================================================================================
ASSET PURCHASE AGREEMENT
by and among
MISSISSIPPI POTASH, INC.
and
XXXX XXXXXX, INC.,
as Debtors-in-Possession and Sellers,
and
INTREPID MINING NM LLC,
and
XX XXXXXX LLC,
as Buyers
November 26, 2003
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS......................................................1
SECTION 2. PURCHASE OF TRANSFERRED ASSETS AND ASSUMPTION OF
LIABILITIES.....................................................15
2.1 Transferred Assets.................................................15
2.2 Liabilities........................................................16
2.3 Excluded Assets....................................................17
SECTION 3. ESCROW ACCOUNTS AND PURCHASE PRICE..............................17
3.1 Escrow Accounts....................................................17
3.2 The Purchase Price and Allocation..................................18
3.3 Payment of the Closing Purchase Price..............................19
3.4 Adjustment Amount..................................................20
3.5 Prorations as of the Closing Date..................................22
SECTION 4. CLOSING.........................................................23
4.1 Closing Date.......................................................23
4.2 Closing Deliveries.................................................23
SECTION 5. SELLERS' REPRESENTATIONS AND WARRANTIES.........................25
5.1 Authorization for Agreement and Consent............................25
5.2 Organization of Sellers............................................25
5.3 Consents and Approvals.............................................26
5.4 No Violations......................................................26
5.5 No Default.........................................................26
5.6 Real Property......................................................27
5.7 Title to Tangible Property.........................................27
5.8 Permits and Environmental Permits..................................28
5.9 Litigation.........................................................28
5.10 No Finder's Fee....................................................28
5.11 Financial Statements...............................................28
5.12 Legal Compliance...................................................29
5.13 Environmental......................................................29
5.14 Taxes..............................................................29
5.15 Employee Matters...................................................30
5.16 Intellectual Property..............................................30
5.17 Contracts and Cure Amounts.........................................31
5.18 No Changes; Conduct of Business....................................31
5.19 Water Rights.......................................................32
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.........................32
6.1 Authorization for Agreement and Consents...........................32
i
6.2 Organization.......................................................32
6.3 No Violation.......................................................32
6.4 Finder's Fees......................................................32
6.5 No Litigation......................................................32
6.6 No Financing Contingency...........................................32
6.7 Informed Purchaser.................................................33
SECTION 7. COVENANTS.......................................................33
7.1 Sellers' Chapter 11 Bankruptcy Case................................33
7.2 Access.............................................................33
7.3 HSR Act............................................................34
7.4 Consents...........................................................34
7.5 Conduct of the Business Pending Closing............................34
7.6 Public Announcements...............................................35
7.7 Financial Statements...............................................35
7.8 Proceeds of Sale of Water Rights...................................36
7.9 Sellers' Employees.................................................36
7.10 Additional Agreements..............................................38
7.11 Royalty Reduction..................................................39
7.12 BLM Assignments....................................................39
7.13 Relief From PBGC...................................................39
7.14 Mine Closure Liability.............................................40
7.15 Buyers' Set-Off Rights.............................................40
SECTION 8. TAX MATTERS.....................................................40
8.1 Sales and Transfer Taxes...........................................40
8.2 Cooperation on Tax Matters.........................................41
SECTION 9. CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS.....................41
9.1 Representations and Warranties True................................41
9.2 Compliance with Agreement..........................................41
9.3 Bankruptcy Court Approval..........................................41
9.4 HSR Act............................................................41
9.5 No Order...........................................................42
9.6 Consents and Approvals.............................................42
9.7 No Material Adverse Effect.........................................42
9.8 No Casualty Loss...................................................42
9.9 Bank Releases......................................................42
9.10 BLM Approvals......................................................42
SECTION 10. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS....................42
10.1 Representations and Warranties True................................42
10.2 Compliance with Agreement..........................................43
10.3 HSR Act............................................................43
10.4 No Order...........................................................43
ii
10.5 Bankruptcy Court Approval..........................................43
10.6 Bank Releases......................................................43
SECTION 11. POST CLOSING....................................................43
11.1 Further Assurances.................................................43
11.2 Books and Records; Personnel.......................................44
11.3 Laguna Xxxxxx......................................................44
SECTION 12. INDEMNIFICATION.................................................44
12.1 Indemnification by Sellers.........................................44
12.2 Indemnification by Buyer...........................................45
12.3 Indemnification Procedures.........................................46
12.4 Limitations on Indemnification Obligations; Exclusive Remedies.....47
12.5 Release of Indemnification Holdback for Indemnification Claims.....48
12.6 Survival...........................................................49
12.7 Treatment of Indemnification Payments..............................49
SECTION 13. TERMINATION, BREAK-UP FEE AND REMEDIES..........................49
13.1 Termination........................................................49
13.2 Break-Up Fee; Expense Reimbursement................................51
13.3 Remedies...........................................................52
13.4 Effect of Termination..............................................52
SECTION 14. MISCELLANEOUS...................................................53
14.1 Expenses...........................................................53
14.2 Inform of Litigation...............................................53
14.3 Assignment.........................................................53
14.4 Governing Law......................................................53
14.5 Amendment and Modification.........................................53
14.6 Notices............................................................54
14.7 Entire Agreement...................................................55
14.8 Successors.........................................................55
14.9 Counterparts.......................................................55
14.10 Severability.......................................................55
14.11 Headings...........................................................55
14.12 Schedules..........................................................55
14.13 Jurisdiction.......................................................56
14.14 Disclosure of Tax Treatment and Structure..........................56
iii
EXHIBITS
--------
A Permitted Encumbrances
B-1 Xxxxxxx Money Escrow Agreement
B-2 Indemnification Holdback Escrow Agreement
B-3 Adjustment Amount Escrow Agreement
C Example Purchase Price Calculations
D Assumption Agreement
E Transition Services Agreement
SCHEDULES
---------
2.2 Assumed Litigation
2.3 Excluded Assets
5.0 Disclosure Schedule
7.l(a)(1) Auction and Bid Procedures
7.l(a)(2) Bid Procedures Order
7.l(a)(3) Sale Order
7.4 Required Consents
7.9(d) Employee Benefits
iv
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 26th day of November, 2003, by and between MISSISSIPPI POTASH, INC., a
Debtor-in-Possession and a Mississippi corporation ("MPI"), XXXX XXXXXX, INC., a
Debtor-in-Possession, a Mississippi corporation and a direct wholly owned
subsidiary of MPI ("EPI" and, together with MPI, "Sellers"), INTREPID MINING NM
LLC, a New Mexico limited liability company ("IMNM"), and XX XXXXXX LLC, a New
Mexico limited liability company ("HBLLC," and, together with IMNM, "Buyers").
WITNESSETH:
WHEREAS, Sellers are currently in possession of their assets as
Debtors-in-Possession pursuant to Title 11, U.S. Code, Sections 101 et seq. (the
"Bankruptcy Code"), in the Chapter 11 administratively consolidated cases of
Mississippi Chemical Corporation and its filing subsidiaries, Joint Case No.
03-02984 WEE (the "Bankruptcy Cases"), presently pending in the United States
Bankruptcy Court for the Southern District of Mississippi (the "Bankruptcy
Court"), which Bankruptcy Cases include Case No. 03-02990 WEE for MPI and Case
No. 03-02991 WEE for EPI, and Sellers, upon proper approval and authorization
from the Bankruptcy Court, may sell and assign assets outside of the ordinary
course of business;
WHEREAS, Sellers are engaged in the business of mining, refining and
distributing potash with the Transferred Assets (the "Business");
WHEREAS, Sellers desire to sell, assign, transfer and convey to Buyers,
directly or indirectly, the Transferred Assets (as defined below), all upon the
terms and conditions set forth herein and in accordance with the Final Sale
Order and Sections 105, 363 and 365 of the Bankruptcy Code; and
WHEREAS, concurrently with the execution of this Agreement, Intrepid Mining
LLC, a Colorado limited liability company and the parent of each Buyer, has
executed and delivered to Sellers a limited guaranty providing for the guaranty
by Intrepid Mining LLC of (a) the indemnification obligations of HBLLC under
Article 12 of this Agreement with respect to the Assumed Reclamation Obligations
of HBLLC up to $2.3 million and (b) the indemnification obligations of IMNM
under Article 12 of this Agreement with respect to the Assumed Reclamation
Obligations of IMNM up to $5 million.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
The following terms used in this Agreement shall have the following
meanings:
"Accounts Payable Value" has the meaning set forth in Section 3.2(a).
"Accounts Receivable" means all of the accounts receivable or trade
receivables arising out of Inventory sold or services performed in connection
with the operation of the Business.
"Action" has the meaning assigned to that term in Section 9.5 of this
Agreement.
"Adjustment Amount" has the meaning assigned to that term in Section 3.4(d)
of this Agreement.
"Adjustment Amount Escrow" has the meaning assigned to that term in Section
3.1(c) of this Agreement.
"Adjustment Amount Escrow Account" has the meaning assigned to that term in
Section 3.1(c) of this Agreement.
"Adjustment Amount Escrow Agreement" has the meaning assigned to that term
in Section 3.1(c) of this Agreement.
"Agreement" has the meaning assigned to that term in the introduction to
this Agreement.
"Affiliate" or "Affiliates" with respect to any specified Person means a
Person that, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such specified
Person. For this definition, "control" (and its derivatives) means the
possession, directly or indirectly, of 10% or more of the Equity Interests of a
Person, or the power, directly or indirectly, to vote 10% or more of the voting
Equity Interests of a Person.
"Assumed Contracts" means all rights under (i) all contracts or agreements
which are indicated with an asterisk on Disclosure Schedule, Section 5.17, (ii)
all contracts or agreements entered into by Sellers in the ordinary course of
business consistent with past practice between the date of this Agreement and
the Effective Time, excluding any such contracts or agreements that constitute a
breach by Sellers of their covenants in Section 7.5(b), and (iii) all other
contracts or agreements entered into other than in the ordinary course of
business between the date of this Agreement and the Effective Time that a Buyer
agrees to accept by giving written notice thereof to such Seller prior to the
Closing pursuant to Section 2.2(c); provided, however, that at any time prior to
the entry of the Sale Order, Buyers may elect by written notice to Sellers to
delete one or more of such contracts or agreements from the Assumed Contracts,
in which event such contracts or agreements shall not be Assumed Contracts.
"Assumed Employment Liabilities" has the meaning assigned to that term in
Section 7.9(c) of this Agreement.
"Assumed Environmental Liabilities" means all costs, expenses or other
liabilities relating to any conditions (including Hazardous Materials) existing
on the Transferred Assets as of or after the Closing, and Hazardous Materials
which migrate from the Transferred Assets after the Closing, including (without
limitation) costs, expenses or other liabilities relating to the Transferred
Assets and arising out of the conditions (including Hazardous Materials) (a)
described in the four Phase I Environmental Site Assessments and Environmental
Compliance
2
Reviews of Sellers, dated September 2002, prepared for Sellers by ATC
Associates, Inc. or (b) described on Disclosure Schedule, Section 5.13, in each
case, to the extent such conditions (including Hazardous Materials) exist on the
Transferred Assets as of or after the Closing; provided however, that Assumed
Environmental Liabilities shall not include (A) any fines or civil or criminal
penalties for (I) Releases on or from the Transferred Assets occurring prior to
the Closing or (II) violations by Sellers or their Affiliates of Permits,
Environmental Permits or Environmental Laws occurring prior to the Closing, or
(B) liabilities for offsite disposal of Hazardous Materials by Sellers or their
Affiliates occurring prior to the Closing.
"Assumed Liabilities" has the meaning assigned to that term in Section
2.2(a) of this Agreement.
"Assumed Litigation" has the meaning assigned to that term in Section 2.2
of this Agreement.
"Assumed Reclamation Obligations" means the IMNM Assumed Reclamation
Obligations and the HBLLC Assumed Reclamation Obligations.
"Auction" has the meaning assigned to that term in Schedule 7.1(a)(1) of
this Agreement.
"Auction and Bid Procedures" has the meaning assigned to that term in
Schedule 7.1(a)(1) of this Agreement.
"Audited June 30 Statements" means the audited, consolidated balance sheet
of Sellers (including the notes thereto) as of June 30, 2003, and the related
audited statement of operations and cash flows for the year then ended.
"Audited Statements" has the meaning assigned to that term in Section 5.11
of this Agreement.
"Bank Guaranty Release" means the release of all obligations and
liabilities of Sellers pursuant to those certain Amended and Restated Guaranty
Agreements, each dated as of November 15, 2002, made by each Seller in favor of
the banks under the Amended and Restated Credit Agreement dated as of November
15, 2002, among MissChem, Xxxxxx Trust and Savings Bank, individually and as
Administrative Agent, and the banks from time to time party thereto, as amended.
"Bankruptcy Cases" has the meaning assigned to that term in the first
recital of this Agreement.
"Bankruptcy Code" has the meaning assigned to that term in the first
recital of this Agreement.
"Bankruptcy Court" has the meaning assigned to that term in the first
recital of this Agreement.
"Base Price" has the meaning assigned to that term in Section 3.2(a) of
this Agreement.
3
"Bid Procedures Order" has the meaning assigned to that term in Section
7.1(a) of this Agreement.
"BLM" means the United States Department of Interior, Bureau of Land
Management, or successor United States Governmental Authority.
"Break-Up Fee" means $1,000,000 or such other amount as approved by the
Bankruptcy Court in the Bid Procedures Order.
"Business" has the meaning assigned to that term in the second recital of
this Agreement.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which banking institutions in Chicago, Illinois are authorized or required by
law to be closed.
"Buyers Indemnified Party" has the meaning assigned to that term in Section
12.1 of this Agreement.
"Buyers" has the meaning assigned to that term in the introduction to this
Agreement.
"Buyers' 401(k) Plan" has the meaning assigned to that term in Section
7.9(d) of this Agreement.
"Buyers' Proration Amount" has the meaning assigned to that term in Section
3.5(a) of this Agreement.
"Casualty Loss" means any loss, damage, or reduction in value of the
Transferred Assets which occurs on or before the Closing Date as a result of
acts of God, fire, explosion, earthquake, windstorm, flood, drought, blowout, or
other natural or manmade occurrence, excluding changes in market conditions, in
an amount of $1,500,000 or greater, without regard to any insurance proceeds
relating to such Casualty Loss.
"Closing" means the closing of the transactions contemplated by this
Agreement.
"Closing Balance Sheet" has the meaning assigned to that term in Section
2.2(a) of this Agreement.
"Closing Date" has the meaning assigned to that term in Section 4.1 of this
Agreement.
"Closing Payment" has the meaning assigned to that term in Section 3.3 of
this Agreement.
"Closing Purchase Price" has the meaning assigned to that term in Section
3.3 of this Agreement.
"Closing Statement" has the meaning assigned to that term in Section 3.4(a)
of this Agreement.
"Closing Time" has the meaning assigned to that term in Section 4.1 of this
Agreement.
4
"COBRA Liabilities" has the meaning assigned to that term in Section 7.9(e)
of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Confidential Information" has the meaning assigned to that term in Section
7.2 of this Agreement.
"Confidentiality Agreement" means that certain Confidentiality Agreement,
executed in 2001, between MissChem and Intrepid Mining, LLC, as amended.
"Cure Amounts" means all payments required to be made in order to
effectuate, pursuant to the Bankruptcy Code, the assumption and assignment of
the Executory Contracts included in the Transferred Assets assumed by Sellers
and assigned to the applicable Buyer hereunder pursuant to Section 365 of the
Bankruptcy Code.
"Damages" means losses, costs, claims, strict liability claims, actions,
suits, Proceedings, demands, damages, natural resource damages, punitive
damages, debts, liabilities, obligations, judgments, fines, penalties, amounts
paid in settlement, interest, Taxes and expenses (including reasonable
attorneys' and consultants' fees, court costs and other out-of-pocket expenses
incurred in investigating, preparing or defending the foregoing).
"Destruction Notice" has the meaning assigned to that term in Section 11.2
of this Agreement.
"DIP Guaranty Release" means the release of all obligations and liabilities
of Sellers under Section 10 of the Post-Petition Credit Agreement dated as of
May 16, 2003, as amended by the Revised First Amendment to Post-Petition Credit
Agreement and Waiver dated as of October 2, 2003, among MissChem, Sellers, the
other guarantors named therein and Xxxxxx Trust and Savings Bank, individually,
and as DIP Agent, and the lenders from time to time party thereto, as such
agreement may be amended from time to time.
"Disclosure Schedule" means the exhibit attached hereto as Schedule 5 and
made a part hereof containing the various exceptions to the representations,
warranties and covenants of Sellers in this Agreement.
"Dispute Deadline Date" has the meaning assigned to that term in Section
3.4(b) of this Agreement.
"Xxxxxxx Money" has the meaning assigned to that term in Section 3.1 of
this Agreement.
"Xxxxxxx Money Escrow Account" has the meaning assigned to that term in
Section 3.1(a)of this Agreement.
"Xxxxxxx Money Escrow Agent" has the meaning assigned to that term in
Section 3.1(a) of this Agreement.
5
"Xxxxxxx Money Escrow Agreement" has the meaning assigned to that term in
Section 3.1(a) of this Agreement.
"Effective Time" has the meaning assigned to that term in Section 4.1 of
this Agreement.
"Employees" has the meaning assigned to that term in Section 5.15 of this
Agreement.
"Encumbrances" means any lien, mortgage, deed of trust, deed to secure
debt, pledge, restriction on transfer, proxy and voting or other agreement,
claim, charge, security interest, easement, right of way, encroachment,
servitude, right of first offer, right of first refusal, preemptive right or
similar restriction.
"Environmental Condition" means any condition existing on or at the
Transferred Assets which constitutes (a) a Release on, at, or from such property
of any Hazardous Materials, including any migration into or through the soil,
groundwater, surface water or environment of any pollution or Hazardous
Materials, which would reasonably be expected to result in liability under
Environmental Laws, or (b) a violation of any Environmental Laws or any
Environmental Permits.
"Environmental Laws" means all federal, state and local laws pertaining to
the environment or natural resources including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq.), the Emergency Planning and Community Right to Know
Act and the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act of 1976, the Hazardous and Solid Waste Amendments
Act of 1984, the Clean Air Act, the Clean Water Act, the Toxic Substances
Control Act, the Safe Drinking Water Act, the Oil Pollution Act of 1990, the
Hazardous Materials Transportation Act and the Migratory Bird Treaty Act, as
each of the foregoing may be amended and in effect on or prior to the Closing
Date, together with all regulations issued or promulgated thereunder.
"Environmental Permits" has the meaning assigned to that term in Section
5.13(a) of this Agreement.
"Environmental Reports" means all Phase I or Phase II environmental site
assessments prepared by third party agents of Sellers since January 1, 1999 with
respect to the environmental condition of the Transferred Assets.
"EPI" has the meaning assigned to that term in the introduction to this
Agreement.
"EPI Transferred Assets" has the meaning assigned to that term in the
definition of Transferred Assets in Section 1 of this Agreement.
"Equity Interests" means (a) with respect to a corporation, as determined
under the laws of the jurisdiction of organization of such entity, shares of
capital stock; and (b) with respect to a partnership, limited liability company,
trust or other entity, as determined under the laws of the jurisdiction of
organization of such entity, units, interests, or other partnership or limited
liability company interests.
6
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" has the meaning assigned to that term in Section 2.3 of
this Agreement.
"Excluded Liabilities" means all liabilities of Sellers other than Assumed
Liabilities, including, without limitation, any liability under Title IV of
ERISA with respect to any employee benefit plan (as defined in Section 3(3) of
ERISA) of the Sellers or any member of the Sellers' "controlled group" (as
defined under Section 4001(a)(14) of ERISA) covered by Title IV of ERISA, or any
benefit payments to any participant covered under such plan(s).
"Excluded Records" is defined within the definition of Records in this
Section 1.
"Executory Contracts" means those executory contracts and unexpired leases
which are included in the Assumed Contracts.
"Expense Reimbursement" has the meaning assigned to that term in Section
13.2(c) of this Agreement.
"Expense Termination Provisions" has the meaning assigned to that term in
Section 13.2(c) of this Agreement.
"Final Closing Statement" has the meaning assigned to that term in Section
3.4(c) of this Agreement.
"Final Sale Order" means the Sale Order entered by the Bankruptcy Court (a)
that is not reversed, stayed, enjoined, set aside, annulled, or suspended within
the deadline, if any, provided by applicable statute or regulation, and (b) as
to which the deadlines, if any, for filing any request, motion, petition,
application, appeal or notice relating to the Sale Order, and for the entry by
any regulatory authority of orders staying, reconsidering, or reviewing on its
own motion the Sale Order, have expired without any such request, petition,
motion, application, appeal or notice having been filed; provided, however, that
the possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of
Civil Procedure, or any analogous rule under the Bankruptcy Code, may be filed
with respect to such order shall not prevent such order from being considered a
Final Sale Order.
"Financial Statements" has the meaning assigned to that term in Section
5.11 of this Agreement.
"Funding Mechanism" has the meaning assigned to that term in Section 7.12
of this Agreement.
"GAAP" has the meaning assigned to that term in Section 5.11 of this
Agreement.
"Governmental Authority" means any (a) federal, state, local, municipal, or
other government (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); or (b) body entitled to
exercise any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature, in each of the
7
foregoing cases having jurisdiction over a Seller, a Buyer, the Transferred
Assets or the Business.
"Hazardous Materials" means any chemicals, materials or substances defined
as "hazardous waste", "hazardous substance", "hazardous constituent", "extremely
hazardous substance", "toxic chemical", "hazardous material", "hazardous
chemical", "toxic pollutant", "contaminant", "chemical", "chemical substance",
"hazardous air pollutant", "pollutant", "pesticide", "toxic" or "asbestos", as
such terms are defined in any of the Environmental Laws, and related substances,
petroleum and fractions thereof, and all other substances which may be declared
in any Environmental Law to constitute a material threat to human health or to
the environment.
"HBLLC" has the meaning assigned to that term in the introduction to this
Agreement.
"HBLLC Assumed Liabilities" has the meaning assigned to that term in
Section 2.2(a) of this Agreement.
"HBLLC Assumed Reclamation Obligations" means all costs, expenses or other
liabilities relating to the closure of the mines and facilities consisting of
the EPI Transferred Assets.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"IMNM" has the meaning assigned to that term in the introduction to this
Agreement.
"IMNM Assumed Liabilities" has the meaning assigned to that term in Section
2.2(a) of this Agreement.
"IMNM Assumed Reclamation Obligations" means all costs, expenses or other
liabilities relating to the closure of the mines and facilities consisting of
the MPI Transferred Assets.
