ASSET PURCHASE AGREEMENT Among GT ACQUISITION COMPANY, and GREENVILLE TUBE, LLC JULY 1, 2003
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1. | DEFINITIONS AND USAGE | 1 | ||||||||
1.1 | Definitions | 1 | ||||||||
1.2 | Usage | 12 | ||||||||
2. | SALE AND TRANSFER OF ASSETS; CLOSING. | 13 | ||||||||
2.1 | Assets to be Sold | 13 | ||||||||
2.2 | Excluded Assets | 15 | ||||||||
2.3 | Consideration | 16 | ||||||||
2.4 | Liabilities | 16 | ||||||||
2.5 | Allocation | 19 | ||||||||
2.6 | Closing | 19 | ||||||||
2.7 | Closing Obligations | 20 | ||||||||
2.8 | Adjustment Amount and Payment | 23 | ||||||||
2.9 | Adjustment Procedure | 23 | ||||||||
2.10 | Consents | 25 | ||||||||
2.11 | Accounts Receivable | 26 | ||||||||
2.12 | Contingent Note | 27 | ||||||||
2.13 | Termination of Promissory Note | 27 | ||||||||
3. | REPRESENTATIONS AND WARRANTIES OF SELLER | 28 | ||||||||
3.1 | Organization and Good Standing; Name | 28 | ||||||||
3.2 | Enforceability; Authority; No Conflict | 28 | ||||||||
3.3 | Capitalization | 30 | ||||||||
3.4 | Financial Statements | 30 | ||||||||
3.5 | Books and Records | 30 | ||||||||
3.6 | Sufficiency of Assets | 31 | ||||||||
3.7 | Description of Owned Real Property | 31 | ||||||||
3.8 | The Leased Real Property | 31 | ||||||||
3.9 | Title to Assets; Encumbrances | 31 | ||||||||
3.10 | Condition of Facilities | 32 | ||||||||
3.11 | Accounts Receivable | 32 | ||||||||
3.12 | Inventories | 33 | ||||||||
3.13 | No Undisclosed Liabilities | 33 | ||||||||
3.14 | Taxes | 33 | ||||||||
3.15 | No Material Adverse Change | 35 | ||||||||
3.16 | Employee Benefits | 35 | ||||||||
3.17 | Compliance with Legal Requirements; Governmental Authorizations | 37 | ||||||||
3.18 | Legal Proceedings; Orders | 39 | ||||||||
3.19 | Absence of Certain Changes and Events | 40 | ||||||||
3.20 | Contracts; No Defaults | 41 |
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3.21 | Insurance | 44 | ||||||||
3.22 | Environmental Matters | 45 | ||||||||
3.23 | Employees | 47 | ||||||||
3.24 | Labor Disputes; Compliance | 48 | ||||||||
3.25 | Intellectual Property Assets | 49 | ||||||||
3.26 | Parent Ownership of Assets | 52 | ||||||||
3.27 | Compliance with the Foreign Corrupt Practices Act and Export Control and Antiboycott Laws | 52 | ||||||||
3.28 | Relationships With Related Persons | 53 | ||||||||
3.29 | Brokers or Finders | 54 | ||||||||
3.30 | Securities Law Matters | 54 | ||||||||
4. | REPRESENTATIONS AND WARRANTIES OF BUYER | 55 | ||||||||
4.1 | Organization and Good Standing | 55 | ||||||||
4.2 | Authority; No Conflict | 55 | ||||||||
4.3 | Certain Proceedings | 55 | ||||||||
4.4 | Brokers or Finders | 56 | ||||||||
4.5 | Sufficient Funds | 56 | ||||||||
5. | [Intentionally Omitted] | 56 | ||||||||
6. | [Intentionally Omitted] | 56 | ||||||||
7. | CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE | 56 | ||||||||
7.1 | Consents | 56 | ||||||||
7.2 | Additional Documents | 56 | ||||||||
7.3 | Title Insurance | 57 | ||||||||
7.4 | Governmental Authorizations | 57 | ||||||||
7.5 | Employees | 57 | ||||||||
7.6 | Ancillary Agreements | 57 | ||||||||
7.7 | Financing | 57 | ||||||||
7.8 | Management Investment | 57 | ||||||||
8. | CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE | 57 | ||||||||
8.1 | Consents | 57 | ||||||||
9. | NO TERMINATION | 58 | ||||||||
10. | ADDITIONAL COVENANTS | 58 | ||||||||
10.1 | Employees and Employee Benefits | 58 | ||||||||
10.2 | Payment of Certain Taxes | 61 | ||||||||
10.3 | Payment of Other Retained Liabilities | 61 | ||||||||
10.4 | Financial Information | 61 | ||||||||
10.5 | Removing Excluded Assets | 61 |
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10.6 | Reports and Returns | 62 | ||||||||
10.7 | Assistance in Proceedings | 62 | ||||||||
10.8 | Noncompetition, Nonsolicitation and Nondisparagement | 62 | ||||||||
10.9 | Customer and Other Business Relationships | 63 | ||||||||
10.10 | Retention of and Access to Records | 64 | ||||||||
10.11 | Further Assurances | 64 | ||||||||
10.12 | TCE Sealant | 64 | ||||||||
10.13 | Master Lease Payments | 64 | ||||||||
10.14 | Effective Date | 64 | ||||||||
11. | INDEMNIFICATION; REMEDIES | 65 | ||||||||
11.1 | Survival | 65 | ||||||||
11.2 | Indemnification and Reimbursement by Seller | 65 | ||||||||
11.3 | Indemnification and Reimbursement by Seller — Environmental Matters | 66 | ||||||||
11.4 | Indemnification and Reimbursement by Buyer | 74 | ||||||||
11.5 | Limitations on Amount — Seller | 76 | ||||||||
11.6 | Limitations on Amount — Buyer | 76 | ||||||||
11.7 | Time Limitations | 76 | ||||||||
11.8 | Right of Setoff | 77 | ||||||||
11.9 | Third-Party Claims | 78 | ||||||||
11.10 | Direct Claims | 79 | ||||||||
11.11 | Insurance; Tax | 79 | ||||||||
11.12 | Limitation on Consequential Damages | 80 | ||||||||
11.13 | Payment of Claims | 80 | ||||||||
11.14 | Exclusive Means | 80 | ||||||||
11.15 | Indemnification in Case of Strict Liability or Indemnitee Negligence | 80 | ||||||||
11.16 | Facility Lease | 80 | ||||||||
12. | CONFIDENTIALITY | 81 | ||||||||
12.1 | Definition of Confidential Information | 81 | ||||||||
12.2 | Restricted Use of Confidential Information | 82 | ||||||||
12.3 | Exceptions | 82 | ||||||||
12.4 | Legal Proceedings | 82 | ||||||||
12.5 | Return or Destruction of Confidential Information | 83 | ||||||||
12.6 | Attorney-Client Privilege | 83 | ||||||||
12.7 | Tax Disclosure | 83 | ||||||||
13. | GENERAL PROVISIONS | 84 | ||||||||
13.1 | Expenses | 84 | ||||||||
13.2 | Public Announcements | 84 | ||||||||
13.3 | Notices | 84 | ||||||||
13.4 | Jurisdiction; Service of Process | 85 | ||||||||
13.5 | Enforcement of Agreement | 85 | ||||||||
13.6 | Waiver; Remedies Cumulative | 86 |
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13.7 | Entire Agreement and Modification | 86 | ||||||||
13.8 | Disclosure Schedule | 86 | ||||||||
13.9 | Assignments, Successors and No Third-Party Rights | 86 | ||||||||
13.10 | Severability | 87 | ||||||||
13.11 | Construction | 87 | ||||||||
13.12 | Time of Essence | 87 | ||||||||
13.13 | Governing Law | 87 | ||||||||
13.14 | Execution of Agreement | 87 |
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(a) | any disposal, discharge, Release or presence in the Environment of any Hazardous Material on, under or from the Facility; | ||
(b) | any fine, penalty, judgment, award, settlement, legal or administrative proceeding, damages, loss, claim, demand or response, investigation, remedial or inspection cost or expense arising under any Environmental Law or Occupational Health and Safety Law; | ||
(c) | financial responsibility under any Environmental Law or Occupational Health and Safety Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment or other remediation or response actions (“Cleanup”) and for any natural resource damages; or | ||
(d) | any other compliance, corrective, investigative, or remedial measure required under any Environmental Law or Occupational Safety and Health Law. |
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(a) | nation, state, county, city, town, borough, village, district or other jurisdiction; | ||
(b) | federal, state, local, municipal, or other government; | ||
(c) | governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental powers); | ||
(d) | body exercising or legally entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; or | ||
(e) | official of any of the foregoing. |
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(a) | the named individual is actually aware of that fact or matter; or | ||
(b) | the named individual would discover such fact or matter after conducting a reasonable investigation (consistent with his or her duties) of the books and Records, and making reasonable inquiry of employees, agents, and representatives of Seller and the Prior Owner regarding the accuracy of an applicable representation or warranty contained in this Agreement. |
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(a) | is consistent in all material respects in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person; and | ||
(b) | does not require authorization by the board of directors, board of managers, shareholders, partners, or members of such Person (or by any Person or group of Persons exercising similar authority). |
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(a) | each other member of such individual’s Family; | ||
(b) | any Person that is directly or indirectly controlled by any one or more members of such individual’s Family; | ||
(c) | any Person in which members of such individual’s Family hold (individually or in the aggregate) a Material Interest; and | ||
(d) | any Person with respect to which one or more members of such individual’s Family serves as a director, officer, partner, executor or trustee (or in a similar capacity). |
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(a) | any Person that directly or indirectly controls, is directly or indirectly controlled by or is directly or indirectly under common control with such specified Person; | ||
(b) | any Person that holds a Material Interest in such specified Person; | ||
(c) | any person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity); | ||
(d) | any Person in which such specified Person holds a Material Interest; and | ||
(e) | any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity). |
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1.2 | USAGE |
(a) | Interpretation. In this Agreement, unless a clear contrary intention appears: |
(i) | the singular number includes the plural number and vice versa; | ||
(ii) | reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, reference to a Person in a particular capacity excludes such Person in any other capacity or individually, and reference to a Person does not include the Person’s predecessors unless specifically indicated to the contrary; | ||
(iii) | reference to any gender includes each other gender; | ||
(iv) | reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; | ||
(v) | reference to any Legal Requirement in any representation or warranty means such Legal Requirement as amended, modified, codified, replaced or reenacted, in whole or in part, and currently |
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or previously in effect, including all currently or previously effective rules and regulations promulgated thereunder; | |||
(vi) | “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof; | ||
(vii) | “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; | ||
(viii) | “or” is used in the inclusive sense of “and/or”; | ||
(ix) | with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”; and | ||
(x) | references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto. |
(b) | Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP. | ||
(c) | Legal Representation of the Parties. This Agreement was negotiated by the parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation hereof. |
2. | SALE AND TRANSFER OF ASSETS; CLOSING. |
2.1 | Assets to be Sold |
(a) | Xxxxx Cash; | ||
(b) | all Tangible Personal Property, including those items (including trade fixtures) described in Part 2.1(b) of the Disclosure Schedule; |
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(c) | all Inventories existing on the Closing Date, all of which are listed on Part 2.1(c) of the Disclosure Schedule (the “Purchased Inventory”); | ||
(d) | all Accounts Receivable existing on the Closing Date other than those excluded under Section 2.2(l), all of which are listed on Part 2.1(d) of the Disclosure Schedule (the “Purchased Receivables”); | ||
(e) | except as provided in Section 2.2(e), all Seller Contracts that are Assumed Contracts, all of which are listed in Part 3.20(a) of the Disclosure Schedule (including all outstanding offers or solicitations made by or to Seller to enter into any Contract, all of which are also separately listed on Part 3.20(a) of the Disclosure Schedule); | ||
(f) | all Governmental Authorizations and all pending applications therefor or renewals thereof, in each case to the extent transferable to Buyer, including those listed in Part 3.17(b) of the Disclosure Schedule; | ||
(g) | other than any Records related to the Diversion Agreement or matters related to it, all data and Records related to the operations of Seller, including client and customer lists and Records, referral sources, research and development reports and Records, production reports and Records, service and warranty Records, equipment logs, operating guides and manuals, financial and accounting Records, creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and Records and, subject to Legal Requirements, copies of all personnel Records and other Records described in Section 2.2(f); provided, however, that Seller may retain copies of such Records; | ||
(h) | all of the intangible rights and property of Seller, including Intellectual Property Assets and the names “Greenville Tube, LLC,” “Greenville Tube Corporation” and “Greenville Tube,” going concern value, goodwill, telephone, telecopy and e-mail addresses and listings and those items listed in Parts 3.25(d), (e), (f) and (h) of the Disclosure Schedule; | ||
(i) | all claims of Seller against third parties relating to the Assets, whether xxxxxx or inchoate, known or unknown, contingent or noncontingent, including all such claims listed in Part 2.1(i) of the Disclosure Schedule; and | ||
(j) | all Prepaid Expenses, other than those listed in Parts 2.2(c) and 2.2(h) of the Disclosure Schedule. |
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2.2 | Excluded Assets. |
(a) | the Owned Real Property, subject to the rights of Buyer under the Facility Lease; | ||
(b) | all minute books, equity security Records, company seals, and Records related to the Member’s capital contributions to the Seller; | ||
(c) | those rights relating to the deposits and prepaid expenses and claims for refunds and rights to offset in respect thereof listed in Part 2.2(c) of the Disclosure Schedule; | ||
(d) | all insurance policies and rights thereunder; | ||
(e) | each of the Seller Contracts (including any and all software licenses which are not assignable) that is not an Assumed Contract, including, without limitation, those listed in Part 2.2(e) of the Disclosure Schedule, and any employment, severance, termination, salary continuation, retention, stay-bonus, or similar agreements with Seller’s employees; | ||
(f) | all personnel Records and other Records that Seller is required by law to retain in its possession; | ||
(g) | all Tax assets; | ||
(h) | all claims for refund of Taxes and other governmental charges listed on Part 2.2(h) of the Disclosure Schedule; | ||
(i) | all rights in connection with and assets of the Employee Plans; | ||
(j) | all rights of Seller under this Agreement, the Earnout Agreement, the Facility Lease, the Xxxx of Sale, the Assignment and Assumption Agreement, the Lease Assignment, Assignment of Intellectual Property, Noncompetition Agreement, the Subordination Agreement, the Buyer Subordination Agreement, the Promissory Note, and the Contingent Note, (collectively, the “Transaction Documents”); | ||
(k) | except as otherwise agreed by Buyer and Seller, all insurance benefits, insurance policies and all prepaid insurance premiums of Seller; | ||
(l) | all accounts receivable from the Member or any Related Person of Seller or the Member; |
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(m) | that certain Agreement for Pre-Trial Diversion executed by Seller on July 2, 2002 in connection with the GT Proceeding and any other agreement, instrument, or document associated therewith (collectively, the “Diversion Agreement”); | ||
(n) | the ADEQ Consent Order and all other agreements of Seller and its Affiliates with the ADEQ; | ||
(o) | all of Seller’s cash, cash equivalents, and short term investments (except Xxxxx Cash); and | ||
(p) | any and all rights in or to the names “Chart,” “Chart Industries,” or any derivative thereof. |
2.3 | Consideration. |
2.4 | Liabilities. |
(a) | Assumed Liabilities. On the Closing Date, but effective as of the Effective Time, Buyer shall assume and agree to discharge only the following Liabilities of Seller (the “Assumed Liabilities”): |
(i) | any trade account payable listed on Part 2.4(a)(i) of the Disclosure Schedule (other than a trade account payable to the Member, Parent or a Related Person of Seller, Parent, or the Member); | ||
(ii) | any unpaid accrued expenses of the kind described on Part 2.4(a)(ii) of the Disclosure Schedule; | ||
(iii) | any Liability to Seller’s customers incurred by Seller in the Ordinary Course of Business for nondelinquent orders outstanding as of the Effective Time reflected on Seller’s books (other than any |
