organization, as applicable, has the requisite corporate or similar power and
authority to own, lease and operate its assets and to carry on its business as
now being conducted, and is duly qualified, authorized or licensed to do
business, and, where applicable, is in good standing in the jurisdictions in
which the ownership, lease or operation of its assets or the
18
conduct of its business requires such qualification or license except where the
failure to be so qualified would not cause a Company Material Adverse Effect.
Except as set forth on SCHEDULE 4.3, all the issued and outstanding shares of
capital stock or other equity interests of the Company Subsidiaries are owned,
beneficially and of record, by the Company or another Company Subsidiary, free
and clear of any Liens, and the Company or a Company Subsidiary has good and
valid title to such shares of capital stock or other equity interests. All of
such issued and outstanding shares were duly authorized and validly issued and
are fully paid and nonassessable. Except as set forth on SCHEDULE 4.3, there are
no outstanding subscriptions, options, warrants, calls, preemptive rights,
conversion or other rights, agreements, commitments, arrangements, trusts,
proxies or understandings relating to the sale, issuance or voting of any shares
of the capital stock or other equity interest of any of the Company
Subsidiaries, or of any securities or other instruments convertible into,
exchangeable for or evidencing the right to purchase any shares of capital stock
or other equity interests of any of the Company Subsidiaries. There are no
outstanding agreements or commitments obligating the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any outstanding shares or
other equity interests of any Company Subsidiary. Other than the ownership
interests in the Company Subsidiaries, neither the Company nor the Company
Subsidiaries own any equity interest in any other Person.
4.4 FINANCIAL STATEMENTS. SCHEDULE 4.4(A) sets forth true and
complete copies of the audited consolidated balance sheet of the Company and the
Company Subsidiaries as of December 31, 2005 and December 31, 2004, and the
related audited consolidated statements of income, consolidated statement of
stockholders' equity and consolidated statement of cash flows for each of the
years in the period then ended (the "ANNUAL FINANCIAL STATEMENTS"). SCHEDULE
4.4(A) also sets forth the unaudited consolidated balance sheet of the Company
and the Company Subsidiaries as of September 30, 2006 (the "BALANCE SHEET"), the
related unaudited consolidated statement of income, consolidated statement of
stockholders' equity and the consolidated statement of cash flows for the
nine-month period then ended (the "INTERIM FINANCIAL STATEMENTS" and, together
with the Annual Financial Statements, the "FINANCIAL Statements"). Except as set
forth on SCHEDULE 4.4(A), the Financial Statements have been prepared from the
books and records of the Company and the Company Subsidiaries, and fairly
present in all material respects the financial position and results of
operations of the Company and the Company Subsidiaries on a consolidated basis
at the dates and for the respective periods covered, in each case in accordance
with GAAP applied on a consistent basis, subject, in the case of the Interim
Financial Statements, which in the absence of note disclosures include all
adjustments necessary for a fair presentation.
(b) To the Knowledge of the Company, neither the Company nor any
Company Subsidiary has any material Liabilities of any kind, except for
Liabilities (i) reflected on, accrued or reserved against, in the Balance Sheet,
(ii) incurred in the ordinary course of business since the date of the Balance
Sheet, (iii) arising under Contracts disclosed in the schedules to this
Agreement or not required to be so disclosed, or (iv) set forth on SCHEDULE
4.4(B).
4.5 NO CONFLICTS OR APPROVALS. Except as set forth on SCHEDULE
4.5(A), the execution, delivery and performance by the Company of this Agreement
and the Transaction Agreements and the consummation by the Company of the
transactions contemplated hereby and
19
thereby do not and will not (i) violate, conflict with or result in a breach of
the organizational documents of any of the Company or the Company Subsidiaries,
(ii) violate, conflict with or result in a breach of, or constitute a default by
the Company or the Company Subsidiaries (or create an event which, with notice
or lapse of time or both, would constitute a default) or give rise to any right
of termination, consent, cancellation, acceleration, increased Liabilities or
fees, or right to increase the obligations or otherwise modify the terms under,
or result in the creation of any Lien, other than Permitted Liens, upon any of
the material properties, rights or assets of any of the Company or the Company
Subsidiaries or on the Shares or to which any of such properties, assets or
Shares are subject under, any material Contract to which any of the foregoing is
a party or otherwise bound, or (iii) subject to the receipt of the requisite
approvals referred to on SCHEDULE 4.5(B), conflict with or violate any
Governmental Order or Law applicable to any of the Company or the Company
Subsidiaries or any of their respective properties, rights or assets.
(b) Except as set forth on SCHEDULE 4.5(B), no Consent is required
to be obtained, filed or delivered by the Sellers for the consummation by the
Company or any Company Subsidiary of the transactions contemplated by this
Agreement and the Transaction Agreements.
4.6 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Except as set
forth on SCHEDULE 4.6, each of the Company and the Company Subsidiaries is now
and has been since October 29, 2003, in compliance in all material respects with
all Laws and Governmental Orders. To the Knowledge of the Company, there is no
proposed Law or Governmental Order that would be applicable to any of the
Company or the Company Subsidiaries that would materially adversely affect the
condition (financial or otherwise), business, assets, properties, Liabilities or
operations of any of the Company or the Company Subsidiaries. Neither the
Company nor any Company Subsidiary nor any director, officer, agent or employee
acting on behalf of the Company or any Company Subsidiary has used any corporate
funds to make, directly or indirectly, any unlawful contribution, gift, bribe,
payoff, kickback or other unlawful payment to any United States or foreign
government official or employee or violated any provision of the United States
Foreign Corrupt Practices Act of 1997. Except as set forth in SCHEDULE 4.6, each
of the Company and the Company Subsidiaries possess all material licenses,
approvals, permits, registrations, certificates and other governmental
authorizations ("PERMITS") necessary to own, lease and operate its assets and
conduct the business of the Company and the Company Subsidiaries as currently
conducted. Except as set forth in SCHEDULE 4.6, the Permits are in full force
and effect and the Company and the Company Subsidiaries have not received any
written notice or, to the Knowledge of the Company, oral notice, from any
Governmental Authority (a) asserting that the Company or any Company Subsidiary
is not in material compliance with any Permit or (b) threatening to suspend,
revoke, revise, limit, restrict or terminate any Permit held by the Company or
any Company Subsidiary or declare any such Permit invalid. Except as set forth
in SCHEDULE 4.6, (x) the statutory records of each of the Company and the
Company Subsidiaries required to be maintained by the Laws of its jurisdiction
of incorporation, organization or formation have been properly kept and contain
an accurate and materially complete record of the applicable matters required to
be contained therein and no written notice, that any of them is incorrect or
should be rectified has been received and (y) all documents required to be filed
with any relevant Governmental Authority in any relevant jurisdiction in respect
of the Company and the Company Subsidiaries have been
20
filed and were correct in all material respects. In limitation of the above, no
representation or warranty provided in this SECTION 4.6, shall apply to any
matters covered by SECTIONS 4.9, 4.10 and 4.14, it being understood that the
sole representations and warranties with respect to the matters covered by
SECTIONS 4.9, 4.10 and 4.14 are the representations and warranties contained
therein.
4.7 PROCEEDINGS. Except as set forth on SCHEDULE 4.7, there are no
Proceedings pending or, to the Knowledge of the Company, threatened (a) against
the Company or any Company Subsidiary or (b) that challenge, or question the
validity of, this Agreement, any Transaction Agreement or any action taken or to
be taken by the Company or any Company Subsidiary in connection with, or which
seeks to enjoin or obtain monetary damages in respect of, the consummation of
the transactions contemplated hereby or thereby.
4.8 ABSENCE OF CERTAIN CHANGES. Except as (a) set forth in SCHEDULE
4.8, or (b) otherwise expressly permitted or required by this Agreement, since
the date of the Balance Sheet, the business of the Company and the Company
Subsidiaries has been conducted only in the ordinary course of business.
4.9 TAX MATTERS. Except as set forth in SCHEDULE 4.9;
(a) All Tax Returns required to be filed by or on behalf of the
Company and Company Subsidiaries have been timely filed (subject to permitted
extensions applicable to such filing), and all such Tax Returns of the Company
and Company Subsidiaries are true, correct and complete in all respects. All
Taxes of the Company and Company Subsidiaries due or payable (whether or not
shown on such Tax Returns) have been paid within the prescribed period or any
extension thereof, other than Taxes that are being contested in good faith or
properly reflected or adequately reserved against on a balance sheet of the
Company or a Company Subsidiary prepared in accordance with GAAP. All material
elections made on behalf of the Company or the Company Subsidiaries have been
timely and properly made.
(b) There are no Liens relating to Taxes encumbering any of the
Shares or any assets or properties of the Company or the Company Subsidiaries,
except for Permitted Liens.
(c) There are no Proceedings currently pending against the Company
or the Company Subsidiaries or, to the Knowledge of the Company, threatened
against the Company or the Company Subsidiaries in respect of any Tax for any
Pre-Closing Tax Period. To the Knowledge of the Company, no claims for Taxes
have been made by any Taxing Authority in a jurisdiction in which any of the
Company or the Company Subsidiaries does not file a Tax Return.
(d) None of the Company or the Company Subsidiaries has granted any
extension or waiver of the statute of limitations period applicable to any Tax
or Tax Return, or has agreed to any extension of time with respect to a material
Tax assessment or deficiency, which period (after giving effect to such
extension or waiver) has not yet expired.
(e) Since October 29, 2003, none of the Company or Company
Subsidiaries (i) has been a member of an affiliated, consolidated, combined or
unitary group as set forth in Section 1504 of the Code or any other similar
provision of state, local or foreign Law or (ii) has
21
any liability for Taxes of any Person under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law), as transferee or
successor, by contract or otherwise; in either case, other than with respect to
any current affiliated, consolidated, combined or unitary group.
(f) All Tax amounts required to be withheld or collected for payment
by the Company or Company Subsidiaries, including in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
any other Person have been collected or withheld and paid to the appropriate
Taxing Authorities, except for payments not yet due to be paid over to a taxing
authority.
(g) None of the Company or the Company Subsidiaries will be required
to include any item of income in, or exclude any material item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date (i) as a result of any change in method of accounting made
between October 29, 2003 and on or prior to the Closing Date, (ii) pursuant to a
"closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed between October 29, 2003 and on or prior to the Closing Date, (iii)
pursuant to an installment sale or open transaction disposition made between
October 29, 2003 and on or prior to the Closing, or (iv) as a result of any
prepaid amount received between October 29, 2003 and on or prior to the Closing.
Any income, gain, deduction or loss attributable to "intercompany transactions"
(as defined in Treasury Regulations under Section 1502 of the Code or any
corresponding provision of state, local foreign or other income Tax Law)
involving the Company or any Company Subsidiary consummated prior to the Closing
or "excess loss accounts" (as defined in Treasury Regulations under Section 1502
of the Code or any corresponding provision of state, local foreign or other
income Tax Law) with respect to the stock of the Company or any Company
Subsidiary existing at the Closing will be taken into account for federal, state
or local Income Tax purposes as a result of the transactions contemplated by
this Agreement.
(h) Neither the Company or any of the Company Subsidiaries has 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).
(i) Since October 29, 2003, neither the Company nor any of the
Company Subsidiaries has been a "distributing corporation" or a "controlled
corporation" in a distribution that was purported or intended to be governed by
Section 355(a) of the Code.
(j) Each of the Company and the Company Subsidiaries have disclosed
on their federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code.
(k) Neither the Company nor any Company Subsidiary is a party to or
bound by any Tax allocation or Tax sharing agreement or arrangement.
(l) Since October 29, 2003, no Tax Return filed with respect to the
Company or Company Subsidiaries reflects any material adjustment pursuant to
Section 482 of the Code or any analogous provision of state, local or foreign
Tax law.
22
(m) Since October 29, 2003, none of the Company or the Company
Subsidiaries has been a party to any understanding or arrangement described in
Section 6111(b)(2) of the Code, nor has any of the Company or the Subsidiaries
participated in a reportable transaction as defined in Treasury Regulation
Section 1.6011-4(b) and (c)(3), or any analogous provision of state, local or
foreign Tax law.
(n) There are no outstanding rulings of, or requests for rulings
with, any Tax authority expressly addressed to the Company or any Company
Subsidiary, with respect to the Company or any Company Subsidiary.
(o) None of the Canadian Company Subsidiaries have entered into any
agreement contemplated by section 191.3 of the Income Tax Act (Canada).
(p) No Person (other than the Buyer) has ever acquired or had the
right to acquire control of the Canadian Company Subsidiaries for the purposes
of Section 111 of the Income Tax Act (Canada).
(q) There is no, and prior to the Closing there will not be, any
transaction, election, or failure to take any action or make any election prior
to the Closing that would restrict or limit use (for the benefit of the Buyer)
of the Canadian Company Subsidiaries' net losses as at the Closing in a taxation
year ending after the Closing, other than any limits or restrictions caused by
any act, omission or failure of the Buyer under applicable Laws, including
Section 111 of the Income Tax Act (Canada).
(r) None of sections 78, 80, 80.01, 80.02, 80.03 and 80.04 of the
Income Tax Act (Canada) or any equivalent provision of the Laws of any other
jurisdiction, have applied or will apply to the Canadian Company Subsidiaries on
or before the Closing Date.
(s) No Canadian Company Subsidiary has acquired property from a
non-arm's length Person, within the meaning of the Income Tax Act (Canada), for
consideration, the value of which is less than the fair market value of the
property, including, but not limited to, in circumstances which could subject it
to a liability under section 160 of the Income Tax Act (Canada). The value of
the consideration paid or received by the Canadian Company Subsidiaries for the
acquisition, sale or transfer of property (including intangibles) or the
provision of services (including financial transactions) from or to any non
arm's length Person is equal to the estimated fair market value of such property
acquired, transferred or sold or services purchased or provided. The Canadian
Company Subsidiaries have not received any requirement pursuant to section 224
of the Income Tax Act (Canada) which remains unsatisfied in any respect.
(t) No circumstances exist and no transaction or event or series of
transactions or events has occurred which has resulted or could result in a
liability for Tax to the Canadian Company Subsidiaries, either before, on or
after Closing, under section 17 of the Income Tax Act (Canada). Paragraph
214(3)(a) of the Income Tax Act (Canada) has not applied as a result of any
transaction or event involving the Canadian Company Subsidiaries. For all
transactions between a Canadian Company Subsidiary and any Person that is a
non-resident of Canada for purposes of the Income Tax Act (Canada) with whom it
was not dealing at arm's
23
length during a taxation year commencing after 1998 and ending on or before the
Closing Date and to which subsection 247(3) of the Income Tax Act (Canada) could
apply, the Canadian Company Subsidiary has made or obtained records or documents
that meet the requirements of paragraphs 247(4)(a) to (c) of the Income Tax Act
(Canada).