"Indemnification Holdback" has the meaning assigned to that term in Section
3.1(b) of this Agreement.
"Indemnification Holdback Escrow Account" has the meaning assigned to that
term in Section 3.1(b) of this Agreement.
"Indemnification Holdback Escrow Agreement" has the meaning assigned to
that term in Section 3.1(b) of this Agreement.
"Identified Site" has the meaning assigned to that term in Section 5.13(a)
of this Agreement.
"Indemnified Party" has the meaning assigned to that term in Section 12.3
of this Agreement.
8
"Indemnifying Party" has the meaning assigned to that term in Section 12.3
of this Agreement.
"Independent Auditor" has the meaning assigned to that term in Section
3.4(b).
"Intellectual Property" shall mean all patents, and any reissues,
extensions, divisions, continuations and continuations-in-part; statutory or
common law copyrights; statutory or common law trademarks and service marks,
trade dress, tradenames, logos and slogans, and the goodwill relating thereto;
design rights; trade secrets; confidential information; inventions (whether
patentable or not); Software; all data and information; ideas; developments;
drawings; specifications; bills of material; processes; formulae; supplier
lists; customer lists; marketing information; sales and promotional materials;
business plans; and all registrations and applications for any of the foregoing,
in each case owned or licensed by a Seller and used in the Business.
"Interest" has the meaning assigned to that term in Section 3.4(e) of this
Agreement.
"Inventory" means all Product Inventory, raw materials, supplies, parts and
work-in-process, in each case that is owned by a Seller and used in connection
with the Business.
"Inventory Inspection" has the meaning assigned to that term in Section
3.3(a) of this Agreement.
"Knowledge" means with respect to Buyers, the actual knowledge after due
inquiry of Xxxxxx X. Xxxxxxxxx III and Xxxx X. Xxxxxx, Xx., and with respect to
Sellers, the actual knowledge after due inquiry of the following: Xx XxXxxx,
Xxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, K. Xxxxxxx Xxxxx, Xxxxx X.
Xxxxxxxx, Xx. and Xxxxx X. XxXxxxxxxx, and with respect to the representations
and warranties of Sellers set forth in Section 5.13, Xxxxxxx Xxxxxxxx, Xxxx
Xxxxxxxx and Xxxxxxx Xxxx.
"Leased Real Property" has the meaning assigned to that term in Section
5.6(a) of this Agreement.
"Leases" has the meaning assigned to that term in Section 5.6(c) of this
Agreement.
"Legal Requirement" means any order, constitution, law, ordinance,
regulation, statute, code or treaty issued by any Governmental Authority,
including an arbitration panel, any principle of common law or judicial or
administrative interpretation thereof.
"Licensed Intellectual Property" means the Intellectual Property used by a
Seller in connection with or related to the Business with respect to which the
rights being exercised by such Seller have been licensed from another Person.
"Material Adverse Effect" means any change or effect that is material and
adverse to (a) the Transferred Assets or the Business, (b) the assets,
properties, results of operations, or condition (financial or otherwise) of
Sellers, taken as a whole or (b) the ability of Sellers to consummate the
transactions contemplated by this Agreement; provided, however, that none of the
following shall be deemed in themselves, either alone or in combination, to
constitute, and
9
none of the following shall be taken into account in determining whether there
has been, a Material Adverse Effect: any adverse change or effect attributable
to, resulting from or relating to (i) this Agreement or the announcement or
pendency of the transactions contemplated by this Agreement; (ii) conditions
affecting the industry in which Sellers participate, the United States economy
as a whole or the markets in which Sellers operate, including any fluctuation in
the price or supply of or demand for potash or the price or supply of or demand
for natural gas or electricity; or (iii) compliance with the terms of, or the
taking of any action required by, this Agreement. In determining whether any
individual event would result in a Material Adverse Effect, notwithstanding that
such event does not in and of itself have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event and all
other then existing events would result in a Material Adverse Effect.
"MissChem" means Mississippi Chemical Corporation, a Mississippi
corporation and the direct or indirect parent of Sellers.
"MPI" has the meaning assigned to that term in the introduction to this
Agreement.
"MPI Transferred Assets" has the meaning assigned to that term in the
definition of Transferred Assets in Section 1 of this Agreement.
"NMSA" has the meaning assigned to that term in Section 12.4(f) of this
Agreement.
"Organizational Documents" means the articles of incorporation, bylaws,
operating agreement, limited liability company agreement, partnership agreement,
board resolutions, and other similar documents, instruments or certificates
executed, adopted, or filed in connection with the creation, formation, or
organization of a Person, including any amendments thereto.
"Owned Real Property" has the meaning assigned to that term in Section
5.6(a) of this Agreement.
"Permits" means any permit, consent, approval, franchise, certificate of
inspection or authority, variance, authorization or order, or any waiver of the
foregoing, issued by a Governmental Authority and used or held for use in
relation to the Business, other than the Environmental Permits.
"Permitted Encumbrances" means:
(a) the terms, conditions, restrictions, obligations, exceptions,
reservations, limitations and other matters contained in any rights of way or
documents under which a Seller obtained any rights of way or other property
rights associated with Leases or the other Real Property, in each case that do
not interfere materially with the ownership or use of the Transferred Assets by
a Seller;
(b) liens for property taxes and assessments that are not yet due and
payable as of the Closing (or if delinquent, that are being contested in good
faith by a Seller in appropriate proceedings);
10
(c) any obligations or duties affecting the Transferred Assets to the
extent created by any Governmental Authority under any Permit or Legal
Requirement, other than Taxes and amounts payable pursuant to Title IV of ERISA;
(d) easements, restrictive covenants, defects in title and
irregularities, and other matters that do not interfere materially with the
ownership or use, or materially reduce the value, of the Transferred Assets by a
Seller (provided that any such defects in title and irregularities do not
entitle any third party to any overriding royalty interest or other interest in
potash or other minerals produced in connection therewith except to the extent
set forth on Exhibit A hereto);
(e) mechanic's, materialmen's, repairmen's and other statutory liens
arising or incurred in the ordinary course of business and securing obligations
incurred prior to Closing and which are not overdue or which are being contested
in good faith by appropriate proceedings;
(f) zoning, entitlement, subdivision planning and building codes and
other land use laws, regulations or ordinances regulating the use, development,
conservation restriction and occupancy of the Real Property and permits,
consents and rules under such laws, regulations or ordinances, in each case that
do not materially limit or prohibit the uses to which Sellers have historically
used the Transferred Assets;
(g) any Encumbrances created by the express terms of the Assumed
Contracts;
(h) the Encumbrances listed on Exhibit A hereto; and
(i) defects in title that have been barred by the applicable statute
of limitations.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities.
"PBGC" has the meaning assigned to that term in Section 7.13 of this
Agreement.
"Post-Closing Payment Date" has the meaning assigned to that term in
Section 3.4(d) of this Agreement.
"Preliminary Statement" has the meaning assigned to that term in Section
3.3(b) of this Agreement.
"Proceeding" means any action, arbitration, audit, claim, inspection,
notice, review, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal), at law or in equity,
commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Authority or arbitrator.
11
"Product Inventory" means all of Sellers' (i) finished potash product
inventory (other than mined but unprocessed ore) located on the Real Property or
otherwise in the care, custody or control of Sellers or their respective agents
(whether located on or off of the Real Property) and (ii) potash fines located
on the Real Property or otherwise in the care, custody or control of Sellers or
their respective agents (whether located on or off of the Real Property). For
all purposes under this Agreement, Product Inventory shall be measured in short
tons.
"Product Inventory Value" has the meaning assigned to that term in Section
3.2(a) of this Agreement.
"Property Taxes" means all ad valorem taxes, real property taxes, personal
property taxes and similar obligations attributable to the Transferred Assets.
"Purchase Price" has the meaning assigned to that term in Section 3.2(a) of
this Agreement.
"Real Property" has the meaning assigned to that term in Section 5.6(a) of
this Agreement.
"Receivables Value" has the meaning assigned to that term in Section 3.2(a)
of this Agreement.
"Reclamation Contribution Amount" has the meaning assigned to that term in
Section 7.11 of this Agreement.
"Records" means Sellers' books and records, in any form or media, relating
to the Business (including all digital records), wherever located, but excluding
(i) any of Sellers', or their Affiliates', business plans, strategies and
financial records to the extent that such plans, strategies and records address
or reflect activities outside of the Business; (ii) any of a Sellers', or their
Affiliates', company minute books or records, Tax Returns or other materials
which do not pertain to the Business and (iii) any such information that is
covered by the attorney-client privilege, except in the case of clause (iii)
with respect to information pertaining to the matters included within the
Assumed Liabilities (such books and records described in clauses (i), (ii) and
(iii), the "Excluded Records").
"Reimbursement" has the meaning assigned to that term in Section 12.4(d) of
this Agreement.
"Release" or "Released" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
migrating or disposing (including, but not limited to, the abandoning or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the environment, including but not limited to the
movement or continued movement through or in the air, soil, surface water,
ground water or property.
"Required Consents" has the meaning assigned to that term in Section 7.4 of
this Agreement.
12
"Royalty Reduction Refund" has the meaning assigned to that term in Section
7.11 of this Agreement.
"Sale Motion" has the meaning assigned to that term in Section 7.1(a) of
this Agreement.
"Sale Order" means an order or orders of the Bankruptcy Court, approving
the transaction contemplated hereby, in form and content reasonably satisfactory
to Buyers.
"Scheduled Contracts" has the meaning assigned to that term in Section 5.17
of this Agreement.
"Sellers" has the meaning assigned to that term in the introduction to this
Agreement.
"Sellers Indemnified Party" has the meaning assigned to that term in
Section 12.2 of this Agreement.
"Sellers' 401(k) Plan" has the meaning assigned to that term in Section
5.15(b) of this Agreement.
"Sellers' Proration Amount" has the meaning assigned to that term in
Section 3.5(a) of this Agreement.
"Software" means individually each, and collectively all, of the computer
programs, including interfaces and any embedded software programs or
applications, owned or licensed by a Seller, including as to each program, the
processes and routines used in the processing of data, the object code, source
code (as to third party source code, when rights to the source code may be
obtained), tapes, disks, and all improvements, modifications, enhancements,
versions and releases relating thereto.
"Supplemental Financial Statements" has the meaning assigned to that term
in Section 7.7 of this Agreement.
"Tax" and "Taxes" means, with respect to any Person, any federal, state or
local income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code Sec. 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value-added, ad
valorem, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, for which such Person may be liable.
"Tax Returns" means all returns, declarations, reports, claims for refund
and information returns and statements of any Person required to be filed with
respect to, or in respect of, any Taxes, including any schedule or attachment
thereto and any amendment thereof.
"Third Party Claim" has the meaning assigned to that term in Section 12.3
of this Agreement.
13
"Threatened" means as follows: a claim, Proceeding, dispute, action, or
other matter will be deemed to have been "Threatened" if any demand or statement
has been made (in writing) or any notice has been received (in writing).
"Transfer Taxes" has the meaning assigned to that term in Section 8.1 of
this Agreement.
"Transferred Assets" means (i) with respect to IMNM, the Real Property of
MPI and any and all assets and rights of MPI which are located on the Real
Property of MPI or used or held for use in the Business of MPI (the "MPI
Transferred Assets"), and (ii) with respect to HBLLC, the Real Property of EPI
and any and all assets and rights of EPI which are located on the Real Property
of EPI or used or held for use in the Business of EPI (the "EPI Transferred
Assets"), including the following of the applicable Seller (provided that the
Transferred Assets shall not in any event include Excluded Assets):
(a) Inventory;
(b) Intellectual Property;
(c) Accounts Receivable;
(d) Real Property;
(e) all equipment, machinery, rolling stock and spare parts used in
the Business;
(f) Assumed Contracts;
(g) all Permits, to the extent transfer is permitted under applicable
law;
(h) all Environmental Permits, to the extent transfer is permitted
under applicable law;
(i) all goodwill relating to the Business;
(j) subject to the adjustments contemplated by Sections 3.2, 3.3 and
3.5 of this Agreement, all prepayments and prepaid expenses
relating to the Transferred Assets or the Business that are paid
by Sellers on or prior to the Closing Date;
(k) all claims, causes of action, choses in action, rights of
recovery or setoff of any kind with respect to a Transferred
Asset or an Assumed Liability;
(l) all Records; and
(m) all Water Rights.
"Transferred Employees" has the meaning assigned to that term in Section
7.9(a) of this Agreement.
00
"XXXX Xxx" means the Worker Adjustment and Retaining Notification Act, as
amended.
"Water Rights" means all of the easements, rights-of-way, water rights, and
related pumps, pipelines and Permits owned by Sellers.
Unless the context of this Agreement otherwise requires, (a) words of any
gender are deemed to include the other gender; (b) words using the singular or
plural number also include the plural or singular number, respectively; (c) the
terms "hereof," "herein," "hereby," "hereto," and derivative or similar words
refer to this entire Agreement; (d) the terms "Article" or "Section" refer to
the specified Article or Section of this Agreement; (e) the term "including" and
other forms of such term, with respect to any matter or thing, means "including
but not limited to" such matter or thing; and (f) all references to "dollars" or
"$" refer to currency of the United States.
SECTION 2. PURCHASE OF TRANSFERRED ASSETS AND ASSUMPTION OF LIABILITIES.
2.1 Transferred Assets. Subject to the terms and conditions hereof, and
subject to the representations and warranties made herein, on the Closing Date,
(x) MPI will sell, assign, transfer and convey to IMNM all of its right, title
and interest in and to the MPI Transferred Assets and (y) EPI will sell, assign,
transfer and convey to HBLLC all of its right, title and interest in and to the
EPI Transferred Assets free and clear of all Encumbrances other than Permitted
Encumbrances, in accordance with the Final Sale Order and Sections 105, 363 and
365 of the Bankruptcy Code.
"AS IS" TRANSACTION. BUYERS HEREBY ACKNOWLEDGE AND AGREE THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN AND/OR (i) IN THE CASE OF THE TITLE OF THE
OWNED REAL PROPERTY, IN THE SPECIAL WARRANTY DEEDS CONTEMPLATED BY SECTION
4.2(a)(ii), AND (ii) IN THE CASE OF THE LEASES AND THE WATER RIGHTS, IN THE
ASSIGNMENTS CONTEMPLATED BY SECTION 4.2(a)(ix), SELLERS MAKE NO REPRESENTATIONS
OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED
ASSETS OR ANY OTHER MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, INCOME TO
BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE TRANSFERRED ASSETS,
THE PHYSICAL CONDITION OF ANY PART OF THE TRANSFERRED ASSETS, THE ENVIRONMENTAL
CONDITIONS OR OTHER MATTERS RELATING TO THE PHYSICAL CONDITION OF ANY REAL OR
PERSONAL PROPERTY OR OTHER ASSETS OWNED OR LEASED BY A SELLER, THE ZONING OF ANY
SUCH REAL OR PERSONAL PROPERTY, THE VALUE OF THE TRANSFERRED ASSETS, THE
TRANSFERABILITY OF THE TRANSFERRED ASSETS, THE TERMS, AMOUNT, VALIDITY OR
ENFORCEABILITY OF ANY LIABILITIES OF A SELLER, THE TITLE OF THE TRANSFERRED
ASSETS, THE MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER
ASSETS OWNED OR LEASED BY A SELLER FOR ANY PARTICULAR PURPOSE, OR ANY OTHER
MATTER OR THING RELATING TO THE TRANSFERRED ASSETS, OR ANY
15
PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, SELLERS HEREBY DISCLAIM ANY WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY
PORTION OF THE TRANSFERRED ASSETS. BUYERS FURTHER ACKNOWLEDGE THAT, AS OF THE
CLOSING, BUYERS SHALL HAVE CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION
OF THE PHYSICAL CONDITION OF THE TRANSFERRED ASSETS AND ALL SUCH OTHER MATTERS
RELATING TO OR AFFECTING SUCH ASSETS AS BUYERS DEEMED NECESSARY OR APPROPRIATE
AND THAT IN PROCEEDING WITH THEIR ACQUISITION OF THE TRANSFERRED ASSETS, EXCEPT
FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN, BUYERS ARE
DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS.
ACCORDINGLY, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, EACH BUYER WILL
ACCEPT THE APPLICABLE TRANSFERRED ASSETS AT THE CLOSING "AS IS," "WHERE IS," AND
"WITH ALL FAULTS."
2.2 Liabilities.
(a) Subject to the terms and conditions of this Agreement, if the
Closing occurs, (x) IMNM shall, on and after the Closing Date, assume, pay,
perform or discharge in accordance with their terms solely the following
obligations and liabilities, to the extent such obligations and liabilities are
those of MPI and relate to the MPI Transferred Assets (the "IMNM Assumed
Liabilities"), and (y) HBLLC shall, on and after the Closing Date, assume, pay,
perform or discharge in accordance with their terms solely the following
obligations and liabilities, to the extent such obligations and liabilities are
those of EPI and relate to the EPI Transferred Assets (the "HBLLC Assumed
Liabilities" and, together with the IMNM Assumed Liabilities, the "Assumed
Liabilities"): (i) all "accounts payable" (excluding any such accounts payable
to Affiliates of Sellers and excluding any accounts payable for which Sellers
have received an invoice that is past due as of the Closing Date pursuant to the
normal payment terms of the applicable vendor) on the balance sheet of Sellers
as of 11:59 p.m., mountain time, on the day immediately prior to the Closing
Date (the "Closing Balance Sheet"), and determined in accordance with GAAP
applied on a basis consistent with the determination of such items on the
balance sheet of Sellers as of September 30, 2003, occurring, arising out of or
related to the operation of the Business in the ordinary course; (ii) the
obligations of a Seller under the Assumed Contracts that arise on or after
Closing, relate to periods following the Closing and are to be observed, paid,
discharged, or performed, as the case may be, at any time on and after the
Closing Date; (iii) all liabilities and obligations Sellers occurring, arising
out of or related to the ownership and operation of the Business and the
Transferred Assets by Buyer on and after the Closing Date; (iv) all liabilities
and obligations of Sellers relating to the Cure Amounts; (v) the Assumed
Environmental Liabilities; (vi) the Assumed Reclamation Obligations; (vii) the
Assumed Employment Liabilities; and (viii) all liabilities and obligations of
Sellers to the extent included in Sellers' Proration Amount; and (ix) all
liabilities and obligations relating to the litigation set forth on Schedule 2.2
(the "Assumed Litigation"); provided, however, that the Assumed Litigation shall
not include (A) any fines or civil or criminal penalties for (I) Releases on or
from the Transferred Assets occurring prior to the Closing or (II) violations by
Sellers or their Affiliates of Permits, Environmental Permits or Environmental
Laws occurring prior to the
16
Closing, or (B) liabilities for offsite disposal of Hazardous Materials by
Sellers or their Affiliates occurring prior to the Closing.
(b) Notwithstanding anything to the contrary contained herein, Buyers
shall not assume, or in any way be liable or responsible for, and the Assumed
Liabilities shall not include, any Excluded Liabilities, or any other
obligations and liabilities of Sellers or their Affiliates (whether accrued or
contingent or due or not due) which are not specifically assumed herein, and
such obligations and liabilities shall be and remain the obligations and
liabilities of Sellers (or their Affiliates) to pay and/or discharge.
(c) Prior to the Auction, in the event a Seller requests that either
Buyer assume any contract other than the Assumed Contracts, such Buyer may, but
shall not be obligated to, elect to assume such contract within ten (10) days
following the date on which such Seller makes such request and provides such
Buyer with a copy of such contract. In the event such Buyer notifies such Seller
in writing that such Buyer elects to assume such contract, such contract shall
be added to Disclosure Schedule, Section 5.17, and shall be deemed an Assumed
Contract for all purposes under this Agreement. In the event such Buyer does not
deliver a written notice of election to such Seller within such ten (10) day
period, such contract shall not be an Assumed Contract and shall not be assigned
to such Buyer hereunder.
2.3 Excluded Assets. The Transferred Assets shall not include the
following assets of a Seller (collectively, the "Excluded Assets"), which
Excluded Assets shall be retained by such Seller and shall not transfer to
Buyers with the ownership of the Transferred Assets:
(a) any refunds for Taxes paid by a Seller prior to the Closing Date;
provided that a Buyer shall be entitled to such Buyer's pro rata share of any
refunds attributable to any periods ending after the Closing Date with respect
to which such Buyer has paid Taxes;
(b) the Excluded Records;
(c) Sellers' rights under this Agreement and under any contract or
agreement to which a Seller is a party that is not an Assumed Contract;
(d) all claims, causes of action, choses in action, rights of
recovery and rights of recoupment or set-off of any kind against any Person
solely arising out of or relating to the Excluded Assets;
(e) all cash and cash equivalents, including, without limitation,
bank accounts or certificates of deposit; and
(f) the assets listed on Schedule 2.3.
SECTION 3. ESCROW ACCOUNTS AND PURCHASE PRICE.
3.1 Escrow Accounts.
(a) Upon execution of this Agreement, Buyers shall establish with XX
Xxxxxx Xxxxx Bank (the "Xxxxxxx Money Escrow Agent"), an interest-bearing joint
order escrow account
17
(the "Xxxxxxx Money Escrow Account") and, within one business day after the date
of this Agreement, Buyers shall deposit with the Xxxxxxx Money Escrow Agent an
amount in cash equal to $1,500,000 (the "Xxxxxxx Money"), which Xxxxxxx Money
shall be held pursuant to an escrow agreement in the form attached hereto as
Exhibit B-1 (the "Xxxxxxx Money Escrow Agreement"). Interest accruing on the
Xxxxxxx Money shall become part of the Xxxxxxx Money for all purposes under this
Agreement. If Closing does occur, then Buyers and Sellers shall cause the
Xxxxxxx Money Escrow Agent to release the Xxxxxxx Money to Sellers by wire
transfer of immediately available funds to such account(s) as Sellers shall
designate in writing, which Xxxxxxx Money will thereupon be applied toward the
cash portion of the Purchase Price. If Closing does not occur, the Xxxxxxx Money
shall be released as set forth in Section 13.3 of this Agreement.
(b) At the Closing on the Closing Date, Buyers shall establish with
the Xxxxxxx Money Escrow Agent, an interest-bearing joint order escrow account
(the "Indemnification Holdback Escrow Account"), which account shall be separate
from the Xxxxxxx Money Escrow Account and the Adjustment Escrow Account, in an
amount equal to $500,000 (the "Indemnification Holdback"). The Indemnification
Holdback shall be held pursuant to an escrow agreement in the form attached
hereto as Exhibit B-2 (the "Indemnification Holdback Escrow Agreement").
Interest on the Indemnification Holdback shall become part of the
Indemnification Holdback for all purposes under this Agreement. The
Indemnification Holdback shall be released as set forth in Section 12.5 of this
Agreement.