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Liability arising out of or relating to a Breach that occurred prior to the Effective Time); | |||
(iv) | any Liability to Seller’s customers under written warranty agreements in the forms disclosed in Part 2.4(a)(iv) of the Disclosure Schedule given by Seller to its customers in the Ordinary Course of Business prior to the Effective Time (other than a Liability arising out of or relating to a Breach that occurred before the Effective Time); and | ||
(v) | any Liability arising after the Effective Time under the Assumed Contracts (other than any Liability arising under the Seller Contracts described on Part 2.4(a)(v) of the Disclosure Schedule or arising out of or relating to a Breach that occurred prior to the Effective Time). |
(b) | Retained Liabilities. The Retained Liabilities shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller. “Retained Liabilities” shall mean every Liability of Seller other than the Assumed Liabilities, including: |
(i) | any Liability arising out of or relating to products of Seller to the extent manufactured or sold prior to the Effective Time other than to the extent assumed under Section 2.4(a)(iii), (iv) or (v) and Buyer’s obligations under Section 11.2(d); | ||
(ii) | any Liability under any Assumed Contract that arises after the Effective Time but that arises out of or relates to any Breach that occurred prior to the Effective Time; | ||
(iii) | any Liability for Taxes not specifically assumed under Section 2.4(a), including (A) any Taxes arising as a result of Seller’s or the Prior Owner’s operation of its business or ownership of the Assets before the Effective Time, (B) any Taxes that will arise, as a result of the sale of the Assets pursuant to this Agreement but excluding Taxes relating to the transfer and registration of any vehicles included in the Assets listed on Part 2.4(b)(iii) of the Disclosure Schedule that Buyer will assume and pay, and (C) any deferred Taxes of any nature; | ||
(iv) | any Liability (including interest) under any Seller Contract (other than the Assumed Contracts), including any Liability arising out of or relating to Seller’s credit facilities or any security interest related thereto or any liability under any retention or salary continuation agreement with employees of Seller; |
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(v) | any Environmental Liabilities of Seller or any of its Related Persons that relate to acts, omissions or the condition of the Facilities or any other property on or prior to the Closing Date; | ||
(vi) | any Liability arising out of, or relating to Seller’s failure to comply with the ADEQ Consent Order; | ||
(vii) | any Liability of Seller or any of its Related Persons under the Employee Plans (including liability for any underfunding and accrued expenses for group insurance) or relating to sick leave, workers’ compensation, unemployment benefits, pension benefits, employee equity security option or profit-sharing plans, health care plans or benefits or any other employee plans or benefits of any kind (including payment of all life insurance premiums and life insurance death benefits relating to all life insurance policies offered by Seller, whether Seller is self-insured for the same or not, including, without limitation, those set forth on Part 3.32(b) of the Disclosure Schedule) for Seller’s employees or former employees or both; | ||
(viii) | any Liability of Seller or any of its Related Persons under any employment, severance, retention, stay bonus, salary continuation, or termination agreement with any employee of Seller or any of its Related Persons; | ||
(ix) | any Liability of Seller or any of its Related Persons arising out of or relating to any employee grievance with respect to any period before the Effective Time; | ||
(x) | any Liability of Seller to the Member or Related Person of Seller or the Member; | ||
(xi) | any Liability of Seller or any of its Related Persons to indemnify, reimburse or advance amounts to any officer, manager, employee or agent of Seller; | ||
(xii) | any Liability of Seller to distribute to the Member or otherwise apply all or any part of the consideration received hereunder; | ||
(xiii) | any Liability of Seller or any of its Related Persons arising out of any Proceeding pending as of the Effective Time (including the GT Proceeding or the Diversion Order); | ||
(xiv) | any Liability of Seller or any of its Related Persons arising out of any Proceeding commenced after the Effective Time and arising out of or relating to any occurrence or event happening before the Effective Time, with the exception of any such Liability of Seller |
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arising as a result of Buyer’s failure to perform or satisfy any Assumed Liability; | |||
(xv) | any Liability of Seller or any of its Related Persons arising out of or resulting from Seller’s compliance or noncompliance with any Legal Requirement or Order of any Governmental Body arising from, or related to, operation of the Business by Seller or the Prior Owner during the period prior to the Closing Date; | ||
(xvi) | any Liability of Seller or any of its Related Persons under this Agreement or any other document executed in connection with the Contemplated Transactions; | ||
(xvii) | any other Liability (other than an Assumed Liability) arising out of the ownership or operation of the Assets or the Facility before the Effective Time; | ||
(xviii) | any Liability of Seller or any of its Related Persons based upon Seller’s or such Related Person’s acts or omissions occurring after the Effective Time; | ||
(xix) | any Liability not specified in this Section 2.4(b) and excluded from assumption under Sections 2.4(a)(i)-(v); and | ||
(xx) | accrued expenses payable to or on behalf of the Member or a Related Person of the Seller or Member. |
2.5 | Allocation. |
2.6 | Closing. |
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2.7 | Closing Obligations. |
(a) | Seller shall deliver to Buyer the following: |
(i) | a xxxx of sale for all of the Assets that are Tangible Personal Property in the form of Exhibit 2.7(a)(i) (the “Xxxx of Sale”) executed by Seller; | ||
(ii) | an assignment of all of the Assets that are intangible personal property other than Intellectual Property Assets in the form of Exhibit 2.7(a)(ii), which assignment shall also contain Buyer’s undertaking and assumption of the Assumed Liabilities (the “Assignment and Assumption Agreement”) executed by Seller; | ||
(iii) | for each interest in Real Property identified on Parts 3.7 and 3.8 of the Disclosure Schedule, (x) a lease and memorandum of Lease in the form of Exhibit 2.7(a)(iii)(x) (collectively, the “Facility Lease”) executed by Seller, (y) an Assignment and Assumption of Lease in the form of Exhibit 2.7(a)(iii)(y) (the “Lease Assignment”), or (z) such other appropriate document or instrument of transfer, as the case may require, each in form and substance satisfactory to Buyer and its counsel and executed by Seller; | ||
(iv) | assignments of all Intellectual Property Assets and separate assignments of all registered Marks, Patents and Copyrights in the forms set forth in Exhibit 2.7(a)(iv) executed by Seller; | ||
(v) | a Registrant Name Change Agreement, executed by Seller, transferring the right to the website xxx.xxxxxxxxxxxxxx.xxx to Buyer, in the form of Exhibit 2.7(a)(v); | ||
(vi) | such other bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by Buyer, each in form and substance satisfactory to Buyer and its legal counsel and executed by Seller; | ||
(vii) | noncompetition agreement in the form of Exhibit 2.7(a)(vii), executed by Seller, Member, and Parent (the “Noncompetition Agreement”); | ||
(viii) | evidence satisfactory to Buyer of the termination of the employment agreements and salary continuation agreements listed on Exhibit 2.7(a)(viii), on terms and conditions satisfactory to Seller; |
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(ix) | a Guaranty in the form attached to this Agreement, executed by Member and Parent; | ||
(x) | a certificate of the Secretary of Seller certifying, as complete and accurate as of the Closing, attached copies of the Governing Documents of Seller, certifying and attaching all requisite resolutions or actions of Seller’s sole manager and Member approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions and the change of Seller’s name to GTC of Clarksville, LLC, and certifying to the incumbency and signatures of the officers of Seller executing this Agreement and any other document relating to the Contemplated Transactions and accompanied by the requisite documents for amending the relevant Governing Documents of Seller required to effect such change of name in form sufficient for filing with the appropriate Governmental Body; | ||
(xi) | a certificate of the Secretary of the Member certifying as complete and accurate as of the Closing attached copies of the Governing Documents of the Member, certifying and attaching requisite resolutions of the Member’s board of directors approving the execution and delivery of this Agreement and the other agreements and documents relating to the Contemplated Transactions to be executed and delivered by the Member, and certifying to the incumbency and signatures of the officers of the Member executing this Agreement and any other agreements or documents relating to the Contemplated Transactions; | ||
(xii) | an Earnout Agreement in the form of Exhibit 2.7(a)(xii) executed by Seller (the “Earnout Agreement”); | ||
(xiii) | the consent of the lessor to the Lease Assignment of the Office Lease and the consent of any other lessor to the Lease Assignment of any other Leased Real Property; | ||
(xiv) | an owner’s affidavit related to the Owned Real Property in the form of Exhibit 2.7(a)(xiv) executed by Seller; | ||
(xv) | such affidavits as the issuer(s) of the title insurance policies specified in Section 7.3 may require; | ||
(xvi) | Consents, where required, of the other contracting Persons to the Assumed Contracts; | ||
(xvii) | A subordination agreement with the Buyer’s senior secured lender (or the agent thereof) (the “Subordination Agreement”) executed by Seller; |
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(xviii) | A subordination agreement with Buyer (the “Buyer Subordination Agreement”) executed by Seller; | ||
(xix) | Nineteen Thousand Eight Hundred Eighty One Dollars Fifty-five Cents Dollars ($19,881.55), representing an amount equal to fifty percent (50%) of the fee payable by Buyer for the Phase II assessment conducted by Buyer pursuant to an Access Agreement between Seller and Capital for Business, Inc., dated December 9, 2002, which amount has been paid to Buyer through a reduction in the amount to be wire transferred to Seller under Section 2.7(b)(i); and | ||
(xx) | Such other agreements, documents, and instruments as Buyer may reasonably request, including, without limitation, certificates of good standing of Seller, Member, and Parent in their states of incorporation, Certificate of Seller’s good standing as a foreign corporation in the States of Arkansas and Pennsylvania, and Certificates of no tax due for Seller in the States of Arkansas and Pennsylvania. |
(b) | Buyer shall deliver to Seller and Member, as the case may be: |
(i) | Thirteen Million Four Hundred Fifty Thousand Dollars ($13,450,000.00) by wire transfer to the account set forth on Part 2.7(b)(i) of the Disclosure Schedule; |
(ii) | A promissory note executed by Buyer and payable to Seller in the principal amount of One Million Nine Hundred Fifty Thousand Dollars ($1,950,000.00) in the form of Exhibit 2.7(b)(ii) (the “Promissory Note”); | ||
(iii) | the Assignment and Assumption Agreement executed by Buyer; | ||
(iv) | the Facility Lease executed by Buyer | ||
(v) | the Lease Assignment executed by Buyer; | ||
(vi) | the Noncompetition Agreement executed by Buyer; | ||
(vii) | the Buyer Subordination Agreement executed by the Buyer; | ||
(viii) | a certificate of the Secretary of Buyer certifying, as complete and accurate as of the Closing, attached copies of the Governing Documents of Buyer and certifying and attaching all requisite resolutions or actions of Buyer’s board of directors approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions and certifying to the incumbency |
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and signatures of the officers of Buyer executing this Agreement and any other document relating to the Contemplated Transactions; | |||
(ix) | an Earnout Agreement in the form of Exhibit 2.7(a)(xii) executed by Buyer; | ||
(x) | Buyer check in the amount of the Xxxxx Cash; and | ||
(xi) | Copies of (i) certificate of good standing of Buyer in Delaware, (ii) certificate of good standing of Buyer as a foreign corporation in Arkansas, and (iii) such other state certificates as Buyer simultaneously provides to LaSalle Business Credit, LLC. |
2.9 | Adjustment Procedure. |
(a) | “Working Capital” as of a given date shall mean the amount calculated by subtracting (i) the sum on such date of Seller’s (1) trade accounts payable and listed on Part 2.4(a)(i) of the Disclosure Schedule, (2) accrued expenses specified in Section 2.4(a)(ii) and set for on Part 2.4(a)(ii) of the Disclosure Schedule, and (3) advances to its customers arising in the Ordinary Course of Business from (ii) the sum on such date of (1) the Purchased Receivables, (2) Prepaid Expenses and (3) the Purchased Inventory. Deferred Taxes shall not be included in items 1 through 3 of clause (ii) above. All amounts payable to or receivable from Related Persons of the Seller shall be excluded from the calculation of Working Capital on any date. Seller’s cash, cash equivalents, and short term investments shall not be included in the computation of Working Capital. In computing Working Capital, there shall be no accruals for product warranty or product return claims, and the parties shall include in accrued |
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employee expenses only accruals for the Hired Active Employees that Buyer specifies on the Closing Date as employees it expects to hire. Accrued employee expenses shall not include accruals of retention bonuses or payments or amounts payable to pension or other retirement plans to which Seller contributes. Neither the Purchased Receivables nor the Purchased Inventory shall be subject to any reserves. | |||
(b) | Buyer shall prepare financial statements (“Closing Financial Statements”) of Seller as of the Effective Time in accordance with the accounting principles, policies and practices historically used by Seller and set forth on Exhibit 2.9. Buyer shall then determine the Working Capital as of the Effective Time (the “Closing Working Capital”) based upon the Closing Financial Statements and using the methodology specified in Section 2.9(a) and Exhibit 2.9. Buyer shall deliver the Closing Financial Statements and its determination of the Closing Working Capital to Seller within sixty (60) days following the Closing Date. | ||
(c) | If, within thirty (30) days following delivery of the Closing Financial Statements and the Closing Working Capital calculation, Seller has not given Buyer written notice of its objection as to the Closing Working Capital calculation (which notice shall state the basis of Seller’s objection in reasonable detail), then the Closing Working Capital calculated by Buyer shall be binding and conclusive on the parties and be used in computing the Adjustment Amount. | ||
(d) | If Seller duly gives Buyer such notice of objection, and if Seller and Buyer fail to resolve the issues outstanding with respect to the Closing Financial Statements and the calculation of the Closing Working Capital within thirty (30) days of Buyer’s receipt of Seller’s objection notice, Seller and Buyer shall submit the issues remaining in dispute to Xxxxx Xxxxxxxx LLP in Chicago, Illinois, (the “Independent Accountants”) for resolution applying the principles, policies and practices referred to in Section 2.9(a) and Exhibit 2.9. If issues are submitted to the Independent Accountants for resolution, (i) Seller and Buyer shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (ii) the determination by the Independent Accountants, as set forth in a notice to be delivered to both Seller and Buyer within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute, shall be final, binding and conclusive on the parties and shall be used in the calculation of the Closing Working Capital; and (iii) Seller and Buyer will each bear fifty percent (50%) of the fees and costs of the Independent Accountants for |