(u) The Canadian Company Subsidiaries are duly registered under Part
IX of the Excise Tax Act (Canada) with respect to the goods and services tax and
their registration numbers are 88618-8903RT0001 (Recmix, Inc.), 88613-7207RT0001
(Melri, Inc.) and 84174-5540RT0001 (Excell Materials G.P.), respectively.
4.10 EMPLOYEE BENEFITS. (a) SCHEDULE 4.10(A) sets forth a list of
(i) every employee benefit plan, within the meaning of Section 3(3) of ERISA,
(ii) every other severance pay, retention, parachute, employment, salary
continuation, bonus, incentive, stock option, stock purchase, restricted stock,
retirement, pension, profit sharing or deferred compensation plan, contract,
program, fund, or arrangement of any kind, and (iii) every other employee
benefit plan, contract, program, fund, or arrangement (whether written or oral,
qualified or nonqualified, formal or informal, funded or unfunded, foreign or
domestic, currently effective or terminated) and every trust, escrow, or similar
agreement related thereto, whether or not funded, in respect of any present or
former employees, directors, officers, shareholders, consultants, or independent
contractors of the Company, the Company Subsidiaries or any ERISA Affiliate that
are sponsored or maintained by the Company, a Company Subsidiary or any ERISA
Affiliate or with respect to which the Company, a Company Subsidiary or any
ERISA Affiliate has made or is required to make payments, transfers, or
contributions (all of the above being hereinafter individually or collectively
referred to as a "BENEFIT PLAN" or "BENEFIT PLANS," respectively). Neither the
Sellers, the Company nor any Company Subsidiary has any Liability with respect
to any plan, arrangement or practice of the type described in the preceding
sentence other than the Benefit Plans. "COMPANY EMPLOYEE" means any current or
former employee, director or officer of the Company or the Company Subsidiaries.
(b) SCHEDULE 4.10(B) separately identifies each Benefit Plan that is
maintained in the United States (each, a "U.S. BENEFIT PLAN"), and each Benefit
Plan that is not a U.S. Benefit Plan (each, a "FOREIGN BENEFIT PLAN").
(c) Current, accurate and complete copies (or, as to clause (i) of
this sentence, to the extent no copy exists, an accurate description) of the
following materials have been delivered to the Buyer with respect to each U.S.
Benefit Plan, to the extent applicable: (i) current plan documents, any
amendments and any related trust agreement, group annuity contract or other
funding instrument, (ii) the most recent determination letter from the Internal
Revenue Service ("IRS"), (iii) the most recent summary plan description and
summary of material modifications to the extent not included in the summary plan
description in each case distributed to employees, and (iv) for the three (3)
most recent years (A) the Form 5500 and attached schedules, (B) audited
financial statements and (C) where applicable, actuarial valuation reports.
(d) Except as set forth in SCHEDULE 4.10(D): (i) the U.S. Benefit
Plans have been established and administered in compliance with their terms and
the applicable requirements of ERISA, the Code, and other applicable Laws; (ii)
each U.S. Benefit Plan and related trust that is intended to be qualified within
the meaning of Section 401 or 501, as
24
applicable, of the Code is so qualified and has received or has timely applied
for a favorable determination letter as to its qualification, and to the
Knowledge of the Company, nothing has occurred, whether by action or failure to
act, that could reasonably be expected to cause the loss of such qualification
or other losses arising from such action or failure to act; (iii) no event has
occurred and no condition exists with respect to any U.S. Benefit Plan that
would subject the Company or Company Subsidiaries, either directly or by reason
of their affiliation with any ERISA Affiliate, to any material tax, fine, lien,
penalty or other liability imposed by ERISA, the Code or other applicable Laws;
(iv) no "reportable event" (as such term is defined in Section 4043 of the
Code), non-exempt "prohibited transaction" (as such term is defined in Section
406 of ERISA and Section 4975 of the Code), "accumulated funding deficiency" (as
such term is defined in Section 302 of ERISA and Section 412 of the Code
(whether or not waived)), or breach of any duties imposed on "fiduciaries"
(within the meaning of Section 3(21) of ERISA) by ERISA has occurred with
respect to any U.S. Benefit Plan that could result in any liability or excise
tax under ERISA or the Code being imposed on the Company or a Company
Subsidiary; (v) all premiums due to the Pension Benefit Guaranty Corporation
("PBGC") with respect to any U.S. Benefit Plan have been timely paid in full;
(vi) the PBGC has not instituted proceedings to terminate any U.S. Benefit Plan;
and (vii) no Liability (other than for premiums to the PBGC) under Title IV of
ERISA has been or could reasonably be expected to be incurred by any of the
Company or Company Subsidiaries.
(e) With respect to any insurance policy providing funding for
benefits under any U.S. Benefit Plan, (i) there is no Liability of the Company
or any Company Subsidiary in the nature of a retroactive rate adjustment, loss
sharing arrangement, or other actual or contingent Liability, nor would there be
any such Liability if such insurance policy was terminated on the date hereof,
and (ii) no insurance company issuing any such policy is in receivership,
conservatorship, liquidation or similar proceeding and, to the Knowledge of the
Company, no such proceedings with respect to any such insurer are imminent.
(f) Except as set forth in SCHEDULE 4.10(G), neither the Company, a
Company Subsidiary nor any ERISA Affiliate currently has, and at no time in the
past has had, an obligation to contribute to a "defined benefit plan" as defined
in Section 3(35) of ERISA, a pension plan subject to the funding standards of
Section 302 of ERISA or Section 412 of the Code, a "multiemployer plan" as
defined in Section 3(37) of ERISA or Section 414(f) of the Code or a "multiple
employer plan" within the meaning of Section 210(a) of ERISA or Section 413(c)
of the Code.
(g) With respect to any U.S. Benefit Plan, except as set forth in
SCHEDULE 4.10(G): (i) there are no pending or, to the Knowledge of the Company,
threatened Proceedings, other than routine claims for benefits in the ordinary
course by participants and beneficiaries; (ii) to the Knowledge of the Company,
no facts or circumstances exist that could give rise to any such Proceedings;
(iii) no written or to the Knowledge of the Company, oral communication has been
received from the PBGC in respect of any U.S. Benefit Plan subject to Title IV
of ERISA concerning the funded status of any such plan or any transfer of assets
and liabilities from any such plan in connection with the transactions
contemplated herein; and (iv) no administrative investigation, audit or other
Proceeding by the Department of Labor, the PBGC, the IRS or other Governmental
Authorities is pending or in progress or, to the Knowledge of the Company,
threatened.
25
(h) Except as set forth in SCHEDULE 4.10(H), (i) all persons
classified as independent contractors of the Company or Company Subsidiaries
satisfy and have at all times satisfied in all material respects the
requirements of applicable Law to be so classified; (ii) the Company and Company
Subsidiaries have fully and accurately reported such persons' compensation on
IRS Form 1099 when required to do so; (iii) neither the Company nor any Company
Subsidiary has or has had any obligations to provide benefits with respect to
such persons under any Benefit Plan or otherwise and (iv) none of the Company or
Company Subsidiaries has employed or employs any "leased employees" as defined
in Section 414(n) of the Code.
(i) With respect to each U.S. Benefit Plan that is a group health
plan benefiting any current or former employee of the Company, Company
Subsidiary or any ERISA Affiliate that is subject to Section 4980B of the Code,
the Company, Company Subsidiaries and each ERISA Affiliate have complied with
the continuation coverage requirements of Section 4980B of the Code and Part 6
of Subtitle B of Title I of ERISA.
(j) All contributions, transfers and payments in respect of any U.S.
Benefit Plan, other than transfers incident to an incentive stock option plan
within the meaning of Section 422 of the Code, have been or are fully deductible
under the Code.
(k) No U.S. Benefit Plan provides benefits, including, without
limitation, death or medical benefits, beyond termination of service or
retirement other than (i) coverage mandated by Law or (ii) death or retirement
benefits under any U.S. Benefit Plan that is intended to be qualified under
Section 401(a) of the Code.
(l) (i) All contributions (including, without limitation, all
employer matching or other contributions and employee salary reduction
contributions) to and payments from any U.S. Benefit Plan in respect of any
Company Employees that are required in accordance with the terms of such U.S.
Benefit Plan, any related document, the Code or ERISA have been timely made, or,
if not yet due, have been properly reflected in the Financial Statements; and
(ii) all such contributions to, and payments from, any U.S. Benefit Plan, except
those to be made from a trust qualified under Section 401(a) of the Code, that
are required to be made as of the Closing Date will be made on or prior to the
Closing Date.
(m) (i) SCHEDULE 4.10(M)(I) sets forth a true, complete, up-to-date
and accurate list of all written or oral Foreign Benefit Plans sponsored,
maintained or contributed to or required to be contributed to by the Company or
Company Subsidiaries or any affiliate or subsidiary thereof for the benefit of
its employees or former employees and their dependents or beneficiaries which
are maintained by the Company or Company Subsidiaries or in which the Company or
Company Subsidiaries participates in or has any actual or potential liabilities
or obligations other than plans established and pursuant to a Government Scheme.
With respect to each Foreign Benefit Plan which is not a Government Scheme, to
the extent applicable, current, accurate and complete copies of, or, where oral,
written summaries of the material terms thereof as amended at the date hereof,
including, without limitation, (A) current plan documents, any amendments and
any related trust agreement, group annuity contract or other funding instrument,
investment management agreements, current asset valuations, collective
agreements, all professional opinions (whether or not internally prepared) with
respect to each Foreign Benefit
26
Plan, all material internal memoranda concerning the Foreign Benefit Plans,
copies of material correspondence with all regulatory authorities with respect
to each Foreign Benefit Plan and plan summaries, employee booklets and personnel
manuals (or, to the extent no copy exists, an accurate description), and (B) the
most recent audited financial statements and/or actuarial valuation reports,
have been delivered to the Buyer;
(ii) with respect to each Foreign Benefit Plan, except as set forth
in SCHEDULE 4.10(M)(II), all data and information required, in the case
of such Benefit Plans that are not Government Schemes, to administer or,
in the case of such Benefit Plans that are Government Schemes, to comply
with applicable rules and regulations, is in the possession or control of
the Company or the Company Subsidiaries and is complete and correct in
all material respects;
(iii) with respect to each Foreign Benefit Plan, except as set forth
in SCHEDULE 4.10(M)(III): (A) there are no pending or, to the Knowledge
of the Company, threatened Proceedings, other than routine claims for
benefits in the ordinary course by participants and beneficiaries; (B) to
the Knowledge of the Company, no facts or circumstances exist that could
give rise to any such Proceedings; (C) no written or, to the Knowledge of
Company, oral communication has been received from any Governmental
Authority in respect of any Foreign Benefit Plan concerning the funded
status of any such plan or any transfer of assets and Liabilities from
any such plan in connection with the transactions contemplated herein;
(D) no administrative investigation, audit or other Proceeding by any
Governmental Authority is pending or in progress or, to the Knowledge of
the Company, threatened; and (E) no Foreign Benefit Plan in Canada is
subject to any pending, threatened or anticipated examination,
investigation or other procedure, action, or claim initiated by any
Governmental Authority, by any employee or beneficiary covered by such
plan and there exists no state of facts that could give rise to such
investigation that could affect the registration;
(iv) with respect to each Foreign Benefit Plan, except as set forth
in SCHEDULE 4.10(M)(IV): (A) each such plan that is intended to be tax
qualified or tax registered is so qualified or registered, and no fact or
circumstance exists that could reasonably be expected to cause the loss
of such qualification or registration or exemption or approval (and in
the case of such plans established in Canada, the assets of such plans
have been invested so as to avoid exposure to penalty taxes under the
Income Tax Act (Canada)); (B) all Foreign Benefit Plans that are required
to be funded are funded in accordance with applicable Law and other
requirements (and in the case of each plan established in Canada is fully
funded on a going concern and on a solvency basis pursuant to the most
recently filed actuarial valuation reports for such plans and in
accordance with the methods and assumptions set forth therein and no
material changes have occurred to the Foreign Benefit Plans in Canada or
are expected to occur that would affect the actuarial reports or
financial statements required to be provided to the Buyer); (C) for all
Foreign Benefit Plans that are not required to be funded, the level of
reserves required by Law or applicable accounting standards under each
insured Foreign Benefit Plan is reasonable and sufficient to provide for
all incurred but unreported claims; (D) all current obligations under any
Foreign Benefit Plan have been met, and all contributions to and, with
respect to Foreign Benefit Plans that are not Government Schemes,
payments
27
from any Foreign Benefit Plan in respect of any Company Employee that are
required in accordance with the terms of such Foreign Benefit Plan or
applicable Law have been timely made, or if not yet due, have been
properly reflected in the Financial Statements; (E) where applicable, all
contributions or premiums required to be made by any of the Company or
Company Subsidiaries under the terms of each Foreign Benefit Plan in
Canada to any governmental or non-governmental reinsurance scheme backing
up any Foreign Benefit Plan in case of insolvency of the relevant obligor
have been made, and nothing has occurred, whether by action or failure to
act, that could reasonably be expected to cause the loss of the coverage
under such reinsurance scheme and the Company or Company Subsidiaries do
not have, and as of Closing, will not have any liabilities owing; (F) no
Foreign Benefit Plans (other than Government Schemes which have been
described generically) or similar schemes or promises, whether with
respect to groups of beneficiaries or individual beneficiaries, exist
with respect to or obliging any of the Company or Company Subsidiaries
that have not been disclosed on SCHEDULE 4.10(M)(IV) or expressly or
reasonably identifiable and adequately provided for on the financial
statements of such companies; (G) all Foreign Benefit Plans (and their
corresponding assets or funds) have been implemented, administered and
invested in compliance with their terms, the Law and all applicable
collective bargaining agreements, and all reports, returns or similar
documents required to be filed with a Governmental Authority in respect
of the Foreign Benefit Plans have been duly and timely filed; (H) no
event has occurred that would cause the termination in whole or in part
of a Foreign Benefit Plan in Canada and there have been no improper
withdrawals, applications or transfers of assets from a Foreign Benefit
Plan in Canada or the trusts and funding media thereto and neither the
Company or Company Subsidiaries nor any of their agents have been in
breach of any fiduciary obligation with respect to the administration of
the Foreign Benefit Plans in Canada or trusts or other funding media
thereto; (I) none of the Foreign Benefit Plans is a multi-employer plan
as defined under the provisions of applicable law; and (J) none of the
Foreign Benefit Plans in Canada provides benefits to retired employees or
their beneficiaries or dependents.