(c) At the Closing on the Closing Date, Buyers shall establish with
the Xxxxxxx Money Escrow Agent, an interest-bearing joint order escrow account
(the "Adjustment Amount Escrow Account"), which account shall be separate from
the Xxxxxxx Money Escrow Account and the Indemnification Holdback Escrow
Account, in an amount equal to $300,000 (the "Adjustment Amount Escrow"). The
Adjustment Amount Escrow shall be held pursuant to an escrow agreement in the
form attached hereto as Exhibit B-3 (the "Adjustment Amount Escrow Agreement").
Interest on the Adjustment Amount Escrow shall become part of the Adjustment
Amount Escrow for all purposes under this Agreement. The Adjustment Amount
Escrow shall be released as set forth in Section 3.4 of this Agreement.
3.2 The Purchase Price and Allocation.
(a) Subject to the terms and conditions of this Agreement, as
consideration for the purchase of the Transferred Assets and Buyers' assumption
of the Assumed Liabilities as provided herein and in consideration for the
agreements contained herein, Buyers shall pay to Sellers in cash an aggregate
amount equal to (i) twenty million dollars ($20,000,000) (the "Base Price"),
plus (ii) the amount equal to 96% of the Accounts Receivable as of 11:59 p.m.,
mountain time, on the day immediately prior to the Closing Date, and determined
in accordance with GAAP (including allowance for doubtful accounts) applied on a
consistent basis with the balance sheet of Sellers as of September 30, 2003 (the
"Receivables Value"), plus (iii) the amount equal to the product of $80
multiplied by the number of tons of Product Inventory as of 11:59 p.m., mountain
time, on the day immediately prior to the Closing Date ; provided that, in the
case of potash fines, such amount shall be $55 per ton for fines categorized as
red fines and $78 per ton for fines categorized as white fines (the "Product
Inventory Value"), less (iv) the amount equal to the accounts payable assumed by
Buyers pursuant to Section 2.2(a)(i) (the "Accounts Payable Value") (the Base
Price, plus the Receivables Value, plus the Product Inventory Value, less the
18
Accounts Payable Value being referred to herein as the "Purchase Price"),
subject to adjustment pursuant to the following clauses and Sections 3.4 and
3.5, an example of which is set forth on Exhibit C, Example 3.2(a).
(b) The Purchase Price shall be reduced by Sellers' Proration Amount
and shall be increased by Buyers' Proration Amount.
(c) Within thirty (30) days after the Closing Date, Sellers and
Buyers shall negotiate in good faith an allocation of the Purchase Price
(including the amount of Assumed Liabilities to the extent required by the Code)
among the Transferred Assets that complies with Section 1060 of the Code with
respect to the allocation of the Purchase Price. If the allocation is not agreed
upon on or before the thirtieth day after the Closing Date, then Buyers and
Sellers agree that the allocation shall be made and consistently reported by
Buyers and Seller in compliance with Section 1060 based upon an asset valuation
supplied by Deloitte & Touche LLP. The cost of such asset valuation shall be
shared equally by Buyers and Sellers. Buyers will order such asset valuation
from Deloitte & Touche LLP as soon as practicable after such date as Buyers and
Sellers fail to agree on such allocation. The asset valuation, if required,
shall be provided to Buyers and Sellers within forty-five (45) days after the
date of such order. Any subsequent adjustments to the Purchase Price shall be
reflected in a revised Purchase Price allocation in a manner consistent with
Section 1060 and any other applicable provisions of the Code, and Buyers shall
deliver any such revisions to the Purchase Price allocation to Sellers promptly
after such revisions are made.
3.3 Payment of the Closing Purchase Price.
(a) Sellers shall conduct a physical count of the Product Inventory
(the "Inventory Inspection") not more than five (5) and not less than three (3)
Business Days prior to the scheduled Closing Date in connection with the
preparation of the Preliminary Statement. A representative of the Buyers shall
have the right to observe the physical count of the Product Inventory.
(b) Not later than two (2) Business Days prior to the Closing,
Sellers shall deliver to Buyers a statement (the "Preliminary Statement")
setting forth in reasonable detail Sellers' reasonable estimate of: (i) Sellers'
Proration Amount; (ii) Buyers' Proration Amount; (iii) the Receivables Value;
(iv) the Product Inventory Value based on the Inventory Inspection; (v) the
Accounts Payable Value; and (vi) the Purchase Price based on such estimates (the
"Closing Purchase Price"). Sellers shall coordinate with a representative
designated by Buyers regarding the process for the preparation of the
Preliminary Statement. At the Closing on the Closing Date, Buyers shall make an
aggregate cash payment to Sellers in an amount equal to the Closing Purchase
Price minus (A) an amount equal to the Indemnification Holdback (which amount
will be placed in the Indemnification Holdback Escrow Account by Buyers pursuant
to Section 3.1(b)), (B) an amount equal to the Adjustment Amount Escrow (which
amount will be placed in the Adjustment Amount Escrow Account by Buyers pursuant
to Section 3.1(c)), (C) an amount equal to the Xxxxxxx Money (which amount
Buyers shall cause to be transferred at Closing to Sellers from the Xxxxxxx
Money Escrow Agent pursuant to the terms of this Agreement and the Xxxxxxx Money
Escrow Agreement) and (D) an amount equal to the Cure Amounts (which amounts
will be paid directly by Buyers to the parties to the Assumed Contracts
19
pursuant to the terms of this Agreement), such cash payment (the "Closing
Payment") to be made by wire transfer of immediately available funds to such
account(s) as Sellers shall designate. For the sake of clarity, an example is
set forth on Exhibit C, Example 3.3.
3.4 Adjustment Amount. A post-closing adjustment to the Closing Purchase
Price shall be made as follows:
(a) Post-Closing Adjustments. As promptly as practicable after the
Closing Date, and in any event not later than forty-five (45) days after the
Closing Date, Buyers shall prepare and deliver to Sellers 1. a statement (the
"Closing Statement"), which shall set forth in reasonable detail Buyers'
calculation of (A) the Sellers' Proration Amount, (B) the Buyers' Proration
Amount, (C) the Receivables Value, (D) the Product Inventory Value, (E) the
Accounts Payable Value, and (F) the Adjustment Amount as described in Section
3.4(d), and 1. a copy of the Closing Balance Sheet, prepared by Buyers, as of
11:59 p.m., mountain time, on the day immediately prior to the Closing Date
prepared in accordance with GAAP applied on a basis consistent with the balance
sheet of Sellers as of September 30, 2003, except as set forth in Exhibit X.
Xxxxxxx, at no cost to Buyers, shall give to Buyers and their authorized
representatives reasonable access to such employees, offices, and other
facilities and such books and records of Sellers as are reasonably necessary to
allow Buyers and their authorized representatives to prepare the Closing
Statement, the Closing Balance Sheet and the Adjustment Amount in compliance
with this Section 3.4. Buyers, at no cost to Sellers, shall provide all
information reasonably requested by Sellers and shall give representatives of
Sellers reasonable access to the premises, employees and other facilities
contained in the Transferred Assets related to the Business and to the Records
and any other books and records of Sellers related to the Business as are
reasonably necessary for purposes of reviewing, verifying and auditing the
Adjustment Amount.
(b) Dispute Resolution. The Closing Statement shall become final and
binding on Sellers and Buyers as to the Adjustment Amount thirty (30) days
following the date the Closing Statement is received by Sellers (the "Dispute
Deadline Date"), unless prior to the Dispute Deadline Date Sellers deliver to
Buyers written notice that the Adjustment Amount or Closing Statement shall not
have been determined in accordance with the requirements of this Section 3.4.
Sellers' notice shall set forth all of Sellers' disputed items together with the
Sellers' proposed changes thereto, including an explanation in reasonable detail
of the basis on which Sellers propose such changes. If Sellers have delivered a
timely notice of disagreement in accordance with this Section 3.4, then Buyers
and Sellers shall use their good faith efforts to reach written agreement on the
disputed items to determine the Adjustment Amount. If all of Sellers' disputed
items have not been resolved by Buyers and Sellers within thirty (30) days
following Buyers' receipt of Sellers' dispute notice, then Sellers' disputed
items shall be submitted for final and binding determination to Deloitte &
Touche LLP (the "Independent Auditor") who shall act as an expert and not an
arbitrator, within five (5) Business Days after the end of the foregoing thirty
(30) day period. The determination of the Adjustment Amount by the Independent
Auditor shall be final and binding upon Buyers and Sellers as to the Adjustment
Amount. If the Independent Auditor determines that Buyers are entitled to 50% or
less of the portion of the Adjustment Amount in dispute, Buyers shall pay all of
the Independent Auditor's fees and expenses in connection with this Section 3.4.
If the Independent Auditor determines that Buyers are entitled to more than 50%
of the portion of the Adjustment Amount in dispute,
20
Sellers shall pay all of the Independent Auditor's fees and expenses in
connection with Section 3.4.
(c) Final Closing Statement. The Adjustment Amount shall be deemed to
be finally determined in the amount set forth in the Closing Statement on the
Dispute Deadline Date unless a dispute notice is given in accordance with
Section 3.4(b) with respect to the calculation thereof. If such a dispute notice
is given, the Adjustment Amount shall be deemed finally determined on the date
that the Independent Auditor gives notice to Buyers and Sellers of its
determination with respect to all disputes regarding the calculation thereof,
or, if earlier, the date on which Sellers and Buyers agree in writing on the
amount thereof, in which case the Adjustment Amount shall be calculated in
accordance with such determination or agreement, as the case may be. The Closing
Statement as accepted by Sellers (by absence of notice pursuant to Section
3.4(b)) or as determined by the Independent Auditor shall be referred to as the
"Final Closing Statement."
(d) Determination of Adjustment Amount. If the Purchase Price
calculated using the Preliminary Statement exceeds the Purchase Price calculated
using the Final Closing Statement, Sellers shall pay to Buyers, in accordance
with Section 3.4(e)(i), an amount equal to such excess. If the Purchase Price
calculated using the Preliminary Statement is less than the Purchase Price
calculated using the Final Closing Statement, Buyers shall pay to Sellers, in
accordance with Section 3.4(e)(ii), an amount equal to such deficiency. The
amount of the payment to be made by Buyers or Sellers, as applicable, pursuant
to this Section 3.4(d) shall be referred to as the "Adjustment Amount", examples
of which are set forth on Exhibit C, Example 3.4(d). The Adjustment Amount shall
be paid by Sellers or Buyers, as applicable, in accordance with Section 3.4(e)
within five (5) Business Days after the determination of the Final Closing
Statement (such fifth (5th) Business Day, the "Post-Closing Payment Date").
(e) Payment of Adjustment Amount.
(i) In the event the Adjustment Amount is to be paid by Sellers,
(A) if the Adjustment Amount to be paid by Sellers to Buyers is less than the
Adjustment Amount Escrow, Buyers shall receive the Adjustment Amount as a
distribution from the Adjustment Amount Escrow Account, and the amount remaining
in the Adjustment Amount Escrow Account shall be distributed to Sellers by wire
transfer of immediately available funds to a bank designated by Sellers in
writing; and (B) if the Adjustment Amount to be paid by Sellers to Buyers exceed
the Adjustment Amount Escrow, the entire Adjustment Amount Escrow shall be
distributed to Buyers, and Sellers shall pay to Buyers the amount of such
excess, plus interest at the rate published in The Wall Street Journal from time
to time as the "prime rate" ("Interest") on the portion of such excess that
exceeds the Adjustment Amount Escrow for the actual number of days between the
Closing Date and the date the payment is made by wire transfer of immediately
available funds to a bank account or bank accounts designated by Buyers in
writing. Notwithstanding anything to the contrary in this Agreement, and
regardless of any other means of obtaining payment, Buyers shall have the right,
but not the obligation, to offset any amount in the Indemnification Holdback
Escrow Account (upon determination of the Final Closing Statement) by the amount
by which the Adjustment Amount to be paid by Sellers to Buyers exceeds the
Adjustment Amount Escrow, without giving effect to the limitations set forth in
Section 12.4(b).
21
(ii) In the event the Adjustment Amount is to be paid by
Buyers, the entire amount of the Adjustment Amount Escrow Account shall be
distributed to Sellers and Buyers shall pay the Adjustment Amount to Sellers,
plus Interest on the Adjustment Amount, for the actual number of days between
the Closing Date and the date the payment is made, by wire transfer of
immediately available funds to a bank account or bank accounts designated by
Sellers in writing.
(iii) Any amounts payable under this Section 3.4 shall be
distributed or paid on or before the Post-Closing Payment Date. If the
Adjustment Amount is paid after the Post-Closing Payment Date, interest at a
rate equal to the lesser of 18% per annum and the maximum rate permitted by law
shall be added: (A) in the case of a payment made by Sellers, to the portion of
the Adjustment Amount which exceeds the Adjustment Amount Escrow and (B) in the
case of a payment made by Buyers, to the Adjustment Amount, in each case for the
actual number of days between the Post-Closing Payment Date and the date the
payment is made.
3.5 Prorations as of the Closing Date.
(a) The parties agree that the following items attributable to the
Transferred Assets and the Business shall be further adjustments to the Purchase
Price (to the extent such items are not reflected in the adjustments to the
Purchase Price contemplated by Sections 3.3 and 3.4) and, where necessary,
prorated as of the Closing Time pursuant to the most recent information
available to Sellers, with Sellers to be responsible for, and to receive the
benefit of, the same, but only to the extent relating to any period prior to the
Effective Time (any such amount that has not been paid by Sellers as of the
Closing Time is referred to herein as "Sellers' Proration Amount"), and the
Buyers to be responsible for, and to receive the benefit of, the same after the
Effective Time (any such amount that has been prepaid by Sellers as of the
Closing Time is referred to herein as "Buyers' Proration Amount"):
(i) Property Taxes and assessments for the current tax year;
(ii) water, sewer and other utility charges and similar types
of charges and installments or special benefit assessments;
(iii) electric, gas, telephone and other utility charges;
(iv) rents, royalties and other amounts paid or payable to
lessors under each of the Leases included in the Assumed Contracts;
(v) rents, royalties and other amounts received or owed to a
Seller with respect to each of the Leases included in the Assumed Contracts in
which a Seller is the lessor or sublessor of the Lease; and
(vi) accrued but unpaid wages, salary or other compensation
(but excluding any "Retention Bonuses" payable to Xxxxxxx X. Xxxxx or X.X. Xxxxx
pursuant to each such employee's Key Executive Retention and Severance
Agreement, which shall be the sole responsibility of Sellers).
22
(b) If the final Property Tax rates or assessed value for the current
Tax year is not established as of the date of the calculation of the above
proration, then such proration shall be based on the Property Tax rates or
assessed value in effect for the preceding Tax year.
SECTION 4. CLOSING.
4.1 Closing Date. The Closing shall take place at 10:00 a.m., local time
at the place of the Closing, on the date that is two (2) Business Days after the
satisfaction or written waiver of all of the conditions to the obligations of
the parties hereto to consummate the transactions contemplated hereby, as set
forth in Section 9 and Section 10 of this Agreement, at the offices of Xxxxxx &
Xxxxxx L.L.P., 3700 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000,
or at such other time, date and place as shall be fixed by agreement among the
parties hereto (the date of the Closing being herein referred to as the "Closing
Date", and the time of the Closing being herein referred to as the "Closing
Time"). The Closing shall be effective for tax and accounting purposes and for
purposes of the Adjustment Amounts pursuant to Section 3.4 of this Agreement as
of 12:01 a.m., mountain time, on the Closing Date (the "Effective Time").
4.2 Closing Deliveries. At the Closing on the Closing Date:
(a) Sellers shall sell, assign, transfer and convey or cause to be
sold, assigned, transferred and conveyed, the MPI Transferred Assets to IMNM and
the EPI Transferred Assets to HBLLC, in each case free and clear of all
Encumbrances, other than Permitted Encumbrances. Such sale, assignment, transfer
and conveyance shall be effected, evidenced or accompanied by delivery by
Sellers to Buyers of the following documents:
(i) bills of sale and assignment, duly executed by the
applicable Seller to the applicable Buyer, covering all of the Transferred
Assets of such Seller (other than the Owned Real Property of such Seller), in
each case as contemplated by Section 4.2(d);
(ii) assumption agreements duly executed by the applicable
Seller, pursuant to which the applicable Seller assigns and the applicable Buyer
assumes the Assumed Liabilities of such Seller, in each case substantially in
the form attached hereto as Exhibit D;
(iii) special warranty deeds covering the Owned Real Property as
contemplated by Section 4.2(d), duly executed by the applicable Seller to the
applicable Buyer;
(iv) a certificate from each Seller dated the Closing Date and
duly executed by an officer of each Seller to the effect that the conditions set
forth in Section 9 have been satisfied;
(v) a certified copy of the Final Sale Order;
(vi) the Bank Guaranty Release;
(vii) the DIP Guaranty Release;
23
(viii) a transition services agreement, in substantially the form
of Exhibit E hereto providing for such services as shall be mutually agreed by
MissChem and Buyers, duly executed by MissChem;
(ix) special warranty deeds executed by the applicable Seller
to the applicable Buyer transferring the Leases and assignments of the Water
Rights executed by the applicable Seller, in each case as contemplated by
Section 4.2(d) (other than the Water Rights relating to the Pecos River), and
such additional forms, if any, required by the applicable Governmental
Authority, and a quitclaim assignment executed by the applicable Seller to the
applicable Buyer transferring the Water Rights relating to the Pecos River as
contemplated by Section 4.2(d);
(x) copies of any Required Consents, each duly executed by the
applicable Governmental Authority or other applicable Person;
(xi) a certificate of non-foreign status of Sellers which meets
the requirements of Treasury Regulation Section 1.1445-2(b)(2); and
(xii) the Records (other than the Excluded Records) to the
extent that such Records are not located at facilities on the Real Property, and
including Records which constitute the financial records of Sellers with respect
to the Business in a digital media format to the extent such records currently
exist in a digital media format.
(b) (x) IMNM shall accept and assume all of the right, title and
interest in and to the MPI Transferred Assets sold, assigned, transferred and
conveyed to IMNM by MPI, and IMNM shall accept and assume all of the rights,
obligations and duties of the IMNM Assumed Liabilities, and (y) HBLLC shall
accept and assume all of the right, title and interest in and to the EPI
Transferred Assets sold, assigned, transferred and conveyed to HBLLC by EPI, and
shall accept and assume all of the rights, obligations and duties of the HBLLC
Assumed Liabilities. Buyers shall deliver the following to Sellers:
(i) the Closing Payment;
(ii) a certificate from each Buyer dated the Closing Date and
duly executed by an officer of each Buyer to the effect that the conditions set
forth in Section 10 have been satisfied;
(iii) bills of sale and assignment, duly executed by the
applicable Buyer covering all of the Transferred Assets of the applicable Seller
(other than the Owned Real Property of such Seller), in each as contemplated by
Section 4.2(d);
(iv) assumption agreements duly executed by the applicable
Buyer, pursuant to which IMNM assumes the IMNM Assumed Liabilities, and HBLLC
assumes the HBLLC Assumed Liabilities, in substantially the form attached hereto
as Exhibit D;
(v) a transition services agreement, in substantially the form
of Exhibit E hereto providing for such services as shall be mutually agreed by
IMNM and Sellers, duly executed by IMNM; and
24
(vi) any documents required by any Governmental Authority to be
executed by Buyers in connection with the transfer of the Leases and the Water
Rights.
(c) the applicable Buyer shall pay all Cure Amounts directly to the
applicable parties to the Assumed Contracts and in such amounts as set forth on
the Disclosure Schedule, Section 5.17, (or in such other amounts or on such
other terms as may be agreed to by such Buyer and such parties), in accordance
with the wire instructions provided by Sellers to such Buyer at the Closing.
(d) At the request of Buyers or Sellers, Buyers and Sellers agree to
execute and deliver at Closing such additional bills of sale and assignment,
assumption agreements and special warranty deeds or, in the case of Water Rights
relating to the Pecos River, quitclaim deeds, in each case as shall be
reasonably necessary to record title to the Transferred Assets (or any portion
thereof) in the applicable filing jurisdiction or otherwise reflect the transfer
of the Transferred Assets and the assumption of the Assumed Liabilities, in each
case in a form mutually agreed by Buyers and Sellers, provided that such bills
of sale and assignment, assumption agreements and special warranty or quitclaim
deeds shall be consistent with the terms and conditions of this Agreement and
shall not purport to assign any rights, title or interest in assets other than
the Transferred Assets or assume any liabilities other than the Assumed
Liabilities.
SECTION 5. SELLERS' REPRESENTATIONS AND WARRANTIES.
Sellers hereby jointly and severally represent and warrant to Buyers as
follows (except as set forth on Schedule 5 hereto, such schedule being referred
to herein as the "Disclosure Schedule"):
5.1 Authorization for Agreement and Consent. Subject to Bankruptcy Court
approval, Sellers have all requisite corporate power and authority to enter into
this Agreement and to sell, assign, transfer and convey the Transferred Assets
to the applicable Buyer under this Agreement. The execution, delivery and
performance of this Agreement by Sellers and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate actions of Sellers. Subject to Bankruptcy Court approval, this
Agreement constitutes, and, when executed by Sellers, any documents or
instruments to be executed and delivered by Sellers pursuant hereto will
constitute, legal, valid and binding obligations of Sellers, as applicable,
enforceable in accordance with their terms.
5.2 Organization of Sellers.
(a) MPI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Mississippi and has the corporate power
and authority to own, use, and operate its properties (including, but not
limited to, the MPI Transferred Assets) and to carry on the Business as it is
now being conducted. MPI is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified and in
good standing would not have a Material Adverse Effect.
25
(b) EPI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Mississippi and has the corporate power
and authority to own, use, and operate its properties (including, but not
limited to, the EPI Transferred Assets) and to carry on the Business as it is
now being conducted. EPI is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified and in
good standing would not have a Material Adverse Effect.
(c) MissChem owns 100% of the Equity Interests in MPI. MPI owns 100%
of the Equity Interests in EPI, and neither MPI nor EPI owns any Equity
Interests in any other Person.
5.3 Consents and Approvals. No consent, approval, authorization of,
declaration, filing, or registration with, any Governmental Authority, is
required to be made or obtained by Sellers in connection with the execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated hereby, except for (a) approval of the Bid Procedures
Order by the Bankruptcy Court, (b) approval by the Bankruptcy Court via entry of
the Sale Order, (c) the filing of a notification and report form under the HSR
Act, if applicable, and the expiration or earlier termination of the applicable
waiting period thereunder, (d) consents, approvals, authorizations,
declarations, or rulings identified on the Disclosure Schedule, Section 5.3, and
(e) consents, approvals, authorizations, declarations, or rulings the failure of
which to make or obtain would not have a Material Adverse Effect.