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such determination. Set forth on Exhibit 2.9.1 is a calculation of the estimated Working Capital of Seller as of June 30, 2003. |
2.10 | Consents. |
(a) | If there are any Material Consents that have not yet been obtained (or otherwise are not in full force and effect as of the Closing, in the case of each Seller Contract as to which such Material Consents were not obtained (or otherwise are not in full force and effect) (the “Restricted Material Contracts”), Buyer may waive the closing conditions as to any such Material Consent and either: |
(i) | elect to have Seller continue its efforts to obtain the Material Consents; or | ||
(ii) | elect to have Seller retain that Restricted Material Contract and all Liabilities arising therefrom or relating thereto. | ||
If Buyer elects to have Seller continue its efforts to obtain any Material Consents, notwithstanding Sections 2.1 and 2.4, neither this Agreement nor the Assignment and Assumption Agreement nor any other document related to the consummation of the Contemplated Transactions shall constitute a sale, assignment, assumption, transfer, conveyance or delivery or an attempted sale, assignment, assumption, transfer, conveyance or delivery of the Restricted Material Contracts, and following the Closing, the parties shall use Best Efforts, and cooperate with each other, to obtain the Material Consent relating to each Restricted Material Contract as quickly as practicable. Pending the obtaining of such Material Consents relating to any Restricted Material Contract, the parties shall cooperate with each other in any reasonable and lawful arrangements designed to provide to Buyer the benefits of use of the Restricted Material Contract for its term (or any right or benefit arising thereunder, including the enforcement for the benefit of Buyer of any and all rights of Seller against a third party thereunder). Once a Material Consent for the sale, assignment, assumption, transfer, conveyance and delivery of a Restricted Material Contract is obtained, Seller shall promptly assign, transfer, convey and deliver such Restricted Material Contract to Buyer, and Buyer shall assume the obligations under such Restricted Material Contract assigned to Buyer from and after the date of assignment to Buyer pursuant to a special-purpose assignment and assumption agreement substantially similar in terms to those of the Assignment and Assumption Agreement (which special-purpose agreement the parties shall prepare, execute and deliver in good faith at the time of such transfer, all at no additional cost to Buyer). |
(b) | If there are any Consents not listed on Exhibit 7.1 necessary for the assignment and transfer of any Assumed Contracts (the “Nonmaterial |
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Consents”) which have not yet been obtained (or otherwise are not in full force and effect) as of the Closing, Buyer shall elect at the Closing, in the case of each of the Seller Contracts as to which such Nonmaterial Consents were not obtained (or otherwise are not in full force and effect) (the “Restricted Nonmaterial Contracts”), whether to: |
(i) | Accept the assignment of such Restricted Nonmaterial Contract, in which case, as between Buyer and Seller, such Restricted Nonmaterial Contract shall, to the maximum extent practicable and notwithstanding the failure to obtain the applicable Nonmaterial Consent, be transferred at the Closing pursuant to the Assignment and Assumption Agreement as elsewhere provided under this Agreement; or | ||
(ii) | Reject the assignment of such Restricted Nonmaterial Contract, in which case, notwithstanding Sections 2.1 and 2.4, (A) neither this Agreement nor the Assignment and Assumption Agreement nor any other document related to the consummation of the Contemplated Transactions shall constitute a sale, assignment, assumption, conveyance or delivery or an attempted sale, assignment, assumption, transfer, conveyance or delivery of such Restricted Nonmaterial Contract, and (B) Seller shall retain such Restricted Nonmaterial Contract and all Liabilities arising therefrom or relating thereto. |
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3. | REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to Buyer as follows: |
(a) | Part 3.1(a) of the Disclosure Schedule contains a complete and accurate list of Seller’s jurisdiction of organization and any other jurisdictions in which Seller is qualified to do business as a foreign entity. Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with full power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under the Seller Contracts. Seller is duly qualified to do business as a foreign entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except for the failure to be so qualified would not have a material adverse affect on Seller. | ||
(b) | Complete and accurate copies of the Governing Documents of Seller as currently in effect, are attached to Part 3.1(b) of the Disclosure Schedule. | ||
(c) | Seller does not have any Subsidiaries and does not, directly or indirectly, own any shares of capital stock or other securities of any other Person. | ||
(d) | Since January 1, 1998, the Business has been operated only under the names “Greenville Tube,” “Greenville Tube, LLC,” and the “Greenville Tube division of Chart, Inc.” |
(a) | This Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements affecting creditors’ rights generally and by general principles of equity or the fact that specific performance or other equitable remedies are within the |
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discretion of any court. Upon the execution and delivery by Seller, Parent, and Member of each Transaction Document to which it is a party by Seller, Parent, or the Member each Transaction Document will constitute the legal, valid and binding obligation of each of Seller, Parent, or the Member, as the case may be, enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements affecting creditors’ rights generally and by general principles of equity or the fact that specific performance or other equitable remedies are within the discretion of any court. Seller has the absolute and unrestricted right, power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party and to perform its obligations under this Agreement and such Transaction Documents, and such action has been duly authorized by all necessary action by Member and Seller’s board of managers. | |||
(b) | Except as set forth in Part 3.2(b) of the Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): |
(i) | Breach (A) any provision of any of the Governing Documents of Seller (B) any resolution adopted by the board of managers or Seller; | ||
(ii) | Breach or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal Requirement or any Order to which Seller or any of the Assets may be subject; | ||
(iii) | contravene, conflict with or result in a violation or breach of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by Seller or any of its Subsidiaries or that otherwise relates to the Assets or to the business of Seller or any of its Subsidiaries; | ||
(iv) | Breach any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify, any Assumed Contract; or | ||
(v) | result in the imposition or creation of any Encumbrance upon or with respect to any of the Assets, (other than Encumbrances to be imposed in connection with Buyer’s financing of the Contemplated Transaction). |
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(c) | Except as set forth in Part 3.2(c) of the Disclosure Schedule, Seller is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions. |
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(a) | Seller owns fee simple title to its respective estates in the Owned Real Property free and clear of any Encumbrances other than: |
(i) | liens for Taxes for the current year which are not yet due and payable; and | ||
(ii) | those described in Part 3.9(a) of the Disclosure Schedule (“Permitted Real Property Encumbrances”). |
Seller has delivered true and complete copies of (A) all deeds, existing title insurance policies and surveys of or pertaining to the Owned Real Property and (B) all instruments, agreements and other documents evidencing, creating or constituting any Permitted Real Property Encumbrances to Buyer. Seller warrants to Buyer that the Leased Real Property is free and clear of all Encumbrances other than Permitted Real Property Encumbrances. |
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(b) | Seller owns good and transferable title to all Assets other than Real Property free and clear of any Encumbrances other than those described in Part 3.9(b) of the Disclosure Schedule (“Permitted Non-Real Property Encumbrances” and together with Permitted Real Property Encumbrances, “Permitted Encumbrances”). | ||
(c) | The Owned Real Property and Leased Real Property are the only real property owned, leased, or used by Seller. |
(a) | To the Knowledge of Seller use of the Owned Real Property for the various purposes for which it is presently being used is permitted as of right under all applicable zoning legal requirements and is not subject to “permitted nonconforming” use or structure classifications. All Improvements on the Owned Real Property are in compliance with all applicable Legal Requirements, including those pertaining to zoning, building and the disabled, are in good repair and in good condition, ordinary wear and tear excepted, and are free from latent and patent defects. The Land included in the Owned Real Property abuts on and has direct vehicular access to a public road or has access to a public road via a permanent, irrevocable, appurtenant easement benefiting such Land is supplied with public or quasi-public utilities and other services appropriate for the operation of the Owned Real Property (as conducted or operated by Seller) located thereon. To the Knowledge of Seller, there is no existing or proposed plan to modify or realign any street or highway or any existing or proposed eminent domain proceeding that would result in the taking of all or any part of any Facility or that would prevent or hinder the continued use of any Facility as heretofore used in the conduct of the business of Seller. There are no leases or other rights of occupancy (other than Seller’s right of occupancy) of the Owned Real Property. | ||
(b) | Each item of Tangible Personal Property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business and is free from latent and patent defects. No item of Tangible Personal Property is in need of repair or replacement other than as part of routine maintenance in the Ordinary Course of Business. Except as disclosed in Part 3.10(b) of the Disclosure Schedule, all Tangible Personal Property used in Seller’s business is in the possession of Seller. |
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(a) | Tax Returns Filed and Taxes Paid. Since January 1, 1997, Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business) have each filed or caused to be filed on a timely basis all Tax Returns, reports, or requests for extensions with respect to Taxes relating to the Business that are or were required to be filed pursuant to applicable Legal Requirements. All of such Tax Returns relating to the Business filed by Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business) are true, correct and complete in all material respects. Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business) as the case may be, have paid, or made provision for the payment of, all Taxes relating to the Business that have or may have become due for all periods covered by the Tax Returns or otherwise (including amounts payable as a result of any Tax Audit or similar inquiry), except such Taxes, if any, as are listed in Part 3.14(a) of the Disclosure Schedule and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Balance Sheet and the Interim Balance Sheet. Except as provided in Part 3.14(a) of the Disclosure Schedule, neither Seller nor Prior Owner is currently the beneficiary of any extension of time within which to file any Tax Return. |
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No claim has been made by any Governmental Body in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the Assets that arose in connection with any failure (or alleged failure) to pay any Tax. | |||
(b) | Delivery of Tax Returns and Information Regarding Audits and Potential Audits. Seller has made available to Buyer copies of, and Part 3.14(b) of the Disclosure Schedule contains a complete and accurate list of, all Tax Returns described in the first sentence of Section 3.14(a). Part 3.14(b) of the Disclosure Schedule contains a complete and accurate list of all Tax Returns of Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business) relating to the Business currently under audit and accurately describe any deficiencies or other amounts that were paid or are currently being contested. All deficiencies proposed as a result of such audits have been paid, reserved against, settled or are being contested in good faith by appropriate proceedings as described in Part 3.14(b) of the Disclosure Schedule. Seller and Prior Owner have made available to Buyer, copies of any examination reports, statements or deficiencies or similar items with respect to such audits. Except as described in Part 3.14(b) of the Disclosure Schedule, neither Seller nor the Prior Owner (solely in their capacities as the prior owners and operators of the Business) have given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes concerning the Business for which Seller or the Prior Owners (solely in such capacities) may be liable. | ||
(c) | Specific Potential Tax Liabilities and Tax Situations. |
(i) | Withholding. All Taxes that Seller is or was required by Legal Requirement to withhold, deduct or collect have been duly withheld, deducted and collected and, to the extent required, have been paid to the proper Governmental Body or other Person. | ||
(ii) | Tax Sharing or Similar Agreements. There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes (including any advance pricing agreement, closing agreement or other arrangement relating to Taxes) that will require any payment by Seller. | ||
(iii) | Consolidated Group. Seller (A) has been a member of an affiliated group within the meaning of Code Section 1504(a) (or any similar group defined under a similar provision of state, local or foreign law) and (B) has no liability for Taxes of any person (other than |
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(a) | Set forth in Part 3.16(a) of the Disclosure Schedule is a complete and correct list of all “employee benefit plans” as defined by Section 3(3) of ERISA, all specified fringe benefit plans as defined in Section 6039D of the Code, and all other bonus, incentive-compensation, deferred-compensation, profit-sharing, security-option, security-appreciation-right, security-bonus, security-purchase, employee-security-ownership, savings, severance, change-in-control, supplemental-unemployment, layoff, salary-continuation, retirement, pension, health, life-insurance, disability, accident, group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan, and any other employee compensation or benefit plan, agreement, policy, practice, commitment, contract or understanding (whether qualified or non-qualified, currently effective or terminated, written or unwritten) and any trust, escrow or other agreement related thereto that (i) is currently maintained or contributed to by Seller or with respect to which Seller has liability, and (ii) provides benefits, or describes policies or procedures applicable to any current or former manager, officer, employee or service provider of Seller or the dependents of any thereof, regardless of how (or whether) liabilities for the provision of benefits are accrued or assets are acquired or dedicated with respect to the funding thereof (collectively the “Employee Plans”). Part 3.16(a) of the Disclosure Schedule identifies as such any Employee Plan that is (w) a “Defined Benefit Plan” (as defined in Section 414(1) of the Code), (x) a plan intended to meet the requirements of Section 401(a) of the Code, (y) a “Multiemployer Plan” (as defined in Section 3(37) of ERISA) or (z) a plan subject to Title IV of ERISA, other than a Multiemployer Plan. | ||