(n) Except as set forth in SCHEDULE 4.10(N), no Benefit Plan exists
that, as a result of the execution of this Agreement, shareholder approval of
this Agreement or the transactions contemplated by this Agreement (whether alone
or in connection with any other events), would (i) entitle any Company Employee
to severance pay or any increase in severance pay upon any termination of
employment after the date of this Agreement; (ii) with respect to any Company
Employee, accelerate the time of payment or vesting or result in any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or result in any other material obligation
pursuant to, any of the Benefit Plans; (iii) limit or restrict the right of the
Company or Company Subsidiaries to merge, amend or terminate any of the Benefit
Plans; or (iv) cause the Company or Company Subsidiaries to record additional
compensation expense on their income statements with respect to any outstanding
stock option or other equity-based award.
(o) Except as set forth in SCHEDULE 4.10(O), there is no Contract,
plan or arrangement (written or otherwise) covering any Company Employee that,
individually or collectively, could give rise to the payment of any amount that
would be nondeductible pursuant to Section 280G of the Code or could give rise
to the payment of any amount in respect of Code
28
Section 4999, nor will any of the transactions contemplated by this Agreement
result in any amounts that are not deductible pursuant to Section 280G of the
Code or the payment of any amount in respect of Code Section 4999.
(p) Neither the Company nor any of the Company Subsidiaries has
agreed or committed to institute any plan, program, arrangement or agreement for
the benefit of employees or former employees of the Company or any Company
Subsidiary other than the Benefit Plans, or to make any amendments to any of the
Benefit Plans, nor will any such plan, program, arrangement, agreement or
amendment be made prior to the Closing Date.
(q) Each of the Company and Company Subsidiaries has reserved all
rights necessary to amend or terminate each of the Benefit Plans without the
consent of any other Person.
(r) No Benefit Plan provides benefits to any individual who is not a
current or former employee of the Company or a Company Subsidiary, or the
dependents or other beneficiaries of any such current or former employee.
4.11 LABOR RELATIONS. (a) Except as set forth in SCHEDULE 4.11 or as
otherwise permitted pursuant to this Agreement, (i) none of the Company or the
Company Subsidiaries is a party to any collective bargaining agreement nor is
any such contract or agreement presently being negotiated, (ii) none of the
Company or Company Subsidiaries is in material breach of any collective
bargaining agreement, (iii) within the past three (3) years, there has been no
labor strike, work stoppage, slowdown, lockout or other labor controversy in
effect with respect to the Company or the Company Subsidiaries, or, to the
Knowledge of the Company, threatened against the Company or the Company
Subsidiaries, (iv) there are no material grievances or other material labor
disputes or Proceedings pending against the Company or the Company Subsidiaries
or, to the Knowledge of the Company, threatened against the Company or the
Company Subsidiaries or involving any Company Employees, (v) there are no
material unfair labor practice charges, grievances or complaints, actions,
inquiries, Proceedings or, to the Knowledge of the Company, investigations
pending against the Company or the Company Subsidiaries or, to the Knowledge of
the Company, threatened against the Company or the Company Subsidiaries by or on
behalf of any Company Employees and (vi) the Company and the Company
Subsidiaries are in material compliance with their obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988 ("WARN ACT"), and all
other notification and bargaining obligations arising under any collective
bargaining agreement or statute. As of the date of this Agreement, to the
Knowledge of the Company, there is no union campaign being conducted to solicit
cards from the Company Employees to authorize a union to request a National
Labor Relations Board ("NLRB") certifications election with respect to the
Company Employees.
(b) SCHEDULE 4.11 sets forth a list of (i) all employees of each of
the Company and the Company Subsidiaries with an annual salary of more than
$100,000, (ii) the employment status of each such individual (E.G., active,
inactive, approved leave (including nature of such leave)), (iii) the employment
category of each such individual (E.G., full-time, part-time, temporary), (iv)
the rate of all regular and special compensation payable to each such individual
in any and all capacities and (v) any regular or special compensation that will
be payable to each
29
such individual in any and all capacities as of the Closing Date other than the
then current accrual of regular payroll compensation. To the Knowledge of the
Company, no individual required to be set forth on SCHEDULE 4.11 has provided
oral or written notice that he or she intends to retire or terminate their
employment relationship with the Company or any of the Company Subsidiaries.
Except as set forth in SCHEDULE 4.11, and except for obligations arising under
applicable Laws neither the Company nor any of the Company Subsidiaries employs
any employee whose employment is not at will and cannot be dismissed immediately
without notice or cause and without further Liability to the Company or any of
the Company Subsidiaries.
(c) All current employees of the Company and the Company
Subsidiaries who work in the United States are, and all former employees of the
Company and the Company Subsidiaries who worked in the United States whose
employment terminated, voluntarily or involuntarily, within the three years
prior to the date of this Agreement were, legally authorized to work in the
United States. The Company and each Company Subsidiary that is located in the
United States or has employees working in the United States has completed and
retained the necessary employment verification paperwork under the Immigration
Reform and Control Act of 1986 ("IRCA") for the employees hired prior to the
date of this Agreement, and the Company and each Company Subsidiary that is
located in the United States or has employees working in the United States has
complied with anti-discrimination provisions of the IRCA.
(d) Except as set forth on SCHEDULE 4.11 neither the Company nor any
Company Subsidiary has closed any plant or facility, effectuated any layoffs of
employees or implemented any early retirement, separation or window program
within the past three (3) years, nor has the Company or any Company Subsidiary
planned or announced any such action or program for the future.
(e) Except as set forth on SCHEDULE 4.11, no Company or Company
Subsidiary is a party to or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority related to employees or employment
practices.
4.12 INTELLECTUAL PROPERTY. (a) SCHEDULE 4.12 is a complete and
correct list of all the Owned Intellectual Property that constitutes a patent,
trademark, domain name or copyright registration or patent, trademark, domain
name or copyright application. All fees associated with maintaining any Owned
Intellectual Property required to have been set forth on SCHEDULE 4.12 have been
paid in full in a timely manner to the proper Governmental Authority and, except
as set forth on SCHEDULE 4.12, no such fees are due within the three month
period after the Closing Date. Except as set forth on SCHEDULE 4.12, all of the
Owned Intellectual Property required to be listed thereon are in full force and
effect.
(b) Except pursuant to a Material Contract set forth on SCHEDULE
4.13, all of the Owned Intellectual Property is owned by the Company or a
Company Subsidiary and, to the Knowledge of the Company, the owner thereof has
the exclusive right to use and possess such Intellectual Property, for any
purpose free from (i) any Liens (except for Permitted Liens incurred in the
ordinary course of business) and (ii) any requirement of any past, present or
future royalty payments, license fees, charges or other payments or conditions
or restrictions whatsoever. Except pursuant to a Material Contract set forth on
SCHEDULE 4.13, neither the Company nor the Company Subsidiaries has licensed or
otherwise granted any right to any
30
Person under any Owned Intellectual Property or has otherwise agreed not to
assert any such Intellectual Property against any Person.
(c) Except as set forth on SCHEDULE 4.12, all former and current
consultants or contractors to the Company and the Company Subsidiaries have
executed and delivered valid written instruments that assign to the Company or
the Company Subsidiaries all rights to any Intellectual Property developed by
them in the course of their performing services for the Company or the Company
Subsidiaries. All employees of the Company and the Company Subsidiaries who
participated in the creation or contributed to the conception or development of
Intellectual Property relating to the business of the Company and the Company
Subsidiaries were employees of the Company or the Company Subsidiaries at the
time of rendering such services and such services were within the scope of their
employment or such employees have otherwise validly assigned such Intellectual
Property to the Company or the Company Subsidiaries. Except as set forth on
SCHEDULE 4.12, no director, officer, stockholder, employee, consultant,
contractor, agent or other representative of the Company or the Company
Subsidiaries owns or claims any rights in (nor has any of them made application
for) any Intellectual Property owned or used by the Company or the Company
Subsidiaries.
(d) Except as set forth on SCHEDULE 4.12, the Company and the
Company Subsidiaries have entered into confidentiality and nondisclosure
agreements with all of their directors, officers, employees, consultants,
contractors and agents and any other Person with access to the trade secrets of
the Company and the Company Subsidiaries to protect the confidentiality and
value of such trade secrets, and there has not been any breach by any of the
foregoing of any such agreement. The Company and the Company Subsidiaries use
reasonable measures to maintain the secrecy of all trade secrets of the Company
or the Company Subsidiaries that are material to the operations of the Company
and the Company Subsidiaries and are valuable thereto by virtue of their
secrecy.
(e) Except as set forth on SCHEDULE 4.12 and to the Knowledge of the
Company, the operation of the Company's and the Company Subsidiaries' business
as currently conducted or any part thereof, including without limitation the
manufacture, use, sale and importation of products of the Company or the Company
Subsidiaries and the possession, use, disclosure, copying or distribution of any
information, data or products, whether tangible or intangible, in the possession
of the Company and the Company Subsidiaries, and the possession or use of the
Owned Intellectual Property, has, does and will not infringe, misappropriate,
dilute, violate or otherwise conflict with any Intellectual Property right of
any other Person. To the Knowledge of the Company, the operation of the
Company's and the Company Subsidiaries' business does not constitute unfair
competition or deceptive or unfair trade practice. To the Knowledge of the
Company, none of the Owned Intellectual Property is being infringed or otherwise
used or available for use by any Person other than the Company and the Company
Subsidiaries, except pursuant to a Material Contract listed on SCHEDULE 4.13.
(f) Except as set forth on SCHEDULE 4.12, no Proceeding is pending
or, to the Knowledge of the Company, threatened, that (i) challenges the rights
of the Company or the Company Subsidiaries in respect of any Intellectual
Property or the scope of Intellectual Property, or (ii) asserts that the
operation of the business of the Company and the Company Subsidiaries is, was or
will be infringing or otherwise in violation of any Intellectual Property, or
31
is (except as set forth in a Material Contract listed on SCHEDULE 4.13) required
to pay any royalty, license fee, charge or other amount with regard to any
Intellectual Property. Except as set forth on SCHEDULE 4.12, none of the Owned
Intellectual Property is or has been subject to any Governmental Order, and
neither the Company nor the Company Subsidiaries has been subject to any
Governmental Order in respect of any other Person's Intellectual Property.
Neither the Company nor any Company Subsidiary has requested any oral or written
opinion of any intellectual property counsel regarding any other Person's
Intellectual Property.
(g) Except as set forth in SCHEDULE 4.12, no funding from any
Governmental Authority or facilities of a university, college, other educational
institution or non-profit organization was used in the development of the Owned
Intellectual Property, and to the Knowledge of the Company, no Governmental
Authority, university, college, other educational institution or non-profit
organization has a claim or right to claim any right in the Owned Intellectual
Property.
(h) SCHEDULE 4.12 lists all the Information Systems used by the
Company or the Company Subsidiaries and operated by any other Person. Except for
the Internet and those Information Systems set forth on SCHEDULE 4.12, all
Information Systems used by the Company or the Company Subsidiaries are owned,
controlled and operated by the Company or a Company Subsidiary, as applicable
and are not wholly or partly dependent upon any Information System of any other
Person (other than the Internet). All Information Systems used by the Company
and the Company Subsidiaries are sufficient for the conduct of its business as
currently conducted. The Company and the Company Subsidiaries have sufficient
user licenses in effect for all Information Systems to conduct the Business as
currently conducted.
4.13 CONTRACTS. (a) SCHEDULE 4.13 sets forth a true, complete and
correct list of each of the following contracts to which any of the Company or
the Company Subsidiaries is a party or by which any of them is bound as of the
date of this Agreement, other than the Benefit Plans (collectively, the
"MATERIAL CONTRACTS"):
(i) Contracts involving the expenditure by the Company or the
Company Subsidiaries of more than $200,000 in calendar years 2005 or 2006
for the purchase of materials, supplies, equipment or services, excluding
any such Contracts that are terminable by the Company or the Company
Subsidiaries without penalty on not more than thirty (30) days notice;
(ii) (A) indentures, mortgages, loan agreements, capital leases,
security agreements, or other Contracts relating to Debt Obligations or
(B) any Contract or other currently outstanding instrument under which
any of the Company or the Company Subsidiaries has, directly or
indirectly, made any advance, loan, extension of credit (other than an
account receivable) or capital contribution to, or other investment in,
any Person;
(iii) Contracts that restrict the Company or the Company
Subsidiaries from engaging in any line of business in any geographic area
or competing with any Person;
32
(iv) Contracts that restrict the declaration, set aside or payment
of any dividends or distributions on, or in respect of, any capital stock
or equity interest of the Company or any Company Subsidiary;
(v) Contracts to sell goods or services with respect to the
customers set forth on SCHEDULE 4.18 and any other customers of the
Business with annual purchases in excess of $200,000 in calendar years
2005 or 2006;
(vi) Contracts granting any Person a first-refusal, first offer or
similar preferential right to purchase or acquire any right, asset or
property of the Company or the Company Subsidiaries;
(vii) any commitment to make any capital expenditure or to purchase
a capital asset in each case, in excess of $250,000 not contemplated by
the Capital Expenditure Budget;
(viii) except as to the extent contemplated by the Capital
Expenditure Budget, any commitment for the purchase or sale of any of its
assets, other than in the ordinary course of business, or any capital
stock of the Company or the Company Subsidiaries;
(ix) any lease or similar agreement under which (A) any of the
Company or the Company Subsidiaries is the lessee of, or holds or uses,
any facility, machinery, equipment, vehicle or other tangible personal
property owned by any third Person for an annual rent in excess of
$100,000 or (B) any of the Company or the Company Subsidiaries is the
lessor of, or makes available for use by any third Person, any tangible
personal property owned by any of the Company or the Company Subsidiaries
for an annual rent in excess of $100,000;
(x) Contracts (i) entered into or assumed by any of the Company or
the Company Subsidiaries in which it has an obligation in respect of
providing for indemnification or purchase price adjustment, in connection
with any disposition, sale or other transfer of any present or former
business or commercial activity and (ii) which was either (A) entered
into after October 29, 2003 or (B) pursuant to which there are any
outstanding, unresolved or potential indemnification claims in excess of
$50,000 against any of the Company or Company Subsidiaries;
(xi) Contracts pursuant to which the Company or the Company
Subsidiaries have licensed the Owned Intellectual Property to, or the use
of the Owned Intellectual Property is otherwise permitted with respect
to, any other Person; and pursuant to which the Company or the Company
Subsidiaries have had Intellectual Property licensed to it, or has
otherwise been permitted to use Intellectual Property, excluding
non-exclusive, commercially available software licenses entered into in
the ordinary course of business;
(xii) partnership, limited liability company, joint venture
agreements or other Contracts involving a sharing of profits or expenses
by the Company or Company Subsidiaries;
33
(xiii) Contracts with any directors, officers, employees or
stockholders of any of the Company, the Company Subsidiaries or
Affiliates of any of the Sellers; and
(xiv) Contracts involving the acquisition of any business enterprise
whether via stock or asset purchase, or otherwise.