5.4 No Violations. Neither the execution, delivery, or performance of
this Agreement by Sellers, nor the consummation by Sellers of the transactions
contemplated hereby, nor compliance by Sellers with any of the provisions hereof
will (a) conflict with or result in any breach of any provisions of the
Organizational Documents of Sellers; (b) result in a violation, or breach of, or
constitute (with or without due notice or lapse of time) a default (or give rise
to any right of termination, cancellation, vesting, payment, exercise,
acceleration, suspension, or revocation) under any of the terms, conditions, or
provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan, or other instrument or obligation
to which Sellers are a party or by which Sellers' properties or assets may be
bound or affected; (c) violate any order, writ, injunction, decree, statute,
rule, or regulation applicable to Sellers or to Sellers' properties or assets;
(d) result in the creation or imposition of any Encumbrance on the Transferred
Assets other than Permitted Encumbrances; or (e) cause the suspension or
revocation of any Permit or Environmental Permit (pursuant to the terms of such
Permit) necessary for Sellers or, after the Closing, Buyers, to conduct the
Business as currently conducted, except in the case of clauses (b), (c), (d),
and (e) for violations, breaches, defaults, terminations, cancellations,
vestings, payments, exercises, accelerations, creations, impositions,
suspensions, or revocations that (x) are excused by or the enforcement of
remedies relating thereto are stayed by the Bankruptcy Court or the
applicability of any provision of the Bankruptcy Code, (y) would not have a
Material Adverse Effect, or (z) are set forth on the Disclosure Schedule,
Section 5.4.
5.5 No Default. Except as set forth on the Disclosure Schedule, Section
5.5, Sellers are not in violation, breach of, or default under (and no event has
occurred that with notice or the
26
lapse of time would constitute a violation, breach of, or a default under) any
term, condition, or provision of (a) their Organizational Documents, (b) any
note, bond, mortgage, deed of trust, security interest, indenture, license,
agreement, plan, contract, lease, commitment, or other instrument, or obligation
to which a Seller is a party or by which the Transferred Assets may be bound or
affected, (c) any order, writ, injunction, decree, statute, rule, or regulation
applicable to the Transferred Assets, or (d) any Permit, Environmental Permit,
license, governmental authorization, consent, or approval necessary for Sellers
to conduct the Business as currently conducted, except in the case of clauses
(b), (c) and (d), for those violations, breaches or defaults that (i) occurred
prior to or upon the commencement of the Bankruptcy Cases and that are excused
by or the enforcement of remedies relating thereto are stayed by the Bankruptcy
Court or the applicability of any provision of the Bankruptcy Code or (ii)
would not have a Material Adverse Effect.
5.6 Real Property.
(a) The Disclosure Schedule, Section 5.6 contains (i) a complete list
of all real property that is owned by either Seller (such real property,
together with all rights, title, privileges and appurtenances pertaining
thereto, shall be collectively referred to as the "Owned Real Property") and
(ii) a list of each lease of real property under which either Seller is a
lessee, lessor, sublessee or sublessor, including leases under which either
Seller has the right to explore, mine or remove potash or other minerals (the
"Leased Real Property"). The Owned Real Property and the Leased Real Property
are sometimes collectively referred to as the "Real Property".
(b) Except as set forth on the Disclosure Schedule, Section 5.6, the
Permitted Encumbrances and those Encumbrances that will be released pursuant to
the Sale Order, Sellers have (i) good title in fee simple to the Owned Real
Property and to all plants, buildings and improvements thereon and (ii) good
leasehold title to the Leased Real Property (such that Sellers are entitled to
all production (and proceeds thereof) from the Owned Real Property and the
Leased Real Property subject only to the royalties under the Leases, as the same
may be redetermined from time to time, and the overriding royalty interests
described in Exhibit A) and to all plants, buildings and improvements thereon.
(c) To the extent such are in Sellers' possession, true and complete
copies of each lease under which a leasehold interest in the Leased Real
Property is held by a Seller (the "Leases") (including all amendments,
modifications, extensions and supplements thereto) have been made available to
Buyers. With respect to the Leases, except as set forth on the Disclosure
Schedule, Section 5.6, no breach or event of default on the part of Sellers or,
to the Knowledge of Sellers, no breach or event of default on the part of any
other party thereto, and no event that, with the giving of notice or lapse of
time or both, would constitute such breach or event of default under any term,
covenant or condition of such Leases, has occurred and is continuing unremedied
that would have a Material Adverse Effect.
5.7 Title to Tangible Property. Sellers have good and valid title to all
of the tangible personal property constituting Transferred Assets, free and
clear of all Encumbrances other than Permitted Encumbrances.
27
5.8 Permits and Environmental Permits.
(a) MPI has all Permits and Environmental Permits that are necessary
for the conduct of the Business as it is being conducted by MPI as of the date
of this Agreement other than Permits or Environmental Permits the failure to
possess which would not have a Material Adverse Effect. All such Permits and
Environmental Permits described in the preceding sentence held by MPI are listed
on the Disclosure Schedule, Section 5.8 and are in full force and effect. Except
as set forth on the Disclosure Schedule, Section 5.8, no violations are
occurring or have been committed during the 6-month period prior to the date
hereof in respect of any such Permit or Environmental Permit other than such
violations which did not, or, to the Knowledge of Sellers, would not have a
Material Adverse Effect, and no Proceeding is pending or, to the Knowledge of
Sellers, Threatened to revoke or limit any such Permit or Environmental Permit.
(b) EPI has not conducted any material business or operated its mines
or any of its other facilities since December 31, 1997. EPI has all Permits and
Environmental Permits that are necessary for the conduct of the Business as it
is being conducted by EPI as of the date of this Agreement other than Permits or
Environmental Permits the failure to possess which would not have a Material
Adverse Effect. All Permits and Environmental Permits held by EPI are listed on
the Disclosure Schedule, Section 5.8, and are in full force and effect except as
set forth on such Schedule. Except as set forth on the Disclosure Schedule,
Section 5.8, no violations are occurring or have been committed during the
6-month period prior to the date hereof in respect of any such Permit or
Environmental Permit other than such violations which did not, or, to the
Knowledge of Sellers, would not have a Material Adverse Effect, and no
Proceeding is pending or, to the Knowledge of Sellers, Threatened to revoke or
limit any such Permit or Environmental Permit. To the Knowledge of Sellers, the
BLM has not Threatened that the EPI mines are no longer in [active mine] status
or that EPI is required to commence reclamation of its mines and related
facilities.
5.9 Litigation. Except for the Bankruptcy Cases and as set forth on the
Disclosure Schedule, Section 5.9, there is no (i) Proceeding pending or, to
Sellers' Knowledge, Threatened against either Seller, the outcome of which would
be reasonably expected, individually or in the aggregate, to have a Material
Adverse Effect or (ii) material judgment, decree, injunction, or order of any
Governmental Authority or arbitrator outstanding against Sellers.
5.10 No Finder's Fee. Except as set forth in the Disclosure Schedule,
Section 5.10, no Person is entitled to any brokerage, financial advisory,
finder's, or similar fee or commission payable by Buyers or any of their
Affiliates in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Sellers or MissChem.
5.11 Financial Statements. The audited, consolidated balance sheets of
Sellers (including the notes thereto) as of June 30, 2001 and June 30, 2002, and
the related audited statements of operations and cash flows for the years then
ended (the "Audited Statements"), the unaudited, consolidated balance sheet of
Sellers as of June 30, 2003 and as of September 30, 2003, and the related
unaudited statements of operations, and cash flows for the periods then ended
(collectively with the Audited Statements, the "Financial Statements") are as
set forth in the Disclosure Schedule, Section 5.11. The Financial Statements
have been prepared in
28
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods covered thereby (except as
noted therein) and fairly present in all material respects the financial
position and the related results of operations and cash flows of Sellers for the
dates and periods covered thereby. Upon the delivery of the Audited June 30
Statements by Sellers to Buyers, the Audited Statements and the Disclosure
Schedule, Section 5.11 shall be deemed to include the Audited June 30
Statements, and the Financial Statements and the Disclosure Schedule, Section
5.11 shall be deemed to exclude the unaudited, consolidated balance sheet of
Sellers as of June 30, 2003, and the related unaudited statement of operations
and cash flows for the year then ended.
5.12 Legal Compliance. Except as disclosed in the Disclosure Schedule,
Section 5.12, Sellers are not in violation of, nor have Sellers, been given
notice or been charged with any violation of, any Legal Requirements except for
such violations, notices, or charges that have not had or will not have,
individually or in the aggregate, a Material Adverse Effect. Except as disclosed
in the Disclosure Schedule, Section 5.12, no investigation or review by any
Governmental Authority is pending or, to the Knowledge of Sellers, Threatened
against Sellers.
5.13 Environmental. Except as set forth on the Disclosure Schedule,
Section 5.13 and in the Environmental Reports described thereon, and except as
would not have a Material Adverse Effect:
(a) (i) Sellers are in compliance with, and have complied in all
respects with, and there are not, and have been no, violations of, any
Environmental Laws related to the Business or the Transferred Assets; (ii)
Sellers possess all environmental permits, certificates, consents or other
settlement agreements, licenses, approvals, registrations and authorizations
required for the operation of the Business and the Transferred Assets under all
Environmental Laws ("Environmental Permits"); (iii) to the Knowledge of
Sellers, there are no Environmental Conditions on or affecting the Transferred
Assets; (iv) Sellers have filed all material notices required under all
Environmental Laws and Environmental Permits; (v) Sellers have made available
to Buyers true and complete copies of all Environmental Reports; (vi) to the
Knowledge of Sellers, the Real Property is not listed under any Environmental
Law as a site requiring remediation of Hazardous Material, or the subject of any
enforcement action or investigation, or citizen's suit, under any Environmental
Law ("Identified Site"); (vii) Sellers have not transported or arranged for
transportation of (directly or indirectly) to any Identified Site any Hazardous
Materials generated or created by the use, ownership or operation of the
Transferred Assets or by the operation of the Business; (viii) to Sellers'
Knowledge, there is not now, nor at any time in the past has there been, at, on
or in any of the Transferred Assets, any (A) treatment, recycling, storage or
disposal or any Hazardous Materials, or (B) surface impoundment, landfill lagoon
or other containment facility for the temporary or permanent storage, treatment,
or disposal of Hazardous Materials, in either case except in compliance with
Environmental Laws.
(b) To Sellers' Knowledge, there are no underground storage tanks
currently or formerly located on the Real Property.
5.14 Taxes.
29
(a) Except as set forth on the Disclosure Schedule, Section 5.14,
Sellers have timely filed with the appropriate taxing authorities all Tax
Returns required to be filed by them and have timely paid all Taxes owed by
them. All Tax Returns filed by Sellers are correct and complete in all material
respects. Neither Seller is currently the beneficiary of any extension of time
to file any such Tax Return.
(b) There are no liens for Taxes (other than for current Taxes not
yet due and payable) on the Transferred Assets. Except as set forth on the
Disclosure Schedule, Section 5.14, none of the Transferred Assets is property
that is required to be treated for Tax purposes as being owned by any Person
other than the Sellers.
(c) Neither Seller has received any written notice from a taxing
authority in a jurisdiction where it does not file Tax Returns that it may be
subject to taxation by that jurisdiction.
(d) All Taxes that Sellers are required by law to withhold or collect
for all periods ending on or prior to the date hereof have been withheld or
collected, and Sellers have timely paid all such Taxes due any Governmental
Authority.
5.15 Employee Matters. A complete and accurate list of all employees of
MPI (the "Employees") on the date indicated therein is set forth on the
Disclosure Schedule, Section 5.15. EPI has no employees and has not had any
employees since June 30, 2000. Except as set forth in the Disclosure Schedule,
Section 5.15 and except as would not have a Material Adverse Effect:
(a) With respect to the Employees, there are no pending or, to the
Knowledge of Sellers, Threatened claims, trade disputes or controversies
regarding employment, terms of employment or termination of employment
including, but not limited to, any claims for unpaid wages, harassment or
workmen's compensation.
(b) The Mississippi Chemical Corporation Thrift Plan Plus (the
"Sellers' 401(k) Plan") has been maintained in compliance with its material
terms and in compliance with all material Legal Requirements. Sellers' 401(k)
Plan has received a favorable determination letter from the Internal Revenue
Service regarding its tax-qualified status within the preceding two (2) years,
and Sellers know of no amendments or events subsequent to such favorable
determination letter that would jeopardize the tax-qualified status of Sellers'
401(k) Plan.
(c) No employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to Title IV of ERISA, sponsored by Sellers or any entity in the
same controlled group as Sellers or under common control with Sellers as defined
in Section 414 of the Code has, on a termination basis, liabilities greater than
assets.
5.16 Intellectual Property. Except for Trademark Registration Number
2000546, issued by the Patent and Trademark Office of the United States
Department of Commerce, for Mississippi Potash, Inc. and Design, the registered
owner of which trademark is MissChem, the Intellectual Property owned by MPI,
together with the Licensed Intellectual Property identified in the Disclosure
Schedule, Section 5.16, constitute all the material Intellectual Property rights
used in the operation of the Business as conducted as of the date of this
Agreement. Except as
30
would not have a Material Adverse Effect, to the Knowledge of Sellers, the
products produced and sold in connection with the Business, and all Intellectual
Property (other than Licensed Intellectual Property) used in the conduct of the
Business as conducted as of the date of this Agreement, do not infringe upon,
violate or constitute the unauthorized use of any rights owned or controlled by
any third party, including any Intellectual Property of any third party. Except
as would not have a Material Adverse Effect, Sellers have no Knowledge of any
Licensed Intellectual Property used in the conduct of the Business as conducted
as of the date of this Agreement, that infringes upon, violates or constitutes
the unauthorized use of any rights owned or controlled by any third party,
including any Intellectual Property of any third party.
5.17 Contracts and Cure Amounts. The Disclosure Schedule, Section 5.17
contains a complete and accurate list of all of the following contracts or
agreements to which Sellers are a party or by which any of the Transferred
Assets are bound (collectively, the "Scheduled Contracts"), (i) contracts or
agreements pertaining to the borrowing of money (including any guarantees or
Encumbrances relating thereto); (ii) contracts or agreements relating to any
single capital expenditure in excess of $250,000; (iii) contracts or agreements
for the purchase or sale of real property, any business or line of business or
for any merger or consolidation; (iv) joint venture, limited liability company,
limited partnership or partnership agreements; (v) Leases; (vi) licenses under
which either Seller has the right to explore, mine or remove potash or other
minerals; (vii) written agreements with Employees or oral agreements with
Employees involving annual payments in excess of $80,000; (viii) collective
bargaining agreements; (ix) contracts or agreements that individually require
by their respective terms after the date hereof the payment or receipt of more
than $250,000 during any 12-month period, or $1,000,000 in the aggregate; (x)
contracts or agreements limiting the freedom of either Seller from engaging in
any line of business in any geographic area or to compete with any Person; and
(xi) contracts or agreements which are not terminable by either Seller within
one year after the Closing Date. Except as set forth on the Disclosure Schedule,
Section 5.17, (i) to Sellers' Knowledge, each Person that has any obligation or
liability under any Scheduled Contract is in material compliance with each such
Scheduled Contract and (ii) no event has occurred or circumstance exists that
(with or without notice or lapse of time) may result in a violation or breach
of, or give either Seller or any other Person the right to declare a default
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify, any Scheduled Contract. Sellers have not given or received from any
other Person, at any time since June 30, 2003 any written notice or other
written communication regarding any actual, alleged, possible, or potential
material violation or breach of, or default under, any Scheduled Contract and,
to the Knowledge of Sellers, no such violation, breach or default under any
Scheduled Contract has been Threatened. Except as set forth on the Disclosure
Schedule, Section 5.17, the consummation of the transactions contemplated by
this Agreement do not require the consent of or notice to any Person pursuant to
the Scheduled Contracts. The aggregate amount of all Cure Amounts, and the
parties to whom such Cure Amounts are owed, as of the date hereof, are as set
forth on the Disclosure Schedule, Section 5.17.
5.18 No Changes; Conduct of Business. Except as set forth in the
Disclosure Schedule, Section 5.18, since September 30, 2003, (a) the operations
and affairs of the Business have been conducted in the ordinary course of
business, and (b) there has been no event or change which has had, or will have,
a Material Adverse Effect.
31
5.19 Water Rights. Disclosure Schedule, Section 5.19 contains a complete
list of all of the material Water Rights owned by each Seller. Except as set
forth on the Disclosure Schedule, Section 5.19, the Permitted Encumbrances and
those Encumbrances that will be released pursuant to the Sale Order, Sellers
have good title to the Water Rights; provided that Sellers make no
representations or warranties in this Agreement regarding Water Rights relating
to the Pecos River. Sellers have not entered into any agreement or letter of
intent to sell, lease, transfer, deposit in any "water bank" or make any other
disposition of any Water Rights.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyers hereby jointly and severally represent and warrant to Sellers as
follows:
6.1 Authorization for Agreement and Consents. Each Buyer has all
requisite limited liability company power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by each Buyer and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
limited liability company actions of such Buyer. This Agreement constitutes,
and, when executed by a Buyer, any documents or instruments to be executed and
delivered by such Buyer pursuant hereto will constitute, legal, valid and
binding obligations of such Buyer enforceable in accordance with their terms.
6.2 Organization. Each Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
New Mexico and has the limited liability company power and authority to own,
use, and operate its properties and to carry on its business as it is now being
conducted.
6.3 No Violation. The execution and delivery of this Agreement and all
other agreements, instruments and documents contemplated hereby by each Buyer
and the consummation of the transactions contemplated hereby and thereby will
not conflict with or violate or constitute a breach or default under the
Organizational Documents of such Buyer or any provision of any mortgage, trust
indenture, lien, lease, agreement, instrument, or court order, judgment or
decree to which such Buyer is bound.
6.4 Finder's Fees. No Person is entitled to any brokerage, financial
advisory, finder's, or similar fee or commission payable by Sellers, MissChem or
any of their Affiliates in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of either Buyer or their
Affiliates.
6.5 No Litigation. No Proceeding is pending or, to a Buyer's Knowledge,
has been Threatened by or against a Buyer or any of their Affiliates which would
materially and adversely affect the ability of a Buyer to consummate the
transaction provided for in this Agreement.
6.6 No Financing Contingency. Buyers have cash reserves or availability
under their credit facilities to pay the Purchase Price in cash to Sellers on
the Closing Date without other debt or equity financing. Buyers' obligations
hereunder are not contingent upon procuring financing for the transaction
contemplated hereunder.
32
6.7 Informed Purchaser. Buyers are informed and sophisticated purchasers.
Buyers have engaged expert advisors, experienced in the evaluation and purchase
of property and assets such as those that are the subject of this Agreement and
are involved in a bankruptcy case, and Buyers have undertaken such investigation
and have been provided with and has evaluated such documents and information as
it has deemed necessary to enable it to make an informed and intelligent
decision with respect to the execution, delivery and performance of this
Agreement. Buyers acknowledge that Buyers have had complete and open access to
the key employees, documents and facilities of the Business. Buyers further
acknowledge that Sellers make no representation or warranty with respect to (a)
any projections, estimates or budgets delivered to or made available to Buyers
or any of their Affiliates, counsel, advisors, accountants or other
representatives of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition (or any
component thereof) of the Business or any other aspects of the Business or the
Transferred Assets or (b) any other information or documents made available to
Buyers or their counsel, advisors, accountants or other representatives with
respect to the Business, except as expressly set forth in this Agreement.
SECTION 7. COVENANTS.
7.1 Sellers' Chapter 11 Bankruptcy Case.
(a) This Agreement and the transactions contemplated hereby are
contingent upon the approval and authorization of the Bankruptcy Court. Sellers
shall file a motion (the "Sale Motion") within two (2) Business Days after the
date hereof to seek approval by the Bankruptcy Court of: (1) at a first hearing,
the Auction and Bid Procedures attached hereto as Schedule 7.1(a)(1) and (2) at
a second hearing, the sale contemplated hereby (subject only to said Auction and
Bid Procedures). Sellers shall use their commercially reasonable efforts to
obtain the entry of the order approving the Auction and Bid Procedures in
substantially the form attached hereto as Schedule 7.1(a)(2) (the "Bid
Procedures Order") on or before 30 days after the date of this Agreement.
Sellers shall use their commercially reasonable efforts to obtain the entry of
the Sale Order in substantially the form attached hereto as Schedule 7.1(a)(3)
on or before 75 days after the date of this Agreement.
(b) Sellers shall provide notice of the Sale Motion to every Person
with an interest in the Transferred Assets, the BLM, the PBGC, counter-parties
to the Assumed Contracts, the State of New Mexico, and every Person reasonably
requested by Buyers, in accordance with the notice provisions of the Bankruptcy
Code and orders in the Bankruptcy Cases, including, without limitation, any
applicable state taxing authority. The Notice of the Sale Motion shall provide,
among other matters, that any objections to the Sale Motion shall be served upon
counsel for Buyers.
(c) Upon entry of the Bid Procedures Order and the Sale Order,
Sellers shall promptly provide Buyers with notice of each such entry, and a copy
of such Bid Procedures Order or Sale Order, as applicable.
7.2 Access. From and after the date of this Agreement until the Closing
Date, Sellers shall give Buyers and their employees, agents and authorized
representatives reasonable access, during regular business hours and upon
reasonable advance notice, to the Transferred Assets and
33
to such employees and records relating to the Transferred Assets or the
Business, in each case, as are necessary to allow Buyers and their employees,
agents and authorized representatives to make such inspections, to interview or
confer with officers, employees, agents and representatives of the Sellers as
Buyers believe necessary and appropriate with respect to the Transferred Assets
or the Business. Sellers shall have the right to have a representative present
at all times of any such inspections, interviews and examinations. Additionally,
all records provided to Buyers pursuant to this Section will be deemed to be
"Confidential Information" for purposes of the Confidentiality Agreement. Upon
Buyers' request, MPI shall provide to Buyers such information and records
regarding the Employees as Buyers may reasonably request, including, without
limitation, the Employees' addresses, dates of birth, dates of hire, and
dependent information, personnel files, performance evaluations, and other
employment related documents. Buyers, however, shall not be entitled to access
to any materials containing privileged communications (except with the written
consent of the Sellers) or information about employees, disclosure of which
might violate an employee's reasonable expectation of privacy. Notwithstanding
the foregoing, at the request of Buyers, Sellers shall make available to Buyers
any written performance evaluations of the Employees. Buyers expressly
acknowledge that nothing in this Section 7.2 is intended to give rise to any
contingency to Buyers' obligations to proceed with the transactions contemplated
herein.