(b) | Seller has delivered to Buyer true, accurate and complete copies of (i) the documents comprising each Employee Plan (or, with respect to any Employee Plan which is unwritten, a detailed written description of eligibility, participation, benefits, funding arrangements, and assets), (ii) all trust agreements, insurance contracts or any other funding instruments related to the Employee Plans, (iii) all rulings, determination letters, no-action letters or advisory opinions from the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation (PBGC) or any other Governmental Body that pertain to each Employee Plan and any open requests therefor, (iv) all collective bargaining agreements pursuant to which contributions to any Employee Plan(s) have been made or |
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obligations incurred by Seller and all collective bargaining agreements pursuant to which contributions are being made or obligations are owed by such entities, and (v) all summary plan descriptions, summaries of material modifications and memoranda, employee handbooks and other written communications regarding the Employee Plans. | |||
(c) | [Intentionally Omitted] | ||
(d) | [Intentionally Omitted] | ||
(e) | [Intentionally Omitted] | ||
(f) | Seller has, at all times, complied, and currently complies, in all material respects with the applicable continuation requirements for its welfare benefit plans, including (1) Section 4980B of the Code (as well as its predecessor provision, Section 162(i) of the Code) and Sections 601 through 608, inclusive, of ERISA, which provisions are hereinafter referred to collectively as “COBRA” and (2) any applicable state statutes mandating health insurance continuation coverage for employees. | ||
(g) | The form of all Employee Plans is in material compliance with the applicable terms of ERISA, the Code, and any other applicable laws, including the Americans with Disabilities Act of 1990, the Family Medical Leave Act of 1993 and the Health Insurance Portability and Accountability Act of 1996, and such plans have been operated in material compliance with such laws and the written Employee Plan documents. Neither Seller nor any fiduciary of an Employee Plan has violated the requirements of Section 404 of ERISA. All required reports and descriptions of the Employee Plans (including Internal Revenue Service Form 5500 Annual Reports, Summary Annual Reports and Summary Plan Descriptions and Summaries of Material Modifications) have been (when required) timely filed with the IRS, the U.S. Department of Labor or other Governmental Body and distributed as required, and all notices required by ERISA or the Code or any other Legal Requirement with respect to the Employee Plans have been appropriately given. | ||
(h) | Each Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS. Each trust created under any Employee Plan has been determined to be exempt from taxation under Section 501(a) of the Code. Each Employee Welfare Benefit Plan (as defined in Section 3(1) of ERISA) that utilizes a funding vehicle described in Section 501(c)(9) of the Code or is subject to the provisions of Section 505 of the Code qualifies for tax-exempt status under Section 501(c)(9) of the Code or complies with Section 505 of the Code. | ||
(i) | [Intentionally Omitted] |
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(j) | Seller has maintained workers’ compensation coverage as required by applicable state law. | ||
(k) | [Intentionally Omitted] | ||
(l) | Except for the continuation coverage requirements of COBRA, Seller has no obligations or potential liability for benefits to employees, former employees or their respective dependents following termination of employment or retirement under any of the Employee Plans that are Employee Welfare Benefit Plans. | ||
(m) | Except as provided in Section 10.1(d) and except for Seller’s intention to freeze its pension plan, none of the Contemplated Transactions will result in an amendment, modification or termination of any of the Employee Plans. No written or oral representations have been made to any employee or former employee of Seller promising or guaranteeing any employee payment or funding for the continuation of medical, dental, life or disability coverage for any period of time beyond the end of the current plan year (except to the extent of coverage required under COBRA). Seller has made no written or oral representations to its current employee or former employees concerning the employee benefits of Buyer. | ||
(n) | Seller has no obligation to contribute to any Employee Plan that is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (“Multiemployer Plan”). |
(a) | Except as set forth in Part 3.17(a) of the Disclosure Schedule: |
(i) | Seller is, in all material respects, in compliance with each Legal Requirement that is applicable to the conduct or operation of the Business or the ownership or use of any of its assets, except where the failure to be in compliance would not have a material adverse effect on Seller; | ||
(ii) | Since January 1, 2000, each of Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business) has been, in all material respects, in compliance with each Legal Requirement that was applicable to it or to the conduct or operation of the Business or the ownership or use of any of its assets, except where the failure to be in compliance would not have a material adverse effect on Seller or the Prior Owner as applicable; | ||
(iii) | To Seller’s Knowledge, since January 1, 2000, no event has occurred or fact exists that (with or without notice or lapse of time or both) (A) may be reasonably likely to constitute or result in a |
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material violation by Seller of, or a failure on the part of Seller to comply with, any Legal Requirement or (B) may be reasonably likely to give rise to any obligation on the part of Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and | |||
(iv) | Neither Seller nor the Prior Owner (solely in their capacities as the prior owners and operators of the Business) has received, at any time since January 1, 2000, any written, electronic, or to Seller’s Knowledge, oral notice from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement, which, if true, may be reasonably likely to have a material adverse effect on Seller or the Business or (B) any actual, alleged, possible or potential obligation on the part of Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature, which may be reasonably likely to have a material adverse effect on Seller or the Business. |
This Section 3.17(a) shall not apply to matters addressed by the representations and warranties contained in Sections 3.14 (Taxes), 3.16 (Employee Benefits), 3.22 (Environmental Matters), 3.23 (Employees) or 3.24 (Labor Disputes). | |||
(b) | Part 3.17(b) of the Disclosure Schedule contains a complete and accurate list of each Governmental Authorization that is held by Seller or that otherwise relates to the Business or the Assets. Each Governmental Authorization required to be listed in Part 3.17(b) of the Disclosure Schedule is valid and in full force and effect. Except as set forth in Part 3.17(b) of the Disclosure Schedule: |
(i) | Seller is and since January 1, 2000, Seller and Prior Owner (solely in their capacities as the prior owners and operators of the Business) have been in full compliance with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Part 3.17(b) of the Disclosure Schedule except where such failure to be in compliance would not have a material adverse effect on the Seller or the Business. | ||
(ii) | To Seller’s Knowledge, no event has occurred or facts arisen since January 1, 2000, that is likely to (with or without notice or lapse of time or both) (A) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Governmental Authorization required to be listed in Part 3.17(b) of the Disclosure Schedule that is likely to have a material adverse effect on Seller or the Business or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation |
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or termination of, or any modification to, any Governmental Authorization required to be listed in Part 3.17(b) of the Disclosure Schedule; | |||
(iii) | Since January 1, 2000, neither Seller nor Prior Owner (solely in their capacities as the prior owners and operators of the Business) has received any written or electronic, or to the Knowledge of Seller, oral notice from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of or failure to comply with any term or requirement of any Governmental Authorization or (B) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of or modification to any Governmental Authorization; and | ||
(iv) | all applications required to have been filed since January 1, 2000, for the renewal of the Governmental Authorizations listed or required to be listed in Part 3.17(b) of the Disclosure Schedule have been duly filed on a timely basis with the appropriate Governmental Bodies, and, to the knowledge of Seller, all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies. |
(a) | Except as set forth in Part 3.18(a) of the Disclosure Schedule, there is no pending or, to Seller’s Knowledge, threatened Proceeding: |
(i) | by or against Seller or that otherwise relates to or may affect the Business or any of the assets owned or used by Seller; or | ||
(ii) | that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions. |
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(i) | there is no Order to which Seller, its business or any of the Assets is subject; and | ||
(ii) | to the Knowledge of Seller, no officer, manager, agent or employee of Seller is subject to any Order that prohibits such officer, manager, agent or employee from engaging in or continuing any conduct, activity or practice relating to the business of Seller. |
(c) | Except as set forth in Part 3.18(c) of the Disclosure Schedule: |
(i) | Each of Seller and the Prior Owners (solely in their capacities as the prior owners and operators of the Business) is, and, at all times since January 1, 2000, has been in compliance in all material respects, with all of the terms and requirements of each Order to which it or any of the Assets is or has been subject; | ||
(ii) | To Seller’s Knowledge, no event has occurred or facts exist that are likely to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which Seller or any of the Assets is subject; and | ||
(iii) | Each of Seller and the Prior Owners (solely in their capacities as the prior owners and operators of the Business), has not received, at any time since January 1, 2000, any notice or other communication (whether written or, to the Knowledge of Seller, oral) from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which Seller or the Prior Owners (solely in their capacities as the prior owners and operators of the Business) or any of the Assets is or has been subject. |
(a) | amendment to the Governing Documents of Seller; |
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(b) | payment or increase (except in the Ordinary Course of Business) by Seller of any bonuses, salaries or other compensation to the Member, or any manager, officer or employee or entry into any employment, severance or similar Contract with any manager, officer or employee; | ||
(c) | adoption of, amendment to or increase in the payments to or benefits under, any Employee Plan; | ||
(d) | damage to or destruction or loss of any asset of Seller having a value in excess of One Thousand Dollars ($1,000), whether or not covered by insurance; | ||
(e) | entry into, termination of or receipt of notice of termination of (i) any license, distributorship, dealer, sales representative, joint venture, credit or similar Contract to which Seller is a party, or (ii) any Contract or transaction involving a total remaining commitment by Seller of at least Twenty Thousand Dollars ($20,000.00); | ||
(f) | sale (other than sales of Inventories in the Ordinary Course of Business), lease or other disposition of any one or more of the Assets or properties of Seller (including the Intellectual Property Assets) having a value in excess of Twenty-Five Thousand Dollars ($25,000) individually or in the aggregate or the creation of any Encumbrance on any Asset; | ||
(g) | cancellation or waiver of any claims or rights with a value to Seller in excess of Fifteen Thousand Dollars ($15,000.00); | ||
(h) | indication by any customer or supplier having purchases from or sales to Seller of Ten Thousand Dollars ($10,000.00) or more in the twelve months ended December 31, 2002, of an intention to discontinue or change the terms of its relationship with Seller; | ||
(i) | material change in the accounting methods used by Seller; or | ||
(j) | contract by Seller or the Member to do any of the foregoing. |
(a) | Part 3.20(a) of the Disclosure Schedule contains an accurate and complete list, and Seller has delivered to Buyer accurate and complete copies, of: |
(i) | each Seller Contract that involves performance of services or delivery of goods or materials by Seller of an amount or value in excess of Twenty Thousand Dollars ($20,000.00); | ||
(ii) | each Seller Contract (including outstanding purchase orders) that involves performance of services or delivery of goods or materials |
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to Seller of an amount or value in excess of Twenty Thousand Dollars ($20,000.00); | |||
(iii) | each Seller Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of Seller in excess of Twenty Thousand Dollars ($20,000.00); | ||
(iv) | each Seller Contract affecting the ownership of, leasing of, title to, use of or any leasehold or other interest in any real or personal property (except personal property leases and installment and conditional sales agreements for personal property having a value per item or aggregate annual payments of less than Ten Thousand Dollars ($10,000.00) and with a term of less than one year; | ||
(v) | each Seller Contract with any labor union or other employee representative of a group of employees relating to wages, hours and other conditions of employment; | ||
(vi) | each Seller Contract (however named) involving a sharing of Seller’s profits, losses, costs or liabilities by Seller with any other Person; | ||
(vii) | each Seller Contract containing covenants that in any way purport to restrict Seller’s business activity or limit the freedom of Seller to engage in any line of business or to compete with any Person; | ||
(viii) | each Seller Contract providing for payments to or by any Person based on sales, purchases or profits, other than direct payments for goods; | ||
(ix) | each power of attorney of Seller that is currently effective and outstanding; | ||
(x) | each Seller Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by Seller to be responsible for consequential damages; | ||
(xi) | each Seller Contract for capital expenditures in excess of Twenty Thousand Dollars ($20,000.00); | ||
(xii) | each Seller Contract not denominated in U.S. dollars; | ||
(xiii) | each written warranty, guaranty and/or other similar undertaking with respect to contractual performance extended by Seller other than in the Ordinary Course of Business; and | ||
(xiv) | each amendment, supplement and modification (whether oral or written) in respect of any of the foregoing. |
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(b) | Except as set forth in Part 3.20(b) of the Disclosure Schedule, the Member has not and will not acquire any rights under, and the Member has not and will not become subject to any obligation or liability under, any Seller Contract that relates to the business of Seller or any of the Assets. | ||
(c) | Except as set forth in Part 3.20(c) of the Disclosure Schedule: |
(i) | each Assumed Contract is in full force and effect and is valid and enforceable in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar legal requirements affecting creditors’ rights generally; | ||
(ii) | each Assumed Contract is assignable by Seller to Buyer without the consent of any other Person; and | ||
(iii) | to the Knowledge of Seller, no Assumed Contract would, upon completion or performance thereof, have a material adverse affect on the business, assets or condition of Seller. |
(d) | Except as set forth in Part 3.20(d) of the Disclosure Schedule: |
(i) | each of Seller, Member (in its capacity as Prior Owner), and GTC is, and at all times since January 1, 2000, has been, in compliance in all material respects with all applicable terms and requirements of each Assumed Contract; | ||
(ii) | to the Knowledge of Seller, each other Person that has or had any obligation or liability under any Assumed Contract is currently in material compliance with all applicable terms and requirements of such Assumed Contract; | ||
