STOCK PURCHASE AGREEMENT BY AND AMONG SHV NEDERLAND B.V., SHV FINANCE B.V., PARCS LLC, SHV HOLDINGS N.V. solely as guarantor under Section 10.15 AND NUCOR CORPORATION solely as guarantor under Section 10.15 Dated as of February 7, 2008
BY
AND AMONG
SHV
NEDERLAND B.V.,
SHV
FINANCE B.V.,
PARCS
LLC,
SHV
HOLDINGS N.V.
solely
as guarantor under Section 10.15
AND
NUCOR
CORPORATION
solely
as guarantor under Section 10.15
Dated
as of February 7,
2008
TABLE
OF CONTENTS
|
Page
|
|||
|
ARTICLE
I
|
DEFINITIONS
|
1
|
|
|
Section
1.1
|
Definitions
|
1
|
|
|
Section
1.2
|
Other
Definitions
|
8
|
|
|
Section
1.3
|
Construction
|
10
|
|
|
ARTICLE
II
|
PURCHASE
AND SALE
|
10
|
|
|
Section
2.1
|
The
Purchase and Sale
|
10
|
|
|
Section
2.2
|
Purchase
Price
|
10
|
|
|
Section
2.3
|
Closing
|
11
|
|
|
Section
2.4
|
Deliveries
by Seller
|
11
|
|
|
Section
2.5
|
Deliveries
by Buyer
|
11
|
|
|
Section
2.6
|
Mutual
Release
|
11
|
|
|
Section
2.7
|
Calculation
of the Adjustment Amount
|
12
|
|
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF SELLER
|
14
|
|
|
Section
3.1
|
Organization
|
14
|
|
|
Section
3.2
|
Authorization
|
14
|
|
|
Section
3.3
|
Capitalization
|
14
|
|
|
Section
3.4
|
Consents
and Approvals; No Violations
|
15
|
|
|
Section
3.5
|
Financial
Statements
|
16
|
|
|
Section
3.6
|
No
Undisclosed Liabilities
|
16
|
|
|
Section
3.7
|
Absence
of Certain Changes
|
16
|
|
|
Section
3.8
|
Real
Property
|
16
|
|
|
Section
3.9
|
Intellectual
Property
|
16
|
|
|
Section
3.10
|
Litigation
|
16
|
|
|
Section
3.11
|
Compliance
with Applicable Law
|
17
|
|
|
Section
3.12
|
Company
Contracts
|
17
|
|
|
Section
3.13
|
Licenses
and Permits
|
18
|
|
|
Section
3.14
|
Company
Benefit Plans
|
18
|
|
|
Section
3.15
|
Labor
Relationships
|
18
|
|
|
Section
3.16
|
NO
OTHER REPRESENTATIONS OR WARRANTIES
|
18
|
|
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF BUYER
|
19
|
|
|
Section
4.1
|
Organization
|
19
|
|
|
Section
4.2
|
Authorization
|
19
|
|
|
Section
4.3
|
Consents
and Approvals; No Violations
|
19
|
|
|
Section
4.4
|
Litigation
|
20
|
|
|
Section
4.5
|
Financial
Capability
|
20
|
|
|
Section
4.6
|
Independent
Review
|
20
|
|
|
Section
4.7
|
Certain
Fees
|
20
|
TABLE
OF CONTENTS
|
Page
|
|||
|
ARTICLE
V
|
COVENANTS
|
21
|
|
|
Section
5.1
|
Conduct
of the Business
|
21
|
|
|
Section
5.2
|
Access
to Information
|
22
|
|
|
Section
5.3
|
Consents
|
23
|
|
|
Section
5.4
|
Reasonable
Best Efforts
|
23
|
|
|
Section
5.5
|
Public
Announcements
|
24
|
|
|
Section
5.6
|
Buyer
Knowledge
|
24
|
|
|
Section
5.7
|
Tax
Matters
|
24
|
|
|
Section
5.8
|
Preservation
of Records
|
26
|
|
|
Section
5.9
|
Employees;
Employee Benefits
|
26
|
|
|
Section
5.10
|
Further
Assurances
|
27
|
|
|
Section
5.11
|
Non-Competition
|
27
|
|
|
Section
5.12
|
Exclusivity
|
29
|
|
|
Section
5.13
|
Transfer
of Company Shares
|
29
|
|
|
Section
5.14
|
Intercompany
Debt
|
29
|
|
|
Section
5.15
|
Transaction
Payments
|
29
|
|
|
Section
5.16
|
Name
Change
|
30
|
|
|
ARTICLE
VI
|
CONDITIONS
TO OBLIGATIONS OF THE PARTIES
|
30
|
|
|
Section
6.1
|
Conditions
to Each Party’s Obligations
|
30
|
|
|
Section
6.2
|
Conditions
to Obligations of Seller and Note Holder
|
30
|
|
|
Section
6.3
|
Conditions
to Obligations of Buyer
|
31
|
|
|
ARTICLE
VII
|
TERMINATION
|
31
|
|
|
Section
7.1
|
Termination
|
31
|
|
|
Section
7.2
|
Procedure
and Effect of Termination
|
32
|
|
|
ARTICLE
VIII
|
INDEMNIFICATION
|
32
|
|
|
Section
8.1
|
Indemnification
Obligations of Seller
|
32
|
|
|
Section
8.2
|
Indemnification
Obligations of Buyer
|
33
|
|
|
Section
8.3
|
Indemnification
Procedure
|
33
|
|
|
Section
8.4
|
Claims
Period
|
34
|
|
|
Section
8.5
|
Liability
Limits
|
35
|
|
|
Section
8.6
|
Exclusive
Remedies
|
37
|
|
|
ARTICLE
IX
|
ENVIRONMENTAL
REAL PROPERTY
|
37
|
|
|
Section
9.1
|
Buyer’s
Access to Perform Environmental Site Assessments
|
37
|
|
|
Section
9.2
|
Actions
Dependent Upon Findings From Phase I Environmental Site
Assessments
|
38
|
|
|
Section
9.3
|
Actions
Dependent Upon Findings From Phase II Environmental Site
Assessments
|
39
|
|
|
Section
9.4
|
Payment
for Environmental Remediation Costs
|
41
|
|
|
Section
9.5
|
Obligations
of Buyer and Seller
|
42
|
|
|
ARTICLE
X
|
MISCELLANEOUS
|
43
|
|
|
Section
10.1
|
Fees
and Expenses
|
43
|
-ii-
TABLE
OF CONTENTS
|
Page
|
|||
|
Section
10.2
|
Notices
|
43
|
|
|
Section
10.3
|
Severability
|
44
|
|
|
Section
10.4
|
Binding
Effect; Assignment
|
44
|
|
|
Section
10.5
|
No
Third Party Beneficiaries
|
45
|
|
|
Section
10.6
|
Section
Headings
|
45
|
|
|
Section
10.7
|
Dispute
Resolution
|
45
|
|
|
Section
10.8
|
Entire
Agreement
|
45
|
|
|
Section
10.9
|
Governing
Law
|
45
|
|
|
Section
10.10
|
Consent
to Jurisdiction and Service of Process
|
45
|
|
|
Section
10.11
|
Waiver
of Jury Trial
|
46
|
|
|
Section
10.12
|
Specific
Performance
|
46
|
|
|
Section
10.13
|
Counterparts
|
46
|
|
|
Section
10.14
|
Amendment;
Modification
|
46
|
|
|
Section
10.15
|
Guarantee
|
46
|
-iii-
This
STOCK PURCHASE AGREEMENT dated February 7, 2008 (this “Agreement”),
is
made and entered into by and among SHV NEDERLAND B.V., a company incorporated
in
the Netherlands Antilles and registered in Utrecht, The Netherlands
(“Seller”),
SHV
FINANCE B.V., a company incorporated in the Netherlands Antilles and registered
in Utrecht, The Netherlands formerly known as “NPM Finance B.V.” (“Note
Holder”),
PARCS
LLC, a Delaware limited liability company (“Buyer”)
and,
solely for the purpose of Section 10.15 hereof, SHV HOLDINGS N.V., a company
incorporated in the Netherlands Antilles and registered in Utrecht, The
Netherlands (“Seller
Guarantor”),
and
NUCOR CORPORATION, a Delaware corporation (“Buyer
Guarantor”).
Seller and Buyer are sometimes individually referred to in this Agreement as
a
“Party”
and
collectively as the “Parties”.
WHEREAS,
Seller owns all of the issued and outstanding shares (the “Company
Shares”)
of
capital stock of SHV North America Corporation, a Delaware corporation (the
“Company”);
WHEREAS,
the Company and its Subsidiaries (collectively, the “Acquired Companies”
and individually, an “Acquired Company”) are in the business of (i)
trading, brokering and processing scrap metal and (ii) recycling, transporting
and marketing scrap metal and substitutes thereof (the
“Business”);
WHEREAS,
Note Holder is the lender of the Intercompany Debt (as defined herein);
and
WHEREAS,
Seller, Note Holder and Buyer desire to enter into this Agreement pursuant
to
which (i) Seller will sell to Buyer, and Buyer will purchase from Seller, all
of
the Company Shares and (ii) Note Holder will sell to Buyer, and Buyer will
purchase from Note Holder, the Intercompany Debt, in each case, on the terms
and
subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants, agreements and conditions set forth in this Agreement,
and intending to be legally bound hereby, each of Seller, Note Holder and Buyer
hereby agrees:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
The
following terms, as used in this Agreement, have the following
meanings:
“Additional
Cash Amount”
means
an amount equal to (a) One Hundred Ninety-Six Thousand Dollars ($196,000),
multiplied by
(b) the
actual number of days elapsed from December 31, 2007 up to and including the
Closing Date.
“Adjustment
Amount”
means
the amount equal to the lesser of (a) the Additional Cash Amount as reflected
on
the Final Closing Statement and (b) the Company Net Income as reflected on
the
Final Closing Statement.
“Adjustment
Amount Deficit”
means
the amount, if any, by which the Estimated Adjustment Amount is less than the
Adjustment Amount.
“Adjustment
Amount Surplus”
means
the amount, if any, by which the Estimated Adjustment Amount is greater than
the
Adjustment Amount.
“Affiliate”
of
any
specified Person means any other Person directly or indirectly controlling
or
controlled by, or under common control with, such specified Person.
“Business
Day”
means
any day except Saturday, Sunday or any days on which banks are generally not
open for business in New York, New York.
“Buyer
Indemnified Parties”
means
Buyer and its Affiliates, each of their respective officers, directors,
employees, agents, trustees and representatives and each of the heirs,
executors, successors and assigns of any of the foregoing.
“Claims
Period”
means
the period during which a claim for indemnification may be asserted hereunder
by
an Indemnified Party.
“Clean
Up Standards”
means
that standard consistent with commercial/industrial land use pursuant to which
Environmental Laws as in effect on the Closing Date, or Governmental Entities
implementing such Environmental Laws as of the Closing Date, determine the
need
for any Remedial Action.
“Code”
means
the United States Internal Revenue Code of 1986, as amended.
“Company
Benefit Plan”
means
each Employee Benefit Plan currently sponsored or maintained by any Acquired
Company or to which any Acquired Company makes, or has any obligation to make,
any contributions or with respect to which any Acquired Company has any other
liabilities.
“Company
Intellectual Property”
means
any Intellectual Property that is owned by any Acquired Company.
“Company
Net Income”
means
an amount equal to eighty percent (80%) of the net income of the Acquired
Companies for the period from December 31, 2007 until as of 11:59 p.m. Eastern
Time on the date preceding the Closing Date determined on a consolidated basis
in accordance with GAAP using such assumptions and applications of GAAP as
were
used in preparing the Financial Statements.
“Confidentiality
Agreement”
means
that certain confidentiality agreement by and between Seller and Buyer dated
December 7, 2007, as amended.
“Continued
Employee”
means
each individual who is employed by any Acquired Company at the close of business
on the Closing Date (including those who are actively employed or on leave,
disability or other absence from employment).
-2-
“Contracts”
means
all written agreements, contracts, leases, subleases, purchase orders,
arrangements and legally enforceable commitments, to which any Acquired Company
is a party and is currently bound.
“Debt
Agreements”
means
the following Contracts: (a) the Contracts for the Intercompany Debt; (b) the
Credit Agreement, dated October 1, 2007, by and among The Xxxxx X. Xxxxxx
Company, the various lenders from time to time party thereto, and Fifth Third
Bank as Administrative Agent and L/C Issuer; (c) the Amended and Restated
Receivables Purchase Agreement, dated as of July 12, 2007, by and among DJJ
Receivables, LLC, The Xxxxx X. Xxxxxx Company, Fifth Third Bank and the other
parties thereto from time to time; and (d) the ISDA Master Agreement, dated
July
21, 2006, by and between The Xxxxx X. Xxxxxx Company and Fifth Third
Bank.
“Dollar”,
“Dollars” and the symbol “$” shall mean lawful money of the United
States of America.
“Employee
Benefit Plan”
means,
with respect to any Person, each plan, fund, program, agreement, arrangement
or
scheme that is at any time sponsored or maintained by such Person or to which
such Person makes, or has an obligation to make, contributions or to which
such
Person has any liability providing for employee benefits or for the remuneration
of the employees, former employees, directors, managers, officers, consultants,
independent contractors, contingent workers or leased employees of such Person
or the dependents of any of them (whether written or oral), including
(a) each deferred compensation, bonus, incentive compensation, pension,
retirement, profit sharing, 401(k), stock purchase, stock option and other
equity compensation plan, (b) each “welfare” plan (within the meaning of
Section 3(1) of ERISA, determined without regard to whether such plan is subject
to ERISA), (c) each “pension” plan (within the meaning of Section 3(2) of ERISA,
determined without regard to whether such plan is subject to ERISA), (d) each
severance plan or agreement, and (e) each health, vacation, summer hours,
supplemental unemployment benefit, hospitalization insurance, medical, vision,
dental, hospitalization, prescription drug, cafeteria, flexible benefits,
short-term and long-term disability, accident and life insurance, legal and
other employee benefit plan, fund, program, agreement, arrangement or
scheme.
“Environmental
Laws” means any and all Laws relating to noise, or to pollution or
protection of human health or the environment (including the air, surface water,
ground water, wetlands, land surface or subsurface strata), including Laws
relating to air and water emissions or discharges, Releases or threatened
Releases of Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
recycling, reporting or handling of Hazardous Material, all as in effect as
of
the Closing Date.
“Environmental
Permits”
means
all material Licenses applicable to the Business issued pursuant to
Environmental Laws.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as
amended.
-3-
“Estimated
Adjustment Amount”
means
the amount equal to the lesser of (a) the Estimated Additional Cash Amount
and
(b) the Estimated Company Net Income.
“GAAP”
means generally accepted accounting principles in the United States as in effect
on any applicable date.
“Governmental
Entity”
means
any federal or state government (whether domestic or foreign), any political
subdivision thereof or any court, administrative or regulatory agency,
department, instrumentality, body or commission or other governmental authority
or agency.
“Hazardous
Material” shall mean any chemicals, pollutants, contaminants, medical waste
or specimens, toxic substances, petroleum or petroleum products, whether or
not
discarded, that are regulated by Environmental Laws or the Release or disposal
of which creates or would reasonably be expected to create responsibility under
Environmental Laws, including hazardous wastes, hazardous substances, extremely
hazardous substances, asbestos, polychlorinated biphenyls and urea formaldehyde,
and low level nuclear materials, special nuclear materials or nuclear byproduct
materials.
“HSR
Act”
means
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“Income
Tax”
means
all Taxes based upon, measured by, or calculated with respect to (i) net
income or profits (including any capital gains, alternative minimum taxes and
any Taxes on items of tax preference, but not including sales, use, real
property gains, real or personal property, gross receipts, transfer or other
similar Taxes) or (ii) multiple bases (including corporate franchise, doing
business or occupation Taxes) if one or more of the bases upon which such Tax
may be based upon, measured by, or calculated with respect to is described
in
clause (i) of this definition.