7.3 HSR Act. If filings pursuant to and under the HSR Act are required in
connection with the consummation of the transactions contemplated by this
Agreement, Sellers and Buyers will promptly (and in no event later than ten
Business Days after the date of this Agreement) compile and file (or will cause
their "ultimate parent entity" (as determined for purposes of the HSR Act) to
file) under the HSR Act such information respecting such party as the HSR Act
requires.
7.4 Consents. Sellers shall use their commercially reasonable efforts to
obtain prior to Closing all consents of any Person not a party to this Agreement
which are required to (i) transfer Sellers' interest in the Transferred Assets
to Buyers, (ii) vest title in the Transferred Assets in Buyers, or (iii)
permit Buyers to operate the Business without a default under, or breach,
termination or acceleration of, any material Lease, contract or agreement
(collectively, the "Required Consents"), a true and complete list of which
Sellers represent is attached as Schedule 7.4 hereto. Buyers shall cooperate
with Sellers to obtain all Required Consents. Sellers shall advise Buyers
promptly in writing with respect to any Lease, contract or agreement when they
know they will not receive any Required Consent.
7.5 Conduct of the Business Pending Closing. Subject to any obligations
as a debtor or debtor-in-possession under the Bankruptcy Code, from the date
hereof until the Closing Date, Sellers shall use commercially reasonable efforts
to conduct the Business in the ordinary course of business. Except as otherwise
contemplated under this Agreement or as required by applicable Legal
Requirements, from the date hereof until the Closing Date, without the prior
written consent of Buyers:
(a) Sellers shall not acquire a material amount of assets of any
other Person;
34
(b) Sellers shall not enter into any contract or agreement which will
be an Assumed Contract with a term greater than one year or providing for
payments by Buyers after the Closing in the aggregate of greater than $100,000;
(c) Sellers shall not sell, lease, license, or otherwise surrender,
relinquish, encumber, or dispose of the Transferred Assets other than
dispositions of current assets (as defined under GAAP) or used or obsolete
equipment in the ordinary course of business; provided such used or obsolete
equipment is replaced with reasonable items of replacement equipment prior to
the closing to the extent that such used or obsolete equipment is necessary for
the conduct of the Business by Sellers as currently conducted; and provided
further that Sellers may continue negotiating with the New Mexico State
Engineer's Office regarding title to the Water Rights relating to the Pecos
River, but shall not enter into any agreement or letter of intent for the sale,
lease, transfer, deposit in any "water bank" or other disposition of any Water
Rights;
(d) Sellers shall not change any method of accounting or accounting
practice used by them, except for any change required by GAAP;
(e) Sellers shall use their commercially reasonable efforts to
preserve their relationships with third parties and keep available the services
currently provided to Sellers (excluding the impact of Sellers' rejection or
potential rejection of any contracts or Sellers' good faith business judgment to
terminate any contract with any vendor);
(f) Sellers shall not obtain any rulings or make any elections with
respect to Taxes, or enter into any agreements with any Taxing Authority, to the
extent any such elections or agreements have or could reasonably be expected to
have any affect on the Transferred Assets after the Closing;
(g) Sellers shall not establish or increase the benefits under, or
promise to establish, modify or increase the benefits under, any employee
benefit plan (as defined in Section 3(3) of ERISA) in which Employees
participate or otherwise increase the compensation payable to any Employees,
except in accordance with existing plans and agreements consistent with past
practice, or establish, adopt or enter into any collective bargaining agreement,
service agreement, employment contract or related agreement (written or oral)
with any Employee, or modify or amend any agreements contained in the Disclosure
Schedule, Section 5.15; and
(h) Sellers shall not agree or commit to do any of the foregoing.
7.6 Public Announcements. Buyers, on the one hand, and Sellers, on the
other hand, agree that they will not issue any press release or respond to any
press inquiry with respect to this Agreement or the transactions contemplated
hereby without the prior approval of the other party (which approval will not be
unreasonably withheld, conditioned or delayed), except as may be required by
Legal Requirements or the Bankruptcy Court.
7.7 Financial Statements. From the date of this Agreement through the
Closing Date, within twenty (20) days after the end of each applicable calendar
month, Sellers shall provide Buyers with copies of Sellers' consolidated
financial statements prepared in accordance with past practice for each calendar
month ending subsequent to the date of this Agreement (the "Supplemental
Financial Statements"), which shall be prepared in accordance with GAAP
35
applied on a consistent basis throughout the periods covered thereby (except
that such Supplemental Financial Statements may not include footnotes and shall
be subject to nonmaterial recurring year-end adjustments).
7.8 Proceeds of Sale of Water Rights. If, within one (1) year following
the Closing Date, either Buyer consummates, or enters into an agreement or
letter of intent to consummate, any sale, lease, transfer, deposit in any "water
bank" or other disposition of Water Rights, then, within ten (10) Business Days
following the consummation of such sale, lease, transfer, deposit or other
disposition, Buyers shall pay to Sellers, by wire transfer of immediately
available funds to such account as Sellers shall designate, an amount in cash
equal to fifty percent (50%) of the value of any cash proceeds received by
either Buyer and, concurrently with the receipt of any non-cash consideration by
Buyers, fifty percent (50%) of any non-cash consideration received by either
Buyer, in each case with respect to such sale, lease, transfer, deposit or other
disposition of Water Rights.
7.9 Sellers' Employees.
(a) Employment. At least three (3) Business Days prior to the Closing
Date, IMNM shall offer employment to substantially all Employees not then absent
from work because of a short-term or long-term disability (subject to IMNM's
reasonable screening processes for potential employees) at rates of base
compensation similar to the rates of base compensation of such Employees as of
the date of this Agreement and with the benefits for Transferred Employees
contemplated by Section 7.9(d). IMNM shall offer employment to substantially all
Employees who did not receive an offer of employment prior to Closing because of
their absence from work on account of a short-term disability (subject to the
same screening processes and base compensation rates and benefits as outlined
above) when each such Employee's short-term disability is lifted and the
Employee again becomes fit to resume full-time work. Employees who accept IMNM's
offer of employment (the "Transferred Employees") shall become employees of IMNM
effective on the Closing Date or such later date as the offer of employment is
made and accepted, and shall thereafter no longer be Employees of MPI. IMNM
shall have sole responsibility for the payment of all wages, overtime, sick pay,
taxes, withholdings, and employee benefits with respect to IMNM's employment of
the Transferred Employees on and after the Closing Date.
(b) Hiring Process. MPI shall assist IMNM in IMNM's efforts to
evaluate and employ the Employees. Notwithstanding the foregoing, IMNM shall be
solely responsible for any and all communications it makes to the Employees
regardless of Sellers' involvement in such process or receipt of documents and
materials to be distributed to the Employees. IMNM shall comply, at its own
expense, with all laws in connection with its communications to the Employees,
the process of offering employment to them, and the hiring and transition of
such Employees.
(c) Certain Employee Liabilities. From and after the Closing, IMNM
shall assume all of the following liabilities, claims, obligations, costs or
expenses (the "Assumed Employment Liabilities"): (i) supplemental unemployment
benefits for Employees terminated by MPI in connection with the Closing (or
after the Closing, if applicable in the case of Employees absent from work on
account of a short-term disability) who are not made offers of
36
employment by IMNM, or for Transferred Employees subsequently terminated by IMNM
within six months thereafter, the amounts of such benefits to be determined
based on the benefit formula contained in MPI's Supplemental Unemployment
Benefit Plan (including, as applicable, the payment of COBRA premiums) as
amended through October 2, 2003, taking into account the Employees' or
Transferred Employees' service with MPI, (ii) the Key Executive Retention and
Severance Agreements dated October 2, 2003, between MPI and each of Xxxxxxx X.
Xxxxx and X.X. Xxxxx, as modified to delete any "Retention Bonus" amounts
payable thereunder, which agreements (as so modified) shall be assumed by IMNM,
(iii) workers' compensation claims by Employees (whether arising before, on or
after Closing); provided, however, that IMNM's liability with respect to
worker's compensation claims attributable to incidents occurring before the
Closing shall be limited to a total of $713,000, (iv) subject to Sellers'
obligations pursuant to Section 7.9(e), claims under the WARN Act or similar
state or local laws, including in connection with the termination of the
Transferred Employees by MPI at Closing or by IMNM on or after the Closing and
(v) all accrued but unpaid vacation benefits and vacation pay (in each case,
whether arising before, on or after Closing) due to Employees. With respect to
the matters assumed in clause (i) and clause (v) (to the extent applicable to
Employees not offered employment by IMNM), clause (ii) and clause (iii) (to the
extent of worker's compensation claims attributable to incidents occurring
before the Closing), MPI shall administer, or cause to be administered, and pay
directly to the applicable Employees the amounts due to them, and Buyer shall
reimburse MPI therefore within 15 days after receipt of an invoice therefore
accompanied by appropriate documentation evidencing that such amounts have been
paid to the Employees. IMNM shall also reimburse MPI for its out-of-pocket costs
paid to Xxxxxxxx & Co. in connection with the administration of MPI's worker's
compensation claims attributable to incidents occurring before the Closing
within 15 days after receipt of an invoice therefor accompanied by appropriate
documentation evidencing such payments. Notwithstanding the foregoing, IMNM
shall not assume or be liable for any liabilities, claims, obligations, costs or
expenses (which liabilities, claims, obligations, costs and expenses shall
constitute Excluded Liabilities) with respect to (A) accrued but unpaid wages,
salary or other compensation (including incentive compensation) arising prior to
or upon the Closing (other than the benefits or payments expressly described in
clauses (i) through (v) above), (B) "Retention Bonus" amounts payable to Xxxxxxx
X. Xxxxx or X.X. Xxxxx pursuant to each such individual's Key Executive
Retention and Severance Agreement, (C) the Mississippi Chemical Corporation
Retirement Plan, or (D) short-term or long-term disability benefits with respect
to any former Employees receiving such benefits as of or prior to the Closing.
(d) Employee Benefit Plans. All Transferred Employees shall be
immediately eligible to participate in a health plan sponsored by IMNM, which
plan shall have substantially similar terms, conditions, and benefits as those
provided under the Intrepid Mining, LLC health plan and described on Schedule
7.9(d). In addition, Buyers intend to offer all Transferred Employees other
benefits substantially similar to the corresponding benefits offered by Intrepid
Mining, LLC to its employees. In addition, IMNM shall, to the extent permitted
by applicable law, permit direct cash rollovers and direct rollovers of notes
representing outstanding participant loans from the Mississippi Chemical
Corporation Thrift Plan Plus (the "Seller's 401(k) Plan") to the Moab Salt,
L.L.C. Employees' Savings Plan (the "Buyer's 401(k) Plan"), for those
Transferred Employees who are otherwise eligible to become participants in
Buyer's 401(k) Plan. Other than the foregoing obligations, IMNM shall decide, in
its sole and absolute discretion, which, if any, employee benefit plans,
programs, policies, or arrangements it shall
37
offer to Transferred Employees, and shall further decide, in its sole and
absolute discretion, which Transferred Employees may participate in such
employee benefit plans, programs, policies, or arrangements. Except as set forth
in this Section 7.9, IMNM need not offer the same employee benefit plans,
programs, policies or arrangements to all such Transferred Employees.
(e) Health Care Continuation Coverage. Sellers shall pay and be
solely liable for all liability, cost, expense, taxes and sanctions under
Section 4980B of the Code, and interest and penalties imposed upon, incurred by,
or that arise by reason of or relate to any failure to comply with the health
care continuation coverage requirements of Section 4980B of the Code and
Sections 601 through 608 of ERISA, as amended ("COBRA Liabilities") (i) for any
Employees who do not become Transferred Employees, (ii) for any qualified
beneficiary (as defined in Section 4980B(g)(1) of the Code and Section 607(3) of
ERISA) of individuals described in (i) above, (iii) for any Transferred Employee
or qualified beneficiary of a Transferred Employee who does not elect to become
covered under IMNM's group health plan in connection with the Transferred
Employee's offer of employment with IMNM, provided that Sellers' obligation to
provide group health plan coverage to any such individual shall terminate upon
the date the individual becomes covered under the IMNM group health plan, and
(iv) for any other qualified beneficiary (as defined above) who became such
prior to the Closing Date. IMNM shall be responsible for all COBRA Liabilities
with respect to any Transferred Employee who becomes covered under an IMNM group
health plan (as defined previously) upon employment with IMNM, and any qualified
beneficiary (as defined previously) of that Transferred Employee who becomes a
qualified beneficiary after the Transferred Employee becomes covered under
IMNM's group health plan.
(f) WARN Act. MPI shall provide the notice required by the WARN Act
for any plant closing or mass layoff by MPI which takes place up to and
including the Closing Date. Prior to the Closing Date, MPI shall, upon
reasonable request from IMNM and approval of the Bankruptcy Court (if
necessary), deliver such notice as agent of, and on behalf of IMNM for any plant
closing or mass layoff occurring within sixty (60) days after the Closing Date.
IMNM shall provide MPI with reasonable and adequate notice to permit MPI to
fulfill its obligations under this Section. Sellers agree to pay all liability,
cost, expense and sanctions (whether originally incurred by Buyers or Sellers)
resulting from MPI's failure to provide the WARN Act notice in accordance with
this Section (provided that IMNM shall have provided MPI with reasonable and
adequate notice as contemplated by the preceding sentence). IMNM shall be solely
responsible for providing the notice required by the WARN Act for any plant
closing or mass layoff occurring more than sixty (60) days after the Closing
Date.
(g) No Employment or Third-Party Beneficiary Rights. The provisions
of this Section 7.9 shall neither create any rights in any Transferred Employee
to continued employment with IMNM for any specified period of time, nor create
any third-party beneficiary rights in any Employee or, if hired by IMNM, any
Transferred Employee, or any other Person (including any heir, beneficiary,
executor, administrator, or representative of any Employee, Transferred Employee
or any other Person claiming through any such employee or other Person), with
respect to such employee's or other Person's employment or any term or condition
thereof.
7.10 Additional Agreements. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use its commercially reasonable
efforts to do, or cause to be taken
38
all action and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Legal Requirements to consummate and make effective
the transactions contemplated by this Agreement, including the fulfillment of
the conditions set forth in Section 9 and Section 10 to the extent that the
fulfillment of such is within the control of such party.
7.11 Royalty Reduction. If, after the Closing Date, the BLM approves a
reduction in royalties payable to the BLM under the Leases with respect to the
mines included in the Transferred Assets as contemplated by the pending sylvite
royalty rate reduction application filed by MPI, then within five (5) Business
Days following receipt by Buyers of any refunds from the BLM in respect of such
royalty reduction (a "Royalty Reduction Refund"), Buyers shall pay to Sellers,
by wire transfer of immediately available funds to such account as Sellers shall
designate, an amount equal to (a) 100% of (b)(i) the amount of such refund
attributable to such reduction in royalties from August 1, 2000 (or the earliest
retroactive date from which such reduction shall commence, if not August 1,
2000) through the Closing Date, less (ii) the reasonable out-of-pocket costs and
expenses (including reasonable attorneys' fees) incurred by Buyers in
cooperating with Sellers to obtain any such royalty reduction or refunds
pursuant to the following sentence, less (iii) the portion of such refund
attributable to 50% of such reduction in royalty rate (not to exceed a reduction
in royalty rate of 1/2 of 1%) (the amount in clause (iii) is referred to as the
"Reclamation Contribution Amount"). If Sellers receive any Royalty Reduction
Refund directly from the BLM, then within five (5) Business Days following
receipt by Sellers of such Royalty Reduction Refund, Sellers shall pay directly
into any Funding Mechanism, by wire transfer of immediately available funds to
the account for such Funding Mechanism designated by Buyers, the Reclamation
Contribution Amount with respect to such Royalty Reduction Refund. Buyers shall
cooperate with Sellers after the Closing to obtain any royalty reduction or
refunds in respect of any royalty reduction for periods prior to the Closing.
Any Reclamation Contribution Amounts shall be placed by Buyers into one or more
accounts approved by the BLM as part of the Funding Mechanism for the purpose of
funding the Assumed Reclamation Obligations.
7.12 BLM Assignments. Buyers shall use their commercially reasonable
efforts to obtain the approval of the BLM for the assignment of the applicable
Leases from the applicable Seller to the applicable Buyer. For purposes of the
foregoing sentence, Buyers shall, if necessary to obtain such consent, commit to
provide a funding mechanism for the Assumed Reclamation Obligations in the form
of a seven year funding schedule with an assumed rate of return of between five
percent (5%) and six percent (6%) or any reasonable economic equivalent of such
funding schedule (the "Funding Mechanism"); provided, however, that
notwithstanding the actual amount of the Assumed Reclamation Obligations, for
purposes of this Section 7.12, the Assumed Reclamation Obligations will be
deemed to be the net present value, using a discount factor of between five
percent (5%) and six percent (6%), as reasonably agreed to by Buyers and the
BLM, of the sum of (i) $2,290,000 for the closure of the EPI facilities, payable
seven years from the Closing Date, (ii) $951,881 for the closure of MPI's North
facilities, payable 25 years from the Closing Date, (iii) $1,818,283 for the
closure of MPI's East facilities, payable 15 years from the Closing Date, and
(iv) $2,290,768 for the closure of MPI's West facilities, payable 25 years from
the Closing Date.
7.13 Relief From PBGC. Sellers shall use their commercially reasonable
efforts to arrange, as soon as reasonably practicable but no later than the
Closing, for the Pension Benefit
39
Guarantee Corporation (the "PBGC") to agree in a final and binding written
instrument that (a) the PBGC has not made and shall not make any claim with
respect to the Mississippi Chemical Corporation Retirement Plan during the
previous five calendar years against the Transferred Assets, Buyers, any member
of either Buyer's "controlled group" (as defined under Section 4001(1)(14) of
ERISA) or any transferee of either Buyer with respect to the Transferred Assets
and that (b) neither Buyers, nor any member of either Buyer's "controlled
group", nor any transferee of either Buyer, has or shall have any liability
whatsoever owing to the PBGC pursuant to ERISA for any benefits or other amounts
that may be or become payable with respect to the Mississippi Chemical
Corporation Retirement Plan.
7.14 Mine Closure Liability. As reasonably requested by Sellers, Buyers
shall cooperate with Sellers and shall use their commercially reasonable efforts
to assist Sellers in obtaining one or more letters from the BLM releasing
Sellers from any responsibility or liability for compliance with closure
requirements relating to the potash mines and United States potassium leases
included in the Transferred Assets. Such cooperation and assistance by Buyers
shall include, at the request of Sellers, the execution and delivery by the
applicable Buyer of one or more letters to Sellers and the BLM confirming such
Buyer's assumption of the Assumed Environmental Liabilities and the Assumed
Reclamation Obligations assumed by it pursuant to this Agreement.
7.15 Buyers' Set-Off Rights. Notwithstanding anything herein to the
contrary, Buyers shall have the right to deduct from and set-off against any
post-Closing payment obligation of Buyers to Sellers, or either of them,
hereunder, the amount, if any, by which the Adjustment Amount to be paid by
Sellers exceeds the amount actually received by Buyers with respect thereto
pursuant to Section 3.4(e). For the avoidance of doubt, Buyers shall have no
obligation to offset any amount in the Indemnification Holdback Escrow Account
pursuant to Section 3.4(e)(i) against any deficiency in the Adjustment Amount
Escrow before exercising its set-off rights pursuant to this Section 7.15.
SECTION 8. TAX MATTERS.
8.1 Sales and Transfer Taxes. In accordance with Section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer under a
plan confirmed under Section 1129 of the Bankruptcy Code shall not be taxed
under any Law imposing a sales, use, value added, documentary, stamp, gross
receipts, transfer, conveyance, stock, excise, real estate recording, other
recording, authorization, filing or other similar Tax or fee (collectively,
"Transfer Taxes"). The instruments transferring the Transferred Assets to the
applicable Buyer shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to an Order of
the United States Bankruptcy Court for the Southern District of
Mississippi relating to a plan of reorganization of the [Grantor], it
is exempt from transfer taxes, stamp taxes or similar taxes pursuant
to 11 U.S.C. Section 1146(c)."
In the event Transfer Taxes are assessed at Closing or at any time thereafter on
the transfer of any Transferred Assets, such Taxes incurred as a result of the
transactions contemplated hereby shall be paid by the applicable Buyer, and
Buyers shall indemnify and hold harmless Sellers for
40
any such Transfer Taxes. The applicable Buyer shall prepare and timely file all
Tax Returns required to be filed in respect of Transfer Taxes, if any, provided
that Sellers shall prepare any such Tax Returns that are the primary
responsibility of Sellers under applicable law. Sellers' preparation of any such
Tax Returns shall be subject to the applicable Buyer's approval, which approval
shall not be unreasonably withheld, conditioned or delayed. Sellers shall
reasonably cooperate with Buyers in procuring any available exemptions from any
Transfer Taxes and shall reasonably cooperate in procuring any documentation
that may be necessary to establish any such exemption.
8.2 Cooperation on Tax Matters. After the Closing, Sellers will cooperate
with Buyers, and Buyers will cooperate with Sellers, to the extent necessary in
the preparation of all Tax Returns and will provide (or cause to be provided)
any records and other information the other so reasonably requests and will
provide the cooperation of its employees and auditors. Sellers will reasonably
cooperate with Buyers and Buyers will reasonably cooperate with Sellers in
connection with any Tax investigation, audit or other Tax Proceeding.
SECTION 9. CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS.
The obligations of Buyers hereunder are subject to the satisfaction on or
prior to the Closing Date of the conditions set forth below (compliance with
which or the occurrence of which may be waived in whole or in part in a writing
executed by Buyers, unless such a waiver is prohibited by law).
9.1 Representations and Warranties True. The representations and
warranties made by Sellers in this Agreement that are qualified by materiality
or Material Adverse Effect shall be true and correct in all respects, and such
representations and warranties that are not so qualified shall be true and
correct in all material respects, in each case as of the Closing Date (other
than those representations and warranties that address matters as of a
particular date), with the same effect as though such representations and
warranties had been made or given on and as of such date, and Buyers shall have
received a certificate from each Seller dated as of the Closing Date signed by
an officer of such Seller as to the satisfaction of this condition.
9.2 Compliance with Agreement. Sellers shall have performed and complied
in all material respects with all of their obligations under this Agreement
which are to be performed or complied with by them prior to or on the Closing
Date (including the deliveries contemplated by Section 4.2(a)), and Buyers shall
have received a certificate from each Seller signed by an officer of such Seller
dated as of the Closing Date as to the satisfaction of this condition.