(iii) | no event has occurred or, to the Knowledge of Seller, circumstance exists that (with or without notice or lapse of time or both) is likely to contravene, conflict with or result in a Breach of, or give Seller or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify, any Assumed Contract; | ||
(iv) | to the Knowledge of Seller, no event has occurred or facts exist under or by virtue of any Assumed Contract that (with or without notice or lapse of time) would cause the creation of any Encumbrance affecting any of the Assets; and |
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(v) | each of Seller and Prior Owner have not given to or received from any other Person, at any time since January 1, 2000, any notice or other communication (whether written or, to Seller’s Knowledge, oral) regarding any actual, alleged, possible or potential violation or Breach of, or default under, any Assumed Contract. |
(e) | There are no renegotiations of, attempts to renegotiate or outstanding rights to renegotiate any material amounts paid or payable to Seller under current or completed Seller Contracts with any Person having the contractual or statutory right to demand or require such renegotiation and no such Person has made written demand for such renegotiation. | ||
(f) | Each Seller Contract relating to the sale, design, manufacture or provision of products or services by Seller (including executory Contracts originally entered into by the Prior Owner) has been entered into in the Ordinary Course of Business of the Seller or Prior Owner and has been entered into without the commission of any act alone or in concert with any other Person, or any consideration having been paid or promised, that is or would be in violation of any Legal Requirement. | ||
(g) | All contracts between the Seller and Member or any of its Related Persons have been provided to Buyer and Buyer has notified Seller of those that it will assume and those that it will not assume. |
(a) | Part 3.21(a) of the Disclosure Schedule provides a summary of the kinds of insurance currently maintained by Seller, Member, or Parent insuring the Business, including the kind of coverage, the amount insured and the insurer. Seller, Member, and Parent do not self insure the Business. | ||
(b) | Part 3.21(b) of the Disclosure Schedule describes all current (i) obligations of Seller to provide insurance coverage to Third Parties (for example, under Leases or service agreements) and identifies the policy under which such coverage is provided, and (ii) Contracts or arrangements, other than a policy of insurance, for the transfer or sharing of any risk to which Seller is a party or that involves the Business. | ||
(c) | Part 3.21(c) of the Disclosure Schedule sets forth for the current policy year and each of the three (3) preceding policy years: |
(i) | a summary of the loss experience under each policy of insurance maintained by Seller, Member, or Parent with respect to the Business; | ||
(ii) | a statement describing each claim under any such policy of insurance for an amount in excess of Five Thousand Dollars |
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($5,000.00) (Five Thousand Dollars ($5,000.00) in the case of workers’ compensation insurance), which sets forth: |
(A) | the name of the claimant; | ||
(B) | a description of the policy by insurer, type of insurance and period of coverage; and | ||
(C) | the amount and a brief description of the claim. |
(d) | Except as set forth in Part 3.21(d) of the Disclosure Schedule: |
(i) | all policies of insurance to which Seller, Member, or Parent is a party that provide coverage of Seller or the Business: |
(A) | taken together, provide adequate insurance coverage for the Assets, Seller, and Business for all risks normally insured against by a Person carrying on the same business or businesses as Seller in the same location; and | ||
(B) | to Seller’s knowledge are sufficient for compliance with all Legal Requirements and Seller Contracts; |
(ii) | Since January 1, 2000, neither Seller, Prior Owner, or Parent has received with respect to coverage of affecting the Business (A) any refusal of coverage (except for a notice that a defense will be afforded with reservation of rights) or (B) any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect or that the issuer of any policy of insurance is not willing or able to perform its obligations thereunder; | ||
(iii) | Seller, Member, and Parent have paid all premiums due, and have otherwise performed all of their respective obligations, under each current policy of insurance to which it is a party or that provides coverage to Seller or the Business, provided that an insurer may assert a reservation of rights without regard to the payment of premiums; and | ||
(iv) | Seller, Member or Parent have given notice to the insurer of all claims with respect to Seller that in Seller’s, Member’s, or Parent’s reasonable judgment may be insured thereby. |
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(a) | Since January 1, 1997, Seller has been in material compliance with, and has not been and is not in material violation of, any Environmental Law. Seller has not received any written order, notice, warning, request for information, from (i) any Governmental Body or private citizen acting in the public interest or (ii) the current or prior owner or operator of any Facilities, of any actual or alleged violation or failure to comply with any Environmental Law or Occupational Safety or Health Law, or of any actual or threatened obligation to undertake or bear the cost of any Environmental Liabilities with respect to any Facility or, to the Knowledge of Seller, other property or asset (whether real, personal or mixed) in which Seller has or had an interest, or any property to which Hazardous Materials generated, manufactured, imported, used or processed by Seller have been transported, treated, stored, handled, transferred, disposed, recycled or received. | ||
(b) | There are no pending or, to the Knowledge of Seller, threatened claims, Encumbrances, or other restrictions of any nature resulting from any Environmental Liabilities or Occupational Safety and Health Liabilities with respect to or affecting any Facility or, to the Knowledge of Seller, any other property or asset (whether real, personal or mixed) in which Seller has or had an interest. | ||
(c) | Seller has not received any written citation, directive, inquiry, notice, Order, summons, or warning that relates to Hazardous Materials, or any alleged or actual violation or material failure to comply with any Environmental Law, or of any alleged or actual obligation to undertake or bear the cost of any Environmental Liabilities or Occupational Safety and Health Liabilities with respect to any Facility or with respect to any property or facility to which Hazardous Materials generated, manufactured, refined, transferred, imported, used or processed by Seller have been transported, treated, stored, handled, transferred, disposed, recycled or received. | ||
(d) | [Intentionally Omitted] | ||
(e) | There are no Hazardous Materials present on or in the Environment at any Facility or, to the Knowledge of Seller, at any geologically or hydrologically adjoining property, (except for such Hazardous Materials in such amounts necessary for the Ordinary Course of Business and which are in compliance with Environmental Laws). | ||
(f) | There has been no Release or, to the Knowledge of Seller, Threat of Release, of any Hazardous Materials at or from any Facility or to the Knowledge of Seller, at any other location where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by any Facility, or from any other property or asset in which Seller has or, to the Knowledge of Seller, had an interest. |
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(g) | Seller has delivered to Buyer true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by Seller, Member, or any of their Related Persons within the past ten (10) years pertaining to Hazardous Materials in, on, or under the Facilities, or concerning compliance, by Seller, Member, with Environmental Laws in respect of the Facilities, except for the results of analyses, tests or monitoring performed in the Ordinary Course of Business pursuant to any Governmental Authorization issued under Environmental Law, which documents have been provided for the past three (3) years. |
(a) | Part 3.23(a) of the Disclosure Schedule contains a complete and accurate list of the following information for each employee, manager, independent contractor, consultant and agent of Seller, including each employee on leave of absence or layoff status: name; job title; date of commencement of employment or engagement; current compensation paid or payable; sick and vacation leave that is accrued but unused; service credited for purposes of vesting and eligibility to participate under any Employee Plan and, with respect to employees compensated on a salaried rather than hourly basis, any change in compensation paid by Seller or Prior Owner since January 1, 2002; | ||
(b) | Part 3.23(b) of the Disclosure Schedule contains a complete and accurate list of the following information for each retired employee or manager of Seller or Prior Owner (solely in their capacities as the prior owners and operators of the Business) or their dependents, receiving benefits or scheduled to receive benefits in the future: name; pension benefits; pension option election; and other benefits. Seller and Prior Owner (solely in their capacities as the prior owners and operators of the Business) not obligated and do not provide any retiree medical or retiree life insurance coverage to any of their former employees. | ||
(c) | Part 3.23(c) of the Disclosure Schedule states the number of employees terminated by Seller since December 1, 2002, and contains a complete and accurate list of the following information for each employee of Seller who has been terminated or laid off, or whose hours of work have been reduced by more than fifty percent (50%) by Seller, same December 1, 2002: (i) the date of such termination, layoff or reduction in hours; (ii) the reason for such termination, layoff or reduction in hours; and (iii) the location to which the employee was assigned. | ||
(d) | Seller has not violated the Worker Adjustment and Retraining Notification Act (the “WARN Act”) or any similar state or local Legal Requirement. Since April 1, 2003, Seller has not terminated any employees. |
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(e) | To the Knowledge of Seller, no officer, manager, agent, employee, consultant, or contractor of Seller is bound by any Contract that purports to limit the ability of such officer, manager, agent, employee, consultant, or contractor (i) to engage in or continue or perform any conduct, activity, duties or practice relating to the business of Seller or (ii) to assign to Seller or to any other Person any rights to any invention, improvement, or discovery. |
(a) | Since June 1, 2000, Seller and Prior Owner (solely in their capacities as the prior owners and operators of the Business), have complied in all material respects with all (and are not, and have not been, liable for fines penalties or other amounts for violations of any) (i) Legal Requirements relating to employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar Taxes, and the employment of individuals who are not Citizens of the United States and (ii) Occupational Safety and Health Laws. | ||
(b) | Except as disclosed in Part 3.24(b) of the Disclosure Schedule: (i) neither Seller nor Prior Owner (solely in their capacities as the prior owners and operators of the Business) has been, and is not now, a party to any collective bargaining agreement or other labor contract; (ii) since January 1, 2000, there has not been, there is not presently pending or existing, and to Seller’s Knowledge there is not threatened, any strike, slowdown, picketing, work stoppage or employee grievance process involving Seller or Prior Owner (solely in their capacities as the prior owners and operators of the Business); (iii) to Seller’s Knowledge, no event has occurred or fact exists, that could provide the basis for any work stoppage or other labor dispute; (iv) there is not pending or, to Seller’s Knowledge, threatened against or affecting Seller, any Proceeding relating to the alleged violation of any Legal Requirement pertaining to labor relations or employment matters, including any charge or complaint filed with the National Labor Relations Board or any comparable Governmental Body, and to Knowledge of Seller, there is no organizational activity or other labor dispute against or affecting Seller or the Facilities; (v) no application or petition for an election of or for certification of a collective bargaining agent is pending; (vi) no grievance or arbitration Proceeding exists that might have an adverse effect upon Seller or the conduct of its business; (vii) there is no lockout of any employees by Seller, and no such action is contemplated by Seller; and (viii) to Seller’s Knowledge, there has been no charge of discrimination filed against or threatened against Seller with the Equal Employment Opportunity Commission or similar Governmental Body. |
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(a) | The term “Intellectual Property Assets” means all intellectual property owned or licensed (as licensor or licensee) by Seller in which Seller has a proprietary interest, including: |
(i) | Seller’s name, all assumed fictional business names, trade names, registered and unregistered trademarks, service marks and applications (collectively, “Marks”); | ||
(ii) | all patents, patent applications and inventions and discoveries that may be patentable (collectively, “Patents”); | ||
(iii) | all registered and unregistered copyrights in both published works and unpublished works (collectively, “Copyrights”); | ||
(iv) | all rights in mask works; | ||
(v) | all know-how, trade secrets, confidential or proprietary information, customer lists, Software, technical information, data, process technology, plans, drawings and blue prints (collectively, “Trade Secrets”); and | ||
(vi) | all rights in internet web sites and internet domain names presently used by Seller (collectively “Net Names”). |
(b) | Part 3.25(b) of the Disclosure Schedule contains a complete and accurate list and summary description, including any royalties paid or received by Seller, and Seller has delivered to Buyer accurate and complete copies, of all Seller Contracts relating to the Intellectual Property Assets, except for any license implied by the sale of a product and perpetual, paid-up licenses for commonly available Software programs with a value of less than Two Hundred Dollars ($200.00) under which Seller is the licensee. There are no outstanding and, to Seller’s Knowledge, no threatened disputes or disagreements with respect to any such Contract. |
(i) | Except as set forth in Part 3.25(c) of the Disclosure Schedule, the Intellectual Property Assets are all those necessary for the operation of Seller’s business as it is currently conducted. Seller is the owner or licensee of all right, title and interest in and to each of the Intellectual Property Assets, free and clear of all Encumbrances, and has the right to use without payment to a Third Party all of the Intellectual Property Assets, other than in respect of licenses listed in Part 3.25(c) of the Disclosure Schedule. |
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(ii) | Except as set forth in Part 3.25(c) of the Disclosure Schedule, all former and current employees of Seller have executed written Contracts with Seller that assign to Seller all rights to any inventions, improvements, discoveries or information relating to the business of Seller. |
(i) | Part 3.25(d) of the Disclosure Schedule contains a complete and accurate list and summary description of all Patents. | ||
(ii) | All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing, examination and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety (90) days after the Closing Date. | ||
(iii) | No Patent has been or is now involved in any interference, reissue, reexamination, or opposition Proceeding. To Seller’s Knowledge, there is no potentially interfering patent or patent application of any Third Party. | ||