“Indemnified
Party”
means
a
Buyer Indemnified Party or Seller Indemnified Party.
“Intellectual
Property” means any or all of the following and all rights, arising out of
or associated therewith: (a) all patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, (b) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know-how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing, (c) all works of authorship (whether
copyrightable or not), all copyrights, copyright registrations and applications
therefor, and all other rights corresponding thereto, (d) all industrial designs
and any registrations and applications therefor, (e) all internet uniform
resource locators, domain names, trade names, logos, slogans, designs, trade
dress, common law trademarks and service marks, trademark and service xxxx
and
trade dress registrations and applications therefore and (f) all software,
computer programs and other computer-readable instructions (in both object
code
and source code formats) and all other rights corresponding
thereto.
-4-
“Intercompany
Debt”
means
the aggregate principal amount of Two Hundred Fifty Million Dollars
($250,000,000) outstanding pursuant to the following: (a) the Credit
Facility Agreement, dated October 18, 2004, between Seller and the Company;
(b)
the Credit Facility Agreement, dated October 28, 2005, between Seller and the
Company; (c) the Cession Agreement dated January 31, 2006 among Seller, the
Company and Note Holder; (d) the Credit Facility Agreement, dated October 10,
2006, between Note Holder and the Company; (e) the Credit Agreement, dated
April
2, 2007, between Note
Holder
and the
Company; and (f) the Credit Agreement, dated September 25, 2007, between Note
Holder and the Company.
“Knowledge”
with
respect to Seller means all facts actually known by each of Xxxxx Grass, Xxx
Xxxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxx Xxxxx and Xxxxx
Xxxxxx.
“Law”
means
any material statutes, rules, codes, regulations, ordinances or orders, of,
or
issued by, Governmental Entities.
“Leased
Real Property”
means
the parcels of real property currently leased by any Acquired Company, together
with all fixtures and improvements thereon.
“Licenses”
means
all licenses, permits (including environmental, construction and operation
permits), franchises and certificates issued by any Governmental
Entity.
“Liens”
means
mortgages, liens, pledges, security interests, charges, claims, restrictions
and
encumbrances.
“Losses”
means
any claims, liabilities, obligations, damages, losses, costs, expenses,
penalties, fines and judgments (at equity or at law, including statutory and
common) and damages whenever arising or incurred (including reasonable
attorneys’ fees and expenses, but not including any such fees or expenses in
connection with investigating or pursuing any claim hereunder), but excluding
consequential or indirect damages arising out of lost profits or revenues,
and
excluding punitive and exemplary damages other than punitive and exemplary
damages actually paid to Persons other than a Buyer Indemnified Party or a
Seller Indemnified Party.
-5-
“Material
Adverse Effect”
means
any event, change or effect that has occurred that has a material adverse effect
upon the financial condition or business of the Acquired Companies, taken as
a
whole; provided,
that
none of the following shall be deemed, either individually or in the aggregate
to constitute, and none of the following shall be taken into account in
determining whether there has been or will be, a Material Adverse Effect: any
event, change, effect, condition or circumstance (a) in the financial,
banking, credit, securities, or commodities markets, the economy in general
or
prevailing interest rates of the United States or any other jurisdiction, where
the Company has operations or revenues, (b) in (i) the general economic
conditions affecting the industries in which any Acquired Company operates
or
(ii) the prices of the commodities, products or services the Company and its
Subsidiaries sell or provide, (c) arising as a result of a change in GAAP
or regulatory accounting principles or interpretations thereof after the date
hereof, (d) arising or resulting from the announcement of this Agreement, or
the
pendency of the transactions contemplated herein, (e) arising or resulting
from
(i) the execution of, compliance with the terms of, or the taking of any action
required by this Agreement or (ii)
the
consummation of the transactions contemplated by this Agreement, (f) in
applicable Laws or the interpretation thereof, (g) arising or resulting
from changes in national or international political or social conditions,
including the engagement by the United States in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or the occurrence
of
any military or terrorist attack (or, in each case, escalation thereof), (h)
arising or resulting directly or indirectly from the acts or omissions of Buyer
and/or its Affiliates, (i) arising or resulting from the failure of any Acquired
Company to pay any Tax or (j) arising or resulting from the violation by any
Acquired Company of any Environmental Laws, the breach of any Environmental
Permits, or any Loss resulting from the handling, disposal or Release of any
Hazardous Material; provided,
however,
that
any
Loss, occurrence, change or effect that is cured prior to the Closing Date
shall
not be considered a Material Adverse Effect.
“NLRB”
means
the United States National Labor Relations Board.
“Ordinary
Course”
means
the ordinary course of business of the Acquired Companies consistent with past
practice.
“Owned
Real Property”
means
the parcels of real property owned in fee simple by any Acquired Company
(together with all fixtures and improvements thereon).
“Permitted
Liens”
means
(a) Liens imposed by law for Taxes not yet due and payable or that are being
properly contested, (b) statutory Liens of landlords, (c) Liens of carriers,
warehousemen, mechanics, materialmen, landlords, repairmen, and other Liens
imposed by Law or Contract incurred in the Ordinary Course that are not overdue
by more than thirty (30) days or that are being properly contested,
(d) pledges and deposits made in the Ordinary Course in compliance with
workers’ compensation, unemployment insurance and other social security Laws or
regulations, (e) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety, indemnity and appeal bonds,
performance and return-of-money and fiduciary bonds and other obligations of
a
like nature, in each case in the Ordinary Course, (f) easements, zoning
restrictions, rights-of-way, licenses, covenants, conditions, minor defects,
encroachments or irregularities in title and similar encumbrances on or
affecting any Real Property that do not secure any monetary obligations and
do
not materially interfere with the ordinary conduct of the Business at any Real
Property subject to such liens, (g) any (i) interest or title of a
lessor or sublessor under any lease, (ii) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to or
(iii) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding clause
(ii), (h) Liens on goods held by suppliers arising in the Ordinary Course
for sums not yet delinquent or being contested in good faith, (i) with respect
to any Real Property in which any Acquired Company owns a leasehold estate,
any
defect or encumbrance caused by or arising out of the failure to record the
lease or a memorandum thereof in the applicable real property records in the
jurisdiction where such Real Property is located and (j) the effect of any
moratorium, eminent domain or condemnation proceedings.
-6-
“Person”
means any individual, partnership, joint venture, corporation, trust, limited
liability company, unincorporated organization or other entity or any
Governmental Entity.
“Real
Property”
means
the Owned Real Property and the Leased Real Property.
“Release”
means
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the environment of
any
Hazardous Material other than that which is in compliance with Environmental
Laws.
“Remedial
Action”
means
any action, to the extent required by Environmental Laws, to remediate,
investigate, clean up, remove, treat, or otherwise mitigate a Release of
Hazardous Material or to complete post-remedial investigations, monitoring,
operation and maintenance, or other care with respect thereto.
“Seller
Indemnified Parties”
means
Seller and its Affiliates, each of their respective officers, directors,
employees, agents, trustees and representatives and each of the heirs,
executors, successors and assigns of any of the foregoing.
“Subsidiary”
or
“Subsidiaries”
means,
with respect to a Person, any other Person of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions, or a majority
of the outstanding voting securities of which, are at the time owned directly
or
indirectly by such Person.
“Taxes”
means
all federal, state, local or non-U.S. taxes, assessments, charges, duties,
fees,
levies or other governmental charges, including income, franchise, capital
stock, real property, personal property, tangible, withholding, employment,
payroll, social security, social contribution, unemployment compensation,
disability, stamp, transfer, registration, sales, use, excise, gross receipts,
value-added and all other taxes of any kind, whether disputed or not, and any
charges, interest or penalties imposed by any Governmental Entity with respect
to any taxes.
“Tax
Return”
means
any report, return, declaration, claim for refund or information return or
statement or other information required to be supplied to a Governmental Entity
in connection with Taxes, including estimated returns and reports with respect
to Taxes.
-7-
“Transaction
Expenses”
means
each of the following without duplication: (a)
the
aggregate amount required to be paid pursuant to any applicable agreement or
other governing document or policy (including, “success fees” or bonuses, or
severance payments) by any Acquired Company to any third party (including any
current or former shareholders, directors, officers or employees of Seller
or
any of its Affiliates (other than Seller itself pursuant to this Agreement))
solely as a result of the consummation of the transactions contemplated by
this
Agreement and without any action on the part of Buyer (other than consummating
the transactions contemplated by this Agreement); provided,
however,
that
“Transaction Expenses” shall not include any amounts paid by an Acquired Company
pursuant to Section 5.15; (b) any fees and expenses of any legal, financial
or accounting advisors incurred by an Acquired Company with respect to the
transactions contemplated by this Agreement; and (c) any fees and expenses
of
any broker, finder, investment banker or other intermediary incurred by an
Acquired Company in connection with the transactions contemplated by this
Agreement, in each case not paid prior to the Closing Date; provided,
however,
that
“Transaction Expenses” shall not include (i) any interest or principal with
respect or related to indebtedness of the Acquired Companies for borrowed money,
debt or capitalized lease obligations; or (ii) any
prepayment premiums, termination, acceleration, breakage, contingent or similar
fees or penalties of any kind or nature related to
the
repayment or termination of any indebtedness of the Acquired Companies for
borrowed money, debt, or capitalized lease obligations (including but not
limited to the Debt Agreements), to the extent the repayment, termination or
default resulting in such premiums or fees is other than solely as a result
of
the consummation of the transactions provided for herein; provided
that
Buyer shall use commercially reasonable efforts to obtain any necessary consents
or waivers in order to minimize or eliminate any such fees or
penalties.
“Treasury
Regulations”
means
the Income Tax Regulations promulgated under the Code.
Section
1.2 Other
Definitions.
Each of
the following terms is defined in the Section set forth opposite such
term:
|
Term
|
Section
|
|
|
2007
Accrued Interest
|
2.2
|
|
|
Acquired
Company
|
Recitals
|
|
|
Acquired
Companies
|
Recitals
|
|
|
Acquisition
Proposal
|
5.12
|
|
|
Agreement
|
Preamble
|
|
|
Business
|
Recitals
|
|
|
Buyer
|
Preamble
|
|
|
Buyer
Cap
|
8.5(b)
|
|
|
Buyer
Deductible
|
8.5(a)
|
|
|
Buyer
Guarantor
|
Preamble
|
|
|
Buyer
Losses
|
8.1
|
|
|
Buyer’s
Environmental Consultant
|
9.3(b)(i)
|
|
|
Buyer’s
Remediation Plan
|
9.3(b)(i)
|
|
|
Cash
Purchase Price
|
2.2
|
|
|
Claims
|
2.6(a)
|
|
|
Closing
|
2.3
|
|
|
Closing
Date
|
2.3
|
|
|
Closing
Date Deadline
|
7.1(d)
|
|
|
Company
|
Preamble
|
-8-
|
3.3(a)
|
||
|
Company
Contracts
|
3.12(a)
|
|
|
Company
Releasee(s)
|
2.6(a)
|
|
|
Company
Shares
|
Recitals
|
|
|
Covenant
|
5.11(a)
|
|
|
Designated
Locations
|
9.1(a)
|
|
|
Environmental
Basket
|
9.4
|
|
|
Environmental
Cap
|
9.4
|
|
|
Environmental
Remediation Costs
|
9.4
|
|
|
Environmental
Site Assessment Period
|
9.2(b)
|
|
|
Estimated
Additional Cash Amount
|
2.7(a)
|
|
|
Estimated
Closing Statement
|
2.7(a)
|
|
|
Estimated
Company Net Income
|
2.7(a)
|
|
|
Final
Closing Statement
|
2.7(d)
|
|
|
Financial
Statements
|
3.5
|
|
|
Fundamental
Representations
|
8.4(a)
|
|
|
Indemnifying
Party
|
8.3(a)
|
|
|
Independent
Accountant
|
2.7(e)(ii)
|
|
|
Intercompany
Debt Consideration
|
2.2
|
|
|
Parties
|
Preamble
|
|
|
Party
|
Preamble
|
|
|
Phase
I Environmental Site Assessment
|
9.1(a)
|
|
|
Phase
I Standard
|
9.1(a)
|
|
|
Phase
II Environmental Site Assessment
|
9.1(b)
|
|
|
Pre-Closing
Period
|
5.1
|
|
|
Proposed
Closing Statement
|
2.7(b)
|
|
|
Purchase
Price
|
2.2
|
|
|
Restricted
Territory
|
5.11(e)
|
|
|
Seller
|
Preamble
|
|
|
Seller
Guarantor
|
Preamble
|
|
|
Seller
Losses
|
8.2
|
|
|
Seller
Releasee(s)
|
2.6(b)
|
|
|
Seller’s
Environmental Consultant
|
9.3(b)(iii)
|
|
|
Seller’s
Remediation Plan
|
9.3(b)(iii)
|
|
|
Supporting
Documentation
|
5.7(c)
|
|
|
Term
|
5.11(b)
|
|
|
Termination
Date
|
7.1
|
|
|
Third
Consultant
|
9.3(b)(v)
|
|
|
Third
Remediation Plan
|
9.3(b)(v)
|
|
|
Transferee
|
5.13
|
|
|
8.5(a)
|
-9-
Section
1.3 Construction.
(a) Unless
the context of this Agreement otherwise clearly requires, (i) references to
the
plural include the singular, and references to the singular include the plural,
(ii) references to one gender include the other gender, (iii) the words
“include,” “includes” and “including ” do not limit the preceding terms or words
and shall be deemed to be followed by the words “without limitation”, (iv) the
terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement, (v) the terms “day” and “days” mean and refer to calendar
day(s), (vi) the terms “year” and “years” mean and refer to calendar year(s) and
(vii) unless set forth specifically otherwise, the settlement of all payments
hereunder shall be made in Dollars.
(b) Unless
otherwise set forth in this Agreement, references in this Agreement to any
document, instrument or agreement (including this Agreement) (i) includes and
incorporates all exhibits, schedules and other attachments thereto, (ii)
includes all documents, instruments or agreements issued or executed in
replacement thereof and (iii) means such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified or supplemented
from
time to time in accordance with its terms and in effect at any given time.
All
Article and Section references herein are to Articles and Sections of this
Agreement, unless otherwise specified.
(c) This
Agreement shall not be construed as if prepared by one of the Parties, but
rather according to its fair meaning as a whole, as if all Parties had prepared
it.
ARTICLE
II
PURCHASE
AND SALE
Section
2.1 The
Purchase and Sale.
Subject
to the terms and conditions of this Agreement, at the Closing, (a) Seller will
sell, transfer and deliver to Buyer, and Buyer will purchase and acquire from
Seller, all of the Company Shares and (b) Note Holder will sell, transfer and
deliver to Buyer, and Buyer will purchase and acquire from Note Holder, the
Intercompany Debt, in the case of each (a) and (b), free and clear of all
Liens.
Section
2.2 Purchase
Price.
Subject
to Section 2.7, the aggregate purchase price to be paid by Buyer at the Closing
for the Company Shares and the Intercompany Debt (the “Purchase
Price”)
shall
be an amount equal to (a) One Billion Four Hundred Thirty-Four Million
Seven Hundred Fifty Thousand Dollars ($1,434,750,000) (the
“Cash
Purchase Price”),
plus
(b) the
Estimated Adjustment Amount, minus
(c) Two
Million Nine Hundred and Two Thousand Eight Hundred Seventeen Dollars
($2,902,817) (the “2007
Accrued Interest”).
The
Purchase Price shall be allocated between Seller and Note Holder as follows:
(a)
first, that portion of the Purchase Price equal to the fair market value of
the
Intercompany Debt (not to be less than the principal balance due), as of the
Closing Date, shall be paid to Note Holder as consideration for the Intercompany
Debt (the “Intercompany
Debt Consideration”);
and
(b) an amount equal to (i) the Purchase Price, minus
(ii) the
Intercompany Debt Consideration shall be paid to Seller as consideration for
the
Company Shares.