9.3 Bankruptcy Court Approval. The Bankruptcy Court shall have entered
the Sale Order, in substantially the form attached hereto as Schedule 7.1(a)(3),
and which Sale Order shall have been entered in a form reasonably satisfactory
to Buyers, and the Sale Order shall not have been reversed, stayed, modified, or
amended in any manner materially adverse to Buyers and shall have become a Final
Sale Order.
9.4 HSR Act. Any waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act, if applicable,
shall have expired or been terminated, and no action shall have been instituted
by any Governmental Authority challenging
41
or seeking to enjoin the consummation of the transactions contemplated by this
Agreement, which action shall not have been withdrawn or terminated.
9.5 No Order. No statute, rule, regulation, executive order, decree,
ruling, or preliminary or permanent injunction shall have been enacted, entered,
promulgated, or enforced by any Governmental Authority or arbitrator that
prohibits, restrains, enjoins, or restricts the consummation of the transactions
contemplated by this Agreement that has not been withdrawn or terminated; and no
claim, action, suit, arbitration, inquiry, Proceeding or investigation (each, an
"Action") shall be pending by or before any Governmental Authority or arbitrator
against Buyers or Sellers, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement; provided, however, that the
provisions of this Section 9.5 shall not apply if either Buyer has directly
solicited or encouraged any such Action.
9.6 Consents and Approvals. Sellers shall have obtained and delivered to
Buyers all Required Consents; provided that consents by the BLM shall be covered
by the closing condition in Section 9.10 and shall not be Required Consents for
purposes of this Section 9.6; and provided further that the consents to be
obtained from the Federal Communications Commission set forth on the Disclosure
Schedule, Section 5.3 shall not be Required Consents for purposes of this
Section 9.6.
9.7 No Material Adverse Effect. Since the date of this Agreement, no
event or occurrence shall have taken place which has had a Material Adverse
Effect; provided, however, that Sellers shall have the opportunity to cure such
Material Adverse Effect for a period of thirty (30) days from the date of such
event or occurrence.
9.8 No Casualty Loss. No Casualty Loss shall have occurred.
9.9 Bank Releases. Sellers shall have delivered to Buyers copies of the
Bank Guaranty Release and the DIP Guaranty Release.
9.10 BLM Approvals. Subject to Buyers' compliance with Section 7.12, the
BLM shall have approved the assignment of the Leases from each applicable Seller
to each applicable Buyer.
SECTION 10. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
The obligations of Sellers hereunder are subject to the satisfaction on or
prior to the Closing Date of the conditions set forth below (compliance with
which or the occurrence of which may be waived in whole or in part in a writing
executed by Sellers, unless such a waiver is prohibited by law).
10.1 Representations and Warranties True. The representations and
warranties made by Buyers in this Agreement that are qualified by materiality
shall be true and correct in all respects, and such representations and
warranties that are not so qualified shall be true and correct in all material
respects, in each case as of the Closing Date (other than those representations
and warranties that address matters as of a particular date), with the same
effect as though such representations and warranties had been made or given on
and as of such date,
42
and Sellers shall have received a certificate dated as of the Closing Date
signed by a manager of Buyer as to the satisfaction of this condition.
10.2 Compliance with Agreement. Buyers shall have performed and
complied in all material respects with all of their obligations under this
Agreement which are to be performed or complied with by them prior to or on the
Closing Date (including the deliveries contemplated by Section 4.2(b), and
Sellers shall have received a certificate dated as of the Closing Date signed by
a manager of each Buyer as to the satisfaction of this condition.
10.3 HSR Act. Any waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act, if applicable,
shall have expired or been terminated, and no action shall have been instituted
by any Governmental Authority challenging or seeking to enjoin the consummation
of the transactions contemplated by this Agreement, which action shall not have
been withdrawn or terminated.
10.4 No Order. No statute, rule, regulation, executive order, decree,
ruling, or preliminary or permanent injunction shall have been enacted, entered,
promulgated, or enforced by any Governmental Authority or arbitrator that
prohibits, restrains, enjoins, or restricts the consummation of the transactions
contemplated by this Agreement that has not been withdrawn or terminated; and no
Action shall be pending by or before any Governmental Authority or arbitrator
against Buyers or Sellers, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement; provided, however, that the
provisions of this Section 10.4 shall not apply if either Seller has directly
solicited or encouraged any such Action.
10.5 Bankruptcy Court Approval. The Bankruptcy Court shall have entered
the Sale Order in substantially the form attached hereto as Schedule 7.1(a)(3),
and such Sale Order shall not have been reversed, stayed, modified or amended in
any manner materially adverse to Sellers and shall have become a Final Sale
Order.
10.6 Bank Releases. Sellers shall have received the Bank Guaranty Release
and the DIP Guaranty Release.
SECTION 11. POST CLOSING.
11.1 Further Assurances.
(a) Each party shall, from time to time at the reasonable request of
another party hereto, and without further consideration, execute and deliver
such other instruments of sale, transfer, conveyance, assignment, clarification,
and termination, and take such other action as the party making the request may
reasonably require to effectuate the intentions of the parties and the
transactions contemplated hereunder and related hereto, including those required
to sell, transfer, convey and assign to, and vest in the applicable Buyer, and
to place the applicable Buyer in possession of the applicable Transferred
Assets, and to transfer, assign, or convey any Excluded Assets not owned by
Sellers to a Seller. Sellers intend to convey the Transferred Assets to the
applicable Buyer at Closing, and Buyers intend to assume the applicable Assumed
Liabilities at Closing; provided, however, if it is determined after Closing
that: (a) any of the Transferred Assets were not in fact conveyed to the
applicable Buyer, and that any Transferred Assets are incorrectly held in the
name of a Seller, (b) any Excluded Asset not owned by a Seller
43
was not conveyed to such Seller and that the title to such Excluded Asset is
incorrectly in the name of a Buyer or (c) any Assumed Liability was not properly
assumed by the applicable Buyer, then the parties shall take all such action
necessary to promptly and correctly convey any such Transferred Assets to the
applicable Buyer, or any such part of the Excluded Assets to the applicable
Seller, or to cause the applicable Buyer to promptly and correctly assume any
such Assumed Liabilities. To the extent all Required Consents from any
Governmental Authority have not been obtained by Sellers at or prior to the
Closing and Buyers, if applicable, elect to waive the condition to Closing set
forth in Section 9.6 above, Sellers shall reasonably cooperate with Buyers to
obtain all such Required Consents after the Closing Date.
(b) Buyers shall cooperate with Sellers to take such actions as may
be necessary to cause Buyers to assume, and Sellers to be released from any
liabilities or obligations in respect of, the Assumed Litigation, including such
action as may be necessary to substitute the applicable Buyer in place of the
applicable Seller as the party in each of the matters comprising the Assumed
Litigation.
11.2 Books and Records; Personnel. Except in the ordinary course of
business of such party regarding its own general records or in compliance with
such party's general record retention policies, until the seventh anniversary of
the Closing Date, Buyers and Sellers will maintain all books and records,
including electronic and computerized records, that relate to the pre-Closing
business, operations, assets and properties related to the Business, and shall
give each other party full and complete access during regular business hours and
on reasonable prior notice, to all such books, records, and personnel to the
extent reasonably required to enable such other party to satisfy its respective
obligations hereunder or under applicable law. In addition to the foregoing,
neither Sellers nor Buyers shall, without ninety (90) days prior written
notification (a "Destruction Notice") to the other parties, destroy any
pre-Closing books and records, including electronic and computerized records,
related to the Business, unless such destruction is to occur in the ordinary
course of business of the party destroying such books and records, or in
compliance with such party's general record retention policies. Following
receipt of a Destruction Notice, if a Seller or a Buyer, as applicable, advises
the other party or parties in writing within such ninety (90) day period, the
applicable party will promptly deliver the applicable books and records to the
other.
11.3 Laguna Xxxxxx. At Buyers' expense, Buyers agree to engage a third
party to provide duck hazing services at Laguna Xxxxxx in the manner currently
conducted for twelve months following the date of this Agreement and to
cooperate with Sellers to monitor the status of the conditions at Laguna Xxxxxx
to the extent reasonably requested by Sellers.
SECTION 12. INDEMNIFICATION.
12.1 Indemnification by Sellers. From and after the Closing, to the
fullest extent permitted by law, Sellers shall indemnify, defend and hold each
Buyer, and each Buyer's Affiliates, and their respective direct and indirect
shareholders, partners, officers, directors, members, representatives, managers,
employees, agents and assigns (each a "Buyers Indemnified Party") harmless, from
and against any and all Damages incurred by any Buyers Indemnified Party in
connection with or arising or resulting from any one or more of the following:
44
(a) any misrepresentation or breach of any representation or
warranty, without regard to qualifications as to Knowledge, materiality or
Material Adverse Effect contained in such representations and warranties
(provided that Sellers shall under no circumstances be obligated to indemnify,
defend or hold harmless any Buyers Indemnified Party pursuant to this Section
12.1(a) for any misrepresentation or breach of a representation or warranty made
by Sellers in this Agreement if, on the date hereof, a Buyer had Knowledge of
such misrepresentation or breach), or breach of any covenant or obligation of a
Seller under this Agreement which by its nature is intended to be performed
after Closing; provided, however, that for purposes of Sellers' indemnification
obligations pursuant to this Section 12.1(a) with respect to Environmental
Conditions which are a breach of Sellers' representations and warranties in
Section 5.13, Sellers shall not be deemed to be in breach of such
representations and warranties and shall have no obligation to indemnify Buyers
hereunder to the extent that Sellers did not have Knowledge as of date of this
Agreement of the Environmental Conditions giving rise to an indemnification
claim.
(b) any failure by Sellers to comply with any applicable transfer
laws or similar laws, and any claims against Buyer by creditors of Sellers or
any Affiliate of Sellers (except with respect to the Assumed Liabilities);
(c) the possession, ownership, use, or operation of the Transferred
Assets prior to Closing other than the Assumed Liabilities;
(d) the Excluded Liabilities;
(e) the enforcement of indemnification rights under this Section
12.1.
12.2 Indemnification by Buyers.
(a) From and after the Closing, to the fullest extent permitted by
law, IMNM shall indemnify, defend and hold each Seller, and each Sellers'
Affiliates, and their respective direct and indirect shareholders, partners,
officers, directors, members, representatives, managers, employees, agents and
assigns (each a "Sellers Indemnified Party") harmless, from and against any and
all Damages incurred by any Sellers Indemnified Party in connection with or
arising or resulting from any one or more of the following:
(i) any misrepresentation or breach of any representation or
warranty of IMNM, without regard to qualifications as to Knowledge or
materiality contained in such representations and warranties (provided that IMNM
shall under no circumstances be obligated to indemnify, defend or hold harmless
any Sellers Indemnified Party pursuant to this Section 12.2(a)(i) for any
misrepresentation or breach of a representation or warranty made by IMNM in this
Agreement if, on the date hereof, a Seller had Knowledge of such
misrepresentation or breach), or breach of any covenant or obligation of a IMNM
under this Agreement which by its nature is intended to be performed after
Closing;
(ii) any Environmental Condition at, on or under or arising from
any of the MPI Transferred Assets arising from IMNM's possession, ownership,
use, or operation of the MPI Transferred Assets after the Closing, including any
loss, property damage, injury to, or death of any third-party arising therefrom;
45
(iii) arising from IMNM's possession, ownership, use or
operation of the MPI Transferred Assets after the Closing (except that IMNM
shall have no duty to indemnify under this Section 12.2(a)(iii) with respect to
any Environmental Condition, which is covered exclusively by the provisions of
Section 12.2(a)(ii));
(iv) the IMNM Assumed Liabilities; and
(v) the enforcement of indemnification rights under this
Section 12.2(a).
(b) From and after the Closing, to the fullest extent permitted by
law, HBLLC shall indemnify, defend and hold each Sellers Indemnified Party
harmless, from and against any and all Damages incurred by any Sellers
Indemnified Party in connection with or arising or resulting from any one or
more of the following:
(i) any misrepresentation or breach of any representation or
warranty of HBLLC, without regard to qualifications as to Knowledge or
materiality contained in such representations and warranties (provided that
HBLLC shall under no circumstances be obligated to indemnify, defend or hold
harmless any Sellers Indemnified Party pursuant to this Section 12.2(b)(i) for
any misrepresentation or breach of a representation or warranty made by HBLLC in
this Agreement if, on the date hereof, a Seller had Knowledge of such
misrepresentation or breach), or breach of any covenant or obligation of HBLLC
under this Agreement which by its nature is intended to be performed after
Closing;
(ii) any Environmental Condition at, on or under or arising from
any of the EPI Transferred Assets arising from HBLLC's possession, ownership,
use, or operation of the EPI Transferred Assets after the Closing, including any
loss, property damage, injury to, or death of any third-party arising therefrom;
(iii) arising from HBLLC's possession, ownership, use or
operation of the EPI Transferred Assets after the Closing (except that HBLLC
shall have no duty to indemnify under this Section 12.2(b)(iii) with respect to
any Environmental Condition, which is covered exclusively by the provisions of
Section 12.2(b)(ii));
(iv) the HBLLC Assumed Liabilities; and
(v) the enforcement of indemnification rights under this
Section 12.2(b).
12.3 Indemnification Procedures. If any Buyers Indemnified Party or
Sellers Indemnified Party (each, an "Indemnified Party") receives notice of any
claim or the commencement of any Proceeding by any Person other than the parties
to this Agreement or their Affiliates (a "Third Party Claim") with respect to
which another party (each, an "Indemnifying Party") is obligated to indemnify
pursuant to Section 12.1 or Section 12.2, the Indemnified Party shall promptly
give the Indemnifying Party or Parties written notice thereof. Such notice shall
describe the claim in reasonable detail and shall indicate the amount (estimated
if necessary) of Damages that has been or may be sustained by the Indemnified
Party in connection therewith. In the event of a Third Party Claim, the
Indemnifying Party shall be
46
entitled to assume and control the defense, appeal or settlement of such Third
Party Claim and to appoint counsel of the Indemnifying Party's choice to
represent the Indemnifying Party in connection with such Third Party Claim. The
Indemnified Party shall cooperate with the Indemnifying Party and its counsel
and be allowed to participate in such defense and, at the Indemnified Party's
reasonable expense (provided that the Indemnifying Party shall pay the
reasonable attorney's fees of separate counsel for the Indemnified Party if the
Indemnified Party shall have reasonably concluded that there is a conflict of
interest that would make it inappropriate under applicable standards of
professional conduct to have common counsel), make available to the Indemnifying
Party all witnesses, records, materials, and information in the Indemnified
Party's possession or under the Indemnified Party's control relating thereto as
may be reasonably requested by the Indemnifying Party, and in contesting any
claim, demand or Proceeding which the Indemnifying Party defends, or, if
appropriate and related to the claim, demand or Proceeding in question, in
making any counterclaim against the Person asserting the Third Party Claim, or
any cross-complaint against any Person. The Indemnifying Party or its counsel
shall keep the Indemnified Party reasonably and periodically informed as to the
status of the Third Party Claim. If the Indemnifying Party fails to assume the
defense, appeal or settlement of any Third Party Claim within twenty (20)
Business Days after receipt of notice thereof from the Indemnified Party (or
sooner if the nature of the Third Party Claim so requires), the Indemnified
Party shall be entitled to undertake the defense, appeal or settlement of such
Third Party Claim and, if such Third Party Claim is one for which the
Indemnified Party is entitled to be indemnified under this Article 12, such
defense, appeal or settlement of such Third Party Claim shall be at the expense
of the Indemnifying Party. The Indemnifying Party shall obtain the prior written
approval of the Indemnified Party (which approval shall not be unreasonably
withheld) before entering into or making any settlement, compromise or admission
of the validity of any Third Party Claim or any liability in respect thereof if,
pursuant to or as a result of such settlement, compromise or admission,
injunctive or other equitable relief would be imposed against the Indemnified
Party.
12.4 Limitations on Indemnification Obligations; Exclusive Remedies.
(a) The aggregate liability of Sellers for all matters arising out of
or related to this Section 12 (including, without limitation, attorneys' fees
and other expenses incurred in connection with the defense of any claim pursuant
to Section 12.3) shall not exceed an amount equal to the Indemnification
Holdback. The aggregate liability of Buyers for all matters arising out of or
related to this Section 12 (including, without limitation, attorneys' fees and
other expense incurred in connection with the defense of any claim pursuant to
Section 12.3) shall not exceed an amount equal to $500,000; provided, however,
that such limitation shall not apply to matters arising out of or related to
Section 12.2(a)(ii), (iii) or (iv) or (b)(ii), (iii) or (iv).
(b) Sellers will be liable to the Buyers Indemnified Parties for
Damages that are indemnifiable pursuant to this Section 12 only to the extent
and in the amount that the aggregate amount of Damages that are indemnifiable
pursuant to this Section 12 to all Buyers Indemnified Parties exceeds $100,000
(at which point the Buyers Indemnified Parties shall be entitled to
indemnification amounts only in excess of such threshold amount). Buyers will be
liable to the Sellers Indemnified Parties for Damages that are indemnifiable
pursuant to this Section 12 only to the extent and in the amount that the
aggregate amount of Damages that are indemnifiable pursuant to this Section 12
to all Sellers Indemnified Parties exceeds $100,000 (at
47
which point the Sellers Indemnified Parties shall be entitled to indemnification
amounts only in excess of such threshold amount); provided, however, that such
limitation shall not apply to matters arising out of or related to Section
12.2(a)(ii), (iii) or (iv) or (b)(ii), (iii) or (iv).
(c) No party will have any obligation to indemnify any Sellers
Indemnified Party or Buyers Indemnified Party for any incidental, special or
consequential damages.
(d) To the extent any Damages of an Indemnified Party are reduced by
receipt of payment under insurance policies (such net payment, a
"Reimbursement"), such Reimbursement shall be credited against any such Damages.
If any Reimbursement is obtained subsequent to payment by an Indemnifying Party
in respect of any Damages, such Reimbursement shall be promptly paid over to the
Indemnifying Party.
(e) Except in the case of fraud, from and after the Closing, (x) the
indemnification provided in this Section 12 shall be the sole and exclusive
remedy of any party hereto arising out of, related to, in connection with or
with respect to this Agreement, including without limitation, any breaches of
covenants, representations or warranties, and indemnifiable events under this
Section 12, and (y) each of the parties hereby waives, to the fullest extent it
may lawfully do so, any other rights, causes of action, remedies or Damages that
it may have or assert against the other party in connection with this Agreement
and the transactions, if any, contemplated hereby, whether under statutory or
common law, any Environmental Law, or securities, trade regulation or other
Legal Requirements. Notwithstanding the foregoing, the limitations set forth in
this Section 12.4(e) shall not apply to claims by a Sellers Indemnified Party
under Section 12.2(a)(ii), (iii) or (iv) or (b)(ii), (iii) or (iv).
(f) Notwithstanding the other provisions of this Article 12, to the
extent, if at all, that New Mexico Statutes Annotated ("NMSA") 1978, Sec. 56-7-1
is applicable, no provision of this Agreement purports or shall be construed or
applied to require any Indemnifying Party to indemnify, hold harmless, insure or
defend any Indemnified Party against liability, claims, damages, losses or
expenses, including attorney fees, arising out of bodily injury to persons or
damage to property caused by or resulting from, in whole or in part, the
negligent act or omission of the Indemnified Party, its officers, employees or
agents.
(g) Notwithstanding the other provisions of this Article 12, to the
extent, if at all, that XXXX 0000, Sec. 56-7-2 is applicable, no provision of
this Agreement purports or shall be construed or applied to require any
Indemnifying Party to indemnify any Indemnified Party against loss or liability
for damages arising from the sole or concurrent negligence of such Indemnified
Party or its agents or employees, the sole or concurrent negligence of an
independent contractor who is directly responsible to such Indemnified Party, or
an accident that occurs in operations carried on at the direction or under the
supervision of such Indemnified Party or an employee or representative of such
Indemnified Party or in accordance with methods and means specified by such
Indemnified Party or employees or representatives of such Indemnified Party.
12.5 Release of Indemnification Holdback for Indemnification Claims. Upon
the resolution of any claim for Damages by any Buyers Indemnified Party pursuant
to this Section 12, an amount equal to the indemnification payment, if any, to
which such Buyers
48
Indemnified Party is entitled shall be released to Buyers from the
Indemnification Holdback. On the date which is six (6) months after the Closing
Date, Buyers and Sellers shall promptly cause the Xxxxxxx Money Escrow Agent to
pay to Sellers by wire transfer an amount equal to any amounts remaining in the
Indemnification Holdback Escrow Account (including any interest that has been
added thereto), less the amount of Buyers' reasonable estimate of any
outstanding claim or claims for Damages which, as of such date, have not yet
been fully and finally resolved. Any amounts remaining in the Indemnification
Holdback Escrow Account after any indemnification payments contemplated by this
Section 12 have been made by Sellers to any Buyers Indemnified Party shall be
released to Sellers at such time as all claims for Damages have been fully and
finally resolved and all indemnification payments contemplated by this Section
12 have been made by Sellers.
12.6 Survival. In the case of Buyers with respect to a breach by Sellers
of the representations and warranties set forth in Section 5.8 (with respect to
Environmental Permits) or Section 5.13 or, in the case of any Indemnified Party,
with respect to other environmental matters for which an Indemnifying Party is
obligated to indemnify an Indemnified Party pursuant to this Section 12, claims
for Damages arising out of or related to this Section 12 may be made by an
Indemnified Party for a period of six (6) calendar months following the Closing
Date, and in the case of any Indemnified Party with respect to any claims for
Damages arising out of or related to this Section 12 other than those
environmental claims contemplated by the immediately preceding sentence, such
claims may be made by an Indemnified Party for a period of three (3) calendar
months following the Closing Date; it being understood that in the event notice
of any claim for indemnification under this Section 12 shall have been given
before the end of such three (3) or six (6) calendar month period, as
applicable, the provision that is the subject of such claim shall survive with
respect to such claim and any related claims, until such time as such claim and
any related claims are fully and finally resolved. Notwithstanding the
foregoing, the limitations set forth in this Section 12.6 shall not apply to
claims by a Sellers Indemnified Party under Section 12.2(a)(ii), (iii) or (iv)
or (b)(ii), (iii) or (iv).
12.7 Treatment of Indemnification Payments. All indemnification payments
made pursuant to this Section 12 shall be treated by the parties as an
adjustment to the Purchase Price unless otherwise required by applicable law.
SECTION 13. TERMINATION, BREAK-UP FEE AND REMEDIES.