(iv) | Except as set forth in Part 3.25(d) of the Disclosure Schedule, (A) no Patent is infringed or, to Seller’s Knowledge, has been challenged or threatened in any way and (B) none of the products manufactured or sold, nor any process or know-how used, by Seller infringes or is alleged to infringe any patent or other proprietary right of any other Person. | ||
(v) | All products made, used or sold under the Patents have been marked with the proper patent notice. |
(i) | Part 3.25(e) of the Disclosure Schedule contains a complete and accurate list and summary description of all Marks. | ||
(ii) | All Marks filed or registered with the United States Patent and Trademark Office, are currently in compliance with all formal Legal Requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal applications), are not subject to any maintenance fees or taxes or actions falling due within ninety (90) days after the Closing Date, and, to Sellers Knowledge, are valid and enforceable. | ||
(iii) | No Xxxx has been or is now involved in any opposition, invalidation or cancellation Proceeding and, to Seller’s |
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Knowledge, no such action is threatened with respect to any of the Marks. | |||
(iv) | To Seller’s Knowledge, there is no potentially interfering trademark or trademark application of any other Person. | ||
(v) | No Xxxx is infringed or, to Seller’s Knowledge, has been challenged or threatened in any way. None of the Marks used by Seller infringes or is alleged to infringe any trade name, trademark or service xxxx of any other Person. |
(i) | Part 3.25(f) of the Disclosure Schedule contains a complete and accurate list and summary description of all Copyrights. | ||
(ii) | All of the registered Copyrights are, to Seller’s Knowledge, valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety (90) days after the date of Closing. | ||
(iii) | No Copyright is infringed or, to Seller’s Knowledge, has been challenged or threatened in any way. None of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of any Third Party or is a derivative work based upon the work of any other Person. | ||
(iv) | All works encompassed by the Copyrights have been marked with the proper copyright notice. |
(i) | With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory of any individual. | ||
(ii) | Seller has taken all reasonable precautions to protect the secrecy, confidentiality and value of all Trade Secrets (including the enforcement by Seller of a policy requiring each employee or contractor to execute proprietary information and confidentiality agreements substantially in Seller’s standard form, and all current and former employees and contractors of Seller have executed such an agreement). | ||
(iii) | Seller has good title to and an absolute right to use the Trade Secrets. The Trade Secrets are not part of the public knowledge or |
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literature and, to Seller’s Knowledge, have not been used, divulged or appropriated either for the benefit of any Person (other than Seller) or to the detriment of Seller. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any way or infringes any intellectual property right of any other Person. |
(i) | Part 3.25(h) of the Disclosure Schedule contains a complete and accurate list and summary description of all Net Names. | ||
(ii) | All Net Names have been registered in the name of Seller and are in compliance with all formal Legal Requirements. | ||
(iii) | No Net Name has been or is now involved in any dispute, opposition, invalidation or cancellation Proceeding and, to Seller’s Knowledge, no such action is threatened with respect to any Net Name. | ||
(iv) | To Seller’s Knowledge, there is no domain name application pending of any other person which would or would potentially interfere with or infringe any Net Name. | ||
(v) | No Net Name is infringed or, to Seller’s Knowledge, has been challenged, interfered with or threatened in any way. No Net Name infringes, interferes with or is alleged to interfere with or infringe the trademark, copyright or domain name of any other Person. |
(a) | Since January 1, 2000, Seller and the Prior Owners (solely in their capacities as the prior owners and operators of the Business) have not, to obtain or retain business, directly or indirectly, offered, paid or promised to pay, or authorized the payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment with a value in excess of One Hundred Dollars ($100.00) in the aggregate to any one individual in any year) or any commission payment to: |
(i) | any person who is an official, officer, agent, employee or representative of any Governmental Body or of any existing or prospective customer (whether government owned or nongovernment owned); | ||
(ii) | any political party or official thereof; |
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(iii) | any candidate for political or political party office; or | ||
(iv) | any other individual or entity; |
while knowing that all or any portion of such money or thing of value would be offered, given, or promised directly or indirectly to any such official, officer, agent, employee, representative, political party, political party official, candidate, individual, or any entity affiliated with such customer, political party or official or political office. | |||
(b) | Except as set forth in Part 3.27(b) of the Disclosure Schedule, since January 1, 2002, Seller and Member (solely in its capacity as a prior owner and operator of the Business) have made all payments to Third Parties by check mailed to such Third Parties’ principal place of business or by wire transfer to a bank located in the same jurisdiction as such party’s principal place of business. | ||
(c) | Seller maintains no off-the-books accounts. | ||
(d) | Since January 1, 2000, Seller and the Prior Owner (solely in their capacities as the prior owners and operators of the Business), have at all times been in material compliance with all Legal Requirements relating to export control and trade embargoes. No product sold or service provided by Seller or the Prior Owners (solely in their capacities as the prior owners and operators of the Business) during such period has been directly sold to or performed by Seller or the Prior Owners (solely in their capacities as the prior owners and operators of the Business), on behalf of Cuba, Iraq, Iran, Libya or North Korea. | ||
(e) | Except as set forth in Part 3.27(e) of the Disclosure Schedule, Seller and Prior Owner (in their capacities as the prior owners and operators of the Business) have not violated of any of the antiboycott prohibitions contained in 50 U.S.C. Section 2401 et seq. or taken any action that can be penalized under Section 999 of the Code. Except as set forth in Part 3.27(e) of the Disclosure Schedule, during the last five (5) years Seller and Prior Owner (in their capacities as the prior owners and operators of the Business) are not a party to, are not a beneficiary under and have not performed any service or sold any product under any Seller Contract or other Contract under which a product has been sold to customers in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Quatar, Saudi Arabia, Sudan, Syria, United Arab Emirates or the Republic of Yemen. |
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(a) | Seller is acquiring the Promissory Note, its interest in the Earnout Agreement and, if issued, the Contingent Note for its own account and not with a view to its distribution within the meaning of Section 2(11) of the Securities Act. | ||
(b) | Seller confirms that Buyer has made available to Seller and its Representatives the opportunity to ask questions of the officers and management employees of Buyer and to acquire such additional information about the business and financial condition of Buyer as Seller has requested, and all such information has been received. |
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4. | REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller as follows: |
(a) | This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. Upon the execution and delivery by Buyer of the Transaction Documents to which it is a party, each of which will constitute the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its respective terms. Buyer has the absolute and unrestricted right, power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party and to perform its obligations under this Agreement and thereunder, and such action has been duly authorized by all necessary corporate action. | ||
(b) | Neither the execution and delivery of this Agreement by Buyer nor the consummation or performance of any of the Contemplated Transactions by Buyer will give any Person the right to prevent, delay or otherwise interfere with any of the Contemplated Transactions pursuant to: |
(i) | any provision of Buyer’s Governing Documents; | ||
(ii) | any resolution adopted by the board of directors or the shareholders of Buyer; | ||
(iii) | any Legal Requirement or Order to which Buyer may be subject; or | ||
(iv) | any Contract to which Buyer is a party or by which Buyer may be bound. |
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5. | [Intentionally Omitted] | |
6. | [Intentionally Omitted] | |
7. | CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE. Buyer’s obligation to purchase the Assets and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part): |
(a) | The Certificate of Formation and all amendments thereto of Seller, duly certified as of a recent date by the Secretary of State of Delaware; | ||
(b) | If requested by Buyer, any Consents or other instruments that may be required to permit Buyer’s qualification in each jurisdiction in which Seller is licensed or qualified to do business as a foreign entity under the name “Greenville Tube” or any derivative thereof; | ||
(c) | Releases of all Encumbrances on the Assets, other than Permitted Encumbrances; | ||
(d) | Certificates dated as of a date not earlier than the third (3rd) business day prior to the Closing as to the good standing of Seller, executed by the appropriate officials of the State of Delaware and each jurisdiction in which Seller is licensed or qualified to do business as a foreign corporation as specified in Part 3.1(a) of the Disclosure Schedule; | ||
(e) | Certificates dated as of a date not earlier than the tenth (10th) business day before the Closing as to the payment of all applicable state Taxes executed by the appropriate officials in Pennsylvania and Arkansas; and | ||
(f) | Such other documents as Buyer may reasonably request for the purpose of facilitating the consummation or performance of any of the Contemplated Transactions. |
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(a) | Buyer shall have entered into employment agreements with those employees of Seller identified in Exhibit 7.5. | ||
(b) | Those key employees of Seller identified on Exhibit 7.5, or substitutes therefor who shall be acceptable to Buyer, in its sole discretion, shall have accepted employment with Buyer on terms mutually agreeable to the Buyer and each such respective employee, with such employment to commence on and as of the Closing Date. | ||
(c) | Substantially all other employees of Seller shall be available for hiring by Buyer, in its sole discretion, on and as of the Closing Date. |
8. | CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE. Seller’s obligation to sell the Assets and to take the other actions required to be taken by Seller at the Closing is subject to the satisfaction, at the Closing, of each of the following conditions (any of which may be waived by Seller in whole or in part): |
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9. | NO TERMINATION. |
(a) | Information on Active Employees. For the purpose of this Agreement, the term “Active Employees” shall mean all employees employed on the Closing Date by Seller in the operation of the business acquired by Buyer hereunder, including employees on temporary leave of absence, including family medical leave, military leave, temporary disability or sick leave, but excluding employees on long-term disability leave. A list of Seller’s employees as of the Closing Date is attached hereto as Exhibit 10.1(a). | ||
(b) | Employment of Active Employees by Buyer. |
(i) | Attached hereto as Exhibit 10.1(b)(i) is a list of Active Employees to whom Buyer has made an offer of employment that has been accepted to be effective on the Closing Date (the “Hired Active Employees”). Effective immediately before the Closing, Seller will terminate the employment of all of its Hired Active Employees. | ||
(ii) | Neither Seller nor its Related Persons shall solicit the continued employment of any Active Employee (unless and until Buyer has informed Seller in writing that the particular Active Employee will not receive any employment offer from Buyer) or the employment of any Hired Active Employee after the Closing. Set forth on Exhibit 10.1(b)(ii) is a list of those Active Employees to whom Buyer will not make employment offers (the “Non-Hired Active Employees”). | ||
(iii) | It is understood and agreed that (A) Buyer’s expressed intention to extend offers of employment as set forth in this Section shall not constitute any commitment, Contract or understanding (expressed or implied) of any obligation on the part of Buyer to a post-Closing employment relationship of any fixed term or duration or upon any terms or conditions other than those that Buyer may establish pursuant to individual offers of employment, and (B) employment offered by Buyer is “at will” and may be terminated by Buyer or |
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by an employee at any time for any reason (subject to any written commitments to the contrary made by Buyer or an employee and Legal Requirements). Nothing in this Agreement shall be deemed to prevent or restrict in any way the right of Buyer to terminate, reassign, promote or demote any of the Hired Active Employees after the Closing or to change adversely or favorably the title, powers, duties, responsibilities, functions, locations, salaries, other compensation or terms or conditions of employment of such employees. | |||
(iv) | As of the Closing Date, each Hired Active Employee shall, without duplication of benefits, be given credit for all service with Seller before the Effective Time under all employee benefit plans (including credit for service as applicable to pre-existing conditions under Buyer’s health insurance plans), programs, and arrangements maintained by or contributed to by Buyer in which the Hired Active Employee becomes a participant for the purposes of eligibility to participate, vesting, and determination of level of benefits (excluding however benefit accrual under any defined benefit plans, if any). | ||
(v) | Seller shall be responsible for providing continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for all Non-Hired Active Employees, all of Seller’s former employees, and all Hired Active Employees who elect not to participate or are unable to participate in Buyer’s health plans and, in each case, elects such continuation coverage, provided that Buyer will not advise Hired Active Employees who are eligible for coverage by Buyer’s health plans to elect to receive such continuation coverage. | ||
(vi) | Effective as of the Closing Date, Hired Active Employees who are participants in Seller’s 401(k) plan shall become fully vested in their account balances in such plan (the “Seller Savings Plan”) and distributions of such account balance shall be made available to such Hired Active Employees as soon as reasonably practicable following the Closing Date, in accordance with the provisions of the Seller Savings Plan and Legal Requirements. As soon as reasonably practicable after the Closing Date, Buyer will establish a 401(k) plan that will accept rollover contributions from the Seller Savings Plan. | ||
(vii) | Buyer and Seller will cooperate as necessary to effect the requirements of this Section 10.1. |
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(c) | Salaries and Benefits. |
(i) | Seller shall be responsible for (A) the payment of any termination or severance payments (excluding all retention and salary continuation bonuses or payments) and the provision of health plan continuation coverage in accordance with the requirements of COBRA and Sections 601 through 608 of ERISA, (B) any and all payments to employees required under the WARN Act, and (D) payment of all retention payments or salary continuation payments to which Seller is contractually obligated. | ||