(b) True, correct and complete copies of each of the Material
Contracts that are in writing have been made available to the Buyer and, if such
Material Contract is not in writing, written summaries thereof have been made
available to the Buyer, including in each case amendments, waivers or other
changes thereto.
(c) Each Material Contract is in full force and effect, and is a
valid and binding agreement of the Company or applicable Company Subsidiary
enforceable by or against the Company or such Company Subsidiary in accordance
with its terms subject to the General Enforceability Exceptions. The Company or
the Company Subsidiaries have performed in all material respects its obligations
required to be performed by them to date under the Material Contracts. There is
no default or breach by the Company or the Company Subsidiaries or, to the
Knowledge of the Company, any other party, in the timely performance of any
material obligation to be performed or paid under any Material Contract.
4.14 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 4.14:
(a) each of the Company and the Company Subsidiaries is and for the
past three (3) years has been, in material compliance with all Environmental
Laws applicable to the Real Property or the Business (including all material
Permits required under such Environmental Laws), and with respect to any
locations owned, leased or operated within the past three (3) years, each of the
Company and the Company Subsidiaries had been in material compliance with
applicable Environmental Laws during the respective period of such Company's or
the Company Subsidiary's ownership, leasing or operation of any such location;
(b) neither the Company nor any Company Subsidiaries has received
any written notice of the following, which in each instance has not been
settled, dismissed or prosecuted to a final, non-appealable judgment or decision
with no ongoing obligations or Liabilities: (i) any Environmental Claim (ii) any
threatened Environmental Claim, or (iii) any violation, request for information,
demand letter, or administrative inquiry relating to any Environmental Law or
the Release of any Hazardous Material regarding the Company, any Company
Subsidiary, or the Real Property; nor to the Knowledge of Company, has the
Company or any Company Subsidiary received oral notice of any of the foregoing
described in clauses (i) through (iii);
(c) none of the Company and the Company Subsidiaries has Released
any Hazardous Materials at or in the vicinity of the Real Property that requires
reporting, investigation, assessment, cleanup, remediation or other type of
response action by the Company or any Company Subsidiary pursuant to any
Environmental Law or that could otherwise reasonably be expected to result in
material Liability under or relating to any Environmental Law, and Hazardous
Materials are not otherwise present at or, to the Knowledge of the Company,
about (i) any of the Real Property, (ii) any other facility currently owned,
leased or
34
operated by any of the Company or the Company Subsidiaries, or (iii) any other
facility formerly owned, leased or operated by any of the Company or the Company
Subsidiaries, with respect to any of the foregoing described in clauses (i)
through (iii) in an amount or condition that would reasonably be expected to
result in material Liability to the Company or any Company Subsidiary under or
relating to any Environmental Law;
(d) Reserved.
(e) there are no (i) underground storage tanks and related pipes and
equipment, whether active or abandoned, (ii) asbestos or asbestos-containing
materials, (iii) polychlorinated biphenyls, or (iv) urea-formaldehyde insulation
present at or, to the Knowledge of the Company, about any of the Real Property
in a condition that currently requires reporting, investigation, assessment,
cleanup, removal, remediation or any other type of response action by the
Company or any Company Subsidiary pursuant to applicable Environmental Laws, or
that would otherwise result in material Liability under any Environmental Laws;
(f) Hazardous Materials have not been Released, transported,
disposed of or arranged to be disposed of by, or on behalf of, any of the
Company or the Company Subsidiaries to any location, in material violation of,
or in a manner that would reasonably be expected to result in material Liability
under or relating to, any Environmental Law, or to any location which is listed
or proposed (through written notice to the public) for listing on the National
Priorities List under the Comprehensive Environmental Response, Compensation and
Liability Information System or any similar state list;
(g) none of the Company and the Company Subsidiaries has expressly
assumed or retained by contract any material Liabilities or material obligations
of other Persons under any Environmental Laws;
(h) the Company and the Company Subsidiaries do not sell and have
not sold any product containing asbestos or that utilizes or incorporates
asbestos-containing materials in any way;
(i) there currently are effective all material Permits required
under any Environmental Law which are necessary for the Company's and each
Company Subsidiary's business operations and activities and operations at the
Real Property, including any ongoing alterations or improvements at the Real
Property; and any application for renewal of such Permits have been submitted on
a timely basis;
(j) to the Knowledge of the Company the use, handling and
manufacture of products containing silicon or silica by the Company or any
Company Subsidiary and the distribution and sale of such products by the Company
or any Company Subsidiary have not resulted in the exposure of any Persons to
silicon or silica above any thresholds or standards established pursuant to any
Environmental Law or at levels which have been associated with or could give
rise to adverse health effects; and
(k) the Company and the Company Subsidiaries have delivered to Buyer
copies of all documents, records and information in their possession concerning
Releases of Hazardous Materials at, upon or from the Real Property, exposure of
any Person to Hazardous
35
Materials, and compliance with or Liability under any Environmental Laws with
regard to the Company or any Company Subsidiary, including, without limitation,
previously conducted environmental audits and documents regarding any Release or
disposal of Hazardous Materials at, upon or from the Real Property or formerly
owned, leased or operated property and environmental agency reports and
correspondence.
4.15 INSURANCE. (a) SCHEDULE 4.15(A) contains a true, correct and
complete list of all insurance policies held in the names of the Company or the
Company Subsidiaries and all other insurance arrangements or contracts for the
transfer or sharing of insurance risks covering the assets, businesses,
operations, Company Employees, officers or directors of the Company and the
Company Subsidiaries (the "INSURANCE POLICIES") as of the date hereof,
specifying the insurer, amount of coverage and type of insurance. All such
policies are in full force and effect and were in full force and effect during
the periods of time that such insurance policies purported to be in effect, are
valid, enforceable, existing and binding and all premiums due thereon have been
timely paid (subject to changes made in the ordinary course of business that
will not materially reduce the coverage thereunder).
(b) SCHEDULE 4.15(B) sets forth a true, complete and correct list of
all material claims filed under the Insurance Policies within three years prior
to the Closing Date.
(c) The Insurance Policies are sufficient for compliance with
applicable Law and all Contracts to which any of the Company or the Company
Subsidiaries is a party or by which they or any of their respective assets or
properties are bound. All appropriate insurers under the Insurance Policies have
been notified of all pending litigation and legal matters, and no such insurer
has informed the Company or any of the Company Subsidiaries of any denial of
coverage or reservation of rights thereto.
(d) Except as set forth in SCHEDULE 4.15(B), since the date of the
Balance Sheet no event has occurred which, with notice or lapse of time or both,
would constitute a material breach or default or give rise to any right of
termination or cancellation or otherwise modify the terms under any Insurance
Policy.
4.16 ASSETS. (a) Except as set forth on SCHEDULE 4.16, the Company
and the Company Subsidiaries have good, valid and marketable title to, or hold
by valid and existing lease or license, all the tangible personal property
assets reflected as assets on the Balance Sheet, or acquired after the date of
the Balance Sheet, except with respect to assets disposed of in the ordinary
course of business since such date, free and clear of all Liens, except for
Permitted Liens, and such tangible assets are in good operating condition,
ordinary wear and tear excepted.
(b) The Company and the Company Subsidiaries own, or have valid
leasehold interests in or licenses to use, all the assets necessary for the
conduct of the Business, as currently conducted.
4.17 REAL PROPERTY. SCHEDULE 4.17(A) lists all real property leased
or subleased or otherwise used or occupied (but not owned) by any of the Company
or the Company Subsidiaries (the "LEASED REAL PROPERTY"). The Leased Real
Property is sufficient for the operation of the Business as it is currently
conducted. Except as set forth on
36
SCHEDULE 4.17(A), the Sellers have delivered to the Buyer true and complete
copies of the leases and subleases covering the Leased Real Property leased by
the Company or any Company Subsidiary. With respect to each such lease and
sublease and except as otherwise specified on SCHEDULE 4.17(A):
(i) such lease or sublease is in full force and effect in all
material respects and enforceable in accordance with its terms, subject
to the General Enforceability Exceptions;
(ii) all rents, deposits and additional rents due pursuant to such
lease or sublease have been paid in full and no security deposit or
portion thereof has been applied in respect of a breach or default under
such lease or sublease that has not been redeposited in full; and
(iii) none of the Company or the Company Subsidiaries is in material
default under any such lease or sublease and, to the Knowledge of the
Company, no other party to any such lease or sublease is in material
default thereunder.
(b) SCHEDULE 4.17(B) lists all real property owned by the Company or
any of the Company Subsidiaries (the "OWNED REAL PROPERTY"). The Owned Real
Property is sufficient for the operation of the Business as it is currently
conducted. With respect to each such parcel of the Owned Real Property and
except as otherwise specified on SCHEDULE 4.17(B):
(i) the identified owner has fee simple title to the parcel of Owned
Real Property, free and clear of any Liens, except for Permitted Liens;
and
(ii) there are no pending or, to the Knowledge of the Company,
threatened condemnation Proceedings with respect to the Owned Real
Property.
(c) With respect to each parcel of the Owned Real Property and the
Leased Real Property, except as otherwise specified on SCHEDULE 4.17(C):
(i) the Company's and the Company Subsidiary's use and occupation of
the Owned Real Property and the Leased Real Property, and the condition
thereof, comply with, and neither, the Company nor any Company Subsidiary
has received written notification, or to the Knowledge of Company, oral
notification of any violation of, (A) any applicable Law and Governmental
Orders applicable to or affecting the Owned Real Property or Leased Real
Property, (B) any restriction, covenant or encumbrance of record with
respect to the Owned Real Property or Leased Real Property, or (C) any
Contract (including, without limitation, insurance policies to the extent
necessary to prevent cancellation thereof and to insure full payment of
any claims made under such policies), applicable to the Owned Real
Property or Leased Real Property or the ownership, operation, use or
possession thereof;
(ii) the structures, improvements and fixtures at or upon the Owned
Real Property and Leased Real Property, including, but not limited to,
roofs and structural elements thereof and the electrical, plumbing,
heating, ventilation, air conditioning, and similar units and systems,
are fit for their intended use, subject to the provision of usual
37
and customary maintenance and repair performed in the ordinary course of
business with respect to similar properties of like age and construction,
and are free from structural defects;
(iii) all facilities located on the Owned Real Property and Leased
Real Property are supplied with utilities and other services necessary
for the operation of such facilities as currently operated, all of such
services are adequate to conduct that portion of the Business as it
presently is conducted at each of such facilities and all utility
connection fees and use charges have been paid in full as of the date of
this Agreement, to the extent due and owing; and
(iv) there exist adequate rights of access to public roads and ways
available to the Owned Real Property and Leased Real Property to permit
full utilization of the Owned Real Property and Leased Real Property for
the conduct of the Business and, to the Knowledge of the Company, all
such public roads and ways have been completed and dedicated to public
use and to the Knowledge of the Company there are no encroachments onto
adjacent properties, or from adjacent properties onto the Owned Real
Property or Leased Real Property that materially adversely affect the use
of the Owned Real Property or Leased Real Property.
4.18 CUSTOMERS AND SUPPLIERS. SCHEDULE 4.18 sets forth a true,
correct and complete list of (a) the ten (10) largest customers of the Company
and the Company Subsidiaries taken as a whole in terms of sales during the
nine-month period ended September 30, 2006 and (b) the ten (10) largest
suppliers of the Company and the Company Subsidiaries taken as a whole in terms
of purchases during the nine-month period ended September 30, 2006. Neither the
Company nor any Company Subsidiary has received written notice, or to the
Knowledge of the Company, oral notice from any customer or supplier listed on
SCHEDULE 4.18 that such customer or supplier intends to terminate or materially
adversely modify its relationship or materially reduce the volume of business
that it does with the Company or any Company Subsidiary. Except as set forth on
SCHEDULE 4.18, the Company and Company Subsidiaries have not purchased, from any
single supplier, goods or services for which the aggregate purchase price
exceeds five percent (5%) of the total amount of goods and services purchased
for the Company and the Company Subsidiaries taken as a whole during its most
recent full fiscal year.
4.19 PRODUCT LIABILITY. Except as set forth on SCHEDULE 4.19, none
of the Company or any Company Subsidiary has received any written notice, or, to
the Knowledge of the Company, any oral notice, relating to any claim involving
use of or exposure to any of the products (or any part or component) designed,
manufactured, serviced or sold, or services performed, by the Company or any
Company Subsidiary, including for negligence, strict liability, design or
manufacturing defect, conspiracy, failure to warn, or breach of express or
implied warranties of merchantability or fitness for any purpose or use, or from
any alleged breach of implied warranties or representations, or any alleged
noncompliance with any applicable Laws pertaining to products liability matters.
4.20 AFFILIATE TRANSACTIONS. SCHEDULE 4.20 lists all existing
Contracts or other arrangements or transactions between any of the Company and
the Company Subsidiaries, on the one hand, and any of (a) the Sellers and its
Affiliates (other than the Company and the Company
38
Subsidiaries) or (b) the directors, officers or employees (or any immediate
family member thereof) of any Seller and its Affiliates (including the Company
and the Company Subsidiaries) (except those of a type available to employees
generally), on the other hand (collectively, the "AFFILIATE CONTRACTS"). All
Affiliate Contracts are at least as favorable to the Company and the Company
Subsidiaries as would be available with independent third parties dealing at
arm's length. Except as set forth on SCHEDULE 4.20, as of the Closing, all
Affiliate Contracts shall be terminated and Buyer, the Company and the Company
Subsidiaries shall not have any obligations thereunder.