13.1 Termination. This Agreement may be terminated on or prior to the
Closing Date as follows:
(a) by Buyers if a material breach of any provision of this Agreement
has been committed by Sellers and such material breach (if and to the extent
such breach is capable of being cured by Sellers) is not cured within twenty
(20) Business Days after Buyers have notified Sellers in writing of Buyers'
intention to terminate this Agreement pursuant to this clause (a) or such breach
has not been waived by Buyers;
(b) by Sellers if a material breach of any provision of this
Agreement has been committed by Buyers and such material breach (if and to the
extent such breach is capable of being cured by Buyers) is not cured within
twenty (20) Business Days after Sellers have notified
49
Buyers in writing of Sellers' intention to terminate this Agreement pursuant to
this clause (b) or such breach has not been waived by Sellers;
(c) by Buyers if any condition in Section 9 has not been satisfied by
March 31, 2004 or if the satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Buyers to comply with
their obligations under this Agreement), and Buyers have not waived such
condition on or before such date;
(d) by Sellers if any condition in Section 10 has not been satisfied
by March 31, 2004 or if the satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Sellers to comply with
their obligations under this Agreement), and Sellers have not waived such
condition on or before such date;
(e) by Buyers if (1) the Bid Procedures Order, in substantially the
form attached hereto as Schedule 7.1(a)(2), and which form shall be reasonably
satisfactory to Buyers, has not been entered by the Bankruptcy Court by 60 days
after the date of this Agreement; provided, however, that Buyers shall not be
entitled to exercise its rights under this clause (1) (A) later than five (5)
Business Days after such date or (B) if the Bid Procedures Order has been
entered by the Bankruptcy Court in substantially such form prior to Buyers
exercising such rights, or 1. the Sale Order, in substantially the form attached
hereto as Schedule 7.1(a)(3), and which form shall be reasonably satisfactory to
Buyers has not been entered by the Bankruptcy Court by 120 days after the date
of this Agreement; provided, however, that Buyers shall not be entitled to
exercise their rights under this clause (2) (A) later than five (5) Business
Days after such date or (B) if the Sale Order has been entered by the Bankruptcy
Court in substantially such form prior to Buyers exercising such rights;
(f) by Buyers upon the consummation of a sale of the Transferred
Assets to a Person or Persons other than Buyers pursuant to the Auction;
(g) by Sellers if Sellers accept or are about to accept a bid
pursuant to the Auction from a Person or Persons other than Buyers, provided
that such termination shall be of no effect if Sellers do not accept such bid
during the Auction;
(h) automatically in the event Sellers' Bankruptcy Cases shall be
converted from cases under Chapter 11 to cases under Chapter 7 or dismissed, or
any Person shall be granted relief from the automatic stay with respect to any
material portion of the Transferred Assets at any time prior to Closing;
(i) by Buyers on or before one Business Day immediately preceding the
commencement date of the Auction, if the closing condition set forth in Section
9.10 shall not have been satisfied prior to one Business Day immediately
preceding the commencement date of the Auction;
(j) by mutual written consent of the parties hereto; or
(k) by Buyers, if (i) Sellers fail to deliver the Audited June 30
Statements to Buyers within ten days after the date of this Agreement or (ii)
such Audited June 30 Statements differ from the unaudited, consolidated balance
sheet of Sellers as of June 30, 2003, and the
50
related unaudited statement of operations and cash flows for the year then ended
in a manner materially adverse to the transactions contemplated by this
Agreement; provided that Buyers shall have waived the termination right set
forth in this Section 13.1(k) if (A) in the case of clause (i), Buyers shall not
have terminated this Agreement within three (3) Business Days after the ten-day
period set forth in clause (i), and (B) in the case of clause (ii), Buyers shall
not have terminated this Agreement within three (3) Business Days after Sellers
deliver the Audited June 30 Statements; or
(l) by Sellers, if (i) Buyers fail to deliver to Sellers, within ten
days after the date of this Agreement, a commitment letter to provide debt
financing in an amount sufficient to enable Buyers to consummate the
transactions contemplated by this Agreement or (ii) such commitment letter is
not in form and substance reasonably satisfactory to Sellers; provided that
Sellers shall have waived the termination right set forth in this Section
13.1(l) if (A) in the case of clause (i), Sellers shall not have terminated this
Agreement within three (3) Business Days after the ten-day period set forth in
clause (i), and (B) in the case of clause (ii), Sellers shall not have
terminated this Agreement within three (3) Business Days after Buyers deliver
such commitment letter.
In the event of termination by any party as provided above, written notice shall
promptly be given to the other party and, except as otherwise provided herein
and in the Auction and Bid Procedures, each party shall pay its own expenses
incident to this Agreement and the transactions contemplated hereby.
13.2 Break-Up Fee; Expense Reimbursement.
(a) After approval of the Bid Procedures Order by the Bankruptcy
Court, Sellers shall comply in all respects with the Auction and Bid Procedures
and the terms of this Agreement with respect to the payment of the Break-Up Fee
or Expense Reimbursement, as applicable.
(b) Sellers shall pay the Break-Up Fee to Buyers 1. within five (5)
Business Days after Buyers terminate this Agreement pursuant to Section 13.1(a)
or Section 13.1(f) or 1. if Sellers terminate this Agreement pursuant to Section
13.1(g), upon the closing of the sale of the Transferred Assets to a Person or
Persons other than Buyers pursuant to the Auction. Notwithstanding the
foregoing, if the Auction occurs prior to the date Buyers properly terminate
this Agreement pursuant to Section 13.1(a), (f) or (g), Sellers shall not be
obligated to pay the Break-Up Fee to Buyers pursuant to this Section 13.2(b) if
the closing condition set forth in Section 9.10 shall not have been waived by
Buyers or satisfied prior to one Business Day immediately preceding the
commencement date of the Auction.
(c) In the event that this Agreement is terminated by Buyers pursuant
to Section 13.1(c), Section 13.1(e)(2) or Section 13.1(h) (the "Expense
Termination Provisions"), Sellers shall be obligated to pay Buyers an aggregate
amount in cash equal to the total amount of reasonable, out-of-pocket fees and
expenses incurred by Buyers in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby up to
(but not in excess of) an aggregate amount equal to the amount of the Break-Up
Fee (the "Expense Reimbursement"); provided however that in no event shall
Buyers be entitled to
51
any Expense Reimbursement in connection with any termination pursuant to
Sections 13.1(c), (e)(2) or (h) if such termination relates to or results from
the failure to satisfy or waive, or the impossibility of satisfying, the
condition in Section 9.10). Sellers shall pay the Expense Reimbursement to
Buyers within five (5) Business Days after both (i) the termination of this
Agreement by Buyers pursuant to an Expense Termination Provision and (ii)
Sellers' receipt of written notice from Buyers describing the fees and expenses
which constitute the Expense Reimbursement in reasonable detail together with
invoices or other documentation of such fees and expenses. Notwithstanding the
foregoing, if the Auction occurs prior to the date Buyers properly terminate
this Agreement pursuant to Section 13.1(c) (e)(2) or (h), Sellers shall not be
obligated to pay the Expense Reimbursement to Buyers pursuant to this Section
13.2(c) if the closing condition set forth in Section 9.10 shall not have been
waived by Buyers or satisfied prior to one Business Day immediately preceding
the commencement date of the Auction.
13.3 Remedies.
(a) Except as set forth in subsection (b) of this Section 13.3, if
Closing does not occur, then within ten (10) days after termination of this
Agreement, Buyers and Sellers shall cause the Xxxxxxx Money Escrow Agent to
release the Xxxxxxx Money to Buyers by wire transfer of immediately available
funds to such account as Buyers shall designate in writing; provided, however,
that if this Agreement is terminated pursuant to Section 13.1(f), immediately
upon such termination, Sellers shall cause the Xxxxxxx Money Escrow Agent to
release the Xxxxxxx Money to Buyers.
(b) Notwithstanding anything else to the contrary contained herein,
if Sellers terminate this Agreement pursuant to Section 13.1(b), Sellers shall
be entitled to the Xxxxxxx Money as liquidated damages and not as a penalty and
Buyers and Sellers shall cause the Xxxxxxx Money Escrow Agent to release the
Xxxxxxx Money to Sellers by wire transfer of immediately available funds to such
account or accounts as Sellers shall designate in writing. In the event the
Closing is not held, except in the case of fraud, Sellers' right to the Xxxxxxx
Money shall be their sole and exclusive remedy for any Damages arising out of or
related to this Agreement or the transactions contemplated hereby. Upon receipt
of the Xxxxxxx Money and except as set forth above, Sellers hereby waive and
release each Buyers Indemnified Party from any and all Damages arising out of or
related to this Agreement or the transactions contemplated hereby.
(c) In the event the Closing does not occur, except in the case of
fraud, return of the Xxxxxxx Money and receipt of the Break-Up Fee, if
applicable, or the Expense Reimbursement, if applicable, shall be Buyers' sole
and exclusive remedy for any Damages arising out of or related to this Agreement
or the transactions contemplated hereby, and, upon receipt of the Xxxxxxx Money
and the Break-Up Fee, if applicable, or the Expense Reimbursement, if
applicable, Buyers hereby waive and release each Seller from any and all Damages
arising out of or related to this Agreement or the transactions contemplated
hereby.
13.4 Effect of Termination. A party desiring to terminate this Agreement
pursuant to Section shall give written notice thereof to each other party
specifying the provision hereof pursuant to which the Agreement is terminated
and this Agreement shall be terminated at the time such notice is given. Upon
termination, this Agreement shall forthwith become null and void and of no
further force and effect, without liability on the part of Buyers or Sellers or
any of
52
their respective Affiliates or representatives under this Agreement, except for
the provisions of Section 1 (Definitions), 5.10 (No Finder's Fee), 6.4 (Finder's
Fee), 7.2, only with respect to treatment of Confidential Information (Access),
7.6 (Public Announcements), Section 13 (Termination, Break-Up Fee and Remedies)
and Section 14 (Miscellaneous), each of which shall remain in full force and
effect. For the avoidance of doubt, the obligations of the parties under the
Xxxxxxx Money Escrow Agreement and the Confidentiality Agreement shall survive
any termination of this Agreement.
SECTION 14. MISCELLANEOUS.
14.1 Expenses. Except as otherwise provided herein and in the Auction and
Bid Procedures, each of the parties hereto agrees to be responsible for its own
costs incurred by it incident to the performance of its obligations hereunder,
without right of reimbursement from the other, whether or not the transactions
contemplated by this Agreement shall be consummated, including, without
limitation, those costs incident to the preparation of this Agreement, and the
fees and disbursements of legal counsel, accountants and consultants employed by
the respective parties in connection with the transactions contemplated by this
Agreement.
14.2 Inform of Litigation. During the period from the date of this
Agreement to the Closing Date, each party will promptly inform the other party
in writing of any litigation commenced or, to the Knowledge of such party,
Threatened against such party in respect of the transactions contemplated by
this Agreement or the Business.
14.3 Assignment. This Agreement may not be assigned by operation of law or
otherwise by Sellers without the prior written consent of Buyers, except that
Sellers shall have the right to assign any rights they have under this Agreement
after the Closing to the extent required by any confirmed plan of reorganization
in the Bankruptcy Cases. This Agreement may not be assigned by operation of law
or otherwise by either Buyer without the prior written consent of Sellers,
except that a Buyer may, without the prior written consent of Sellers, transfer
or assign by operation of law or otherwise this Agreement to any Affiliate or
subsidiary of such Buyer, provided that in the event a Buyer assigns all or a
portion of its rights and obligations under this Agreement, such Buyer hereby
unconditionally and irrevocably guarantees to Sellers the prompt and full
discharge by such subsidiary or Affiliate of all of such Buyer's obligations
under this Agreement in accordance with the terms hereof and Sellers shall not
be required to pursue any remedies against such subsidiary or Affiliate
hereunder prior to pursuing against such Buyer. Upon such transfer of rights by
a Buyer, such entities will have the right to enforce such Buyer's rights under
this Agreement, including without limitation the right to pursue any remedies
allowed under the terms of this Agreement against Sellers hereunder.
14.4 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, including all
matters of construction, validity and performance.
14.5 Amendment and Modification. No amendment, modification, waiver,
replacement, termination, or cancellation of any provision of this Agreement
will be valid, unless the same will be in writing and signed by Buyers and
Sellers.
53
14.6 Notices. All notices, requests, demands and other communications
hereunder shall be made in writing. Notices, requests, demands and other
communications shall be deemed to be duly given upon the date of delivery, if
delivered by hand; upon the second business day after mailing, if mailed by
certified or registered mail with postage prepaid; upon the date of fax
transmission, if delivered by fax (with confirmation confirmed); or upon the
first day after dispatch, if sent by nationally-recognized overnight courier as
follows:
If to Sellers:
Mississippi Potash, Inc.
Xxxx Xxxxxx, Inc.
X.X. Xxx 000
Xxxxx Xxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
Xxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. X'Xxxx
Fax: (000) 000-0000
If to Buyers:
Intrepid Mining NM LLC
XX Xxxxxx LLC
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx III
Fax: (000) 000-0000
With a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
54
or to such other addresses as any party may provide to the other
parties in writing.
14.7 Entire Agreement. Except for the Confidentiality Agreement (which
shall survive the execution and delivery of this Agreement), this Agreement,
together with the exhibits, the Disclosure Schedule, and the certificates,
agreements, documents, instruments and writings that are delivered pursuant
hereto, constitutes the entire agreement and understanding of Buyers and Sellers
in respect of the subject matter hereof and supersedes all prior understandings,
agreements, or representations by or among Buyers and Sellers, written or oral,
to the extent they relate in any way to the subject matter hereof or the
transactions contemplated hereby.
14.8 Successors. This Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and to their respective successors and
permitted assigns. In the event that a Chapter 11 trustee should be appointed
for Sellers, or in the event that Sellers' Chapter 11 case should be converted
to a case under Chapter 7, the obligations of Sellers hereunder shall be binding
upon such trustee or successor Chapter 7 estate.
14.9 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which together
shall constitute but one and the same instrument.
14.10 Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions hereof; provided
that if any provision of this Agreement, as applied to any party or to any
circumstance, is adjudged by a Governmental Authority or arbitrator not to be
enforceable in accordance with its terms, the parties agree that the
Governmental Authority or arbitrator making such determination will have the
power to modify the provision in a manner consistent with its objectives such
that it is enforceable, and/or to delete specific words or phrases, and in its
reduced form, such provision will then be enforceable and will be enforced.
14.11 Headings. The headings used in this Agreement are for convenience
only and shall not constitute a part of this Agreement.
14.12 Schedules. All of the exhibits and schedules attached hereto are
incorporated herein and made a part of this Agreement by reference. Matters
reflected in the Schedules and Exhibits to this Agreement are not necessarily
limited to matters required by this Agreement to be reflected in such Schedules
or Exhibits. Such additional matters are set forth for informational purposes
only and do not necessarily include other matters of a similar nature. A
disclosure made by the Sellers in any Section of this Agreement, Section of the
Disclosure Schedule or Exhibit that is sufficient on its face to reasonably
inform Buyers of information required to be disclosed in another Section of this
Agreement, Section of the Disclosure Schedule or Exhibit in order to avoid a
misrepresentation hereunder or thereunder shall be deemed, for all purposes of
this Agreement, to have been made with respect to such other Section of this
Agreement, Section of the Disclosure Schedule or Exhibit.
55
14.13 Jurisdiction. So long as the Bankruptcy Cases are pending, any
Proceeding between the parties hereto relating to this Agreement or to any
agreement, document or instrument delivered pursuant hereto or in connection
with the transactions contemplated hereby, or in any other manner arising out of
or relating to the transactions contemplated by or referenced in this Agreement
shall be commenced and maintained exclusively in the Bankruptcy Court, and the
parties hereto submit themselves unconditionally and irrevocably to the personal
jurisdiction of such court.
14.14 Disclosure of Tax Treatment and Structure. Notwithstanding anything
in this Agreement or the documents or agreements contemplated hereby to the
contrary, the parties (and each employee, representative or other agent of the
parties) may disclose to any and all persons, without limitation of any kind,
the U.S. federal income tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the parties relating to such tax
treatment and tax structure, such disclosure to be permissible as of the
earliest of (a) the date of the public announcement of discussions relating to
the transactions contemplated by this Agreement, (b) the date of public
announcement of the transactions contemplated by this Agreement, and (c) the
date of the execution of this Agreement. Furthermore, nothing contained in this
agreement shall restrict the ability of a party to consult a tax advisor of its
own choosing with respect to the transactions contemplated by this Agreement.
[Signature page follows]
56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MISSISSIPPI POTASH, INC.
Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXX XXXXXX, INC.
Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
INTREPID MINING NM LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Manager
XX XXXXXX LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Manager
SCHEDULES
Certain schedules to the Asset Purchase Agreement included herewith as
Exhibit 2.1 have been omitted as permitted under Item 601(b)(2) of Regulation
S-K. A list of the omitted schedules is set forth below.
Mississippi Chemical Corporation agrees to furnish supplementally to the
Securities and Exchange Commission a copy of any omitted schedule upon request.
Exhibit A Schedule of Permitted Encumbrances
Exhibit E Transition Services Agreement
Schedule 2.2 Assumed Litigation
Schedule 2.3 Excluded Assets
Schedule 5.0 Disclosure Schedule
Section 5.3: Consents and Approvals
Section 5.4: No Violations
Section 5.5: No Default
Section 5.6: Real Property
Section 5.8: Permits and Environmental Permits
Section 5.9: Litigation
Section 5.10: No Finder's Fee
Section 5.11: Financial Statements
Section 5.12: Legal Compliance
Section 5.13: Environmental
Section 5.14: Taxes
Section 5.15: Employee Matters
Section 5.16: Intellectual Property
Section 5.17: Contracts and Cure Amounts
Section 5.18: No Changes; Conduct of Business
Section 5.19: Water Rights
Schedule 7.l(a)(1) Auction and Bid Procedures
Schedule 7.l(a)(2) Bid Procedures Order
Schedule 7.l(a)(3) Sale Order
Schedule 7.4 Required Consents
Schedule 7.9(d) Employee Benefits
EXHIBIT B-1
Xxxxxxx Money Escrow Agreement
This Xxxxxxx Money Escrow Agreement (as the same may be amended or modified
from time to time and including any and all written instructions given to
"Escrow Agent" (hereinafter defined) pursuant hereto, this "Escrow Agreement")
is made and entered into as of November 26, 2003 by and among Mississippi
Potash, Inc., a Mississippi corporation ("MPI"), Xxxx Xxxxxx, Inc., a
Mississippi corporation ("EPI," and together with MPI, the "Sellers"), Intrepid
Mining NM LLC, a New Mexico limited liability company ("IMNM"), XX Xxxxxx LLC, a
New Mexico limited liability company ("HBLLC," and together with IMNM,
"Buyers"), and JPMorgan Chase Bank, a New York State bank with an office in
Houston, Xxxxxx County, Texas (the "Bank"). Sellers and Buyers are sometimes
collectively referred to herein as the "Other Parties."
W I T N E S S E T H:
Whereas, the Other Parties entered into the Asset Purchase Agreement, dated
as of November 26, 2003 (the "Agreement"), whereby Sellers agreed to sell,
assign, transfer and convey to Buyers certain of their properties, assets and
liabilities.
Whereas, in the Agreement, Buyers agreed to establish with the Bank an
interest-bearing joint order Xxxxxxx Money Escrow Account (as defined in the
Agreement).
Whereas, Sellers and Buyers have requested Bank to act in the capacity of
escrow agent under this Escrow Agreement, and Bank, subject to the terms and
conditions hereof, has agreed so to do.
Now, Therefore, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. Each of Sellers and Buyers hereby
appoints the Bank as the escrow agent under this Escrow Agreement (the Bank in
such capacity, the "Escrow Agent"), and Escrow Agent hereby accepts such
appointment.
2. Deposits. Upon execution of this Escrow Agreement, Buyers will
deliver to the Escrow Agent the sum of $1,500,000 (as said amount may increase
or decrease as a result of the investment and reinvestment thereof and as said
amount may be reduced by charges thereto and payments and setoffs therefrom to
compensate or reimburse Escrow Agent for amounts owing to it pursuant hereto,
the "Deposit") to be held by Escrow Agent in accordance with the terms hereof.
Subject to and in accordance with the terms and conditions hereof, Escrow Agent
agrees that it shall receive, hold in escrow, invest and reinvest and release or
distribute the Deposit. It is hereby expressly stipulated and agreed that all
interest and other earnings on the Deposit shall become a part of the Deposit
for all purposes, and that all losses resulting from the investment or
reinvestment thereof from time to time and all amounts charged thereto to
compensate or
1
reimburse the Escrow Agent from time to time for amounts owing to it hereunder
shall from the time of such loss or charge no longer constitute part of the
Deposit.
3. Investment of the Deposit. Escrow Agent shall invest and reinvest the
Deposit in the JPMorgan's Cash Escrow Product as detailed on Schedule III
hereto, unless otherwise instructed in writing by all of the Other Parties. Such
written instructions, if any, referred to in the foregoing sentence shall
specify the type and identity of the investments to be purchased and/or sold and
shall also include the name of the broker-dealer, if any, which the Other
Parties direct the Escrow Agent to use in respect of such investment, any
particular settlement procedures required, if any (which settlement procedures
shall be consistent with industry standards and practices), and such other
information as Escrow Agent may require. Escrow Agent shall not be liable for
failure to invest or reinvest funds absent sufficient written direction. Unless
Escrow Agent is otherwise directed in such written instructions, Escrow Agent
may use a broker-dealer of its own selection, including a broker-dealer owned by
or affiliated with Escrow Agent or any of its affiliates. The Escrow Agent or
any of its affiliates may receive reasonable compensation with respect to any
investment directed hereunder. It is expressly agreed and understood by the
parties hereto that Escrow Agent shall not in any way whatsoever be liable for
losses on any investments, including, but not limited to, losses from market
risks due to premature liquidation or resulting from other actions taken
pursuant to this Escrow Agreement.
Receipt, investment and reinvestment of the Deposit shall be confirmed by
Escrow Agent as soon as practicable by account statement, and any discrepancies
in any such account statement shall be noted by either Sellers or Buyers to
Escrow Agent within 30 calendar days after receipt thereof. Failure to inform
Escrow Agent in writing of any discrepancies in any such account statement
within said 30-day period shall conclusively be deemed confirmation of such
account statement in its entirety. For purposes of this paragraph, (a) each
account statement shall be deemed to have been received by the party to whom
directed on the earlier to occur of (i) actual receipt thereof and (ii) three
"Business Days" (hereinafter defined) after the deposit thereof in the United
States Mail, postage prepaid and (b) the term "Business Day" shall mean any day
of the year, excluding Saturday, Sunday and any other day on which national
banks are required or authorized to close in Houston, Texas.