(ii) | Seller shall be liable for any claims made or incurred by Active Employees and their beneficiaries through the Closing Date under the Employee Plans. For purposes of the immediately preceding sentence, a charge will be deemed incurred, in the case of hospital, medical or dental benefits, when the services that are the subject of the charge are performed and, in the case of other benefits (such as disability or life insurance), when an event has occurred or when a condition has been diagnosed that entitles the employee to the benefit. |
(d) | Seller’s Retirement and Savings Plans. All Hired Active Employees who are participants in Seller’s or Member’s retirement plans shall retain their accrued benefits under such retirement plans as of the Closing Date, and Seller or Member (or Seller’s or Member’s retirement plans) shall retain sole liability for the payment of such benefits as and when such Hired Active Employees become eligible therefor under such plans. All Hired Active Employees shall become fully vested in their accrued benefits under Seller’s or Member’s retirement plans as of the Closing Date, and Seller or Member will so amend such plans if necessary to achieve this result. | ||
(e) | No Transfer of Assets. Neither Seller nor Member nor their respective Related Persons will make any transfer of pension or other employee benefit plan assets to Buyer. | ||
(f) | General Employee Provisions. |
(i) | Seller and Buyer shall give any notices required by Legal Requirements and take whatever other actions with respect to the plans, programs and policies described in this Section 10.1 as may be necessary to carry out the arrangements described in this Section 10.1. | ||
(ii) | Seller and Buyer shall provide each other with such plan documents and summary plan descriptions, employee data or other |
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information as may be reasonably required to carry out the arrangements described in this Section 10.1. | |||
(iii) | If any of the arrangements described in this Section 10.1 are determined by the IRS or other Governmental Body to be prohibited by law, Seller and Buyer shall modify such arrangements to as closely as possible reflect their expressed intent and retain the allocation of economic benefits and burdens to the parties contemplated herein in a manner that is not prohibited by law. | ||
(iv) | On the Closing Date, Seller shall provide Buyer with completed I-9 forms and attachments with respect to all Hired Active Employees, except for such employees as Seller certifies in writing to Buyer are exempt from such requirement. | ||
(v) | Buyer shall not have any responsibility, liability or obligation, whether to Active Employees, former employees, their beneficiaries or to any other Person, with respect to any employee benefit plans, practices, programs or arrangements (including the establishment, operation or termination thereof and the notification and provision of COBRA coverage extension) maintained by Seller. |
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(a) | Noncompetition. For a period of five (5) years after the Closing Date, neither Seller nor its Related Persons shall, anywhere in the United States, directly or indirectly invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the business of manufacturing steel and stainless steel tubing (“Competing Business”), provided, however, that Seller or its Related Persons may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of the securities of any Person (but may not otherwise participate in the activities of such Person) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Exchange Act. | ||
(b) | Nonsolicitation. For a period of five (5) years after the Closing Date, neither Seller nor its Related Persons shall, directly or indirectly: |
(i) | cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other |
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business relation of Buyer to cease doing business with Buyer, to deal with any competitor of Buyer or in any way interfere with its relationship with Buyer; | |||
(ii) | cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other business relation of Seller on the Closing Date or within the year preceding the Closing Date to cease doing business with Buyer, to deal with any competitor of Buyer or in any way interfere with its relationship with Buyer; or | ||
(iii) | hire, retain or attempt to hire or retain any employee or independent contractor of Buyer or in any way interfere with the relationship between Buyer and any of its employees or independent contractors. |
(c) | Nondisparagement. After the Closing Date, none of the parties hereto will disparage either of the other parties’ shareholders, members, managers, directors, officers, employees, agents or Representatives. | ||
(d) | Modification of Covenant. If a final judgment of a court or tribunal of competent jurisdiction determines that any term or provision contained in Section 10.8(a) through (c) is invalid or unenforceable, then the parties agree that the court or tribunal will have the power to reduce the scope, duration or geographic area of the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. This Section 10.8 will be enforceable as so modified after the expiration of the time within which the judgment may be appealed. This Section 10.8 is reasonable and necessary to protect and preserve Buyer’s legitimate business interests and the value of the Assets and to prevent any unfair advantage conferred on Seller. |
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(a) | any Breach of any representation or warranty made by Seller in (i) this Agreement, or (ii) the Transaction Documents (excluding the Facility Lease); | ||
(b) | any Breach of any covenant or obligation of Seller in this Agreement or the Transaction Documents (excluding the Facility Lease); | ||
(c) | any brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any Person with Seller or the Member (or any Person acting on their behalf) in connection with any of the Contemplated Transactions; | ||
(d) | any product or component thereof manufactured by or shipped, or any services provided by, Seller, in whole or in part, prior to the Closing Date, provided that Buyer shall be responsible for the first Ten Thousand Dollars ($10,000) of product warranty claims arising in the eighteen (18) months immediately following the Closing and product warranty claims specifically assumed under Section 2.4(a)(iv); | ||
(e) | any matter disclosed in Part 11.2(e) of the Disclosure Schedule; | ||
(f) | any noncompliance with any Bulk Sales Laws or fraudulent transfer law in respect of the Contemplated Transactions; |
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(g) | any liability under the WARN Act or any similar state or local Legal Requirement that may result from an “Employment Loss”, as defined by 29 U.S.C. Section 2101(a)(6), caused by any action of Seller prior to the Closing; | ||
(h) | any Employee Plan established or maintained by Seller; or | ||
(i) | any Retained Liabilities. |
(a) | TCE Matters. |
(i) | Subject to the material compliance by Buyer with its obligations in Section 11.3(f) herein, Seller will indemnify and hold harmless Buyer and the other Buyer Indemnified Persons, and will reimburse Buyer and the other Buyer Indemnified Persons, for any Damages (including costs of any other Remedial Action) arising from or in connection with: |
(A) | the TCE Contamination, provided, however, that as between Buyer and Seller, and without limiting the Buyer’s right to indemnification with respect to the matters described in Section 11.3(a)(i)(B) through 11.3(a)(i)(D) herein, upon a determination by the Arkansas Department of Environmental Quality (“ADEQ”) that Seller has complied with the ADEQ Consent Order to the full extent required by ADEQ, the TCE Contamination, referenced in this Section 11.3(a)(i)(A), will be considered a Non-TCE Environmental Condition, as provided in Section 11.3(b); | ||
(B) | any Environmental Claim related to the TCE Contamination; | ||
(C) | the failure of the Seller to comply with the ADEQ Consent Order; and | ||
(D) | any bodily injury (including illness, disability and death, regardless of when any such bodily injury manifested itself), personal injury, property damage (including trespass, nuisance, diminution in property value, wrongful eviction and deprivation of the use of real property) or |
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other damage of or to any Person, property (real or personal), or any Assets from the TCE Contamination. |
(ii) | For purposes of Section 11.3(a), there shall be a rebuttable presumption, subject to Section 11.3(a)(iii), that any TCE Contamination that was present in the Environment at, on or emanating from the Facilities or present in Facility building components (e.g., concrete flooring) was present at or prior to the Closing Date provided that, so long as Buyer uses TCE, Buyer complies with the following requirements set forth in this Section 11.3(a)(ii): |
(A) | maintain the trichloroethylene-resistant sealant currently on the Facility floor pursuant to the sealant manufacturer’s instructions; | ||
(B) | provide written notification to Seller of any Release of fifty (50) pounds of TCE to soil and/or groundwater at, on or from the Greenville Property; | ||
(C) | provide a certification to Seller within one (1) year of the Closing Date and annually thereafter as to whether there have been any Releases of greater than fifty (50) pounds of TCE to soil and/or groundwater at, on or from the Greenville Property during the preceding year and, if applicable, a description of any such Releases, including, without limitation, the date, location and circumstances of the Release, the estimated amount of TCE Released, a description of remedial measures taken to address such TCE Release(s) and a statement as to whether such TCE Release was reported to any Governmental Body and the date of such report, if applicable; and | ||
(D) | provide to Seller written notice at least ten (10) days prior to the performance of regularly scheduled preventative maintenance on the TCE degreaser involving transfer of TCE from the degreaser to and from an in-line aboveground storage tank or any similar container; and provide Parent, Member, Seller or their respective Representatives an opportunity to observe any activities related thereto. |
(iii) | Subject to the provisions contained in this Section 11.3(a)(iii), Buyer may assign its rights under Section 11.3(a) without Seller’s consent, provided, that Buyer, its successors and assigns, shall provide written notice to Seller within five (5) days of any such |
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assignment. | A Buyer Change of Control shall affect assignment of the rebuttable presumption as follows: |
(A) | Following the consummation of a Buyer Change of Control, the rebuttable presumption that the TCE Contamination pre-dated the Closing Date shall terminate and not apply and Buyer shall not be entitled to rely upon the same; provided, that, (x) members of the Investor Group, in their capacities as Buyer Indemnified Parties, and (y) Buyer, in the event the Buyer Change of Control was a sale of assets and the Investor Group, or any combination of the members of the Investor Group or their Affiliates continues to own in excess of 50% of the voting power of Buyer, shall, subject to Section 11.3(a)(ii), continue to be entitled to the benefit of the rebuttable presumption. | ||
(B) | Other than as provided in the immediately preceding Section 11.3(a)(iii)(A), the right of the Buyer Indemnified Parties to indemnification and reimbursement, and Seller’s obligation to provide the same, under Section 11.3(a), including, without limitation, indemnification for any Third-Party Claim shall continue and the rebuttable presumption discussed above, shall not be impaired. |
(b) | Non-TCE Matters. |
(i) | Subject to the material compliance by Buyer with its obligations in Sections 11.3(c), (d), (e) and (f) herein, Seller will indemnify and hold harmless Buyer and the other Buyer Indemnified Persons, and will reimburse Buyer and the other Buyer Indemnified Persons, for any Damages (including costs of any other Remedial Action) arising from or in connection with any Environmental Claims arising out of or relating to: |
(A) | any Breach of any representation or warranty made by Seller in Section 3.22 of this Agreement, provided that such Breach is not a result of fraud; | ||
(B) | ownership or operation at any time on or prior to the Closing Date of any of the Facilities, Assets, the Business or the Greenville Property; | ||
(C) | any Hazardous Materials that are present on, under, or emanating from the Facilities, Assets, or the Greenville Property or that were disposed or transferred from the Facilities, Assets or the Greenville Property at any time by Seller on or prior to the Closing Date, |
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(D) | any bodily injury (including illness, disability and death, regardless of when any such bodily injury manifested itself), personal injury, property damage (including trespass, nuisance, diminution in property value, wrongful eviction and deprivation of the use of real property) or other damage of or to any Person, property (real or personal), or any Assets prior to the Closing Date or from any Hazardous Material that (i) was present or reasonably suspected to be present on or before the Closing Date on or at the Facilities (or present or reasonably suspected to be present on any other property, if such Hazardous Material emanated from any Facility or the Greenville Property and was present or reasonably suspected to be present on any Facility or the Greenville Property, on or prior to the Closing Date), or (ii) Released by any Person on or at any Facilities, Assets, or the Greenville Property at any time on or prior to the Closing Date, and | ||
(E) | any Remedial Actions taken by Seller at the Facilities. |
(ii) | The circumstances and conditions described in Sections 11.3(b)(i)(A) through 11.3(b)(i)(E) are collectively referred to herein as “Non-TCE Environmental Conditions.” The parties acknowledge and agree that Section 11.3(b) shall not include obligations with respect to TCE Contamination, except as provided in Section 11.3(a)(i)(A). In the event of a Buyer Change of Control, the right of the Buyer Indemnified Parties to indemnification and reimbursement under Section 11.3(b) shall terminate automatically and be void and of no force and effect; Notwithstanding the foregoing sentence, (x) the Buyer Indemnified Parties (excluding Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxx, and Xxxxx X. McGaslin), and (y) Buyer, in the event the Buyer Change of Control was a sale of assets and the Investor Group, or any combination of its members, continues to own in excess of 50% of the voting power of Buyer, shall be permitted to assert a claim against Seller under Section 11.3(b); provided that in the event that such claim is made against the Buyer Indemnified Parties by a successor owner of Buyer or its assets, the right to indemnification or reimbursement is limited to claims substantially similar to those in Section 11.3(b)(i). |
(c) | In the event of an Environmental Claim related to Non-TCE Environmental Conditions initiated by any Third Party related to any Environmental Liabilities in connection with a proposed acquisition of assets from Buyer or a proposed loan to Buyer (the “Acquisition Environmental Claim”), Seller shall have no obligation of indemnification or reimbursement under Section 11.3(b) herein if the concentrations of |
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constituents identified by such Third Party are at or below the screening levels for industrial land use developed by U.S. EPA-Region 6 pursuant to its Corrective Action Strategy (“SLs”), any similar standards applicable in Arkansas subsequently adopted in the event U.S. EPA-Region 6 withdraws or revokes the SLs. In the event that the concentrations of constituents exceed such levels or no applicable limit exists for a particular constituent, Seller will perform a risk assessment for that constituent, in compliance with any applicable protocols or guidance acceptable to the Arkansas Department of Environmental Quality and U.S. EPA, Region 6 at the time of the risk assessment at Seller’s sole cost, and will perform such Remedial Action, if any, reasonably necessary to meet the risk level acceptable to the Arkansas Department of Environmental Quality and the U.S. EPA Region 6 for an industrial facility at the time of the risk assessment. Input parameters into the risk assessment must be consistent with the then current use of the Facilities, as long as such use is industrial. | |||