4.21 ACCOUNTS. All accounts and notes receivable of the Company and
the Company Subsidiaries are valid and genuine and have arisen solely out of
bona fide sales and deliveries of goods, performances of services and other
business transactions in the ordinary course of business, and the accounts
receivable reserve reflected in the Balance Sheet is, as of the date thereof,
adequate and established in accordance with GAAP, subject to year-end
adjustments and accruals in the ordinary course of business and not material in
amount. Since the date of the Balance Sheet there has been no event or
occurrence that, when considered individually or together with all such other
events or occurrences, would cause such accounts receivable reserves to be
inadequate. Since the date of the Balance Sheet none of the Company or the
Company Subsidiaries has, (a) with respect to any non-de minimis portion of its
trade accounts payable, (i) failed to pay its trade accounts payable in the
ordinary course or (ii) extended the terms of payment, whether by contract,
amendment, act, deed, or course of dealing, of any trade account payable, and
(b) with respect to any non-de minimis portion of its accounts receivable,
accelerated or delayed collection of such accounts receivable.
4.22 INVENTORY. The inventories set forth in the Balance Sheet were
properly stated therein at the lower of cost or market value determined in
accordance with GAAP consistently maintained and applied by the Company and the
Company Subsidiaries. Inventory costs have been determined by the methods set
forth on SCHEDULE 4.22. Since the date of the Balance Sheet such inventories
have been maintained in the ordinary course of business. All such inventories
are owned free and clear of all Liens other than Permitted Liens. All of the
inventories recorded on the Balance Sheet consist of, and such inventories on
the Closing Date will consist of, items of a quality usable or saleable in the
ordinary course of business subject to appropriate and adequate allowances, if
any, reflected on the books and records of the Company and the Company
Subsidiaries for obsolete, excess, slow-moving and other irregular items.
4.23 BANK ACCOUNTS. SCHEDULE 4.23 sets forth a true and complete
list and description of the bank accounts, lock box accounts and other accounts
maintained by or for the benefit of each of the Company and the Company
Subsidiaries.
4.24 NO BROKERS' OR OTHER FEES. No Person has been employed by or on
behalf of the Sellers as a broker, finder, investment banker or financial
advisor in connection with the transactions contemplated hereby, and no Person
with which the Sellers have had any dealings or communications of any kind is
entitled or will become entitled to any fee or commission, brokerage, finder's
fee or like payment based in any way on any agreement, arrangement or
understanding made by or on behalf of the Sellers to which the Buyer or its
Affiliates (including, from and after the Closing Date, the Company and the
Company
39
Subsidiaries) will have any obligation or responsibility in connection with the
transactions contemplated hereby.
4.25 BOOKS AND RECORDS. All books, records and accounts of the
Company and the Company Subsidiaries are accurate and complete in all material
respects and are maintained in accordance with all applicable Laws. The
corporate minute books and stock record books of the Company and the Company
Subsidiaries previously delivered to the Buyer are true, correct and complete.
All stock transfer taxes levied, if any, or payable with respect to all
transfers of shares of the Company and the Company Subsidiaries prior to the
Closing Date have been paid and appropriate transfer tax stamps affixed.
4.26 DIRECTORS AND OFFICERS. SCHEDULE 4.26 sets forth a true and
complete list of the directors and officers of the Company and the Company
Subsidiaries.
4.27 DISCLOSURE. To the Knowledge of the Company, neither this
Agreement (including the exhibits and schedules hereto) or the Transaction
Agreements contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
5.1 ORGANIZATION. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware.
The Buyer has the requisite corporate power and authority to own, lease and
operate its assets and to carry on its business as now being conducted.
5.2 AUTHORIZATION; ENFORCEABILITY. The Buyer has the requisite
corporate power and authority to execute and deliver this Agreement and the
Transaction Agreements and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the Transaction Agreements by
the Buyer and the performance by the Buyer of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action on the
part of the Buyer and no other corporate or shareholder proceedings or actions
are necessary to authorize and consummate this Agreement, the Transaction
Agreements or the transactions contemplated hereby or thereby. This Agreement
has been, and the Transaction Agreements will be, when delivered to Sellers,
duly executed and delivered by the Buyer and, assuming due authorization,
execution and delivery by the Sellers, as applicable, this Agreement
constitutes, and the Transaction Agreements will constitute, a valid and binding
agreement of the Buyer, enforceable against it in accordance with their terms,
subject to the General Enforceability Exceptions.
5.3 NO CONFLICTS OR APPROVALS. (a) The execution, delivery and
performance by the Buyer of this Agreement and the Transaction Agreements to
which the Buyer is a party and the consummation by the Buyer of the transactions
contemplated hereby and thereby do not and will not (i) violate, conflict with
or result in a breach by the Buyer of the organizational documents of the Buyer,
(ii) violate, conflict with or result in a breach of, or constitute a default by
the Buyer (or create an event which, with notice or lapse of time or both,
40
would constitute a default) or give rise to any right of termination, consent,
cancellation, acceleration, increased Liabilities or fees, or right to increase
the obligations or otherwise modify the terms under, or result in the creation
of any Lien, other than Permitted Liens, upon any of the properties, rights or
assets of the Buyer or to which any of such properties, rights or assets are
subject under, any Contract to which the Buyer or any of its properties, rights
or assets may be bound, except as would not, individually or in the aggregate,
have a material adverse effect on the ability of the Buyer to consummate the
transactions contemplated by this Agreement, or (iii) subject to the receipt of
the requisite approvals referred to on SCHEDULE 5.3(B), conflict with or violate
any Governmental Order or Law applicable to the Buyer or any of its properties,
rights or assets.
(b) Except as set forth on SCHEDULE 5.3(B), no Consent is required
to be obtained, filed or delivered by the Buyer for the consummation by the
Buyer of the transactions contemplated by this Agreement and the Transaction
Agreements that if not obtained, filed or delivered, as the case may be, would
reasonably be expected to have a material adverse effect on the ability of the
Buyer to consummate the transactions contemplated by this Agreement and the
Transaction Agreements.
5.4 PROCEEDINGS. Except as set forth in SCHEDULE 5.4, there are no
Proceedings pending or, to the Knowledge of the Buyer, threatened against the
Buyer that challenge, or question the validity of, this Agreement, any
Transaction Agreement or any action taken or to be taken by the Buyer in
connection with, or which seeks to enjoin or obtain monetary damages in respect
of, the consummation of the transactions contemplated hereby or thereby.
5.5 NO BROKERS' OR OTHER FEES. No Person has been employed by or on
behalf of the Buyer as a broker, finder, investment banker or financial advisor
in connection with the transactions contemplated hereby, and no Person with
which the Buyer has had any dealings or communications of any kind, is entitled
or will become entitled to any fee or commission, brokerage, finder's fee or
like payment based in any way on any agreement, arrangement or understanding
made by or on behalf of the Buyer to which Sellers or their Affiliates will have
any obligation or responsibility in connection with the transactions
contemplated hereby.
5.6 INVESTMENT INTENT. The Buyer is acquiring the Shares for the
Buyer's own account for investment and not with a view to or for sale in
connection with any distribution thereof other than in compliance with the
Securities Act.
5.7 FINANCIAL ABILITY TO PERFORM. The Buyer will have at the Closing
cash in an aggregate amount sufficient for the Buyer to pay the Purchase Price.
ARTICLE VI COVENANTS AND AGREEMENTS
6.1 CONDUCT OF THE BUSINESS PRIOR TO THE CLOSING. Except as (a)
expressly contemplated by this Agreement or (b) disclosed on SCHEDULE 6.1, from
and after the date of this Agreement and until the Closing or the earlier
termination of this Agreement in accordance with its terms, the Company shall,
and shall cause the Company Subsidiaries to: (i) conduct its operations in the
ordinary course of business, (ii) use their commercially reasonable efforts to
41
maintain and preserve intact the Business and to maintain satisfactory
relationships with suppliers, customers, key employees and other Persons having
business relationships with the Company or the Company Subsidiaries and (iii)
make capital expenditures solely to the extent provided on SCHEDULE 6.1. Except
as (x) contemplated by this Agreement or (y) as set forth on SCHEDULE 6.1, the
Company shall not, and shall cause each of the Company Subsidiaries not to do
any of the following without the prior written consent of the Buyer:
(a) purchase or sell any capital stock or other equity interests of
the Company or any Company Subsidiary or grant or make any option, subscription,
warrant, call, commitment or agreement of any character in respect of any such
capital stock or other equity interests;
(b) acquire, lease, license, assign, sell, transfer or otherwise
dispose any of its property, rights, businesses or assets (including by merger,
consolidation or acquisition of stock or assets) excluding in all cases sales of
inventory and obsolete equipment or non-exclusive licenses in the ordinary
course of business;
(c) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
with respect to the Company or any Company Subsidiary;
(d) incur, assume or guarantee any obligations for borrowed money
other than under lines of credit existing on the date of this Agreement;
(e) incur any Lien on any properties, rights or assets of the
Company or any Company Subsidiary, in each case, other than Permitted Liens;
(f) enter into any new lease for Real Property or modify, renew,
extend or terminate any existing lease for Real Property or purchase or acquire
or enter into any agreement to acquire, assign, sell, transfer or dispose of any
Real Property of any Company Subsidiary or the Company;
(g) (i) declare, set aside or pay any dividends or distributions on,
or make any other distributions (whether in securities or other property) in
respect of, any capital stock or equity interest of the Company or any Company
Subsidiary, (ii) split, combine or reclassify any of its outstanding capital
stock or equity interest of the Company or any Company Subsidiary or issue or
authorize the issuance of any capital stock or equity interest of the Company or
any Company Subsidiary, (iii) purchase, redeem or otherwise acquire or dispose
of any securities or equity interests of the Company or Company Subsidiaries or
(iv) issue, sell, transfer, grant, pledge, dispose of or otherwise encumber any
capital stock or equity interest of the Company or any Company Subsidiary;
(h) (i) establish, adopt, enter into any plan, agreement, program,
policy, trust, fund or other arrangement that would be a Benefit Plan if it were
in existence as of the date of this Agreement or amend or terminate any Benefit
Plan in a manner that would affect the benefits provided to or with respect to
any Company Employee or otherwise increase the Liabilities of the Company and
any Company Subsidiaries under the Benefit Plans, except as required by Law, or
take any action to accelerate vesting under, or release any restrictions
42
applicable under, any of the foregoing for any Company Employee, (ii) increase
the compensation or fringe benefits of any Company Employee (except for
increases in salary or hourly wage rates, in the ordinary course of business or
as may be required by the collective bargaining agreements), (iii) pay any bonus
to, accelerate any right under any Employee Plan to, grant any severance or
termination pay to any Company Employee, except in the ordinary course of
business or as may be required by the collective bargaining agreements, (iv)
loan or advance any money or other property to any Company Employee, or (v)
increase the funding obligation to or contribution rate under any Benefit Plan
subject to Title IV of ERISA, except as required by Law;
(i) make any change in its accounting methods, policies or practices
(other than such changes that have been required by Law or GAAP);
(j) make or change any election relating to Taxes, change an annual
accounting period or adopt or change any accounting method relating to Taxes,
file any amended Tax Return, enter into any closing agreement, settle any Tax
claim or assessment relating to the Company or the Company Subsidiaries,
surrender any right to claim a refund, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to the
Company or the Company Subsidiaries;
(k) enter into, amend, supplement, waive, modify, terminate, annul,
cancel, allow to lapse, assign, convey, encumber or otherwise transfer, in each
case in any material respect, in whole or in part, rights and interests in or
under any Material Contracts or enter into any Contract that would be a Material
Contract if in effect on the date of this Agreement, except Contracts made in
the ordinary course of business;
(l) compromise, settle, grant any waiver or release relating to or
otherwise adjust any right or claim with respect to any pending or threatened
Proceeding (A) relating to the transactions contemplated by this Agreement or
(B) against the Company or the Company Subsidiaries;
(m) change, or agree to change, any business policies of the Company
and Company Subsidiaries which relate to advertising, promotional activities,
pricing, personnel, labor relations, sales, returns or warranties in each case
in any material respect other than in the ordinary course of business;
(n) amend any organizational document of the Company or any Company
Subsidiary;
(o) sell, license, sublicense, covenant not to xxx under, abandon,
assign, transfer, disclose, encumber or otherwise grant any rights under any
Owned Intellectual Property to any Person, other than in the ordinary course of
business;
(p) materially shorten or lengthen the customary payment and
collection cycles, as the case may be, for the Company's or the Company
Subsidiaries' trade accounts payable and receivables; or
(q) agree or commit to do any of the foregoing.
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6.2 ACCESS TO BOOKS AND RECORDS; CONFIDENTIALITY.
(a) During the period commencing on the date hereof and ending on
the Closing Date or the earlier termination of this Agreement in accordance with
its terms, the Company shall give the Buyer and its counsel, accountants,
employees, agents, and other authorized representatives full access, during
normal business hours, upon reasonable advance notice, to the officers,
directors, premises, properties, books, records, financial statements, Tax
Returns of the Company and any Company Subsidiary. Any information provided to
or obtained by the Buyer and/or its counsel, accountants, employees, agents and
other authorized representatives pursuant to this SECTION 6.2(A) will be subject
to the Confidentiality Agreement and must be held by the Buyer in accordance
with and be subject to the terms of the Confidentiality Agreement. The Buyer
agrees to be bound by and comply with the provisions set forth in the
Confidentiality Agreement as if such provisions were set forth herein, and such
provisions are hereby incorporated herein by reference.
(b) From and after the date hereof, except as (i) required by Law or
(ii) as necessary for the preparation of any Tax Returns, the Sellers shall, and
shall cause their Affiliates and respective officers, directors, employees,
counsel, accountants, agents and other representatives to hold in strict
confidence all information relating to the Company and Company Subsidiaries as
conducted before the Closing; provided that the foregoing shall not apply to
information that is or becomes generally available to the public through no
action of the Sellers. If any Seller or its Affiliates or their respective
officers, directors, employees, counsel, accountants, agents and other
representatives are legally compelled or required to disclose any such
information, it is agreed that Sellers will promptly notify Buyer to permit
Buyer to seek a protective order or take other appropriate action. Sellers will
cooperate in Buyer's efforts to obtain a protective order or other reasonable
assurance that confidential treatment will be accorded to such information. If,
in the absence of a protective order, Sellers or any of their Affiliates and
respective officers, directors, employees, counsel, accountants, agents and
other representatives are, in the opinion of counsel, compelled as a matter of
Law to disclose such information to a third party, Sellers may disclose to the
third party compelling disclosure only the part of such information as is
required by Law to be disclosed (in which case, prior to disclosure, Sellers
will use reasonable efforts to advise and consult with Buyer and its counsel as
to such disclosure and the nature and wording of such disclosure), and Sellers
will use commercially reasonable efforts to obtain confidential treatment of any
such information so disclosed. Sellers acknowledge and agree that other remedies
cannot fully compensate Buyer for a violation by Sellers of the terms of this
SECTION 6.2(B) and that Buyer shall be entitled to injunctive relief to prevent
any such violation or continuing violation by any Seller. At the Closing, the
Sellers shall assign their respective rights under any confidentiality agreement
relating to the Company and Company Subsidiaries with a third party to Buyer or
its Affiliates.