-10-
Section
2.3 Closing.
Subject
to the terms and conditions of this Agreement, the closing of the transactions
contemplated by this Agreement (the “Closing”)
shall
occur as promptly as possible, and in any event no later than three (3) Business
Days following the satisfaction or waiver of the conditions to the obligations
of the parties set forth in Article VI (other than those conditions that by
their nature are to be fulfilled at Closing, but subject to the satisfaction
or
waiver of such conditions) or on such other date as Seller and Buyer may agree
in writing. The date of the Closing shall be referred to herein as the
“Closing
Date”.
The
Closing shall take place at the offices of King & Spalding LLP located at
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, at 10:00 a.m. Atlanta,
Georgia time, or at such other place or at such other time as Seller and Buyer
may agree in writing.
Section
2.4 Deliveries
by Seller.
At the
Closing, Seller will deliver or cause to be delivered to Buyer (unless delivered
previously) the following:
(a) all
stock
certificates representing the Company Shares and accompanying stock powers
or
other appropriate instruments of assignment and transfer in a form reasonably
satisfactory to Buyer duly executed by Seller, evidencing the transfer of the
Company Shares to Buyer;
(b) (i)
evidence reasonably satisfactory to Buyer of the completion by Note Holder
of
the transactions described in Section 5.14, and (ii) any note, loan agreement
or
other evidence of Intercompany Debt accompanied by appropriate instruments
of
assignment and transfer in a form reasonably satisfactory to Buyer duly executed
by Note Holder, evidencing the transfer of the Intercompany Debt to
Buyer;
(c) a
certificate, prepared in accordance with Sections 1.897-2(h) and 1.1445-2(c)(3)
of the Treasury Regulations, to the effect that the Company Shares do not
constitute United States real property interests for purposes of Sections 897
and 1445 of the Code;
(d) a
certificate executed by Seller and dated as of the Closing Date certifying
as to
the satisfaction of the conditions contained in Section 6.3; and
(e) an
IRS
Form W-8BEN, executed by each of Seller and Note Holder, to establish the
foreign status of Seller and Note Holder and to establish (together with the
certificate described in Section 2.4(c) above) that Seller and Note Holder
are
exempt from any U.S. Tax withholding requirements with respect to amounts to
be
received by them hereunder.
Section
2.5 Deliveries
by Buyer.
At the
Closing, Buyer shall (a) pay to Seller and Note Holder the Purchase Price by
wire transfer in immediately available funds to the account or accounts
designated to Buyer in writing by Seller at least two (2) Business Days prior
to
the Closing Date and (b) deliver or cause to be delivered to Seller a
certificate executed by Buyer and dated as of the Closing Date certifying as
to
the satisfaction of the conditions contained in Section 6.2.
Section
2.6 Mutual
Release.
Effective immediately subsequent to the Closing, and subject to and in
consideration of Buyer’s payment of the Purchaser Price to Seller and Note
Holder and the effective transfer of the Company Shares and Intercompany Debt
by
Seller and Note Holder, respectively, to Buyer:
-11-
(a) Each
of
Seller and Note Holder hereby releases and forever discharges the Acquired
Companies and their respective individual, joint or mutual, past and present
officers, employees, agents or directors (individually a “Company
Releasee”
and
collectively, the “Company
Releasees”)
from
any and all claims, causes of action, demands, suits, debts, obligations,
liabilities, damages, losses, costs, and expenses (including attorneys' fees)
of
every kind or nature whatsoever, known or unknown, actual or potential,
suspected or unsuspected, fixed or contingent (collectively, “Claims”),
which
Seller or Note Holder now has, has ever had or may hereafter have or discover
against the respective Company Releasees arising contemporaneously with or
prior
to the Closing or on account of or arising out of any matter, cause or event
on
or prior to the Closing; provided,
however,
that
nothing contained herein shall operate to release any obligation of (i) Buyer
or
Buyer Guarantor arising under this Agreement or (ii) the Acquired Companies
under any Contracts related to the operation of the Business in the Ordinary
Course between any Acquired Company, on the one hand, and Seller, Note Holder
or
any Affiliate of Seller or Note Holder on the other hand.
(b) Buyer
does hereby on behalf of each Acquired Company, and shall cause each Acquired
Company to, release and forever discharges Seller and Note Holder and their
respective individual, joint or mutual, past and present officers, employees,
agents or directors (individually a “Seller
Releasee”
and
collectively, the “Seller
Releasees”)
from
any and all Claims, which such Acquired Company now has, has ever had or may
hereafter have or discover against the respective Seller Releasees arising
contemporaneously with or prior to the Closing or on account of or arising
out
of any matter, cause or event on or prior to the Closing; provided,
however,
that
nothing contained herein shall operate to release any obligation of (i) Seller,
Note Holder or Seller Guarantor arising under this Agreement or (ii) Seller,
Note Holder or any Affiliate of Seller or Note Holder under any Contracts
related to the operation of the Business in the Ordinary Course between any
Acquired Company, on the one hand, and Seller, Note Holder or any Affiliate
of
Seller or Note Holder on the other hand.
Section
2.7 Calculation
of the Adjustment Amount.
(a) No
later
than three (3) days prior to the Closing Date, Seller shall cause to be prepared
and delivered to Buyer an estimated closing statement of the Acquired Companies
as of the Closing Date (the “Estimated
Closing Statement”),
which
shall include a calculation of the estimated Additional Cash Amount (the
“Estimated
Additional Cash Amount”)
and
the estimated Company Net Income (the “Estimated
Company Net Income”).
(b) No
later
than thirty (30) days following the Closing Date, Buyer shall prepare and
deliver to Seller the draft closing statement of the Acquired Companies as
of
the Closing Date (the “Proposed
Closing Statement”),
which
shall include a calculation of each of the Additional Cash Amount, the Company
Net Income, the Adjustment Amount Surplus, if any, and the Adjustment Amount
Deficit, if any. Buyer shall cause the Acquired Companies to provide Seller
and
its representatives with access to Acquired Company employees and advisors
and
such books and records as may be reasonably requested by them to verify the
information contained in the Proposed Closing Statement.
-12-
(c) Seller
shall have thirty (30) days following receipt of the Proposed Closing Statement
during which to notify Buyer of any dispute of any item contained in the
Proposed Closing Statement, which notice shall set forth in reasonable detail
the basis for such dispute. At any time within such thirty (30)-day period,
Seller shall be entitled to agree with any or all of the items set forth in
the
Proposed Closing Statement.
(d) If
Seller
does not notify Buyer of any such dispute within such thirty (30)-day period,
or
notifies Buyer of its agreement with the adjustments in the Proposed Closing
Statement prior to the expiration of the thirty (30)-day period, the Proposed
Closing Statement prepared by Buyer shall be deemed to be the “Final
Closing Statement”.
(e) If
Seller
does notify Buyer of any such dispute within such thirty (30)-day period, the
Final Closing Statement shall be resolved as follows:
(i) The
Parties shall cooperate in good faith to resolve any such dispute as promptly
as
possible.
(ii) In
the
event the Parties are unable to resolve any such dispute within fifteen (15)
days (or such longer period as the Parties shall mutually agree in writing)
of
notice of such dispute, such dispute and each Party’s work papers related
thereto shall be submitted to, and all issues having a bearing on such dispute
shall be resolved by PricewaterhouseCoopers or another independent
internationally recognized accounting firm agreed to by the Parties (the
“Independent
Accountant”).
Such
resolution shall be final and binding on the Parties, be based on presentations
of the Parties and on the Independent Accountant’s review, and shall be limited
to only those matters in dispute; provided,
however,
the
resolution determined by the Independent Accountant shall not be greater than
the higher value, nor lower than the lower value, of the applicable number
as
calculated by Seller or Buyer and submitted to the Independent Accountant.
The
Parties shall use commercially reasonable efforts to cause the Independent
Accountant to complete its work within thirty (30) days following its
engagement. The fees, costs and expenses of the Independent Account shall be
paid one-half by Seller and one-half by Buyer.
(f) The
Parties jointly shall revise the Proposed Closing Statement and the calculation
of the Additional Cash Amount, the Company Net Income, the Adjustment Amount
Surplus, if any, and the Adjustment Amount Deficit, if any, as appropriate
to
reflect the resolution of Seller’s objections (as agreed upon by the Parties or
as determined by the Independent Accountant) and deliver it to Seller within
ten
(10) days after the resolution of such objections. Such revised balance sheet
shall be the “Final
Closing Statement”.
-13-
(g) (i)
To
the extent there is an Adjustment
Amount
Deficit
on the Final Closing Statement, Buyer shall pay Seller the amount of the
Adjustment Amount Deficit by wire transfer of immediately available funds within
five (5) Business Days after Buyer’s delivery of the Final Closing Statement to
Seller to an account or accounts designated by Seller
and (ii) to the extent there is an Adjustment Amount Surplus on the Final
Closing Statement, Seller shall pay Buyer the amount of the Adjustment Amount
Surplus by wire transfer of immediately available funds within five (5) Business
Days after Buyer’s delivery of the Final Closing Statement to Seller to an
account or accounts designated by Buyer.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF SELLER
Subject
to the terms, conditions and limitations set forth in this Agreement and except
as has been booked, accrued or otherwise reflected in the Financial Statements
or reflected in the notes thereto (other than with respect to the
representations and warranties set forth in Sections 3.1, 3.2 and 3.3,
which such representations and warranties shall not be subject to any
qualifications beyond those set forth in such representations and warranties),
Seller hereby represents and warrants to Buyer as of the date hereof as
follows:
Section
3.1 Organization.
The
Acquired Companies are corporations duly organized, validly existing and in
good
standing under the Laws of their respective jurisdictions of organization,
and
each Acquired Company has all requisite corporate power and authority to own,
lease and operate their respective properties and to carry on in all material
respects their respective businesses as conducted on the date hereof. Each
Acquired Company is duly qualified or registered as a foreign corporation to
transact business under the Laws of each jurisdiction where the character of
its
activities or the location of the properties owned or leased by it requires
such
qualification or registration, except where the failure of such qualification
or
registration would not, individually or in the aggregate, have a Material
Adverse Effect.
Section
3.2 Authorization.
Seller
has the requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by Seller and does, when duly executed by all Parties
and
delivered by Seller, constitute the valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar Laws affecting the enforceability
of
creditors’ rights generally, general equitable principles and the discretion of
courts in granting equitable remedies.
Section
3.3 Capitalization.
(a) The
authorized capital stock of the Company consists of 120,000 shares of common
stock, par value $100.00 per share (the “Company
Common Stock”).
As of
the date hereof, there are 116,000 shares of Company Common Stock issued and
outstanding and owned beneficially and of record by Seller free and clear of
all
Liens. None of the issued and outstanding shares of Company Common Stock was
issued in violation of any preemptive rights. There are no options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the Company Common Stock or obligating either
Seller or the Company to issue or sell any shares of Company Common Stock,
or
any other interest in, the Company. There are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of Company Common Stock.
-14-
(b) All
the
outstanding shares of capital stock of each Subsidiary are validly issued,
fully
paid, nonassessable and free of preemptive rights and are owned by the Company,
whether directly or indirectly, free and clear of all Liens (other than Liens
securing indebtedness reflected on the balance sheet included in the Financial
Statements). There are no options, warrants, convertible securities or other
rights, agreements, arrangements or commitments of any character relating to
the
capital stock of any Subsidiary of the Company or obligating Seller or any
Acquired Company to issue or sell any shares of capital stock of, or any other
interest in, any Subsidiary of the Company. There are no voting trusts,
stockholder agreements, proxies or other agreements or understandings in effect
with respect to the voting or transfer of any shares of capital stock of or
any
other interests in any Subsidiary.
(c) Except
for title to Owned Real Property, with respect to which representations and
warranties are made solely under Section 3.8 hereof, each Acquired Company
holds
good and valid title to all of its material assets, free and clear of all Liens
(other than Permitted Liens or Liens securing indebtedness, debt for borrowed
money or capitalized lease obligations of any Acquired Company), except where
the failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect.
(d) There
are
no outstanding contractual obligations of any Acquired Company to make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person, except such contractual obligations that would not, individually
or in the aggregate, have a Material Adverse Effect.
Section
3.4 Consents
and Approvals; No Violations.
Except
for applicable requirements of the HSR Act and the Debt Agreements, neither
the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will (a) conflict with or
result in any breach of any provision of the certificates of incorporation
or
bylaws of Seller or any Acquired Company; (b) require any filing with, or
the obtaining of any permit, authorization, consent or approval of, any
Governmental Entity; (c) violate, conflict with or result in a default
under, or give rise to any right of termination, cancellation or acceleration
under, any of the terms, conditions or provisions of any note, mortgage, other
evidence of indebtedness, guarantee, license, agreement, lease to which any
Acquired Company is a party; or (d) violate any Law, order, injunction or
decree applicable to any Acquired Company; excluding from the foregoing clauses
(b), (c) and (d) such requirements, violations, conflicts, defaults or rights
(i) which would not, individually or in the aggregate, have a Material
Adverse Effect, or (ii) which become applicable as a result of the business
or activities in which Buyer is or proposes to be engaged or as a result of
any
acts or omissions by, or the status of or any facts pertaining to, Buyer.
-15-
Section
3.5 Financial
Statements.
Seller
has provided Buyer copies of the audited consolidated balance sheet of the
Acquired Companies for the fiscal year ended December 31, 2007, and the related
audited consolidated statements of income, retained earnings, stockholders’
equity and cash flows of the Acquired Companies, together with all related
notes
and schedules thereto, accompanied by the reports
thereon of the Company’s independent auditors (collectively referred to as the
“Financial
Statements”).
The
Financial Statements (a) have been prepared in accordance with GAAP applied
on a
consistent basis throughout the periods indicated (except as may be indicated
in
the notes thereto) and (b) fairly present, in all material respects, the
consolidated financial position, results of operations and cash flows of the
Acquired Companies taken as a whole as at the respective dates thereof and
for
the respective periods indicated therein, except as otherwise noted
therein.
Section
3.6 No
Undisclosed Liabilities.
The
Company and its Subsidiaries do not have any liabilities required to be shown
in, or disclosed in the notes to, the Financial Statements in accordance with
GAAP that are not shown or disclosed, except (a) those liabilities shown in
or arising under this Agreement, (b) those liabilities incurred in the
Ordinary Course since the date of the Financial Statements, (c) those
liabilities not required under GAAP to be reflected in the Financial Statements,
(d) those liabilities arising from actions not in violation of Section
5.1, and (e) any liability or obligation (or related liabilities or
obligations arising out of the same individual fact, event or circumstance)
which in any individual case does not exceed Five Hundred Thousand Dollars
($500,000).
Section
3.7 Absence
of Certain Changes.
Since
January 1, 2008 and through the date hereof there has been no Material Adverse
Effect.
Section
3.8 Real
Property.
Except
as would not, individually or in the aggregate, have a Material Adverse
Effect:
(a) As
of the
date hereof an Acquired Company has good and marketable title to all of the
Owned Real Property free and clear of any Liens other than Permitted
Liens;
(b) As
of the
date hereof an Acquired Company has a valid leasehold interest in the Leased
Real Property, free and clear of any Liens other than Permitted
Liens;
(c) Except
in
the Ordinary Course, there are no condemnation or appropriation or similar
proceedings pending or, to the Knowledge of Seller, threatened against any
of
the Real Property or the improvements thereon; and
(d) All
applicable permits, licenses and other evidences of compliance that are required
for the occupancy, operation and use of the Owned Real Property have been
obtained and complied with.
Section
3.9 Intellectual
Property.