(d) | In the event of an Environmental Claim related to Non-TCE Environmental Conditions initiated by any Governmental Body or for which a Governmental Body requires a response, Seller will be responsible for any Remedial Action required by such Governmental Body under Environmental Law with respect to such Non-TCE Environmental Conditions. Upon completion of Remedial Action to the satisfaction of any Governmental Body having jurisdiction over any Non-TCE Environmental Condition, Seller shall have no further indemnity or reimbursement obligation with respect to any such Environmental Claim. | ||
(e) | Buyer shall not be entitled to indemnification or reimbursement under Section 11.3(b) with respect to any Non-TCE Environmental Condition in the absence of an Environmental Claim. | ||
(f) | The procedure described in Section 11.9 will apply to any claim (whether for monetary damages or injunctive relief) relating to a matter covered by Section 11.3 and as provided in Section 11.4(g), subject to the following: Seller shall be entitled to control any Proceeding with respect to which indemnity may be sought under this Section 11.3. Buyer shall be prohibited from undertaking any TCE Remedial Action or any other Remedial Action arising out of an Environmental Claim related to any Non-TCE Environmental Condition without the prior written consent of Seller; provided, however, if Seller refuses or neglects to perform a Remedial Action after notice from Buyer, as provided in Section 11.9, and Buyer has a reasonable, good faith belief that it will be subject to damages, penalties, fines or action taken by a Governmental Body in response to Seller’s failure to undertake the TCE Remedial Action or any other Remedial Action, Buyer may control the Proceeding. Buyer hereby grants to Seller, its employees, managers, agents, consultants, contractors and subcontractors, access to such portions of the Real Property as may be |
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reasonably required so as to permit Seller to perform the TCE Remedial Action or any other Remedial Action. In the course of any Remedial Action performed by Seller at the Facilities pursuant to this Agreement or in relation to the TCE Remedial Action, the following conditions shall apply: |
(i) | Seller shall provide Buyer with copies of any and all analysis results, workplans, reports and any correspondence with a Governmental Body associated with such Remedial Action; | ||
(ii) | Seller shall not unreasonably or unnecessarily interfere in any way with Buyer’s operation of the Facilities; | ||
(iii) | Seller follow all reasonable safety rules communicated to Seller in writing by Buyer, but in no event shall Buyer be responsible for the safety of Seller, its employees, contractors or invitees; | ||
(iv) | Seller shall inform Buyer in writing at least five (5) days in advance of any activity that is to take place at the Facilities; | ||
(v) | Seller shall perform all such Remedial Actions during normal business hours, except with the written permission of Buyer (such permission not to be unreasonably withheld, delayed, denied or conditioned); | ||
(vi) | Seller shall not communicate to any Governmental Body, a neighboring property owner, or any other Person that Buyer is responsible for the TCE Remedial Action or the TCE Contamination, provided Buyer maintains the trichloroethylene-resistant sealant on the Facility floor; | ||
(vii) | Seller shall provide copies to Buyer of any such Remedial Action workplan at least ten (10) days in advance of the submittal of any such workplan to any Governmental Body and revise such Remedial Action workplan to incorporate any reasonable comments made by Buyer; | ||
(viii) | all of Seller’s contractors or subcontractors operating at the Facilities shall have in force during any such Remedial Action performed by that contractor or subcontractor on the Facilities insurance coverage of the following types, in at least the following amounts: |
(A) | Workers’ compensation in accordance with all applicable statutory requirements; |
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(B) | Comprehensive general liability insurance with a combined single limit of not less than $1,000,000 per occurrence for bodily injury and property damage; | ||
(C) | Comprehensive automobile liability, including coverage for all owned and non-owned vehicles used in connection with any Remedial Action, with a combined single limit of not less than $1,000,000 per occurrence for bodily injury and property damage; | ||
(D) | Employers’ liability insurance with limits of not less than $1,000,000 per occurrence; | ||
(E) | Environmental impairment liability insurance with limits of not less than $1,000,000 per occurrence and $1,000,000 aggregate, or higher if required by state or federal Law; and | ||
(F) | Any such insurance policy shall name Buyer as an additional insured and shall contain an agreement or endorsement that it will not be canceled or materially modified by the insurer without at least thirty (30) days prior written notice to Buyer. |
(ix) | the TCE Remedial Action or any such Remedial Action at the Facilities shall be performed in conformance with all applicable Environmental Laws; | ||
(x) | Seller shall be responsible for the handling, storage and disposal of any Hazardous Materials created, collected or otherwise generated in connection with the TCE Remedial Action or any such Remedial Action performed pursuant to this Agreement; | ||
(xi) | Seller shall take all precautions necessary to prevent damage to the Facilities and shall promptly repair or replace any and all damage to the Facilities caused by any Remedial Action. At the conclusion of the Remedial Action, Seller shall restore the Facilities substantially the same condition it was in prior to the commencement of the Remedial Action; | ||
(xii) | if required by any Governmental Body having jurisdiction over the TCE Remedial Action or if required in conformance with Occupational Safety and Health Laws, Seller shall perform such Remedial Actions as are necessary to reduce exposures by workers at the Facilities to the levels required pursuant to Occupational Health and Safety Law; | ||
(xiii) | Seller shall provide Buyer in advance with the name of any contractor to perform any such Remedial Action or activity in |
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relation to the TCE Remedial Action, provided, however, that Buyer shall be deemed to have approved those contractors identified on Exhibit 11.3(f)(xiii). Buyer may reasonably reject a contractor not identified on Exhibit 11.3(f)(xiii), provided, however, that in the event that Buyer fails to notify Seller of such rejection in writing within ten (10) days of receipt of notice from Seller of the name of any contractor, Buyer will be deemed to have approved such contractor; | |||
(xiv) | Seller shall provide Buyer, at Buyer’s sole cost and expense, with split samples of any environmental media sampled, if requested by Buyer. In no event shall Buyer be deemed the generator or the arranger for disposal of any wastes or materials generated by or during any such Remedial Action; | ||
(xv) | Buyer shall cooperate with Seller in the conduct of any such Remedial Action, including, without limitation, providing reasonable access to any necessary services, such as water, sewer and electricity, provided that Seller reimburses Buyer promptly for the additional out-of-pocket costs of such services; | ||
(xvi) | Buyer shall not initiate any communication with any Governmental Body with respect to any Remedial Action performed under this Agreement without Seller’s prior written consent, except in the event that Buyer: |
(A) | notifies Seller, in writing, at least seven (7) days prior to such communication, which notification shall include a description of the agenda or topics for discussion; and | ||
(B) | provides Seller the opportunity to participate in such communication. |
(xvii) | Buyer may initiate any communication with any Governmental Body with respect to any Environmental Liability performed under this Agreement other than a Remedial Action without Seller’s prior written consent, provided that, in the event that Buyer has a reasonable belief that Seller is obligated to indemnify it with respect to such Environmental Liability, Seller must notify Buyer |
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and afford Buyer an opportunity to participate in any such communication pursuant to Section 11.3(f)(xvi) of this Agreement. | |||
(xviii) | In the case of any Remedial Action performed under this Agreement other than the TCE Remedial Action, the clean-up standards selected shall reflect the least stringent remediation standards acceptable under Environmental Law, assuming such Remedial Action is conducted using the most cost-effective commercially reasonable methods for investigation, remediation and/or containment, including, without limitation, the use of “institutional” or “engineering” controls or deed restrictions limiting the use of the relevant Facility to industrial purposes, provided that such controls or restrictions: (A) are consistent with applicable Environmental Law; and (B) do not materially preclude Buyer from using such Facility in the manner it was used in as of the Closing Date. |
(g) | Without limiting the generality of the foregoing, absent fraud, the provisions of this Section 11.3 shall exclusively govern the rights and obligations of the parties and shall be the only remedies available to the parties hereto in respect of any matter arising hereunder with respect to the matters expressed herein, provided, however, that this Section 11.3(g) shall have no force and effect for Non-TCE Environmental Conditions on the first day following the expiration of the “Non-TCE Survival Period” (as defined in Section 11.7 herein). Following the expiration of the Non-TCE Survival Period, the Buyer Indemnified Parties may, subject to Section 11.3(b)(ii), pursue all other remedies for Non-TCE Environmental Conditions, whether statutory, regulatory, common law or otherwise. |
(a) | any Breach of any representation or warranty made by Buyer in this Agreement or the Transaction Documents (excluding the Facility Lease); | ||
(b) | any Breach of any covenant or obligation of Buyer in this Agreement or the Transaction Documents (excluding the Facility Lease); | ||
(c) | any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Buyer (or any Person acting on Buyer’s behalf) in connection with any of the Contemplated Transactions; | ||
(d) | any Assumed Liabilities; |
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(e) | any liability resulting or arising from Buyer’s ownership and operation of the Assets or business after the Closing that is not a Liability for which Seller otherwise indemnifies Buyer under Sections 11.2 or 11.3 hereof; or | ||
(f) | any liability under WARN Act caused by Buyer’s decision not to hire the requisite number of Active Employees so as to avoid liability under the WARN Act; | ||
(g) | any Environmental Claims arising out of or relating to: |
(i) | operation by Buyer at any time subsequent to the Closing Date of any of the Facilities, Assets, the Business or the Greenville Property; | ||
(ii) | any Hazardous Materials that Buyer causes to be present on, under, or emanating from the Facilities, Assets, or the Greenville Property or that Buyer disposes or transfers from the Facilities, Assets or the Greenville Property at any time subsequent to the Closing Date, and | ||
(iii) | any bodily injury (including illness, disability and death, regardless of when any such bodily injury manifested itself), personal injury, property damage (including trespass, nuisance, diminution in property value, wrongful eviction and deprivation of the use of real property) or other damage of or to any Person, property (real or personal), or any Assets subsequent to the Closing Date or from any Hazardous Material that Buyer causes to be (i) present or reasonably suspected to be present subsequent to the Closing Date on or at the Facilities (or present or reasonably suspected to be present on any other property, if such Hazardous Material emanated from any Facility or the Greenville Property and Buyer caused the Hazardous Material to be present on the Facility or the Greenville Property, subsequent to the Closing Date), or (ii) Released on or at any Facilities, Assets, or the Greenville Property at any time subsequent to the Closing Date any liability arising under Environmental Law, including, without limitation, any Environmental Liabilities, resulting or arising from the acts or omissions of Buyer or the ownership or operation of the Facilities, Assets, the Business or the Greenville Property after the Closing Date; and |
(h) | any damage or destruction to the Leased Equipment, normal wear and tear excepted and further excepting any existing wear, tear, and damage existing on the Closing Date. |
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(a) | Seller’s aggregate liability for Damages under Section 11.2(a), 11.2(f), 11.2(g) and 11.2(i) shall not exceed $2,000,000 provided that this Section 11.5(a) shall not apply to Sections 2.4(b)(iii), (v), (vi), (vii) (ix), (xii) and (xv); and |
(b) | Seller’s aggregate liability for Damages for Non-TCE Contamination under Section 11.3(b) shall not exceed $13,500,000 provided, however, that the limitation under this Section 11.5(b) shall not apply to Damages for Non-TCE Contamination under Section 11.3(b)(i)(D). |
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12. | CONFIDENTIALITY. |
(i) | all information that is a trade secret under applicable trade secret or other law; | ||
(ii) | all information concerning product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer hardware, Software and computer software and database technologies, systems, structures and architectures; | ||
(iii) | all information concerning the business and affairs of the Disclosing Party (which includes historical and current financial statements, financial projections and budgets, tax returns and accountants’ materials, historical, current and projected sales, capital spending budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts, the names and backgrounds of key personnel and personnel training techniques and materials, however documented), and all information obtained from review of the Disclosing Party’s documents or property or discussions with the Disclosing Party regardless of the form of the communication; and | ||
(iv) | all notes, analyses, compilations, studies, summaries and other material prepared by the Receiving Party to the extent containing or based, in whole or in part, upon any information included in the foregoing. |
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13. | GENERAL PROVISIONS. |
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Seller:
|
Greenville Tube, LLC | |||
c/o Chart Industries, Inc. | ||||
0000 Xxxxxxxxxxx Xxxxx | ||||
Xxxxxxxxx, XX 00000 | ||||
Attention: | Chief Financial Officer | |||
Fax no.: | 000-000-0000 | |||
E-mail address: | xxxxxxx.xxxxx@Xxxxx-xxx.xxx | |||
With a mandatory copy to: | Xxxxxx, Halter & Xxxxxxxx, LLP | |||
000 Xxxxxxxx Xxxxxx | ||||
Xxxxxxxxx, XX 00000 | ||||
Attention: | Xxxxxx X. XxXxx, Esq. | |||
Fax no.: | 000-000-0000 | |||
E-mail address: | xxxxxx@xxxxxx.xxx | |||
Buyer:
|
GT Acquisition Company | |||
c/o CFB Venture Fund III, L.P. | ||||
Eleven Xxxxx Xxxxxxx, Xxxxx 0000 | ||||
Xx. Xxxxx, Xxxxxxxx 00000 | ||||
Attention: | Xxxxxxx X. Xxxxx | |||
Fax no.: | 000-000-0000 | |||
E-mail address: | xxxxx.xxxxx@xxxxxxxxxxxxxxxxxx.xxx | |||
With a mandatory copy to: | Husch & Eppenberger, LLC | |||
000 Xxxxxxxxxx Xxxxx, Xxxxx 000 | ||||
Xx. Xxxxx, Xxxxxxxx 00000 | ||||
Attention: | Xxxxx X. Xxxxxxxxx, Esq. | |||
Fax no.: | 000-000-0000 | |||
E-mail address: | xxxxx.xxxxxxxxx@xxxxx.xxx |
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GT ACQUISITION COMPANY | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name: Xxxxxxx X. Xxxxx | ||||
Title: President | ||||
GREENVILLE TUBE, LLC | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name: Xxxxxxx X. Xxxxx | ||||
Title: Assistant Secretary |
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2
CHART INDUSTRIES, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: | Xxxxxxx X. Xxxxx | |||
Title: | Chief Financial Officer and Treasurer | |||
CHART, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: | Xxxxxxx X. Xxxxx | |||
Title: | Chief Financial Officer and Treasurer |
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