6.3 TAX RETURNS, CONTESTS AND COOPERATION. (a) The Buyer and the
Sellers agree to furnish or cause to be furnished to each other, upon request,
as promptly as practicable, such information and assistance (including powers of
attorney and, at the expense of the requesting party, reasonable access to the
other party's Tax Return preparer, provided that such other party may limit such
access as it reasonably deems necessary to protect confidential information)
relating to any of the Company or the Company Subsidiaries (including access to
books and records, employees, contractors and representatives) as is reasonably
necessary for the
44
filing of all Tax Returns, the making of any election related to Taxes, the
preparation for any audit by any Taxing Authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax or Tax Return. The
Buyer and the Sellers shall retain all books and records that pertain to the
Company or the Company Subsidiaries until the expiration of all relevant
statutes of limitations (and, to the extent notified by the Buyer and the
Sellers, any extensions thereof). At the end of such period, each party shall
provide the other with at least thirty (30) days' prior written notice before
destroying any such books and records, during which period the party receiving
such notice can elect to take possession, at its own expense, of such books and
records. Neither Buyer nor any of its Affiliates will revoke, amend or otherwise
modify any existing powers of attorney effective for or with respect to any
Current Tax Matter without the prior written consent of Sellers Representative,
which shall not be unreasonably withheld.
(b) Sellers shall prepare and timely file, or cause to be prepared
and timely filed, all Tax Returns that are due to be filed on or prior to the
Closing Date for any Pre-Closing Tax Period, in respect of the Company or any of
the Company Subsidiaries, and shall timely pay all Taxes shown on such Tax
Returns (the "SELLER FILED TAX RETURNS"). All such Seller Filed Tax Returns
shall be prepared in accordance with prior practices unless otherwise required
by Law. For all such Seller Filed Tax Returns filed following the date of this
Agreement, the Company shall provide Buyer with a copy of each proposed Seller
Filed Tax Return (and such additional information regarding such Seller Filed
Tax Return as may reasonably be requested by Buyer) (i) at least fifteen (15)
calendar days prior to the filing of such Seller Filed Tax Return or (ii) in the
case of a Seller Filed Tax Return that is required to be filed within twenty
(20) calendar days of the Closing Date, at least ten (10) calendar days prior to
the date such Seller Filed Tax Return is required to be filed; provided, that
with respect to all Seller Filed Tax Returns related to corporate income taxes,
Buyer shall have the right to approve such filing, which approval must not be
unnecessarily withheld or delayed; provided, further, that in the case of a Tax
Return that is required to be filed within ten (10) calendar days of the Closing
Date, the Company shall use its commercially reasonable efforts to afford Buyer
a reasonable opportunity to review and approve if related to corporate income
taxes, such Seller Filed Tax Return prior to filing such Tax Return. Except as
required by Law, neither Buyer nor any of its Affiliates shall amend, refile,
revoke or otherwise modify any Tax Return or Tax election of the Company or any
Company Subsidiary in respect of a Pre-Closing Tax Period to the extent that
such amendment, refiling, revocation or other modification would have an adverse
effect on any of the Sellers or their Affiliates, without the prior written
consent of Sellers, which consent shall not be unreasonably withheld or delayed.
The Buyer shall prepare and timely file, or cause to be prepared and timely
filed, all other Tax Returns in respect of the Company or any of the Company
Subsidiaries with respect to all Tax periods, including any Pre-Closing Tax
Period and any Straddle Period.
(c) All transfer, documentary, sales, use, registration and other
such Taxes (including all applicable real estate transfer Taxes, but excluding
any Taxes based on or attributable to income or gains) and related fees
(including any penalties, interest and additions to Tax) ("TRANSFER TAXES")
arising out of or incurred in connection with this Agreement shall be borne by
the party incurring such cost. The party (or parties) that is legally required
to file a Tax Return relating to Transfer Taxes shall be responsible for
preparing and timely filing such Tax Return.
45
(d) All Tax sharing agreements between any of the Company or Company
Subsidiaries, on the one hand, and any of Sellers or their Affiliates (other
than the Company or any of the Company Subsidiaries), on the other hand, shall
be terminated as of the Closing Date and shall have no further effect on or
after the Closing Date.
6.4 SECTION 338. Neither the Buyer nor the Company shall make any
election under Section 338 of the Code with respect to the transactions
contemplated by this Agreement.
6.5 REFUNDS AND TAX BENEFITS. All Tax refunds or credits
attributable to any Tax period shall be for the sole benefit of the Buyer.
6.6 EMPLOYEES; BENEFIT PLANS.
(a) Except as set forth in SCHEDULE 6.6, all persons who were
employed by the Company or Company Subsidiaries immediately preceding the
Closing Date, including those on vacation, leave of absence or disability (the
"ACTIVE COMPANY EMPLOYEES"), will remain employed in a comparable position on
and immediately after the Closing Date; provided, however, subject to the
requirements of applicable Law, nothing in this Agreement shall require the
Company or Company Subsidiaries to retain any Active Company Employees for any
period of time after the Closing Date.
(b) For a period of twelve (12) months following the Closing Date
(the "TRANSITION PERIOD"), the Buyer shall, and shall cause the Company and the
Company Subsidiaries to, either maintain the Benefit Plans (other than any stock
option or equity-based plans) or provide the Active Company Employees
eligibility to participate in employee benefit plans of the Buyer which in the
aggregate are substantially equivalent to those provided to similarly-situated
employees of the Buyer. The Buyer may, or may cause the Company or Company
Subsidiaries to, amend, modify or terminate any of the Benefit Plans or merge
any of the Benefit Plans with the Buyer's employee benefit plans as the Buyer
deems appropriate. To the extent not otherwise required by or resulting from the
operation of Law, the Buyer shall, or shall cause the Company and Company
Subsidiaries to, recognize each Active Company Employee's service for purposes
of eligibility to participate and vesting (but not for any other purpose, such
as benefit accrual or level of benefits) with the Company or the Company
Subsidiaries as of the Closing Date as service with the Buyer, to the extent
that such service was credited under the corresponding Benefit Plans, under the
Buyer's employee welfare benefit plans, employee pension plans, vacation,
disability, severance and other employee benefit plans or policies and any other
such plans or policies in which the Active Company Employees become or may
become eligible to participate on or after the Closing Date.
(c) Nothing herein expressed or implied shall confer upon any of the
employees of the Buyer, the Company, the Company Subsidiaries or any of their
Affiliates, any rights or remedies, including any right to benefits or
employment, or continued benefits or employment, for any specified period, of
any nature or kind whatsoever under or by reason of this Agreement.
6.7 LABOR MATTERS. (a) Between the date hereof and the Closing Date
or the earlier termination of this Agreement in accordance with its terms, the
Company and the
46
Company Subsidiaries shall not effect or permit a "plant closing" or "mass
layoff" as these terms are defined in the WARN Act with respect to any member of
the Company and the Company Subsidiaries without notifying the Buyer in advance
and without complying with the notice requirements and all other provisions of
the WARN Act. The Company will also notify the Buyer of, and obtain its consent
to, prior to the Closing, all layoffs and terminations at any "single site of
employment" or "facility or operating unit within a single site of employment"
that occur within ninety (90) days of the Closing and that, in the aggregate,
exceed twenty percent (20%) of the workforce or 25 or more employees at either
the "single site of employment" or a "facility or operating unit", which consent
shall not be unreasonably withheld.
(b) The Company and the Buyer shall reasonably cooperate in
connection with any required notification to, or any required consultation with,
or the provision of documents and information to, the employees, employee
representatives, work councils, unions, labor boards and relevant government
agencies and governmental officials concerning the transactions contemplated by
this Agreement with respect to non-U.S. Employees of any of the Company and the
Company Subsidiaries so that such Persons may render advice as required in
accordance with Law.
6.8 CONSENTS AND COMPETITION. (a) The Buyer and the Sellers shall,
(i) as promptly as practicable, but in no event later than five (5) Business
Days following the date of this Agreement, within the applicable filing
deadlines, submit all initial filings required by the HSR Act and (ii) as
promptly as practicable, within the applicable filing deadlines, submit all
initial filings required by or any other applicable Competition/Investment Law,
and thereafter provide any supplemental information requested in connection
therewith. The Buyer and the Sellers shall furnish to the other such necessary
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission that is necessary under the HSR
Act or any other applicable Competition/Investment Law. The Buyer and the
Sellers shall request early termination of the applicable waiting period under
the HSR Act or any other applicable Competition/Investment Law. The Buyer and
the Sellers will promptly inform the other party of any material communication
received by such party from any Governmental Authority in respect of any filing
under the HSR Act or any other applicable Competition/Investment Law. Each of
the parties will (a) use its respective commercially reasonable efforts to
comply as expeditiously as possible with all requests of any Governmental
Authority for additional information and documents, including, without
limitation, information or documents requested under the HSR Act or any other
applicable Competition/Investment Law; (b) not (i) extend any waiting period
under the HSR Act or any other applicable Competition/Investment Law or (ii)
enter into any agreement with any Governmental Authority not to consummate the
transactions contemplated by this Agreement, except with the prior consent of
the other parties; and (c) cooperate with the other parties and use commercially
reasonable efforts to contest and resist any action, including legislative,
administrative or judicial action, and to have vacated, lifted, reversed or
overturned any Governmental Order (whether temporary, preliminary or permanent)
that restricts, prevents or prohibits the consummation of the transactions
contemplated by this Agreement.
(b) The Company shall use commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to
47
obtain all third-party Consents in order to consummate the transactions
contemplated hereby, including securing Consents listed in SCHEDULE 2.4(A)(VII).
6.9 INSURANCE. From the date of this Agreement to the Closing Date,
the Company shall use its commercially reasonable efforts to maintain its
Insurance Policies in full force and effect (subject to any renewals thereof)
and in any event will not materially reduce the level of its insurance coverage
from the level of coverage as of the date hereof.
6.10 NOTICE OF EVENTS. (a) During the period from the date of this
Agreement to the Closing Date or the earlier termination of this Agreement in
accordance with its terms, the Buyer shall give prompt written notice to the
Sellers of (i) the occurrence or non-occurrence of any event that has caused, or
could reasonably be expected to cause, any representation or warranty made by it
to be untrue or inaccurate in any material respect at any time after the date of
this Agreement and prior to the Closing Date; and (ii) any material failure on
its part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
(b) During the period from the date of this Agreement to the Closing
Date or the earlier termination of this Agreement in accordance with its terms,
the Company shall give prompt written notice to the Buyer if it becomes aware of
(i) the occurrence or non-occurrence of any event to the Knowledge of the
Company which has caused, or could reasonably be expected to cause, any
representation or warranty made by the Company or any Seller to be untrue or
inaccurate in any material respect at any time after the date of this Agreement
and prior to the Closing Date; and (ii) any material failure on the Company's or
Sellers' part to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder. If any such event requires any
change to the schedules to this Agreement with respect to ARTICLE III or ARTICLE
IV, the Company shall promptly deliver to the Buyer a supplement to the
schedules specifying such change; provided that any such supplement shall not be
taken into account for purposes of determining whether the conditions precedent
in ARTICLE VII are satisfied or for purposes of indemnification as set forth in
ARTICLE IX. The delivery of any notice pursuant to this SECTION 6.10(B) shall
not limit or otherwise affect the rights or remedies available hereunder
(including, without limitation, the indemnification provisions hereof).
6.11 COOPERATION. Upon the terms and subject to the conditions set
forth in this Agreement, each party hereto shall use its commercially reasonable
efforts to take, or cause to be taken, all actions, and do, or cause to be done,
and to assist and cooperate with the other parties hereto in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated hereby, and to
satisfy, or cause to be satisfied all of the conditions precedent that are set
forth in ARTICLE VII, as applicable to each of them.
6.12 ANTI-SANDBAG. Notwithstanding anything to the contrary
contained in this Agreement (including without limitation the Company's or
Sellers' failure to disclose any matter required to be disclosed on any Exhibit
or Schedule hereto), Buyer agrees that no representation or warranty of the
Sellers or the Company in this Agreement or in any agreement or instrument
executed in connection herewith shall be deemed to be untrue or incorrect, and
Sellers and the Company shall not be deemed to be in breach thereof, if the
following officers or
48
employees of Buyer had actual knowledge on the date of this Agreement of any
undisclosed matter that would constitute a breach of such representation or
warranty or that any such representation or warranty was untrue or incorrect:
Xxxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxxxxx X.
Xxxxxxxxx, Xxxx Xxxxxxx (but only with respect to matters uncovered in Buyer's
due diligence review of the Company in connection with the transactions
contemplated by this Agreement and not with respect to any other matters,
including matters known to or discovered by Xxxx Xxxxxxx as a result of his
day-to-day duties and/or activities) and Xxxxxxx X. Xxxxxxx. For purposes of
determining whether any such persons had such actual knowledge, all such persons
shall be deemed to have actual knowledge of all due diligence reports prepared
and delivered to the Buyer by the outside advisors set forth on SCHEDULE 6.12.
ARTICLE VII CONDITIONS TO CLOSING
7.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The respective
obligations of the Buyer and the Sellers to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or waiver (if
permitted by applicable Law) at or prior to the Closing of each of the following
conditions:
(a) None of the parties hereto will be subject to any Governmental
Order or Law that restrains or prohibits the consummation of the transactions
contemplated by this Agreement (a "RESTRAINT"). If any such Restraint has been
issued, enacted, enforced or promulgated by a Governmental Authority, each party
shall use its commercially reasonable efforts to have any such Restraint
overturned or lifted.
(b) The waiting period (including any extension thereof) applicable
to the consummation of the transactions contemplated by this Agreement under the
HSR Act or any other applicable Competition/Investment Law will have expired or
been terminated.