An
Acquired Company has good and valid title to or possesses the rights to use
the
material Company Intellectual Property, free and clear of all Liens, other
than
Permitted Liens, and has paid all material maintenance fees, renewals or
expenses related to such material Company Intellectual Property, except where
such failure would not, individually or in the aggregate, have a Material
Adverse Effect.
Section
3.10 Litigation.
As of
the date hereof, there is no action, suit or proceeding pending or, to the
Knowledge of Seller, threatened against any Acquired Company by or before any
Governmental Entity, other than those that would not, individually or in the
aggregate, have a Material Adverse Effect. As of the date of this Agreement,
no
Acquired Company is subject to any outstanding order, writ, judgment, award,
injunction or decree of any Governmental Entity of competent jurisdiction or
any
arbitrator or arbitrators, other than those that would not, individually or
in
the aggregate, have a Material Adverse Effect.
-16-
Section
3.11 Compliance
with Applicable Law.
Each
Acquired Company is in compliance with all applicable Laws, except where the
results of any such noncompliance would not, individually or in the aggregate,
have a Material Adverse Effect.
Section
3.12 Company
Contracts.
(a) For
purposes of this Section 3.12, “Company
Contracts”
means:
(i) all
Contracts with suppliers under which the Acquired Companies, collectively make
payments in excess of $10,000,000
on an
annual basis;
(ii) all
Contracts that individually involve payments to or from the Acquired Companies,
collectively, in excess of $10,000,000 on an annual basis;
(iii) all
bonds, debentures, notes, loans, credit or loan agreements or loan commitments,
mortgages, indentures, guarantees or other contracts relating to the borrowing
of money;
(iv) all
leases relating to the Leased Real Property or other leases or licenses
involving any properties or assets (whether real, personal or mixed, tangible
or
intangible) involving an annual commitment or payment of more than $5,000,000
individually by any Acquired Company; and
(v) all
Contracts not made in the Ordinary Course that individually involve annual
payments to or from the Company or any Subsidiary in excess of
$10,000,000.
(b) All
Company Contracts are in full force and effect in all material respects and,
to
the Knowledge of Seller assuming the due authorization, execution and delivery
by any other party thereto, are currently enforceable in all material respects
against the applicable Acquired Company and, as of the Closing will be, if
not
previously terminated or expired, enforceable in all material respects against
the other party thereto in accordance with the express terms thereof, subject
to
bankruptcy, insolvency, reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors’ rights and to general
principles of equity, except for such failures that would
not, individually or in the aggregate, have a Material Adverse Effect. To the
Knowledge of Seller, there does not exist under any Company Contract any event
of default or event or condition that, after notice or lapse of time or both,
would constitute a violation, breach or event of default thereunder as of the
date hereof on the part of any Acquired Company, except for such violations,
breaches, defaults, events or conditions that would not, individually or in
the
aggregate, have a Material Adverse Effect.
-17-
Section
3.13 Licenses
and Permits.
Each of
the Acquired Companies own or possess all Licenses that are necessary to enable
it to carry on their respective operations as presently conducted, except,
in
each case, where the failure to have a particular license or permit would not,
individually or in the aggregate, have a Material Adverse Effect.
Section
3.14 Company
Benefit Plans.
Except
as would not, individually or in the aggregate, have a Material Adverse
Effect:
(a) No
Company Benefit Plan is or was, within the last five years, a “multiemployer
pension plan” (as defined in Sections 3(37) or 4001(a)(3) of ERISA) or a
“multiple employer plan” described in Section 413(c) of the Code, and no
Acquired Company has, within the last five years, contributed to, been required
to contribute to, or otherwise had any obligation or liability in connection
with any such “multiemployer plan” or “multiple employer plan;”
(b) To
the
Knowledge of Seller, each Company Benefit Plan has been established and
administered in all material respects in accordance with its terms and in
compliance with applicable Laws, including ERISA and the Code;
(c) There
is
no pending or, to the Knowledge of Seller, threatened claim (other than a
routine claim for benefits), proceeding, examination, audit, investigation
or
other proceeding with respect to any Company Benefit Plan; and
(d) The
execution, delivery and performance of, and consummation of the transactions
contemplated by, this Agreement will not (i) entitle any Person to any
additional benefits, including severance pay, unemployment compensation or
any
other payment, or (ii) accelerate the time of payment or vesting of any
benefits under any Company Benefit Plan, or increase the amount of compensation
due any such individual. No Acquired Company is obligated or will become
obligated in connection with the transactions contemplated by this Agreement
to
make a payment that will not be deductible under Section 280G of the
Code.
Section
3.15 Labor
Relationships.
Except
as would not, individually or in the aggregate, have a Material Adverse
Effect:
(a) None
of
the Company’s or its Subsidiaries’ employees are represented by a labor
organization or group that was either voluntarily recognized or certified by
any
labor relations board (including the NLRB) or by any other Governmental
Entity;
(b) No
Acquired Company is a signatory to a collective bargaining agreement with any
trade union, labor organization or group; and
(c) No
labor
dispute, walk out, strike, hand billing, picketing, or work stoppage involving
the employees of any Acquired Company has occurred, is in progress or, to the
Knowledge of Seller, has been threatened in the last two years.
SECTION
3.16 NO
OTHER REPRESENTATIONS OR WARRANTIES.
NOTWITHSTANDING ANY OTHERWISE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY
SELLER IN THIS AGREEMENT, NEITHER SELLER, THE COMPANY, NOR ANY SUBSIDIARY MAKES
ANY REPRESENTATION OR WARRANTY TO BUYER WITH RESPECT TO:
-18-
(A) ANY
PROJECTIONS, ESTIMATES OR BUDGETS HERETOFORE DELIVERED TO OR MADE AVAILABLE
TO
BUYER OR ANY FUTURE REVENUES, EXPENSES OR EXPENDITURES OR FUTURE RESULTS OF
OPERATIONS OF THE COMPANY OR ANY SUBSIDIARY; OR
(B) EXCEPT
AS
EXPRESSLY COVERED BY A REPRESENTATION AND WARRANTY CONTAINED IN THIS ARTICLE
III, ANY OTHER INFORMATION OR DOCUMENTS (FINANCIAL OR OTHERWISE) MADE AVAILABLE
TO BUYER OR ITS COUNSEL, ACCOUNTANTS OR ADVISERS WITH RESPECT TO THE COMPANY,
THE SUBSIDIARIES OR THE BUSINESS.
EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE III, NONE
OF
THE COMPANY, ITS SUBSIDIARIES OR SELLER MAKES ANY REPRESENTATIONS OR WARRANTIES
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby represents and warrants to Seller as of the date hereof as
follows:
Section
4.1 Organization.
Buyer
is a limited liability company duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization, and has the
requisite power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted.
Section
4.2 Authorization.
Buyer
has the requisite power and authority to execute and deliver this Agreement
and
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by Buyer and does, when duly executed by all Parties and delivered
by
Buyer, constitute the valid and binding agreement of Buyer, enforceable against
Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency
and other similar Laws affecting the enforceability of creditors’ rights
generally, general equitable principles and the discretion of courts in granting
equitable remedies.
Section
4.3 Consents
and Approvals; No Violations.
Except
for applicable requirements of the HSR Act, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of the organizational documents of Buyer; (b) require any
filing with, or the obtaining of any permit, authorization, consent or approval
of, any Governmental Entity; (c) violate, conflict with or result in a
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or give rise to any right of termination,
cancellation or acceleration under, any of the terms, conditions or provisions
of any note, mortgage, other evidence of indebtedness, guarantee, license,
agreement, lease or other contract, instrument or obligation to which Buyer
is a
party or by which Buyer or any of its assets may be bound; or (d) violate
any Law, order, injunction or decree applicable to Buyer, excluding from the
foregoing clauses (b), (c) and (d) such requirements, violations,
conflicts, defaults or rights (i) which would not adversely affect the
ability of Buyer to consummate the transactions contemplated by this Agreement
or (ii) which become applicable as a result of any acts or omissions by, or
the status of or any facts pertaining to, Seller.
-19-
Section
4.4 Litigation.
There
is no claim, action, suit, proceeding or governmental investigation pending
or,
to the knowledge of Buyer, threatened against Buyer, by or before any
Governmental Entity or by any third party which challenges the validity of
this
Agreement or which would be reasonably likely to adversely affect or restrict
Buyer’s ability to consummate the transactions contemplated by this
Agreement.
Section
4.5 Financial
Capability.
Buyer
has funds available, which taken together with available borrowing capacity
under its existing revolving credit agreements, are sufficient to permit Buyer
to consummate the transactions contemplated by this Agreement. Notwithstanding
anything to the contrary contained herein, the Parties acknowledge and agree
that it shall not be a condition to the obligations of Buyer to consummate
the
transactions contemplated by this Agreement that Buyer have sufficient funds
for
payment of the Purchase Price.
Section
4.6 Independent
Review.
(a) Buyer
has
conducted its own independent review and analysis of the Acquired Companies
and
their respective condition, cash flow and prospects. In entering this Agreement,
Buyer has relied exclusively upon the representations and warranties contained
herein.
(b) Buyer
acknowledges that neither the Company, its Subsidiaries nor any of their
respective directors, officers, employees, Affiliates, agents or representatives
make any representation or warranty, either express or implied, as to the
accuracy or completeness of any of the information provided or made available
to
Buyer or its agents or representatives prior to the execution of this
Agreement.
(c)
Buyer
agrees, to the fullest extent permitted by Law, that neither the Company, its
Subsidiaries nor any of their respective directors, officers, employees,
Affiliates, agents or representatives shall have any liability or responsibility
whatsoever to Buyer on any basis (including in contract or tort, under federal
or state securities laws or otherwise) based upon any information provided
or
made available, or statements made, to Buyer prior to the execution of this
Agreement.
Section
4.7 Certain
Fees.
Buyer
has not employed any broker, finder, investment banker, or other intermediary
or
incurred any liability for any investment banking fees, financial advisory
fees,
brokerage fees, finders’ fees, or other similar fees in connection with this
Agreement or the transactions contemplated hereby.
-20-
ARTICLE
V
COVENANTS
Section
5.1 Conduct
of the Business.
Seller
agrees that, during the period from the date of this Agreement to the earlier
of
(x) the Closing Date and (y) the date on which this Agreement is terminated
in accordance with Article VII (such period, the “Pre-Closing
Period”),
except as otherwise contemplated by this Agreement, or as consented to in
writing by Buyer, either prior to or following the date hereof (which consent
shall not be unreasonably withheld, conditioned or delayed), Seller will cause
the Acquired Companies to:
(a) not
amend
their respective certificates or articles of incorporation or
bylaws;
(b) not
authorize for issuance, issue, sell, pledge, encumber or deliver or agree or
commit to issue, sell, pledge, encumber or deliver any shares of its capital
stock, or not issue any securities convertible into, exchangeable for or
representing a right to purchase or receive, or not enter into any contract
with
respect to the issuance of, shares of their capital stock;
(c) not
split, combine or reclassify any shares of its capital stock; not declare,
set
aside or pay any cash or stock dividend or other stock distribution in respect
of their capital stock; or not redeem or otherwise acquire any of their
securities;
(d) use
commercially reasonable efforts to conduct the Business substantially in the
Ordinary Course;
(e) use
commercially reasonable efforts to maintain, preserve and retain relationships
with their suppliers;
(f) not
sell
or dispose of any material asset, except in the Ordinary Course;
(g) not
mortgage, pledge or subject to any material Lien (other than Permitted Liens)
any material asset, except in the Ordinary Course;
(h) except
in
the Ordinary Course, not enter into or amend any employment, bonus, severance
or
retirement contract or arrangement, or increase any salary or other form of
compensation payable or to become payable to any of their executives,
stockholders, affiliates, or employees, enter into or amend any contract or
arrangement of any affiliates, or employees nor pay any special bonus to their
executives, stockholders, affiliates, directors or employees, except for
payments under those Contracts and arrangements for increases in salaries made
in the Ordinary Course;
(i) not
sell,
lease, license or otherwise dispose of or agree to sell, lease, license or
otherwise dispose of any of their assets, properties, rights or claims, except
in the Ordinary Course;
-21-
(j) not
cancel or terminate any existing lease agreement, except in the Ordinary
Course;
(k) not
adopt, modify, amend, cancel or terminate any Company Benefit Plan, except
in
the Ordinary Course or as required by applicable Law;
(l) not
modify, amend, cancel or terminate any existing agreement or arrangement
involving any obligation with a value in excess of $10,000,000 and not otherwise
expressly provided for in this Section 5.1, except in the Ordinary Course;
(m) not
make
or authorize any individual capital expenditure, capital commitment, or addition
to property, plant or equipment other than in accordance with the Ordinary
Course or otherwise in accordance with the Acquired Companies’ capital
expenditure plan in effect as of the date hereof;
(n) not
incur
any indebtedness for borrowed money other than borrowings under the Acquired
Companies’ revolving credit facility in the Ordinary Course;
(o) not
incur
or pay any management or director fees;
(p) not
make
or change any Tax election or settle or compromise any liability in respect
of
Taxes, change in any respect any accounting method in respect of Taxes, file
any
amendment to a Tax Return, enter into any closing agreement, settle any claim
or
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes;
and
(q) not
agree
in writing, or otherwise, to take any action described in this
Section 5.1.
Section
5.2 Access
to Information.
Except
with respect to access for the purposes of the provisions of Article IX which
shall be governed solely by Article IX:
(a) Subject
to the restrictions of any applicable Law or contractual undertaking, during
the
Pre-Closing Period, Seller shall cause the Company to (i) give Buyer and its
authorized representatives reasonable access to the books, records, work papers,
offices and other facilities and properties of the Acquired Companies,
(ii) permit Buyer to make such inspections thereof as Buyer may reasonably
request and (iii) cause the officers of Acquired Companies to furnish Buyer
with such financial and operations data and other information with respect
to
the Acquired Companies as Buyer may reasonably request; provided,
however,
that
any such investigation shall be conducted during normal business hours under
the
supervision of the Company’s personnel and in such a manner as to maintain the
confidentiality of this Agreement and the transactions contemplated by this
Agreement and not interfere unreasonably with the business operations of the
Acquired Companies.
(b) All
information furnished or provided by Seller, Acquired Companies or any of their
respective Affiliates or representatives to Buyer or its representatives
(whether furnished before or after the date of this Agreement) shall be held
subject to the Confidentiality Agreement.
-22-
(c) Following
the Closing and subject to the restrictions of any applicable Law or contractual
undertaking, Buyer agrees to make personnel of Buyer or its Affiliates available
to Seller to the extent such access is reasonably necessary for Seller to comply
with the terms of this Agreement or any applicable Law; provided,
however,
that
any such access shall be provided only after receipt of reasonable advance
notice from Seller and during normal business hours of Buyer’s personnel or the
personnel of such Affiliate of Buyer.
(d) Buyer
shall provide Seller with such documentation as Seller may reasonably request
to
permit Seller to conduct a reasonable due diligence investigation concerning
the
financial capability, resources, condition and creditworthiness of
Buyer.
Section
5.3 Consents.
(a) Each
Party will promptly after execution of this Agreement, and in no event later
than five (5) Business Days from the date hereof, make all filings or
submissions as are required under the HSR Act. Each Party will promptly furnish
to the other such necessary information and reasonable assistance as the other
may request in connection with its preparation of any filing or submission
that
is necessary under the HSR Act. Each Party will promptly provide the other
with
copies of all written communications (and memoranda setting forth the substance
of all oral communications) between each of them, any of their Affiliates or
any
of its or their representatives, on the one hand, and any Governmental Entity,
on the other hand, with respect to this Agreement or the transactions
contemplated hereby. Without limiting the generality of the foregoing, each
Party will promptly notify the other of the receipt and content of any inquiries
or requests for additional information made by any Governmental Entity in
connection therewith and will promptly (i) comply with any such inquiry or
request and (ii) provide the other with a description of the information
provided to any Governmental Entity with respect to any such inquiry or request.
In addition, each Party will keep the other apprised of the status of any such
inquiry or request.
(b) No
party
hereto shall, and each shall cause their respective Affiliates not to, take
any
action that could reasonably be expected to adversely affect or delay the
approval of any Governmental Entity of any of the aforementioned
filings.
Section
5.4 Reasonable
Best Efforts.
Each
Party shall cooperate, and use its reasonable best efforts to take, or cause
to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate the transactions
contemplated by this Agreement as promptly as practicable after the date hereof,
including using reasonable best efforts to obtain approval of the transactions
contemplated by this Agreement from all Governmental Entities. The Parties
further covenant and agree, with respect to a threatened or pending preliminary
or permanent injunction or other order, decree or ruling or statute, rule,
regulation or executive order that would adversely affect the ability of the
Parties to consummate the transactions contemplated hereby, to use their
reasonable best efforts to prevent or lift the entry, enactment or promulgation
thereof, as the case may be.
-23-
Section
5.5 Public
Announcements.
Except
as otherwise agreed to by the Parties, the Parties shall not issue any report,
statement or press release or otherwise make any public statements with respect
to this Agreement and the transactions contemplated hereby, except as in the
reasonable judgment of a Party may be required by Law or by the rules of a
national securities exchange, and in any event a Party shall use its reasonable
best efforts to consult with the other Party a reasonable time in advance of
such required disclosure.
Section
5.6 Buyer
Knowledge.
Buyer
has, as a result of its receipt of information provided by Seller to Buyer
pursuant to Buyer’s due diligence, no actual knowledge as of the date hereof of
any breach by Seller of any representation or warranty set forth in Article
III.
Should, prior to the Closing, Buyer obtain actual knowledge of a breach by
Seller of any representation or warranty set forth in Article III as a result
of
its receipt of information provided by Seller to Buyer following the date
hereof, then Buyer promptly shall notify Seller in writing of the existence
of
such breach.
Section
5.7 Tax
Matters.
(a) Tax
Periods Ending on or Before the Closing Date.
Buyer
shall, at its own expense, prepare or cause to be prepared and timely file
or
cause to be timely filed all Tax Returns of the Acquired Companies for all
periods ending on or prior to the Closing Date that have not yet been filed
and
are required to be filed after the Closing Date. Provided that Buyer has
complied with the procedures outlined in Section 5.7(c) hereof, Buyer shall
be
reimbursed by Seller for Taxes of the Acquired Companies required to be paid
(less
any
prepayment of Taxes and any
Taxes
attributable to the period from January 1, 2008 until the Closing Date) as
shown
on the Tax Returns described in the preceding sentence within fifteen (15)
days
after receipt by Seller of notice from Buyer stating that payment by Buyer
or
the applicable Acquired Company of such Taxes has been made.
(b) Tax
Periods Beginning Before and Ending After the Closing Date.
Buyer
shall, at its own expense, prepare or cause to be prepared and timely file
or
cause timely to be filed any Tax Returns of the Acquired Companies for Tax
periods that begin before the Closing Date and end after the Closing Date.
Provided Buyer has complied with the procedures outlined in Section 5.7(c)
hereof, Buyer shall be reimbursed by Seller for an amount equal to the portion
of the Taxes (less any prepayment of Taxes) shown as due on such Tax Returns
that relate to the portion of such Taxable period ending on December 31,
2007 within fifteen (15) days after receipt by Seller of notice from Buyer
that
payment by Buyer or the applicable Acquired Company of such Taxes has been
made.
For purposes of this Section 5.7(b) and Section 8.1(d), in the case of any
Income Taxes that are imposed on a periodic basis and are payable for a Taxable
period that includes (but does not end on) December 31, 2007, the portion of
such Income Tax that relates to the portion of such Taxable period ending on
December 31, 2007 shall be deemed equal to the amount which would be payable
if
the relevant Taxable period ended on December 31, 2007. The portion of any
Taxes
other than Income Tax that relates to the period ending on December 31, 2007
shall be determined on a daily pro rata basis. Any credits or estimated tax
payments relating to a Taxable period that begins before and ends after December
31, 2007 shall be taken into account as though the relevant Taxable period
ended
on December 31, 2007. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior practice
of the applicable Acquired Company.
-24-
(c) Preparation
of Tax Returns.
Buyer
shall provide Seller with copies of any Tax Returns to be filed pursuant to
this
Section 5.7, along with all schedules, statements, workpapers and supporting
documentation (the “Supporting
Documentation”),
prior
to the filing of any such Tax Return and at least sixty (60) days prior to
the
due date thereof (giving effect to any extensions thereto). Seller shall have
the right to review any such Tax Return and Supporting Documentation prior
to
the filing of such Tax Return. If Seller disputes any item(s) shown on any
such
Tax Return, Buyer and Seller shall negotiate in good faith and use commercially
reasonable efforts to resolve any issues arising as a result of the review
of
such Tax Return and to mutually consent to the filing as promptly as possible
of
such Tax Return. If such Parties are unable to resolve any dispute within thirty
(30) days after the receipt by Seller of the Tax Return proposed to be filed,
such dispute shall be resolved by the Independent Accountant, which shall
resolve any issue in dispute as promptly as practicable. If the Independent
Accountant is unable to make a determination with respect to any disputed issue
prior to the due date (including any extensions) for the filing of the Tax
Return in question, (i) Buyer shall file, or shall cause to be filed, such
Tax Return without such determination having been made and (ii) Seller
shall pay to Buyer an amount equal to the amount of Taxes not in dispute with
respect to such Tax Return in accordance with Section 5.7(a) or 5.7(b), as
the case may be. Upon the Independent Accountant’s delivery of its determination
to Buyer and Seller, appropriate adjustments shall be made to the amount paid
in
accordance with Section 5.7(a) or 5.7(b), as the case may be, in order to
reflect the Independent Accountant’s determination. If such determination
reflects an overpayment by Seller pursuant to Section 5.7(a) or 5.7(b), Buyer
shall promptly pay, or shall cause the applicable Acquired Company to promptly
pay to Seller such overpayment amount. The determination by the Independent
Accountant shall be final, conclusive and binding on the Parties. The fees
and
expenses of the Independent Accountant shall be shared equally by Buyer and
Seller. Each such Party shall indemnify the other for any interest or penalties
imposed by any taxing authority resulting from a Party’s failure to deliver Tax
Returns in a timely manner as provided in this Section.
(d) Certain
Taxes.
All
transfer, documentary, sales, use, stamp, registration and other such Taxes
and
fees (including any penalties and interest) incurred in connection with this
Agreement shall be paid by Buyer when due, and Buyer will, at its own expense,
file all necessary Tax Returns and other documentation with respect to all
such
transfer, documentary, sales, use, stamp, registration and other such Taxes
and
fees, and, if required by applicable Law, Seller will, and will cause their
Affiliates to, join in the execution of any such Tax Returns and other
documentation.
-25-
(e) Refunds
and Tax Benefits.
Any Tax
refunds that are received by Buyer or any Acquired Company, and any amounts
credited against Tax to which Buyer or any Acquired Company becomes entitled
(including any interest paid or credited with respect thereto), that relate
to
Tax periods or portions thereof ending on or before December 31, 2007 shall
be
for the account of Seller, and Buyer shall pay over to Seller any such refund
or
amount of any such credit within fifteen (15) days after receipt or entitlement
thereto. Any such refunds or credits relating to Tax periods or portions thereof
beginning before and ending after December 31, 2007 shall be equitably
apportioned between Buyer and Seller.
(f) Amendments
to Returns; Refund Claims.
Following the Closing, Buyer shall not file an amended Tax Return with respect
to Taxes of any Acquired Company for a Tax period ending on or before the
Closing Date without compliance with the disclosure, review and dispute
resolution procedures set out in Section 5.7(c) hereof. Upon written request
of
Seller, Buyer shall, at Seller’s expense, cause the relevant entity to file for,
and use commercially reasonable efforts to obtain and expedite the receipt
of,
any refund to which any Acquired Company may be entitled with respect to Tax
periods or portions thereof ending on or before December 31, 2007.
(g) Purchase
Price Adjustment.
Any
amount paid pursuant to this Section 5.7 shall be treated as an adjustment
to
the Purchase Price for U.S. federal income Tax purposes.
Section
5.8 Preservation
of Records.
Except
as otherwise provided in this Agreement, Buyer agrees that it shall, and it
shall cause the Acquired Companies to, (a) preserve and keep the records
(including all Tax and accounting records) of the Acquired Companies for a
period of seven years from the Closing, or for any longer periods as may be
required by any Governmental Entity or ongoing litigation, and (b) make such
records available to Seller, during normal business hours and under the
supervision of Buyer personnel, as may be reasonably required by Seller. If
Buyer or an Acquired Company wishes to destroy such records after the time
specified above, Buyer shall first give sixty (60) days’ prior written notice to
Seller and Seller shall have the right at its option and expense, upon prior
written notice given to Buyer within that sixty (60)-day period, to take
possession of the records within ninety (90) days after the date of Seller’s
notice to Buyer.
Section
5.9 Employees;
Employee Benefits.
(a) Effective
as of the Closing Date and for a period of two (2) years following the Closing
Date, Buyer shall (i) provide to substantially all Continued Employees
compensation and benefits that are substantially comparable, in the aggregate,
to the aggregate compensation and benefits that were provided to such Continued
Employees on the Closing Date and (ii) not terminate in the aggregate during
such period more than ten percent (10%) of the aggregate workforce of the
Acquired Companies.
-26-
(b) If
Buyer
does not continue the Company Benefit Plans after the Closing Date,
(i) Buyer will cause the benefit plans applicable to the Continued
Employees to recognize all previous service with the Company, a Subsidiary
or
any of their respective Affiliates for the purpose of determining eligibility
for and entitlement to succeeding benefits, including vesting (provided that
service with the Company, a Subsidiary or any of their respective Affiliates
shall not be counted for purposes of benefit accrual under any pension plan
of
Buyer); (ii) Buyer shall cause its group health plan to recognize all
deductibles and coinsurance payments accrued by the Continued Employees prior
to
the Closing Date and to waive any preexisting condition limitations for the
Continued Employees; (iii) for the remainder of the calendar year in which
the
Closing occurs and for the succeeding year, the vacation, paid time off and
holiday plan offered to Continued Employees shall be substantially comparable
to
and in place of what an Acquired Company or any of its respective Affiliates,
as
applicable, would have provided the Continued Employees had they remained
employees of the Company, a Subsidiary or any of their respective Affiliates;
(iv) Buyer shall maintain for at least two years starting on the Closing
Date substantially comparable severance arrangements applicable to the Continued
Employees that were in effect immediately before the Closing Date; and (v)
after
the second anniversary of the Closing Date, subject to applicable Law, Buyer
shall provide Continued Employees with base salary and overall benefits
(including retiree benefits) that are no less favorable, in the aggregate,
than
those then provided to similarly-situated employees of Buyer.
(c) If
Buyer
does not continue the Company Benefit Plans after the Closing Date, Buyer shall
credit each Continued Employee with such number of unused vacation days and
other paid time off accrued by such employee with the applicable Acquired
Company or any of its Affiliates prior to the Closing Date in accordance with
the personnel policies of the Company, a Subsidiary or any of their respective
Affiliates applicable to such employees on the date hereof.
Section
5.10 Further
Assurances.
Each of
the Parties hereto shall use all commercially reasonable efforts to take, or
cause to be taken, all appropriate action, do or cause to be done all things
necessary, proper or advisable under applicable Law, and to execute and deliver
such documents and other papers, as may be required to carry out the provisions
of this Agreement and consummate and make effective the transactions
contemplated by this Agreement.
Section
5.11 Non-Competition.
(a) Covenant.
For and
in consideration of receipt of the Purchase Price, Seller hereby grants to
Buyer
a covenant not to compete (the “Covenant”)
on the
terms and conditions set forth in this Section 5.11. The parties recognize
and
agree that Buyer would not be willing to enter into this Agreement nor
consummate the transactions contemplated hereby without Seller entering into
the
Covenant and that Seller’s performance and observance of this Section 5.11 is
valuable consideration for Buyer and Buyer’s willingness to enter into this
Agreement and pay the Purchase Price to Seller.
(b) Non-Competition.
Seller
covenants and agrees that, for and during the period of time commencing on
the
Closing Date and expiring five (5) years thereafter (the “Term”),
Seller shall not, directly or indirectly, whether individually or in partnership
or association with any one or more persons or entities, or as a principal,
partner, shareholder, agent, employee, consultant, or contractor, or in any
other capacity, engage in or carry on in the Restricted Territory (as defined
below) the Business; provided,
however,
that an
ownership interest of less than five percent (5%) of the outstanding stock
of
any publicly traded corporation that is engaged in the Business shall not be
deemed to violate this Section 5.11(b), so long as no officer or director of
such Seller or any of its Affiliates is a member of the board of directors
(or
other similar governing body) of such publicly traded corporation.
-27-
(c) No
Interference with an Acquired Company. Seller
covenants and agrees that, for and during the three (3) year period commencing
on the Closing Date, Seller shall not, directly or indirectly: (i) in
connection with the Business solicit or otherwise interfere with any
relationship between any Acquired Company, on the one hand, and any supplier
or
customer of an Acquired Company, on the other hand; (ii) solicit
for employment (or assist anyone in soliciting the employment) any individual
employed by an Acquired Company as of the Closing Date; or (iii) induce, or
assist anyone in inducing, any individual employed by an Acquired Company as
of
the Closing Date to resign or sever employment, or to terminate or breach any
employment agreement, with an Acquired Company; provided,
however
that
such restrictions shall only apply to the
relationships of the Acquired Companies, existing in connection with the
Business as engaged in by the Acquired Companies prior to or on the Closing
Date; provided,
further,
that
general advertisement or solicitation programs conducted by or on behalf of
Seller or its Affiliates that are not specifically directed toward the employees
of the Acquired Companies shall not be deemed to violate this
Section 5.11(c).
(d) No
Financing of a Competing Business.
Seller
further covenants and agrees that, for and during the Term of the Covenant,
Seller shall not, directly or indirectly, lend
money to
any
Person engaged, directly or indirectly, in the Business in the Restricted
Territory.
(e) Geographic
Coverage. The
geographic coverage of the Covenant shall include: (i) North America, (ii)
the
United States of America, Canada and Mexico, (iii) the United States of
America, (iv) Canada, (v) Mexico, (vi) each state of the United States of
America in which any Acquired Company conducted business up through and
including the Closing Date, (vii) each state or territory of Mexico in which
any
Acquired Company conducted business up through and including the Closing Date,
and (viii) each province of Canada in which any Acquired Company conducted
business up through and including the Closing Date, which geographic coverage
is
referred to hereinafter collectively as the “Restricted
Territory.”
(f) No
Violation of Public Policy.
The
Parties expressly agree and acknowledge the terms of this Section 5.11 are
reasonable in scope, time and territory, and are necessary to protect the value
of the Company Shares and related assets and Business purchased by Buyer. The
Parties further acknowledge and agree that it is not their intention that the
Covenant violate any public policy or statutory or common law. If a court of
competent jurisdiction renders a ruling (sustained on appeal, if any) holding
that any one or more of the provisions of the Covenant, including the Restricted
Territory or stated term of the Covenant, constitute an unreasonable
restriction, then the Parties specifically agree that the Covenant shall not
be
rendered void but shall apply to such extent and as to such time period and
Restricted Territory as such court may determine constitutes a reasonable
restriction under the circumstances.