7.2 CONDITIONS TO THE OBLIGATION OF THE SELLERS. The obligation of
the Sellers to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver (if permitted by applicable Law) at or
prior to the Closing of each of the following conditions:
(a) The representations and warranties made by the Buyer in this
Agreement will be true and correct in all material respects (provided that any
representation or warranty of the Buyer contained herein that is subject to a
materiality, material adverse effect or similar qualification will not be so
qualified for purposes of determining the existence of any breach thereof on the
part of the Buyer) as of the Closing Date as though made on and as of such date
(except to the extent such representations and warranties speak as of an earlier
date, in which case such representations and warranties shall be, subject to the
proviso set forth above, true and correct in all material respects as of such
earlier date).
(b) The Buyer will have performed and complied in all material
respects with all agreements and covenants required by this Agreement to be so
performed or complied with by it at or prior to the Closing.
(c) The Buyer will have delivered, or caused to be delivered, all of
the closing deliveries required by SECTION 2.4(B).
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7.3 CONDITIONS TO THE OBLIGATIONS OF THE BUYER. The obligation of
the Buyer to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver (if permitted by applicable Laws) at or
prior to the Closing of each of the following conditions:
(a) The representations and warranties made by the Sellers and the
Company in this Agreement will be true and correct in all material respects
(provided that any representation or warranty of the Sellers contained herein
that is subject to a materiality, Company Material Adverse Effect or similar
qualification will not be so qualified for purposes of determining the existence
of any breach thereof on the part of the Company) as of the Closing Date as
though made on and as of such date (except to the extent such representations
and warranties speak as of an earlier date, in which case such representations
and warranties shall be, subject to the proviso set forth above, true and
correct in all material respects as of such earlier date).
(b) The Company and the Sellers will have performed and complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them at or prior to the Closing.
(c) Since the date of this Agreement, there has been no change,
development or occurrence of any character (whether or not covered by insurance)
that, in the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect, except for (i) changes in the price of nickel
or other metals recovered by the Company in connection with its slag handling
business, (ii) changes resulting from the announcement of the transactions
contemplated by this Agreement, or (iii) changes in generally accepted
accounting principles, Environmental Law or other Law.
(d) Sellers will have delivered, or caused to be delivered, all of
the closing deliveries required by SECTION 2.4(A).
ARTICLE VIII TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing Date:
(a) by the mutual written consent of Sellers Representative, on
behalf of the Sellers, and the Buyer;
(b) by Sellers Representative, on behalf of the Sellers, or the
Buyer, upon written notice to the other party, if the Closing has not occurred
on or before March 1, 2007 (the "OUTSIDE DATE"), provided, however, that if the
transactions contemplated by this Agreement shall not have been consummated
solely due to the waiting period (or any extension thereof) or approvals under
the HSR Act or any other Competition/Investment Law not having expired or been
terminated or received, then such date shall be extended to April 15, 2007; and
provided, further, that the right to terminate this Agreement under this SECTION
8.1(B) shall not be available to any party whose failure to fulfill any material
obligations under this Agreement has been the cause of, or resulted in, the
failure of the transactions contemplated by this Agreement to have been
consummated on or before such date.
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(c) by Sellers Representative, on behalf of the Sellers, or the
Buyer, upon written notice to the other party, if any Restraint is in effect and
has become final and nonappealable, provided that the party seeking to terminate
this Agreement pursuant to this SECTION 8.1(C) has used its commercially
reasonable efforts to remove such Restraint;
(d) by the Buyer, if the Company or any Seller materially breaches
any of its representations, warranties, covenants or agreements under this
Agreement and such breach is not capable of being cured or if curable is not
cured within twenty (20) calendar days after written notice to the Sellers
Representative by the Buyer; or
(e) by Sellers Representative, on behalf of the Sellers, if the
Buyer materially breaches any of its representations, warranties, covenants or
agreements under this Agreement and such breach is not capable of being cured or
if curable is not cured within twenty (20) calendar days after written notice to
the Buyer by Sellers Representative.
8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to SECTION 8.1, this Agreement will become void and have no
effect, and no party will have any liability or any further obligation to any
other party, except as provided in this SECTION 8.2 and except that nothing
herein releases, or may be construed as releasing, any party hereto from any
liability or damage to any other party hereto arising out of the breaching
party's willful breach of its representations and warranties or breach in the
performance of any of its covenants or agreements arising under this Agreement.
The obligations of the parties to this Agreement under SECTION 6.2 (as such
Section relates to confidentiality), SECTION 8.2 and ARTICLE X will survive any
termination of this Agreement.
ARTICLE IX INDEMNIFICATION
9.1 INDEMNIFICATION BY THE SELLERS. Subject to the terms and
conditions set forth in this ARTICLE IX, from and after the Closing, the Sellers
shall, severally and not jointly, indemnify and hold harmless the Buyer, its
Affiliates (including, after the Closing, the Company and the Company
Subsidiaries) and their respective officers, directors, shareholders, employees,
agents and representatives (collectively, the "BUYER INDEMNIFIED PERSONS") from
and against any and all Losses incurred or suffered by any Buyer Indemnified
Person arising out of or related to (i) any breach or inaccuracy of any
representation or warranty by the Sellers or the Company contained in this
Agreement whether made upon execution of this Agreement or at Closing as
contemplated by SECTION 7.3(A), (ii) any non-fulfillment or breach by the
Company or any Seller of any covenant or agreement hereunder, or (iii) payments
to Company Employees, including former employees, triggered in whole or in part
by the transactions contemplated hereby (whether alone or in connection with
other events), excluding those payments made to Company Employees included in
the definition of Debt Obligations and any payments resulting from Buyer's
termination of such Company Employee following the Closing.
(b) None of the Buyer Indemnified Persons will be entitled to
recover from the Sellers for any Losses indemnifiable pursuant to SECTION
9.1(A)(I) AND (A)(II), unless and until the total of all Losses indemnifiable
under SECTION 9.1(A)(I) AND (II) exceeds $1,500,000, in which case the Sellers
will be liable in the manner set forth in this ARTICLE IX for all such Losses
(including such first $1,500,000 of Losses) without regard to such amount. The
Buyer
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Indemnified Persons will not be entitled to recover more than an aggregate of
$20,000,000 (the "MAXIMUM AMOUNT"), from the Sellers with respect to all Losses
indemnifiable pursuant to SECTION 9.1(A)(I) AND (A)(II); provided that, subject
to the limitations in the following sentence, the foregoing limitations shall
not apply to any obligation or Liability under SECTION 9.1(A)(I) arising out of
or related to a breach or inaccuracy of any of the representations or warranties
set forth in SECTIONS 3.1, 3.2, 4.1, 4.2, 4.3 and 4.24. Notwithstanding the
above, any breach of a representation or warranty set forth in SECTIONS 3.1 or
3.2, shall be made only against such Seller breaching such representation or
warranty and no other Seller shall have any liability to Buyer with respect to
such breach.
9.2 INDEMNIFICATION BY THE BUYER. Subject to the terms and
conditions set forth in this ARTICLE IX, from and after the Closing, the Buyer
shall indemnify and hold harmless each of the Sellers, their respective
Affiliates and their respective officers, directors, shareholders, employees,
agents, and representatives (collectively, the "SELLER INDEMNIFIED PERSONS")
from and against any and all Losses incurred or suffered by any Seller
Indemnified Person arising out of or related to (i) any breach of any
representation or warranty by Buyer contained in this Agreement whether made
upon execution of this Agreement or at Closing as contemplated by SECTION
7.2(A), and (ii) any non-fulfillment or breach by Buyer of any covenant or
agreement hereunder.
9.3 INDEMNIFICATION AS EXCLUSIVE REMEDY. Except as otherwise
provided below, the indemnification provided for in this ARTICLE IX, subject to
the limitations set forth herein, shall be the exclusive post-Closing remedy
available to any party in connection with any Losses arising out of the matters
set forth in this Agreement or the transactions contemplated hereunder;
provided, however, that nothing herein will limit in any way any such party's
remedies in respect of fraud by a party in connection herewith or with any
Transaction Agreement or the transactions contemplated hereby or thereby;
provided that liability for such claims of fraud with respect to each Seller who
was not a party perpetrating such fraud shall be limited to the product of: (x)
the aggregate Losses of Buyer resulting from such fraud times (y) (a) the
Purchase Price (as adjusted pursuant to SECTION 2.6) received by such Seller
divided by (b) the aggregate Purchase Price (as adjusted pursuant to SECTION
2.6); provided further, that in no instance shall any Seller be liable, after
taking into consideration all amounts paid by such Seller pursuant to this
ARTICLE IX, for any amount in excess of such Seller's portion of the Purchase
Price (as adjusted pursuant to SECTION 2.6).
9.4 SURVIVAL. Except as set forth below, all claims for
indemnification under SECTION 9.1(A) must be asserted on or prior to the date of
the termination of the respective survival periods set forth in this SECTION
9.4, except such claims may be pursued thereafter if written notice thereof
(specifying in reasonable detail the basis for such claim) was duly given within
such period. Claims for fraud may be asserted at any time prior to the
expiration of the applicable statute of limitations. The representations and
warranties, covenants and other agreements contained in this Agreement will
survive the Closing Date until the second anniversary of the Closing Date,
except that the representations and warranties (a) set forth in SECTIONS 3.1,
3.2, 4.1, 4.2, 4.24 and 5.5 shall survive indefinitely, (b) set forth in
SECTIONS 4.3, 4.9, 4.10, 5.1 and 5.2 shall survive the Closing until sixty days
after the expiration of the applicable statute of limitations (and in the case
of SECTION 4.9 any extensions thereof), and
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(c) set forth in SECTION 4.14 shall survive the Closing until the third
anniversary of the Closing Date.
9.5 LIMITATIONS ON INDEMNIFICATION. (a) The amount of any Losses for
which indemnification is provided under SECTION 9.1(A) or 9.2 shall be computed
net of any third party insurance proceeds received by, or payable to, an
Indemnified Party in connection with such Losses (net of any expenses incurred
by the Indemnified Party in obtaining such insurance proceeds including the cost
of maintaining any insurance policy). The parties agree that any indemnification
payments made pursuant to this Agreement shall be treated for tax purposes as an
adjustment to the Purchase Price, unless otherwise required by Law.
(b) Sellers shall use all commercially reasonable efforts to
maintain and to assign to Buyer any third-party indemnities, settlements or cost
sharing agreements available or potentially available to Buyer.
(c) Notwithstanding anything to the contrary contained in this
ARTICLE IX, any indemnification obligations of the Sellers to the Buyer
Indemnified Persons that are subject to the Maximum Amount shall be first drawn
from the funds subject to the Escrow Agreement. Thereafter, the Sellers will be
severally, and not jointly, liable for all indemnification obligations to the
Buyer Indemnified Persons pursuant to this Agreement, subject to the limitations
contained herein. Any indemnification obligations of the Sellers to the Buyer
Indemnified Persons not subject to the Maximum Amount may be drawn from the
funds subject to the Escrow Agreement or may be sought from the Sellers in the
sole discretion of Buyer. In each case, the Buyer may offset the indemnification
obligations of such Seller under this ARTICLE IX against any amounts due or to
become due to such Seller under this Agreement. The parties agree that no Seller
Indemnified Persons shall have any rights of contribution or indemnity, or any
other right, remedy or recourse, as against the Company in connection with any
indemnification obligation or other Liability arising under or in connection
with, or related to, this Agreement or any Transaction Agreement, or any of the
transactions contemplated hereby or thereby. Each Seller's liability for
indemnification shall be limited to the product of: (x) the aggregate Losses of
Buyer resulting from such claims times (y) (a) the Purchase Price (as adjusted
pursuant to SECTION 2.6) received by such Seller divided by (b) the aggregate
Purchase Price (as adjusted pursuant to SECTION 2.6); provided further, that in
no instance shall any Seller be liable, after taking into consideration all
amounts paid by such Seller pursuant to this ARTICLE IX, for any amount in
excess of such Seller's portion of the Purchase Price (as adjusted pursuant to
SECTION 2.6); provided further, that with respect to claims subject to the
Maximum Amount, no Seller's liability for indemnification under this ARTICLE IX
shall exceed the product of the following: (x) (i) $20,000,000 minus (ii) the
total amount paid to Buyer from the funds subject to the Escrow Agreement times
(y) (a) the Purchase Price (as adjusted pursuant to SECTION 2.6) received by
such Seller divided by (b) the aggregate Purchase Price (as adjusted pursuant to
SECTION 2.6).
(d) PROCEDURES.
(i) Notice of Losses. As soon as is reasonably practicable after the
Sellers or the Buyer has actual knowledge of any Losses for which
indemnification is available under SECTION 9.1(A) or SECTION 9.2 (a
"CLAIM"), such party shall give written notice
53
thereof (a "CLAIM NOTICE") to the other party. A Claim Notice must
describe the Claim in reasonable detail, and must indicate the amount
(estimated to the extent feasible) of the Loss that has been or will be
suffered by the Indemnified Party. No delay in or failure to give a Claim
Notice by the Indemnified Party to the Indemnifying Party will adversely
affect any other rights or remedies that the Indemnified Party has under
this Agreement, or alter or relieve the Indemnifying Party of its
obligations to indemnify the Indemnified Party to the extent that such
delay or failure has not materially prejudiced the Indemnifying Party.
Each Indemnifying Party to whom a Claim Notice is given shall respond to
any Indemnified Party that has given a Claim Notice (a "CLAIM RESPONSE")
within thirty (30) calendar days (the "RESPONSE PERIOD") after the date
the Claim Notice is given. Any Claim Response must specify whether or not
the Indemnifying Party disputes the Claim described in the Claim Notice.
If any Indemnifying Party fails to give a Claim Response within the
Response Period, such Indemnifying Party will be deemed not to dispute
the Claim described in the related Claim Notice. If any Indemnifying
Party elects not to dispute a Claim described in a Claim Notice, whether
by failing to give a timely Claim Response or otherwise, then the amount
of such Claim will be conclusively deemed to be an obligation of such
Indemnifying Party and such Indemnifying Party shall pay to the
Indemnified Party within thirty (30) days after the last day of the
applicable Response Period the amount to which such Indemnified Party is
entitled. If a Claim is disputed, the parties may pursue any remedies
available in Law or equity.