-28-
Section
5.12 Exclusivity.
During
the Pre-Closing Period, Seller shall not, and shall cause the Acquired Companies
and each of its and their respective Affiliates, officers, directors, employees
or agents, or anyone acting on their behalf or with their consent, to not,
directly or indirectly (a) initiate, solicit, negotiate, accept or discuss
with any Person (other than Buyer), directly or indirectly, any proposal or
offer (an “Acquisition
Proposal”),
to
acquire all or any substantial part of an Acquired Company, whether by merger,
recapitalization, arrangement, amalgamation, purchase of equity securities,
purchase of assets or otherwise, (b) provide any information to any Person
(other than Buyer) in connection with an Acquisition Proposal or (c) permit
an Acquired Company to enter into any joint venture, partnership or other
similar commercial relationship with any Person which would cause Seller to
abandon, terminate or fail to consummate, or prevent or prohibit Seller from
consummating the transactions contemplated by this Agreement. If during the
Pre-Closing Period Seller or any of its Affiliates shall receive an Acquisition
Proposal, Seller shall notify Buyer within two (2) Business Days after Seller’s
or such Affiliate’s receipt of such Acquisition Proposal.
Section
5.13 Transfer
of Company Shares.
Notwithstanding anything to the contrary in this Agreement, Seller may, prior
to
the Closing, transfer to one or more of its Affiliates (each a “Transferee”)
all of
Seller’s right, title and interest in and to the Company Shares; provided,
that
Seller
(a) notifies Buyer of any such transfer in writing and (b) provides all
documentation to Buyer effecting such transfer, in each case at least three
(3)
Business Days prior to the Closing Date and each such Transferee assumes all
of
Seller’s rights and obligations under this Agreement in accordance with
Section 10.4.
Section
5.14 Intercompany
Debt.
(a) Prior
to
the Closing, Note Holder shall cause the applicable Acquired Company to pay
to
Note Holder, or its designee, the 2007 Accrued Interest.
(b) Prior
to
the Closing, Note Holder shall waive (i) any requirement for any Acquired
Company to pay Note Holder any accrued interest on the Intercompany Debt for
the
period from January 1, 2008 through and including the Closing Date and (ii)
the
acceleration of any Acquired Company’s obligation to repay the Intercompany Debt
and all accrued but unpaid interest thereon solely as a result of the
consummation of the transactions contemplated by this Agreement.
Section
5.15 Transaction
Payments.
Prior
to the Closing, Seller may cause an Acquired Company to pay employees of such
Acquired Company, or any other Acquired Company, bonus payments in contemplation
of the transactions contemplated by this Agreement; provided,
that,
prior
to the Closing, Seller shall make a capital contribution to the Acquired Company
making any such bonus payments in an amount equal to the net after-Tax cost
to
such Acquired Company of making such bonus payments (determined by properly
taking into account any Tax deduction to which the Acquired Company may be
entitled as a result of making such bonus payments).
-29-
Section
5.16 Name
Change.
As
soon
as practicable following the Closing Date, and in no event later than thirty
(30) days thereafter, Buyer shall cause each Acquired Company with “SHV” in its
corporate name to (a) change its corporate name to remove any reference to
“SHV”
and provide Seller evidence of such name change as Seller may reasonably
request, and (b) file in all jurisdictions in which such Acquired Company is
qualified to do business any documents necessary to reflect such change of
name
or to terminate its qualification therein.
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF THE PARTIES
Section
6.1 Conditions
to Each Party’s Obligations.
The
respective obligation of each of Seller, Note Holder and Buyer to consummate
the
transactions contemplated by this Agreement is subject to the satisfaction
(or
written waiver by such Party) at or prior to the Closing of the following
conditions:
(a) Injunction.
There
will be no effective injunction, writ or preliminary restraining order or any
order of any nature issued by a Governmental Entity of competent jurisdiction
to
the effect that the transactions contemplated by this Agreement may not be
consummated as provided in this Agreement, no proceeding or lawsuit will have
been commenced by any Governmental Entity for the purpose of obtaining any
such
injunction, writ or preliminary restraining order and no written notice will
have been received from any Governmental Entity indicating an intent or
otherwise threatening to restrain, prevent, materially delay or restructure
the
transactions contemplated by this Agreement; and
(b) Antitrust
Approval.
The
waiting period under the HSR Act shall have expired or been
terminated.
Section
6.2 Conditions
to Obligations of Seller and Note Holder.
Unless
waived in writing by Seller, the obligation of Seller and Note Holder to
consummate the transactions contemplated by this Agreement is further subject
to
the following:
(a) Representations.
Each of
the representations and warranties of Buyer set forth in Article IV shall be
true and correct in all material respects (except that those representations
and
warranties which are qualified as to material, materiality, Material Adverse
Effect or similar expressions shall be true, complete and correct in all
respects) on and as of the date of this Agreement and, except where expressly
limited to a specific date, on and as of the Closing Date; and
(b) Covenants.
Buyer
shall have performed, in all material respects (except
where such performance is qualified as to material, materiality, Material
Adverse Effect or similar expressions shall have been performed in all respects)
at
or
prior to the Closing, its obligations under this Agreement which are required
to
be performed by it at or prior to the Closing pursuant to the terms
hereof.
-30-
Section
6.3 Conditions
to Obligations of Buyer.
Unless
waived in writing by Buyer, the obligation of Buyer to consummate the
transactions contemplated by this Agreement is further subject to the
following:
(a) Representations.
(i)
Each of the representations and warranties of Seller set forth in Article III,
other than the representations and warranties set forth in Sections 3.5 and
3.6 to which this clause (i) shall not apply, shall be true and correct in
all
material respects (except that those representations and warranties which are
qualified as to material, materiality, Material Adverse Effect or similar
expressions shall be true, complete and correct in all respects) on and as
of
the date of this Agreement and, except where expressly limited to a specific
date, on and as of the Closing Date; and (ii) each of the representations and
warranties of Seller in Section 3.5 shall be true and correct, except where
the
failure of such representations and warranties to be so true and correct,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect; and
(b) Covenants.
Seller
and Note Holder shall have performed, in all material respects (except where
such performance is qualified as to material, materiality, Material Adverse
Effect or similar expressions shall have been performed in all respects) at
or
prior to the Closing, their respective obligations under this Agreement which
are required to be performed by them at or prior to the Closing pursuant to
the
terms hereof.
ARTICLE
VII
TERMINATION
Section
7.1 Termination.
This
Agreement may be terminated at any time at or prior to the Closing (the
“Termination
Date”):
(a) in
writing, by mutual consent of Buyer and Seller;
(b) by
written notice from Buyer to Seller if any of the conditions set forth in
Sections 6.1 and 6.3 hereof shall have become incapable of fulfillment and
shall
not have been waived in writing by Buyer, so long as such failure to satisfy
the
conditions is not the result of a breach by Buyer of this
Agreement;
(c) by
written notice from Seller to Buyer if any of the conditions set forth in
Sections 6.1 and 6.2 hereof shall have become incapable of fulfillment and
shall
not have been waived in writing by Seller, so long as such failure to satisfy
the conditions is not the result of a breach by Seller of this Agreement; or
(d) by
written notice by Buyer or Seller if the Closing has not occurred on or prior
to
April 30, 2008 (the “Closing
Date Deadline”)
for
any reason other than delay and/or nonperformance of the Party seeking such
termination; provided,
however,
that
the Closing Date Deadline shall, upon written notice of either Buyer or Seller
to the other Party, be extended for a period of six (6) months if and only
if
(i) all conditions set forth in Article VI other than Section 6.1(b) are
satisfied or the Party to so satisfy such conditions demonstrates its ability
to
satisfy such conditions immediately and (ii) the failure of the expiration
or
termination of the waiting period under the HSR Act is not due to a breach
of
any provision of this Agreement by the Party so seeking to extend the Closing
Date Deadline.
-31-
Section
7.2 Procedure
and Effect of Termination.
In the
event of the termination of this Agreement and the abandonment of the
transactions contemplated hereby pursuant to Section 7.1 hereof, written notice
thereof shall forthwith be given by the Party so terminating to the other
Parties, and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned without further action by any Party. If this Agreement
is terminated pursuant to Section 7.1 hereof:
(a) each
Party shall redeliver all documents, work papers and other materials of the
other Party relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the Party furnishing the same or,
upon
prior written notice to such Party, shall destroy all such documents, work
papers and other materials and deliver notice to the Party seeking destruction
of such documents that such destruction has been completed, and all confidential
information received by any Party with respect to the other Parties shall be
treated in accordance with the Confidentiality Agreement and
Section 5.2(b);
(b) all
filings, applications and other submissions made pursuant hereto shall, at
the
option of Seller, and to the extent practicable, be withdrawn from the agency
or
other Person to which made; and
(c) there
shall be no liability or obligation hereunder on the part of Seller, Buyer
or
any of their respective directors, officers, employees, Affiliates, agents
or
representatives, except that (i) if the basis of termination is a willful,
material breach by Seller or Buyer, as the case may be, of one or more of the
provisions of this Agreement (including the failure of Buyer to consummate
the
transactions contemplated hereunder), the breaching Party shall be liable to
the
non-breaching Party, and (ii) the obligations provided for in this Section
7.2
and Sections 5.5 (Public Announcements), 10.1 (Fees and Expenses), 10.2
(Notices), 10.3 (Severability), 10.7 (Dispute Resolution), 10.9 (Governing
Law) and 10.10 (Consent to Jurisdiction and Service of Process) hereof and
in
the Confidentiality Agreement shall survive any such termination.
ARTICLE
VIII
INDEMNIFICATION
Section
8.1 Indemnification
Obligations of Seller.
Subject
to the provisions of this Article VIII, from and after the Closing, Seller
shall
indemnify and hold harmless each of the Buyer Indemnified Parties from, against
and in respect of any and all Losses arising out of:
(a) any
breach of any representation or warranty made by Seller in Article III of
this Agreement;
(b) any
breach of any covenant, agreement or undertaking made by Seller or Note Holder
in this Agreement;
-32-
(c) any
claim
by any Person for any Transaction Expenses, to the extent not paid on or prior
to the Closing Date; or
(d) all
Taxes
owed by any Acquired Company for all taxable periods, or portions thereof,
ending on or before December 31, 2007.
The
Losses of the Buyer Indemnified Parties described in this Section 8.1 as to
which the Buyer Indemnified Parties are entitled to indemnification are
collectively referred to as “Buyer
Losses”.
Section
8.2 Indemnification
Obligations of Buyer.
Buyer
shall indemnify and hold harmless each of the Seller Indemnified Parties from,
against and in respect of any and all Losses arising out of:
(a) any
breach of any representation or warranty made by Buyer in Article IV of this
Agreement;
(b) any
breach of any covenant, agreement or undertaking made by Buyer in this
Agreement; or
(c) any
liability or obligation for brokerage or finder’s fees or commissions or similar
payments based upon an agreement or understanding alleged to have been made
by
any such Person with Buyer, any of its Affiliates (other than the Acquired
Companies) or any Person acting on behalf of any of them in connection with
the
transactions contemplated hereby.
The
Losses of the Seller Indemnified Parties described in this Section 8.2 as to
which the Seller Indemnified Parties are entitled to indemnification are
collectively referred to as “Seller
Losses”.
-33-
Section
8.3 Indemnification
Procedure.
(a) Promptly
after receipt by an Indemnified Party of notice by a third party of a threatened
or filed complaint or the threatened or actual commencement of any audit,
investigation, action or proceeding with respect to which such Indemnified
Party
may be entitled to receive payment from the other Party for any Loss, such
Indemnified Party shall provide written notification to Buyer, on the one hand,
or the Seller, on the other hand, whoever is the appropriate indemnifying Party
hereunder (the “Indemnifying
Party”)
within
five (5) Business Days of the Indemnified Party’s notice of threatening or
filing of such complaint or of the notice of the threatened or actual
commencement of such audit, investigation, action or proceeding; provided,
however,
that
the failure to so notify the Indemnifying Party shall relieve the Indemnifying
Party from liability under this Agreement with respect to such claim only if,
and only to the extent that, such failure to notify the Indemnifying Party
results in (i) the forfeiture by the Indemnifying Party of rights and defenses
otherwise available to the Indemnifying Party with respect to such claim or
(ii)
prejudice to the Indemnifying Party with respect to such claim. The Indemnifying
Party shall have the right, upon written notice delivered to the Indemnified
Party within sixty (60) days thereafter, to assume the defense of such
complaint, audit, investigation, action or proceeding, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment
of
the fees and disbursements of such counsel. If the Indemnifying Party declines
or fails to assume the defense of the audit, investigation, action or proceeding
on the terms provided above within such sixty (60) day period, however, the
Indemnified Party may employ counsel to represent or defend it in any such
audit, investigation, action or proceeding and, if the Indemnifying Party agrees
that such audit, investigation, action or proceeding is a matter with respect
to
which the Indemnified Party is entitled to receive payment from the Indemnifying
Party for the Loss in question, the Indemnifying Party will pay the reasonable
fees and disbursements of such counsel as incurred; provided,
however,
that
the Indemnifying Party will not be required to pay the fees and disbursements
of
more than one counsel for all Indemnified Parties in any jurisdiction in any
single audit, investigation, action or proceeding. In any audit, investigation,
action or proceeding with respect to which indemnification is being sought
hereunder, the Indemnified Party or the Indemnifying Party, whichever is not
assuming the defense of such action, shall have the right to participate in
such
matter and to retain its own counsel at such Party’s own expense. The
Indemnifying Party or the Indemnified Party, as the case may be, shall at all
times use reasonable efforts to keep the Indemnifying Party or the Indemnified
Party, as the case may be, reasonably apprised of the status of any matter
the
defense of which they are maintaining and to cooperate in good faith with each
other with respect to the defense of any such matter.
(b) No
Indemnified Party may settle or compromise any claim or consent to the entry
of
any judgment with respect to which indemnification is being sought hereunder
without the prior written consent of the Indemnifying Party.
(c) If
an
Indemnified Party claims a right to payment pursuant to this Agreement not
involving a third party claim covered by Section 8.3(a) hereof, such Indemnified
Party shall send written notice of such claim to the appropriate Indemnifying
Party. Such notice shall specify the basis for such claim. As promptly as
possible after the Indemnified Party has given such notice (but in no event
more
than thirty (30) Business Days after such notice has been given), such
Indemnified Party and the appropriate Indemnifying Party shall establish the
merits and amount of such claim (by mutual agreement, arbitration, litigation
or
otherwise) and, within five (5) Business Days of the final determination of
the
merits and amount of such claim, the Indemnifying Party shall pay to the
Indemnified Party immediately available funds in an amount equal to such claim
as determined hereunder, if any.
Section
8.4 Claims
Period.
The
Claims Period hereunder shall begin on the date hereof and terminate as
follows:
(a) with
respect to Buyer Losses arising under (i) Section 8.1(a) with respect to
any breach or inaccuracy of any representation or warranty in (A) the first
sentence of Section 3.1, (B) Section 3.2, (C) Section 3.3(a) or (D) Section
3.3(b) (the “Fundamental
Representations”),
or
(ii) Sections 8.1(b), 8.1(c) or 8.1(d), the
Claims Period shall
survive the Closing until the expiration of the applicable statutes of
limitations;
(b) with
respect to Buyer Losses arising under Section 8.1(a), other than with respect
to
any breach or inaccuracy of any of the Fundamental Representations, the Claims
Period shall terminate on the date that is eighteen (18) months following the
Closing Date;
-34-
(c) with
respect to Seller Losses arising under (i) Section 8.2(a) with respect to
any breach or inaccuracy of any representation or warranty in (A) Section 4.2
(Authorization), (B) Section 4.6 (Independent Review) or (C) Section 4.7
(Certain Fees) or (ii) Sections 8.2(b) or 8.2(c), the Claims Period
shall survive the Closing until the expiration of the applicable statutes of
limitations; and
(d) with
respect to all other Seller Losses, the Claims Period Shall terminate on the
date that is eighteen (18) months following the Closing Date.
No
claim
for indemnification can be made after the expiration of the Claims Period;
provided,
however,
if
prior to the close of business on the last day of the Claims Period, an
Indemnifying Party shall have been properly notified of a claim for indemnity
hereunder and such claim shall not have been finally resolved or disposed of
at
such date, such claim shall continue to survive and shall remain a basis for
indemnity hereunder until such claim is finally resolved or disposed of in
accordance with the terms hereof.
Section
8.5 Liability
Limits.
Notwithstanding anything to the contrary set forth in this Agreement, Seller’s
obligation to indemnify, defend and hold the Buyer Indemnified Parties harmless
shall be limited as follows:
(a) The
Buyer
Indemnified Parties shall not make a claim against Seller for indemnification
under this Article VIII unless and until the Buyer Indemnified Parties shall
have suffered indemnifiable Losses in excess of Fifteen Million Dollars
($15,000,000) (the “Buyer
Deductible”)
in the
aggregate, in which case the Buyer Indemnified Parties shall be entitled to
recover only Losses in excess of the Buyer Deductible; provided,
that no
Losses may be claimed by any Buyer Indemnified Party or shall be reimbursable
by
or included in calculating the Buyer Deductible other than Losses in excess
of
Two Hundred Fifty Thousand Dollars ($250,000) (the “Threshold
Amount”)
resulting from a single claim or aggregated claims arising out of the same
facts, events or circumstances; provided,
however,
that
any Losses arising under Section 8.1(a) with respect to any breach or
inaccuracy of Section 3.6 shall not be subject to the Threshold Amount but
shall
be subject to the Buyer Deductible;
(b) in
no
event shall the aggregate amount of indemnity required to be paid by Seller
pursuant to this Article VIII exceed One Hundred Million Dollars ($100,000,000)
(the “Buyer
Cap”);
(c) for
purposes of computing the aggregate amount of claims against Seller, the amount
of each claim by a Buyer Indemnified Party shall be deemed to be an amount
equal
to, and any payments by Seller pursuant to this Article VIII shall be limited
to, the amount of Losses that remain after deducting therefrom (i) any third
party insurance proceeds and any indemnity, contributions or other similar
payment payable by any third party with respect thereto, but only to the extent
such proceeds, contributions or payments are actually received by a Buyer
Indemnified Party, and (ii) any net Tax benefit actually recognized by a Buyer
Indemnified Party or any Affiliate thereof with respect to the Losses or items
giving rise to such claim for indemnification, with such net Tax benefit (if
any) being determined by properly taking into account any adverse Tax
consequences to a Buyer Indemnified Party or any Affiliate thereof with respect
to the receipt of such indemnification payments from Seller;
-35-
(d) in
any
claim for indemnification under this Agreement, Seller shall not be required
to
indemnify any Person for special, exemplary or consequential damages, including
loss of profit or revenue, any multiple of reduced cash flow, interference
with
operations, or loss of tenants, lenders, investors or buyers, other than
special, exemplary or consequential damages actually paid to a Person other
than
a Buyer Indemnified Party;
(e) no
Indemnifying Party shall have any liability under this Article VIII to
indemnify any Indemnified Party with respect to a Loss to the extent that the
Loss arose from any action taken directly or indirectly by any Indemnified
Party
on or after the Closing Date;
(f) no
Party
shall have any liability for any Loss which would not have arisen but for any
alteration or repeal or enactment of any Law after the Closing
Date;
(g) Seller
shall have no liability for any Loss that would not have arisen but for any
change in the accounting policies, practices or procedures adopted by Buyer
or
its Affiliates after the Closing Date, other than such changes in accounting
policies to the extent but only to the extent the Financial Statements are
not
in compliance with GAAP as in effect on the date of the Financial
Statements;
(h) in
any
case where a Buyer Indemnified Party recovers from third Persons any amount
in
respect of a matter with respect to which Seller has indemnified it pursuant
to
this Agreement, such Buyer Indemnified Party shall promptly pay over to Seller
the amount so recovered (after deducting therefrom the full amount of the
expenses incurred by it in procuring such recovery), but not in excess of the
sum of (i) any amount previously so paid by Seller to or on behalf of the Buyer
Indemnified Party in respect of such matter, and (ii) any reasonable amounts
expended by Seller in pursuing or defending any third party claim arising out
of
such matter;
(i) the
liability of Seller for Buyer Losses shall be considered in the aggregate and
shall be determined on a cumulative basis so the Buyer Losses incurred under
Article VIII of this Agreement shall be combined with all other Buyer
Losses incurred under Article VIII for purposes of determining limitations
on
liability, including the maximum liability amounts described above;
and
(j) any
indemnity payment under this Agreement by Seller shall be treated as an
adjustment to the Purchase Price for U.S. federal Income Tax
purposes.
Notwithstanding
anything in this Article VIII to the contrary, in no event shall the limitations
set forth in (x) Section 8.5(a) apply to any Buyer Losses arising under Sections
8.1(b), 8.1(c), 8.1(d) or 8.1(a) with respect to any breach or inaccuracy of
any
of the Fundamental Representations, (y) Section 8.5(b) apply to any Buyer
Losses arising under Sections 8.1(c), 8.1(d), 8.1(a) with respect to any breach
or inaccuracy of any of the Fundamental Representations or (z) Section 8.5(b)
apply to any Buyer Losses arising under 8.1(b) with respect to any breach of
Sections 5.7(a) or 5.7(b) (nor shall any such Buyer Losses count towards the
Buyer Cap).
-36-
Section
8.6 Exclusive
Remedies.
(a) Except
as
set forth in Section 8.6(b) below, the provisions of Section 5.7, this Article
VIII, Section 9.4, Section 10.7, Section 10.10 and Section 10.12 hereof set
forth the exclusive rights and remedies of the Parties to seek or obtain damages
or any other remedy or relief whatsoever from any party with respect to matters
arising under or in connection with this Agreement and the transactions
contemplated hereby.
(b) Nothing
in Section 8.6(a) shall prohibit, prevent or restrict the equitable remedies,
including specific performance or injunctive relief, available to Buyer or
its
Affiliates in the event of a breach or threatened breach of Section 5.11 or
Section 5.12 of this Agreement.
ARTICLE
IX
ENVIRONMENTAL
REAL PROPERTY
Section
9.1 Buyer’s
Access to Perform Environmental Site Assessments.
(a) Phase
I Environmental Site Assessment.
To the
extent reasonably possible during the Pre-Closing Period and subject to the
restrictions of any applicable Law or contractual undertaking, Seller shall
afford to Buyer and to its authorized Representatives, during reasonable
business hours, reasonable access to the plants, properties (including site
visits), personnel, officers, books and records, Environmental Permits and
other
information of the Acquired Companies, including any and all Phase I
Environmental Site Assessments commissioned by the Acquired Companies (if any).
If any Phase I Environmental Site Assessment commissioned by the Acquired
Companies is dated less than one (1) year prior to the date hereof, Seller
shall
provide to Buyer documentation providing Buyer (in its discretion) with the
ability to rely on those Phase I Environmental Site Assessments commissioned
by
the Acquired Companies. At Buyer’s sole discretion, during the one-month period
following the Closing, Buyer may commission one or more Phase I Environmental
Site Assessment(s) (a “Phase
I Environmental Site Assessment”)
in
accordance with ASTM E 1527-05 Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process (“Phase
I Standard”)
at the
locations at which the Acquired Companies do business. Each such Phase I
Environmental Site Assessment commissioned by Buyer shall be conducted at
Buyer’s cost. Promptly following the Closing Date, Buyer shall provide Seller a
list of those sites at which it intends to conduct Phase I Environmental Site
Assessments (the “Designated
Locations”)
and
shall promptly commission the identified Phase I Environmental Site Assessments
in accordance with this Section 9.1(a).
(b) Phase
II Environmental Site Assessment.
During
the Environmental Site Assessment Period, subject to Section 9.2(b), Buyer
may
perform one or more Phase II Environmental Site Assessments in accordance with
ASTM E 1903-97 Standard Guide for Environmental Site Assessments: Phase II
Environmental Site Assessment Process at one or more Designated Locations (a
“Phase
II Environmental Site Assessment”).
Each
such Phase II Environmental Site Assessment commissioned by Buyer shall be
conducted at Buyer’s cost.
-37-
(c) Notwithstanding
anything to the contrary in this Article IX, Buyer and any of its environmental
consultants and other representatives shall not, during the Pre-Closing Period,
conduct Phase II Environmental Site Assessments, monitoring or invasive sampling
of soil, groundwater, air, any other environmental media, or building materials
or equipment, pertaining to Environmental Laws or Hazardous Materials and
relating to the Owned Real Property or the Leased Real Property, or directly
contact any relevant environmental agency, in each case without the prior
written consent of Seller.
Section
9.2 Actions
Dependent Upon Findings From Phase I Environmental Site
Assessments.
(a) Finding
of No Recognized Environmental Condition.
If any
Phase I Environmental Site Assessment performed or relied on pursuant to Section
9.1(a) with respect to a Designated Location results in a finding that there
are
no “recognized environmental conditions” (as that term is defined in the Phase I
Standard) at that Designated Location, then Seller shall have no obligation
to
pay Buyer any amounts pursuant to Section 9.4 with respect to such Designated
Location.
(b) Finding
of Recognized Environmental Condition.
If any
Phase I Environmental Site Assessment performed or relied on pursuant to Section
9.1(a) with respect to a Designated Location results in a finding that there
is
one or more “recognized environmental conditions” (as that term is defined in
the Phase I Standard) at that Designated Location that did not arise solely
from
off-site conditions or events, then Buyer shall (i) provide Seller with a copy
of each such Phase I Environmental Site Assessment commissioned by Buyer within
five (5) Business Days after Buyer’s receipt of each Phase I Environmental Site
Assessment and (ii) be entitled to commission one or more Phase II Environmental
Site Assessments at that Designated Location in accordance with
Section 9.1(b) above; provided,
that
(x) any
such Phase II Environmental Site Assessment shall be conducted only with respect
to such “recognized environmental condition” and (y) with respect to any
“recognized environmental condition” identified in a Phase I Environmental Site
Assessment referenced in the second sentence of Section 9.1(a), where Buyer
intends to rely on such Phase I Environmental Site Assessment rather than
commission its own, Buyer shall have notified Seller in writing within thirty
(30) days following the Closing Date of Buyer’s intent to conduct a Phase II
Environmental Site Assessment. If Buyer elects not to commission a Phase II
Environmental Site Assessment for a Designated Location, then Seller shall
have
no obligation to pay Buyer pursuant to Section 9.4 with respect to such
Designated Location. If Buyer elects to commission a Phase II Environmental
Site
Assessment for a Designated Location, then Buyer shall provide Seller with
notice of this election within ten (10) Business Days after Buyer’s receipt of
all of the commissioned Phase I Environmental Site Assessments and shall
commission the on-site work required for the Phase II Environmental Site
Assessment during the one-month period after such an election; provided,
that
Seller
shall have no obligation to pay any amount pursuant to Section 9.4 with respect
to any Designated Location if all Phase II Environmental Site Assessments with
respect to such Designated Location are not completed on or before the day
that
is six (6) months following the Closing Date (the “Environmental
Site Assessment Period”).
-38-
Section
9.3 Actions
Dependent Upon Findings From Phase II Environmental Site
Assessments.
(a) No
Exceedance(s) of Clean Up Standards.
If any
Phase II Environmental Site Assessment at a Designated Location finds that
no
concentrations of Hazardous Materials are determined to be present at, on,
under
or around the location or locations of the “recognized environmental condition”
at that Designated Location (including, without limitation, the soil,
groundwater, surface water, sediment or other media) that exceed applicable
Clean Up Standards with respect to that Designated Location, then Seller shall
have no obligation to pay Buyer pursuant to Section 9.4 with respect to such
Designated Location.
(b) Exceedance(s)
of Clean Up Standards.
If any
Phase II Environmental Site Assessment at the location or locations of the
“recognized environmental condition” at a Designated Location finds that
concentrations of Hazardous Materials are determined to be present at, on,
under
or around the property at the location or locations of the “recognized
environmental condition” on that Designated Location (including, without
limitation, the soil, groundwater, surface water, sediment or other media)
in
exceedance of applicable Clean Up Standards and do not clearly originate from
an
off-site source, then (i) Buyer shall provide Seller with a copy of such Phase
II Environmental Site Assessment within ten (10) Business Days after Buyer’s
receipt of the Phase II Environmental Site Assessment and (ii) the Parties
shall
agree upon a remediation plan (or plans) as follows:
(i) Buyer
shall be entitled, at its cost, to commission a qualified environmental
consultant, reasonably acceptable to Seller (“Buyer’s
Environmental Consultant”),
to
prepare a remediation plan (or plans) to address concentrations of Hazardous
Materials at, on, under or around the location or locations of the “recognized
environmental condition” at the Designated Location (including, without
limitation, the soil, groundwater, surface water, sediment or other media)
in
exceedance of applicable Clean Up Standards at the location or locations of
the
“recognized environmental condition” at that Designated Location that do not
clearly originate from an off-site source (“Buyer’s
Remediation Plan”).
Buyer’s Remediation Plan shall (A) be based on the most cost-effective means
reasonably available, including, to the extent reasonable, the use of any
site-specific risk-based standards, deed restrictions, land-use restrictions,
engineering controls, natural attenuation, and monitoring activities, (B) meet
a
reasonable standard allowed under Environmental Laws consistent with
commercial/industrial use at the subject Designated Location compatible with
current zoning at such Designated Location and (C) include, at a minimum, a
summary of remedial action and cost estimate to address each location or
locations of the “recognized environmental condition” where an exceedance of
Clean Up Standards exists. Buyer shall submit Buyer’s Remediation Plan, together
with copies of all underlying or otherwise relevant Phase II Environmental
Site
Assessments not provided to Seller previously, to Seller for consideration
not
later than thirty (30) Business Days following the completion of the Phase
II
Environmental Site Assessment.
-39-
(ii) In
the
event Seller agrees with the cost and recommendations set forth in Buyer’s
Remediation Plan, such costs shall be treated as Environmental Remediation
Costs.
(iii) In
the
event Seller does not agree with the costs and recommendations set forth in
Buyer’s Remediation Plan, Seller shall be entitled, at its cost, to commission a
qualified environmental consultant, reasonably acceptable to Buyer
(“Seller’s
Environmental Consultant”),
to
prepare a remediation plan (or plans) to address concentrations of Hazardous
Materials at, on, under or around the location or locations of the “recognized
environmental condition” at the Designated Location (including, without
limitation, the soil, groundwater, surface water, sediment or other media)
in
exceedance of applicable Clean Up Standards at the location or locations of
the
“recognized environmental condition” at the Designated Location that do not
clearly originate from an off-site source (the “Seller’s
Remediation Plan”).
Seller’s Remediation Plan shall (A) be based on the most cost-effective means
reasonably available, including, to the extent reasonable, the use of any
site-specific risk-based standards, deed restrictions, land-use restrictions,
engineering controls, natural attenuation, and monitoring activities, and (B)
meet a reasonable standard allowed under Environmental Laws consistent with
commercial/industrial use at the subject Designated Location compatible with
current zoning at such Designated Location. Seller shall submit Seller’s
Remediation Plan to Buyer for consideration not later than thirty (30) Business
Days following Seller’s receipt of Buyer’s Remediation Plan; provided,
however,
that
such thirty (30) Business Day period shall be extended by the amount of time,
if
any, by which Buyer denies Seller reasonable access to the Real Property
pursuant to Section 9.5(c).
(iv) In
the
event the estimated costs to remove and/or remediate such Hazardous Materials
as
set forth in Buyer’s Remediation Plan and Seller’s Remediation Plan do not
differ by more than 10% (as stated in Buyer’s Remediation Plan and Seller’s
Remediation Plan), (A) the cost to remove and/or remediate such Hazardous
Materials shall be deemed to equal the average of the two estimated costs as
stated in Buyer’s Remediation Plan and Seller’s Remediation Plan and (B) such
average estimated cost shall be treated as an Environmental Remediation Cost
(as
defined below).