(ii) Third Party Claims. (A) If any Claim Notice identifies any
Claim brought by a third Person (a "THIRD PARTY CLAIM"), the Indemnifying
Party will have the right, exercisable by written notice to the
Indemnified Party within thirty (30) calendar days of receipt of such
Claim Notice, to assume the defense of such Third Party Claim, with
counsel selected by the Indemnifying Party that is reasonably
satisfactory to the Indemnified Party. If the Indemnifying Party assumes
the defense of, and the full responsibility for paying or otherwise
discharging such Third Party Claim, the Indemnifying Party will not be
liable to the Indemnified Party for any legal expenses of other counsel
or any other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof and the Indemnified Party will have
the right to participate at its own expense in the defense of such Third
Party Claim. If the Indemnifying Party does not assume the defense of
such Third Party Claim, the Indemnified Party may defend such Third Party
Claim at the sole cost of the Indemnifying Party and the Indemnifying
Party may still participate in, but not control, the defense of such
Third Party Claim at the Indemnifying Party's sole cost and expense.
(B) The party responsible for the defense of any Third Party Claim
(a "RESPONSIBLE PARTY") shall, to the extent reasonably requested by the
other party, keep such other party informed as to the status of such
Third Party Claim, including, without limitation, all settlement
negotiations and offers. With respect to a Third Party Claim for which a
Seller is the Responsible Party, the Buyer shall use all reasonable
efforts to make available to such Seller all books and records of the
Buyer relating to such Third Party Claim and shall cooperate with such
Seller in the defense of the Third Party Claim. No settlement or
compromise or consent to the entry of any judgment that does not relate
solely to monetary damages arising from any such Third Party Claim may be
effected (1) by the Indemnifying Party without the written consent of the
Indemnified Party
54
(which consent shall not be unreasonably withheld or delayed) unless all
relief provided is paid or satisfied in full by the Indemnifying Party
and the Indemnified Party receives a full release in respect of the Third
Party Claim or (2) by the Indemnified Party without the consent of the
Indemnifying Party (which consent shall not be unreasonably withheld or
delayed). In no event shall an Indemnifying Party be liable for any
settlement effected without its prior written consent.
(e)(i) Notwithstanding the foregoing, at the election of Buyer,
Buyer shall have the sole right to control the defense, compromise and
resolution of any claim, suit, action, audit, litigation or proceeding relating
to any breach of the representations and warranties contained in SECTION 4.9 or
of the covenants contained in SECTION 6.3 (a "TAX CLAIM"). In the event that
Buyer assumes the defense of a Tax Claim and compromises or otherwise reaches a
resolution then Buyer's right to indemnification is subject to clause (ii)
below.
(ii) Buyer shall permit the Sellers Representative to participate in
the Tax Claim, at Sellers sole cost and expense, and keep the Sellers
Representative informed as to the status of all compromise and settlement
negotiations and offers. The Buyer shall make available to Sellers
Representative all books and records of the Buyer and the Company
relating to such Tax Claim in order for Sellers Representative to
evaluate any proposed compromise or other resolution. If the Sellers
Representative consents to the compromise or other resolution of the Tax
Claim, then Buyer shall be entitled to indemnification under SECTION 9.1
for the amount of such compromise or resolution, subject to the
limitations set forth in this ARTICLE IX. If the Sellers Representative
does not agree with a proposed resolution, then Buyer and Sellers
Representative shall consult with the CPA Firm to determine the best
resolution possible (the "CPA RESOLUTION"). In determining the CPA
Resolution, the CPA Firm will attempt to minimize the amount of the Tax
Claim for the Tax year at issue without moving income or loss for any Tax
year to another Tax year, whether from a pre-Closing period to
post-Closing period or from post-Closing period to a pre-Closing period,
except as otherwise required by applicable law. If Buyer agrees to use
the CPA Resolution to resolve the Tax Claim, then Buyer shall be entitled
to indemnification under SECTION 9.1 for the amount of such resolution,
including any legal and/or accounting costs incurred in connection with
such Tax Claim, subject to the limitations set forth in this ARTICLE IX.
If Buyer does not use the CPA Resolution to resolve the Tax Claim, then
Buyer shall be entitled to indemnification under SECTION 9.1 (subject to
the limitations set forth in this ARTICLE IX) only for an amount equal to
but not exceeding the amount reflected in the CPA Resolution.
9.6 SELLERS REPRESENTATIVE.
(a) Sellers Representative; Power and Authority. Each Seller hereby
appoints the Sellers Representative as agent and attorney-in-fact for each such
Seller, for and on behalf of each such Seller, with full power and authority to
represent each Seller and such Seller's successors and assigns with respect to
all matters arising under this Agreement and the Escrow Agreement and all
actions taken by the Sellers Representative under this Agreement or the Escrow
Agreement will be binding upon each such Seller and such Seller's successors and
assigns as if expressly ratified and confirmed in writing by each of them.
Without limiting the generality of the foregoing, the Sellers Representative has
full power and authority, on behalf of
55
each Seller and such Seller's successors and assigns, to interpret the terms and
provisions of this Agreement and the Escrow Agreement, to dispute or fail to
dispute any Claim under this Agreement or the Escrow Agreement, to negotiate and
compromise any dispute that may arise under this Agreement or the Escrow
Agreement and to sign any releases or other documents with respect to any such
dispute. A Seller will be deemed a party or a signatory to any agreement,
document, instrument or certificate for which the Sellers Representative signs
on behalf of such Seller. The Sellers Representative hereby accepts such
designation.
(b) Liability. In performing any of its duties under this Agreement
or upon the claimed failure to perform its duties under this Agreement, the
Sellers Representative will not be liable to the Sellers for any Losses that the
Sellers may incur as a result of any act, or failure to act, by the Sellers
Representative under this Agreement, and the Sellers Representative shall be
indemnified and held harmless by the Sellers for all Losses; provided, however,
that the Sellers Representative will not be entitled to indemnification for
Losses to the extent that a court of competent jurisdiction has finally
determined that the actions or omissions of the Sellers Representative both (i)
were taken or omitted not in good faith and (ii) constituted willful breach
under this Agreement. Accordingly, the Sellers Representative will not incur any
such liability with respect to (x) any action taken or omitted to be taken in
good faith upon advice of counsel given with respect to any questions relating
to the duties and responsibilities of the Sellers Representative under this
Agreement or the Escrow Agreement or (y) any action taken or omitted to be taken
in reliance upon any document, including any written notice or instructions
provided for in this Agreement or the Escrow Agreement, not only as to its due
execution and to the validity and effectiveness of such document's provisions,
but also as to the truth and accuracy of any information contained in such
document, which the Sellers Representative does in good faith believe to be
genuine, to have been signed or presented by the purported proper Person or
Persons and to conform with the provisions of this Agreement or the Escrow
Agreement. The limitation of liability provisions of this SECTION 9.6(B) will
survive the termination of this Agreement and the resignation of the Sellers
Representative.
(c) Successor Sellers Representative. In the event that the Sellers
Representative dies, becomes incapacitated, resigns or otherwise fails to
perform his or her obligations hereunder on behalf of the Sellers for any
reason, then Xxxxx Xxxxxxxx, or if he is unwilling or unable to act, another
Person selected by a vote of Sellers owning in the aggregate at least a majority
of the issued and outstanding Common Stock immediately prior to Closing shall be
appointed and as the substituting representative to act on behalf of the Sellers
with respect to the matters set forth in this Agreement and the Transaction
Agreements.
(d) Reliance on Sellers Representative. The Sellers Representative
is authorized to act on behalf of the Sellers in accordance with the terms of
this SECTION 9.6, notwithstanding any dispute or disagreement among the Sellers.
Buyer shall be entitled to rely on any and all actions taken by the Sellers
Representative without any liability to, or obligation to inquire of, any of the
Sellers even if Buyer is aware of any actual or potential dispute or
disagreement among the Sellers. Buyer, the Company, the Company Subsidiaries and
any third party is and shall be fully protected in acting or refraining from
acting upon and relying upon any notice, instruction, direction, request,
waiver, consent, receipt or other paper or document in writing that Buyer, the
Company, the Company Subsidiaries or such other third party in good faith
reasonably believes after due inquiry has been signed by the Sellers
Representative.
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ARTICLE X MISCELLANEOUS
10.1 FEES AND EXPENSES. Except as otherwise provided in this
Agreement with respect to Selling Expenses remaining unpaid as of the Closing
Date, Sellers, on the one hand, and the Buyer, on the other hand, shall bear its
own expenses and the expenses of its Affiliates in connection with the
preparation and negotiation of this Agreement and the consummation of the
transactions contemplated by this Agreement. Sellers, on the one hand, and the
Buyer, on the other hand, shall bear the fees and expenses of any broker or
finder retained by such party or parties and their respective Affiliates in
connection with the transactions contemplated by this Agreement and the
Transaction Agreements.
10.2 GOVERNING LAW. This Agreement will be construed under and
governed by the Laws of the Commonwealth of Pennsylvania applicable to contracts
made and to be performed in that State.
10.3 AMENDMENT. This Agreement may be amended, supplemented or
modified, and any provision hereof may be waived with the written consent of the
parties hereto.
10.4 ASSIGNMENT; THIRD PARTIES. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any party
hereto without the prior written consent of the other parties; provided that
Buyer may assign its rights or obligations hereunder to any Affiliate of Buyer
or, for collateral security purposes, to any lender providing financing to the
Buyer, any of the Company or any of their Affiliates, without the prior written
consent of the other parties hereto; provided, further, that no such assignment
by Buyer shall relieve Buyer of its obligations hereunder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the parties hereto and their respective successors and
permitted assigns, and is not intended nor shall it be construed to confer upon
any Person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies hereunder (except for Indemnified
Parties in ARTICLE IX).
10.5 WAIVER. Any of the terms or conditions of this Agreement that
may be lawfully waived may be waived in writing at any time by each party, at
its sole discretion, that is entitled to the benefits thereof. Any waiver of any
of the provisions of this Agreement by any party hereto will be binding only if
set forth in an instrument in writing signed on behalf of such party. No failure
to enforce any provision of or right under this Agreement will be deemed to or
will constitute a waiver of such provision or right and no waiver of any of the
provisions of this Agreement will be deemed to or will constitute a waiver of
any other provision hereof (whether or not similar) nor will such waiver
constitute a continuing waiver.
10.6 NOTICES. (a) Any notice, demand, or communication required or
permitted to be given by any provision of this Agreement will be deemed to have
been sufficiently given or served for all purposes if (i) personally delivered,
(ii) sent by a nationally recognized overnight courier service to the recipient
at the address below indicated, (iii) sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) delivered by facsimile with
confirmation of receipt:
57
If to the Buyer:
Xxxxxxxxx Xxxxxxxxx
President, Chief Financial Officer and Treasurer
Harsco Corporation
000 Xxxxxx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
With a copy to:
Xxxx Xxxxxx
General Counsel
Harsco Corporation
000 Xxxxxx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
and
Xxxxx Day
Xxxxx Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
If to any of the Sellers:
Xxxxxx Xxxxxxx
Sellers Representative
Merit Capital Partners
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxxxxx & Xxxxxx PC
One Oxford Center
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
or to such other address or facsimile number as any party hereto may, from time
to time, designate in a written notice given in like manner.
58
(b) Except as otherwise provided herein, any notice under this
Agreement will be deemed to have been given (i) on the date such notice is
personally delivered or delivered by facsimile, (ii) the next succeeding
Business Day after the date such notice is delivered to the overnight courier
service if sent by overnight courier, or (iii) five (5) Business Days after the
date such notice is sent by registered or certified mail; provided that in each
case notices received after 4:00 p.m. (local time of the recipient) will be
deemed to have been duly given on the next Business Day.
10.7 COMPLETE AGREEMENT. This Agreement (together with the
Schedules, Exhibits and Transaction Agreements), the Confidentiality Agreement
and the other documents and writings referred to herein or delivered pursuant
hereto contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and thereof.
10.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
each of which will be deemed an original.
10.9 PUBLICITY. The Sellers and the Buyer will consult with each
other and will mutually agree upon any publication or press release of any
nature with respect to this Agreement or the transactions contemplated hereby
and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by Law or by obligations
pursuant to any listing agreement with any securities exchange or any securities
exchange regulation, in which case the party proposing to issue such publication
or press release shall make all reasonable efforts to consult in good faith with
the other party or parties before issuing any such publication or press release
and shall provide a copy thereof to the other party or parties prior to such
issuance.
10.10 HEADINGS. The headings contained in this Agreement are for
reference only and do not affect in any way the meaning, interpretation or
effect of this Agreement.
10.11 SEVERABILITY. Any provision of this Agreement that is invalid,
illegal or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
10.12 FURTHER ASSURANCES. The parties shall execute such further
instruments and take such further actions as may be reasonably necessary to
carry out the intent of this Agreement. Each party hereto shall cooperate
affirmatively with the other parties, to the extent reasonably requested by such
other parties, to enforce rights and obligations herein provided.
10.13 SERVICE OF PROCESS; WAIVER OF JURY TRIAL. Each of the parties
agrees that service of any process, summons, notice or document to such party's
respective address listed above in one of the manners set forth in SECTION 10.6
will be deemed in every respect effective service of process in any such
Proceeding, and waives any objection it might otherwise have to
59
service of process under Law. Nothing herein will affect the right of any Person
to serve process in any other manner permitted by Law. The parties hereto hereby
irrevocably and unconditionally waive trial by jury in any Proceeding relating
to this Agreement or any other agreement entered into in connection herewith and
for any counterclaim with respect hereto.
10.14 SPECIFIC PERFORMANCE. The parties agree that irreparable
damages would occur if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent actual breaches or threatened breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court, in
addition to any other remedy to which they are entitled at law or in equity and
without the necessity of proving damages or posting a bond or other security.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
60
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed, in each case as of the date first above written.
THE COMPANY:
EXCELL MATERIALS, INC.
By: /s/ X. X. Xxxxx III
-----------------------------------
Name: X. X. Xxxxx III
Title: President/CEO
SELLERS:
XXXXXXX XXXXX MEZZANINE CAPITAL FUND III, L.P.
BY: Xxxxxxx Xxxxx Mezzanine Capital
Partners III, LLC, its general partner
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
WHISPERING PINES PARTNERS L.P.
BY: Connack LLC its General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Member
NATIONAL CITY BANK - TRUSTEE, XXXXXXXX INGERSOLL PC
RETIREMENT PLAN SHARES OF XXXXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx Xxxx
Title: Vice President
THE LENOX GROUP, LLC
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
XXXXXXX X. XXXXX FAMILY TRUST #1996
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
XX XX-IV ENTERPRISES LLC DEFINED BENEFIT PLAN
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Trustee
C&D PARTNERS
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Partner
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
WELSH ROAD PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx, its General Partner
BUYER:
HARSCO CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: President, Chief Financial Officer
and Treasurer
SELLERS REPRESENTATIVE:
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