-40-
(v) In
the
event the estimated costs to remove and/or remediate such Hazardous Materials
as
set forth in Buyer’s Remediation Plan and Seller’s Remediation Plan differ by
more than 10% (as stated in Buyer’s Remediation Plan and Seller’s Remediation
Plan), Buyer and Seller shall select a mutually agreeable third qualified
environmental consultant (the “Third
Consultant”),
whose
costs shall be borne 50/50 by Buyer and Seller, to prepare a remediation plan
(or plans) to address concentrations of Hazardous Materials at, on, under or
around the location or locations of the “recognized environmental condition” at
the Designated Location (including, without limitation, the soil, groundwater,
surface water, sediment or other media) in exceedance of applicable Clean Up
Standards at the location or locations of the “recognized environmental
condition” at the Designated Location that do not clearly originate from an
off-site source (the “Third
Remediation Plan”).
The
Third Remediation Plan shall (A) be based on the most cost-effective means
reasonably available, including, to the extent reasonable, the use of any
site-specific risk-based standards, deed restrictions, land-use restrictions,
engineering controls, natural attenuation, and monitoring activities, and (B)
meet a reasonable standard allowed under Environmental Laws consistent with
commercial/industrial use at the subject Designated Location compatible with
current zoning at such Designated Location.
(vi) The
estimated cost to remove and/or remediate such Hazardous Materials as set forth
in the Third Remediation Plan shall be deemed conclusive and binding on both
parties (subject to the Environmental Basket and the Environmental Cap (as
defined below)) and such cost shall be treated as an Environmental Remediation
Cost (as defined below); provided,
that
the cost
of removal and/or remediation as stated in the Third Remediation Plan shall
not
be higher than the highest estimated cost nor lower than the lowest estimated
cost as stated in Buyer’s Remediation Plan or Seller’s Remediation Plan.
(vii) Notwithstanding
anything herein to the contrary, except as provided in Section 9.4, Seller
shall have no liability for (A) any Designated Location referenced in Section
9.3(a), (B) any environmental condition or remediation identified in any Phase
II Environmental Site Assessment completed after the expiration of the
Environmental Site Assessment Period or (C) any environmental condition or
remediation discovered or identified other than pursuant to a Phase II
Environmental Site Assessment conducted pursuant to
Section 9.2(b).
Section
9.4 Payment
for Environmental Remediation Costs.
Subject
to the limitations set forth herein, with respect to each Designated Location,
Seller shall pay promptly upon determination in accordance with Sections 9.1
through 9.3 (but subject to the limitations therein) the amount determined
to be
the estimated cost of remediation pursuant to Section 9.3(b) (the “Environmental
Remediation Costs”).
Notwithstanding the foregoing, Seller shall have no liability for any
Environmental Remediation Costs under this Section 9.4 unless and until the
aggregate amount of all such Environmental Remediation Costs exceeds Two Million
Dollars ($2,000,000) (the “Environmental
Basket”),
in
which event Seller shall only be liable for all such Environmental Remediation
Costs in excess of the Environmental Basket; provided,
that no
Environmental Remediation Costs shall be due and payable by Seller, or shall
count toward satisfaction of the Environmental Basket, with respect to an
individual “recognized environmental condition” at a given Designated Location
with respect to which the Environmental Remediation Costs relating to such
individual “recognized environment condition” is less than Two Hundred Fifty
Thousand Dollars ($250,000). The total aggregate amount of the liability of
Seller for all Environmental Remediation Costs shall be limited to Thirty
Million Dollars ($30,000,000) (the “Environmental
Cap”).
-41-
Section
9.5 Obligations
of Buyer and Seller.
(a) During
the period prior to Closing, Buyer shall use its reasonable good faith efforts
to apprise Seller of any “recognized environmental conditions” (as that term is
defined in the Phase I Standard) or concentrations of Hazardous Materials at,
on, under or around that particular property or location (including, without
limitation, the soil, groundwater, surface water, sediment or other media)
in
exceedance of applicable Clean Up Standards of which Buyer becomes
aware.
(b) The
provisions of this Article IX set forth the exclusive rights and remedies of
Buyer to seek or obtain damages or any other remedy or relief whatsoever from
Seller with respect to Environmental Remediation Costs or any environmental
condition with respect to any Real Property or any violation by any Acquired
Company of any Environmental Laws, or the storage, handling, disposal or Release
of any Hazardous Material.
(c) Subject
to the restrictions of any applicable Law or contractual undertaking, until
the
payment by or resolution with respect to all Environmental Remediation Costs
pursuant to this Article IX, Buyer shall provide Seller and its authorized
representatives reasonable access to the Real Property as may be reasonably
requested by Seller to verify the information contained in the Phase I
Environmental Site Assessments and Phase II Environmental Site Assessments
provided by Buyer to Seller; provided,
however,
that
any such access shall be provided during normal business hours under the
supervision of Buyer’s personnel and in such a manner as to not interfere
unreasonably with the business operations of Buyer or the Acquired
Companies.
(d) Notwithstanding
anything to the contrary in this Article IX, in no event shall Seller be
required to pay any amounts related to any “recognized environmental condition”
that (i) occurs after the Closing Date, or (ii) exists prior to the Closing
Date, but, in the case of this clause (ii), only to the extent such condition
(A) is made materially worse
by any
action knowingly taken by Buyer or any of its Affiliates after the Closing
(other than Phase I or II environmental testing pursuant to this Article IX
conducted in accordance with customary environmental testing standards), or
(B)
is made materially worse by any knowing failure of Buyer or any of its
Affiliates to take an action after the Closing that is required under
Environmental Laws or an applicable Environmental Permit or by a Governmental
Entity.
-42-
ARTICLE
X
MISCELLANEOUS
Section
10.1 Fees
and Expenses.
Except
as provided above or as otherwise expressly provided herein, each of the Parties
shall pay its own fees, costs and expenses incurred in connection herewith
and
the transactions contemplated hereby, including the fees, costs and expenses
of
its financial advisors, accountants and counsel.
Section
10.2 Notices.
All
notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
given by any of the following methods: (a) personal delivery; (b) registered
or
certified mail, postage prepaid, return receipt requested; (c) overnight mail,
or (d) facsimile transmission. Notices shall be sent to the appropriate Party
at
its address given below (or at such other address for such Party as shall be
specified by notice given hereunder):
If
to
Buyer or Buyer Guarantor, to:
Parcs
LLC
0000
Xxxxxxx Xxxx
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, XXX
Attention:
Xxxxxx X. XxXxxxx
Facsimile:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxx
& Xxx Xxxxx PLLC
000
Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, XXX
Attention:
Xxxxxx X. XxXxxxx III
Facsimile:
(000) 000-0000
If
to
Seller, Note Holder or Seller Guarantor:
SHV
Holdings X.X.
Xxxxxxxxx
0, 0000 XX Xxxxxxx
Postbus
2065, 0000 XX Xxxxxxx
Attention: Xxxxxxx
X. Xxxxxxx
Facsimile:
(000) 000 00 00
-43-
with
a
copy (which shall not constitute notice) to:
King
& Spalding LLP
0000
Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx,
Xxxxxxx 00000-0000
Attention: C.
Xxxxxxx Xxxxxx
X.
Xxxx
Xxxxx, II
Facsimile:
(000) 000-0000
All
such
notices, requests, demands, waivers and communications shall be deemed received
upon (i) actual receipt thereof by the addressee, or (ii) actual delivery
thereof to the appropriate address.
Section
10.3 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of Law or public policy, all other terms, conditions
and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any Party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate
in
good faith to modify this Agreement so as to effect the original intent of
the
Parties as closely as possible in a mutually acceptable manner in order that
the
transactions contemplated by this Agreement be consummated as originally
contemplated to the fullest extent possible.
Section
10.4 Binding
Effect; Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and shall
inure
to the benefit of the Parties and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, directly or indirectly, including by operation
of
law, by any Party without the prior written consent of the other Parties.
Notwithstanding the foregoing, Seller may assign its rights and obligations
under this Agreement to an Affiliate of Seller, and such Affiliate shall assume
all of Seller’s rights and obligations hereunder; provided,
that
Seller
(a) notifies Buyer of such assignment in writing and (b) provides Buyer
with a copy of the documentation effecting such assignment, in each case at
least three (3) Business Days prior to the Closing Date. In the event of any
such assignment and assumption by Seller and an Affiliate of Seller in
accordance with this Section 10.4, references to instruments or agreements
to executed by and delivered to or by Seller in this Agreement at Closing shall
apply to such assignee.
-44-
Section
10.5 No
Third Party Beneficiaries.
This
Agreement is exclusively (a) for the benefit of Seller, and its respective
successors and permitted assigns, with respect to the obligations of Buyer
under
this Agreement, and (b) for the benefit of Buyer, and its respective successors
and permitted assigns, with respect to the obligations of Seller, under this
Agreement, and this Agreement shall not be deemed to confer upon or give to
any
other third party any remedy, claim, liability, reimbursement, cause of action
or other right.
Section
10.6 Section
Headings.
The
Article and Section headings contained in this Agreement are exclusively for
the
purpose of reference, are not part of the agreement of the Parties and shall
not
in any way affect the meaning or interpretation of this Agreement.
Section
10.7 Dispute
Resolution.
Except
with respect to disputes related to a breach or threatened breach of
Sections 5.11 or 5.12, which such disputes Buyer shall be entitled to
submit to an appropriate court pursuant to Section 10.10 without following
the
procedures prescribed in this Section 10.7, in the event a dispute arises under
or pursuant to this Agreement, Buyer and Seller agree to attempt to resolve
such
dispute via good faith discussions between each of their respective senior
management teams for a period of ten (10) days following distribution of notice
from Buyer or Seller, as applicable, of such dispute. Should such discussions
fail to resolve the dispute, the respective Chief Executive Officers of Buyer
and Seller shall then speak directly in an attempt to resolve such issues for
a
period of two (2) days. If, after good faith discussions for two (2) days the
respective Chief Executive Officers of Buyer and Seller are unable to reach an
agreement with respect to such issues, either Buyer or Seller may file suit
as
provided in Section 10.10.
Section
10.8 Entire
Agreement.
This
Agreement, the Confidentiality Agreement and the other documents delivered
pursuant to this Agreement constitute the entire agreement among the Parties
with respect to the subject matter of this Agreement and supersede all other
prior agreements and understandings, both written and oral, between the Parties
with respect to the subject matter of this Agreement.
Section
10.9 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware (regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof) as to all matters, including
matters of validity, construction, effect, performance and
remedies.
Section
10.10 Consent
to Jurisdiction and Service of Process.
The
Parties submit to the exclusive jurisdiction of the Chancery Court of the State
of Delaware or the courts of the United States located in Wilmington, Delaware
in respect of the interpretation and enforcement of the provisions of this
Agreement and any related agreement, certificate or other document delivered
in
connection herewith and by this Agreement waive, and agree not to assert, any
defense in any action for the interpretation or enforcement of this Agreement
and any related agreement, certificate or other document delivered in connection
herewith, that they are not subject thereto or that such action may not be
brought or is not maintainable in such courts or that this Agreement may not
be
enforced in or by such courts or that their property is exempt or immune from
execution, that the action is brought in an inconvenient forum, or that the
venue of the action is improper. Service of process with respect thereto may
be
made upon either Party by mailing a copy thereof by registered or certified
mail, postage prepaid, to such party at its address as provided in Section
10.2.
-45-
Section
10.11 Waiver
of Jury Trial.
Each
Party hereby acknowledges and agrees that any controversy which may arise under
this Agreement is likely to involve complicated and difficult issues, and
therefore each such Party hereby irrevocably and unconditionally waives any
right such Party may have to a trial by jury in respect of any litigation
directly or indirectly arising out of or relating to this Agreement or the
transactions contemplated by this Agreement. Each Party certifies and
acknowledges that (a) no representative, agent or attorney of the other Party
has represented, expressly or otherwise, that such other Party would not, in
the
event of litigation, seek to enforce the foregoing waiver, (b) each Party
understands and has considered the implications of this waiver, (c) each Party
makes this waiver voluntarily, and (d) each Party has been induced to enter
into
this Agreement by, among other things, the mutual waivers and certifications
in
this Section 10.11.
Section
10.12 Specific
Performance.
The
Parties acknowledge and agree that any breach of the terms of this Agreement
would give rise to irreparable harm for which money damages would not be an
adequate remedy and accordingly the Parties agree that, in addition to any
other
remedies, each Party shall be entitled to enforce the terms of this Agreement
by
a decree of specific performance without the necessity of proving the inadequacy
of money damages as a remedy.
Section
10.13 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, but all of which shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of the Agreement.
Section
10.14 Amendment;
Modification.
This
Agreement may be amended, modified or supplemented at any time only by written
agreement of the Parties.
Section
10.15 Guarantee.
(a) Seller
Guarantor and Buyer Guarantor hereby unconditionally and irrevocably guarantee
all obligations of Seller and Buyer, (and in the case of Seller, any Transferee)
respectively, under this Agreement, including, but not limited to, payment
obligations. This guarantee is a guaranty of payment and not of collection
only.
Neither Seller nor Buyer shall be required to exhaust any right or remedy or
to
take any action against any other Person or any collateral in order to receive
payment from Buyer Guarantor or Seller Guarantor, as applicable. The liability
of Seller Guarantor and Buyer Guarantor under this Section 10.15(a) is
absolute and unconditional irrespective of: (i) any change in the time,
manner or place of payment of, or in any other term of, this Agreement or any
amendment of this Agreement, or any waiver of or any consent to departure from
any of the terms of this Agreement; and (ii) any other defense, setoff or
counterclaim whatsoever with respect to this Agreement or the transactions
contemplated hereby that might constitute a defense available to, or discharge
of, Seller or Seller Guarantor, in the case of Buyer, and Buyer or Buyer
Guarantor, in the case of Seller.
-46-
(b) Each
of
Buyer Guarantor and Seller Guarantor hereby acknowledge and agree to be bound
by
Sections 10.10 and 10.11 of this Agreement.
[Signatures
follow on next page.]
-47-
IN
WITNESS WHEREOF, all parties hereto have caused this Agreement to be executed
as
of the date first above written.
|
SELLER:
|
|
|
SHV
NEDERLAND B.V.
|
|
|
By:
|
/s/ J.J. de Rooij |
|
Name:
J.J. de Rooij
|
|
|
Title:
Director
|
|
|
By:
|
/s/ Frits Rebel |
|
Name:
Frits Rebel
|
|
|
Title:
General Counsel, proxy
|
|
NOTE
HOLDER:
|
|
|
SHV
FINANCE B.V.
|
|
|
By:
|
/s/ J.J. de Rooij |
|
Name:
J.J. de Rooij
|
|
|
Title:
Proxy
|
|
|
By:
|
/s/ Frits Rebel |
|
Name:
Frits Rebel
|
|
|
Title:
Director
|
|
BUYER:
|
|
|
PARCS
LLC
|
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx |
|
Name:
Xxxxxx X. Xxxxxxxxx
|
|
|
Title:
Vice President
|
|
[Signature
Page to Stock Purchase Agreement]
S-1
|
SELLER
GUARANTOR:
|
|
|
SHV
HOLDINGS N.V., solely as guarantor under
Section 10.15 |
|
|
By:
|
/s/ J.J. de Rooij |
|
Name:
J.J. de Rooij
|
|
|
Title:
Director
|
|
|
By:
|
/s/ Frits Rebel |
|
Name:
Frits Rebel
|
|
|
Title:
General Counsel, proxy
|
|
NUCOR
CORPORATION, solely as guarantor
under Section 10.15 |
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx |
|
Name:
Xxxxxx X. Xxxxxxxxx
|
|
|
Title:
Executive Vice President
|
|
[Signature
Page to Stock Purchase Agreement]
S-2