4. Disbursement of Deposit. Escrow Agent is hereby authorized to make
disbursements of the Deposit only as follows:
(a) Upon receipt of written instructions signed by both Sellers and
Buyers and otherwise in form and substance reasonably satisfactory to Escrow
Agent, in accordance with such instructions;
(b) As permitted by this Escrow Agreement, to Escrow Agent; and
(c) Into the registry of the court in accordance with Sections 8 or 15
hereof.
Notwithstanding anything contained herein or elsewhere to the contrary, the
Other Parties hereby expressly agree that the Escrow Agent shall be entitled to
charge the Deposit for, and pay and set-off from the Deposit, any and all
amounts, if any, then owing to the Escrow Agent pursuant
2
to this Escrow Agreement prior to the disbursement of the Deposit in
accordance with clauses (a) through (c) of this Section 4.
5. Tax Matters. Sellers and Buyers shall provide Escrow Agent with their
respective taxpayer identification numbers on the signature page hereto. Failure
to provide such may prevent or delay disbursements from the Deposit and may also
result in the assessment of a penalty and Escrow Agent's being required to
withhold tax on any interest or other income earned on the Deposit. All income
earned on the Deposit shall be reported as taxable income of Buyers, and Buyers
shall pay all taxes due on income accrued thereon. Any payments of income shall
be subject to applicable withholding regulations then in force in the United
States or any other jurisdiction, as applicable.
6. Scope of Undertaking. Escrow Agent's duties and responsibilities in
connection with this Escrow Agreement shall be purely ministerial and shall be
limited to those expressly set forth in this Escrow Agreement. Escrow Agent is
not a principal, participant or beneficiary in any transaction underlying this
Escrow Agreement and shall have no duty to inquire beyond the terms and
provisions hereof. Escrow Agent shall have no responsibility or obligation of
any kind in connection with this Escrow Agreement or the Deposit and shall not
be required to deliver the Deposit or any part thereof or take any action with
respect to any matters that might arise in connection therewith, other than to
receive, hold, invest, reinvest and deliver the Deposit as herein provided.
Without limiting the generality of the foregoing, it is hereby expressly agreed
and stipulated by the parties hereto that Escrow Agent shall not be required to
exercise any discretion hereunder and shall have no investment or management
responsibility and, accordingly, shall have no duty to, or liability for its
failure to, provide investment recommendations or investment advice to the Other
Parties or any of them. Escrow Agent shall not be liable for any error in
judgment, any act or omission, any mistake of law or fact, or for anything it
may do or refrain from doing in connection herewith, except for, subject to
Section 7 hereinbelow, its own willful misconduct or gross negligence. It is the
intention of the parties hereto that Escrow Agent shall never be required to
use, advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.
7. Reliance; Liability. Escrow Agent may rely on, and shall not be
liable for acting or refraining from acting in accordance with, any written
notice, instruction or request or other paper furnished to it hereunder or
pursuant hereto and believed by it to have been signed or presented by the
proper party or parties. Escrow Agent shall be responsible for holding,
investing, reinvesting and disbursing the Deposit pursuant to this Escrow
Agreement; provided, however, that in no event shall Escrow Agent be liable for
any lost profits, lost savings or other special, exemplary, consequential or
incidental damages in excess of Escrow Agent's fee hereunder and provided,
further, that Escrow Agent shall have no liability for any loss arising from any
cause beyond its control, including, but not limited to, the following: (a) acts
of God, force majeure, including, without limitation, war (whether or not
declared or existing), revolution, insurrection, riot, civil commotion,
accident, fire, explosion, stoppage of labor and strikes; (b) the act, failure
or neglect of any Other Party or any agent or correspondent; (c) any delay,
error, omission or default of any mail, courier, telegraph, cable or wireless
agency or operator; or (d) the acts or edicts of any government or governmental
agency or other group or entity exercising governmental powers. Escrow Agent is
not responsible or liable in any manner
3
whatsoever for the sufficiency, correctness, genuineness or validity of the
subject matter of this Escrow Agreement or any part hereof or for the
transaction or transactions requiring or underlying the execution of this Escrow
Agreement, the form or execution hereof or for the identity or authority of any
person (other than any person acting on behalf of Escrow Agent) executing this
Escrow Agreement or any part hereof or depositing the Deposit.
8. Right of Interpleader. Should any controversy arise involving the
parties hereto or any of them or any other person, firm or entity with respect
to this Escrow Agreement or the Deposit, or should a substitute escrow agent
fail to be designated as provided in Section 15 hereof, or if Escrow Agent
should be in doubt as to what action to take, Escrow Agent shall have the right,
but not the obligation, either to (a) withhold delivery of the Deposit until the
controversy is resolved, the conflicting demands are withdrawn or its doubt is
resolved or (b) institute a petition for interpleader in any court of competent
jurisdiction to determine the rights of the parties hereto. Should a petition
for interpleader be instituted, or should Escrow Agent be threatened with
litigation or become involved in litigation in any manner whatsoever in
connection with this Escrow Agreement or the Deposit, the Other Parties hereby
jointly and severally agree to reimburse Escrow Agent for its reasonable
attorneys' fees and any and all other expenses, losses, costs and damages
incurred by Escrow Agent in connection with or resulting from such threatened or
actual litigation prior to any disbursement hereunder.
9. Indemnification. The Other Parties hereby jointly and severally agree
to indemnify and defend the Escrow Agent, its officers, directors, partners,
employees and agents (each herein called an "Indemnified Party") against, and
hold each Indemnified Party harmless from, any and all losses, liabilities and
expenses, including, but not limited to, reasonable fees and expenses of in
house or outside counsel, court costs, costs, damages and claims, costs of
investigation, litigation, tax liability (other than for income taxes on fees
earned hereunder) and loss on investments suffered or incurred by any
Indemnified Party in connection with or arising from or out of (i) the
execution, delivery or performance of this Escrow Agreement or (ii) the
compliance or attempted compliance by any Indemnified Party with any instruction
or direction upon which the Escrow Agent is authorized to rely under this Escrow
Agreement, except to the extent that any such loss, liability or expense may
result from the willful misconduct or gross negligence of such Indemnified
Party. IT IS THE EXPRESS INTENT OF EACH OF SELLERS AND BUYERS TO INDEMNIFY EACH
OF THE INDEMNIFIED PARTIES FOR, AND HOLD THEM HARMLESS AGAINST, THEIR OWN
NEGLIGENT ACTS OR OMISSIONS.
10. Compensation and Reimbursement of Expenses. Sellers, on the one hand,
and Buyers, on the other hand, hereby agree to pay one-half of the fees of
Escrow Agent for its services hereunder in accordance with Escrow Agent's fee
schedule as attached as Schedule I hereto as in effect from time to time and to
pay one-half of all expenses incurred by Escrow Agent in connection with the
performance of its duties and enforcement of its rights hereunder and otherwise
in connection with the preparation, operation, administration and enforcement of
this Escrow Agreement, including, without limitation, reasonable attorneys'
fees, brokerage costs and related expenses incurred by Escrow Agent. The
foregoing notwithstanding, the Other Parties shall be jointly and severally
liable to Escrow Agent for the payment of all such fees and expenses. In the
event the Other Parties for any reason fail to pay any such fees and expenses as
4
and when the same are due, such unpaid fees and expenses shall be charged to and
set-off and paid from the Deposit by Escrow Agent upon two (2) Business Days
notice to the Other Parties.
11. Funds Transfer. In the event funds transfer instructions are given by
both Sellers and Buyers pursuant to Section 4(a) (other than in writing at the
time of execution of this Escrow Agreement), whether in writing or by facsimile,
the Escrow Agent is authorized to seek confirmation of such instructions by
telephone call-back to the person or person designated on Schedule II hereto,
and the Escrow Agent may rely upon the confirmations of anyone purporting to be
the person or persons so designated. If the Escrow Agent is unable to contact
any of the authorized representatives identified in Schedule II for either
Sellers or Buyers, the Escrow Agent is hereby authorized to seek confirmation of
such instructions by telephone call-back to any one or more the executive
officers or managers of such Other Party ("Executive Officers"), which shall
include the titles of Vice President, as the Escrow Agent may select. The
persons and telephone numbers for call-backs may be changed only in writing
actually received and acknowledged by the Escrow Agent. The parties to this
Escrow Agreement acknowledge that such security procedure is commercially
reasonable.
It is understood that the Escrow Agent and the beneficiary's bank in any
funds transfer may rely solely upon any account numbers or similar identifying
number provided by both Sellers and Buyers, to identify (i) the beneficiary,
(ii) the beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may
apply any of the Deposit for any payment order it executes using any such
identifying number, even where its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank, designated.
12. Notices. Any notice or other communication required or permitted to
be given under this Escrow Agreement by any party hereto to any other party
hereto shall be considered as properly given if in writing and (a) delivered
against receipt therefore, (b) mailed by registered or certified mail, return
receipt requested and postage prepaid or (c) sent by facsimile, in each case to
the address or fax number, as the case may be, set forth below:
If to Escrow Agent:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx
ITS/Escrow Section
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Sellers:
Mississippi Potash, Inc.
Xxxx Xxxxxx, Inc.
X.X. Xxx 000
Xxxxx Xxxx, Xxxxxxxxxxx 00000
5
Attention: Corporate Secretary
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Xxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. X'Xxxx
Fax: (000) 000-0000
If to Buyers:
Intrepid Mining NM LLC
XX Xxxxxx LLC
000 00/xx/ Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx III
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Except to the extent otherwise provided in the second paragraph of Section 3
hereinabove, delivery of any communication given in accordance herewith shall be
effective only upon actual receipt thereof by the party or parties to whom such
communication is directed. Any party to this Escrow Agreement may change the
address to which communications hereunder are to be directed by giving written
notice to the other party or parties hereto in the manner provided in this
section. All signatures of the parties to this Escrow Agreement may be
transmitted by facsimile, and such facsimile will, for all purposes, be deemed
to be the original signature of such party whose signature it reproduces, and
will be binding upon such party.
6
13. Consultation with Legal Counsel. Escrow Agent may consult with its
counsel or other counsel satisfactory to it concerning any question relating to
its duties or responsibilities hereunder or otherwise in connection herewith and
shall not be liable for any action taken, suffered or omitted by it in good
faith upon the advice of such counsel.
14. Choice of Laws; Cumulative Rights. This Escrow Agreement shall be
construed under, and governed by, the laws of the State of Texas, excluding,
however, (a) its choice of law rules and (b) the portions of the Texas Trust
Code Sec. 111.001, et seq. of the Texas Property Code concerning fiduciary
duties and liabilities of trustees. All of Escrow Agent's rights hereunder are
cumulative of any other rights it may have at law, in equity or otherwise. The
parties hereto agree that the forum for resolution of any dispute arising under
this Escrow Agreement shall be Xxxxxx County, Texas, and each of the Other
Parties hereby consents, and submits itself, to the jurisdiction of any state or
federal court sitting in Xxxxxx County, Texas.
15. Resignation. Escrow Agent may resign hereunder upon ten (10) Business
Days prior written notice to the Other Parties. Upon the effective date of such
resignation, Escrow Agent shall deliver the Deposit to any substitute escrow
agent designated by the Other Parties in writing. If the Other Parties fail to
designate a substitute escrow agent within ten (10) Business Days after the
giving of such notice, Escrow Agent may institute a petition for interpleader.
Escrow Agent's sole responsibility after such 10-Business Day notice period
expires shall be to hold the Deposit (without any obligation to reinvest the
same) and to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time of delivery Escrow Agent's obligations
hereunder shall cease and terminate.
16. Assignment. This Escrow Agreement may not be assigned by operation of
law or otherwise by Sellers without the prior written consent of Buyers and
Escrow Agent (such assigns of Sellers to which Escrow Agent and Buyers consent,
if any, "Sellers' Assigns") except that Sellers shall have the right to assign
any rights they have under this Escrow Agreement after the closing of the
transactions contemplated by the Agreement as required by any plan of
reorganization filed in the Bankruptcy Cases, as defined in the Agreement (such
assigns, the "Bankruptcy Assigns". This Escrow Agreement may not be assigned by
operation of law or otherwise by Buyers without the prior written consent of
Sellers and Escrow Agent (such assigns of Buyers to which Escrow Agent and
Sellers consent, if any, "Buyers' Assigns" and together with Sellers' Assigns
and the Bankruptcy Assigns, the "Permitted Assigns").
17. Severability. If one or more of the provisions hereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and this Escrow Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and the remaining provisions hereof shall be given full force and
effect.
18. Termination. This Escrow Agreement shall terminate upon the
disbursement, in accordance with Sections 4 or 15 hereof, of the Deposit in
full; provided, however, that in the event all fees, expenses, costs and other
amounts required to be paid to Escrow Agent hereunder are not fully and finally
paid prior to termination, the provisions of Section 10 hereof shall
7
survive the termination hereof and, provided further, that the provisions of
Section 8 and Section 9 shall, in any event, survive the termination hereof.
19. General. The section headings contained in this Escrow Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement. This Escrow Agreement and any
affidavit, certificate, instrument, agreement or other document required to be
provided hereunder may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
but one and the same instrument. Unless the context shall otherwise require, the
singular shall include the plural and vice-versa, and each pronoun in any gender
shall include all other genders. The terms and provisions of this Escrow
Agreement constitute the entire agreement among the parties hereto in respect of
the subject matter hereof (except for the Agreement among the Other Parties),
and neither the Other Parties nor Escrow Agent has relied on any representations
or agreements of the other with respect to this Escrow Agreement, except as
specifically set forth herein. This Escrow Agreement or any provision hereof may
be amended, modified, waived or terminated only by written instrument duly
signed by the parties hereto. This Escrow Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors,
trustees, receivers and Permitted Assigns. This Escrow Agreement is for the sole
and exclusive benefit of the Other Parties and the Escrow Agent, and nothing in
this Escrow Agreement, express or implied, is intended to confer or shall be
construed as conferring upon any other person any rights, remedies or any other
type or types of benefits.
[Remainder of page intentionally left blank]
8
In Witness Whereof, the parties hereto have executed this Escrow Agreement
to be effective as of the date first above written.
MISSISSIPPI POTASH, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"MPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _______________
Under the penalties of perjury, Mississippi Potash, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
9
XXXX XXXXXX, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"EPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _______________
Under the penalties of perjury, Xxxx Xxxxxx, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
10
INTREPID MINING NM LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"IMNM"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _______________
Under the penalties of perjury Intrepid Mining NM LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
11
XX XXXXXX LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"HBLLC"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _______________
Under the penalties of perjury XX Xxxxxx LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
12
JPMORGAN CHASE BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"Escrow Agent"
13
Exhibit B-2
Indemnification Holdback Escrow Agreement
This Indemnification Holdback Escrow Agreement (as the same may be amended
or modified from time to time and including any and all written instructions
given to "Escrow Agent" (hereinafter defined) pursuant hereto, this "Escrow
Agreement") is made and entered into as of March 1, 2004 by and among
Mississippi Potash, Inc., a Mississippi corporation ("MPI"), Xxxx Xxxxxx, Inc.,
a Mississippi corporation ("EPI," and together with MPI, the "Sellers"),
Intrepid Mining NM LLC, a New Mexico limited liability company ("IMNM"), XX
Xxxxxx LLC, a New Mexico limited liability company ("HBLLC," and together with
IMNM, "Buyers"), and JPMorgan Chase Bank, a New York State bank with an office
in Houston, Xxxxxx County, Texas (the "Bank"). Sellers and Buyers are sometimes
collectively referred to herein as the "Other Parties".
W I T N E S S E T H :
Whereas, the Other Parties entered into the Asset Purchase Agreement, dated
as of November 26, 2003 (the "Agreement"), whereby Sellers agreed to sell,
assign, transfer and convey to Buyers certain of their properties, assets and
liabilities.
Whereas, in the Agreement, Buyers agreed to establish with the Bank an
interest-bearing joint order escrow account for the Indemnification Holdback (as
defined in the Agreement).
Whereas, Sellers and Buyers have requested Bank to act in the capacity of
escrow agent under this Escrow Agreement, and Bank, subject to the terms and
conditions hereof, has agreed so to do.
Now, Therefore, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. Each of Sellers and Buyers hereby
appoints the Bank as the escrow agent under this Escrow Agreement (the Bank in
such capacity, the "Escrow Agent"), and Escrow Agent hereby accepts such
appointment.
2. Deposits. Upon execution of this Escrow Agreement, Buyers will deliver
to the Escrow Agent the sum of $500,000 (as said amount may increase or decrease
as a result of the investment and reinvestment thereof and as said amount may be
reduced by charges thereto and payments and setoffs therefrom to compensate or
reimburse Escrow Agent for amounts owing to it pursuant hereto, the "Deposit")
to be held by Escrow Agent in accordance with the terms hereof. Subject to and
in accordance with the terms and conditions hereof, Escrow Agent agrees that it
shall receive, hold in escrow, invest and reinvest and release or distribute the
Deposit. It is hereby expressly stipulated and agreed that all interest and
other earnings on the Deposit shall become a part of the Deposit for all
purposes, and that all losses resulting from the investment or reinvestment
thereof from time to time and all amounts charged thereto to compensate or
1
reimburse the Escrow Agent from time to time for amounts owing to it hereunder
shall from the time of such loss or charge no longer constitute part of the
Deposit.
3. Investment of the Deposit. Escrow Agent shall invest and reinvest the
Deposit in the JPMorgan's Cash Escrow Product as detailed on Schedule III
hereto, unless otherwise instructed in writing by all of the Other Parties. Such
written instructions, if any, referred to in the foregoing sentence shall
specify the type and identity of the investments to be purchased and/or sold and
shall also include the name of the broker-dealer, if any, which the Other
Parties direct the Escrow Agent to use in respect of such investment, any
particular settlement procedures required, if any (which settlement procedures
shall be consistent with industry standards and practices), and such other
information as Escrow Agent may require. Escrow Agent shall not be liable for
failure to invest or reinvest funds absent sufficient written direction. Unless
Escrow Agent is otherwise directed in such written instructions, Escrow Agent
may use a broker-dealer of its own selection, including a broker-dealer owned by
or affiliated with Escrow Agent or any of its affiliates. The Escrow Agent or
any of its affiliates may receive reasonable compensation with respect to any
investment directed hereunder. It is expressly agreed and understood by the
parties hereto that Escrow Agent shall not in any way whatsoever be liable for
losses on any investments, including, but not limited to, losses from market
risks due to premature liquidation or resulting from other actions taken
pursuant to this Escrow Agreement.
Receipt, investment and reinvestment of the Deposit shall be confirmed by
Escrow Agent as soon as practicable by account statement, and any discrepancies
in any such account statement shall be noted by either Sellers or Buyers to
Escrow Agent within 30 calendar days after receipt thereof. Failure to inform
Escrow Agent in writing of any discrepancies in any such account statement
within said 30-day period shall conclusively be deemed confirmation of such
account statement in its entirety. For purposes of this paragraph, (a) each
account statement shall be deemed to have been received by the party to whom
directed on the earlier to occur of (i) actual receipt thereof and (ii) three
"Business Days" (hereinafter defined) after the deposit thereof in the United
States Mail, postage prepaid and (b) the term "Business Day" shall mean any day
of the year, excluding Saturday, Sunday and any other day on which national
banks are required or authorized to close in Houston, Texas.
4. Disbursement of Deposit. Escrow Agent is hereby authorized to make
disbursements of the Deposit only as follows:
(a) Upon receipt of written instructions signed by both Sellers and Buyers
and otherwise in form and substance reasonably satisfactory to Escrow Agent, in
accordance with such instructions;
(b) As permitted by this Escrow Agreement, to Escrow Agent; and
(c) Into the registry of the court in accordance with Sections 8 or 15
hereof.
Notwithstanding anything contained herein or elsewhere to the contrary, the
Other Parties hereby expressly agree that the Escrow Agent shall be entitled to
charge the Deposit for, and pay and set-off from the Deposit, any and all
amounts, if any, then owing to the Escrow Agent pursuant
2
to this Escrow Agreement prior to the disbursement of the Deposit in accordance
with clauses (a) through (c) of this Section 4.
5. Tax Matters. Sellers and Buyers shall provide Escrow Agent with their
respective taxpayer identification numbers on the signature page hereto. Failure
to provide such may prevent or delay disbursements from the Deposit and may also
result in the assessment of a penalty and Escrow Agent's being required to
withhold tax on any interest or other income earned on the Deposit. All income
earned on the Deposit shall be reported as taxable income of Sellers, and
Sellers shall pay all taxes due on income accrued thereon. Any payments of
income shall be subject to applicable withholding regulations then in force in
the United States or any other jurisdiction, as applicable.
6. Scope of Undertaking. Escrow Agent's duties and responsibilities in
connection with this Escrow Agreement shall be purely ministerial and shall be
limited to those expressly set forth in this Escrow Agreement. Escrow Agent is
not a principal, participant or beneficiary in any transaction underlying this
Escrow Agreement and shall have no duty to inquire beyond the terms and
provisions hereof. Escrow Agent shall have no responsibility or obligation of
any kind in connection with this Escrow Agreement or the Deposit and shall not
be required to deliver the Deposit or any part thereof or take any action with
respect to any matters that might arise in connection therewith, other than to
receive, hold, invest, reinvest and deliver the Deposit as herein provided.
Without limiting the generality of the foregoing, it is hereby expressly agreed
and stipulated by the parties hereto that Escrow Agent shall not be required to
exercise any discretion hereunder and shall have no investment or management
responsibility and, accordingly, shall have no duty to, or liability for its
failure to, provide investment recommendations or investment advice to the Other
Parties or any of them. Escrow Agent shall not be liable for any error in
judgment, any act or omission, any mistake of law or fact, or for anything it
may do or refrain from doing in connection herewith, except for, subject to
Section 7 hereinbelow, its own willful misconduct or gross negligence. It is the
intention of the parties hereto that Escrow Agent shall never be required to
use, advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.
7. Reliance; Liability. Escrow Agent may rely on, and shall not be liable
for acting or refraining from acting in accordance with, any written notice,
instruction or request or other paper furnished to it hereunder or pursuant
hereto and believed by it to have been signed or presented by the proper party
or parties. Escrow Agent shall be responsible for holding, investing,
reinvesting and disbursing the Deposit pursuant to this Escrow Agreement;
provided, however, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action and
provided, further, that Escrow Agent shall have no liability for any loss
arising from any cause beyond its control, including, but not limited to, the
following: (a) acts of God, force majeure, including, without limitation, war
(whether or not declared or existing), revolution, insurrection, riot, civil
commotion, accident, fire, explosion, stoppage of labor and strikes; (b) the
act, failure or neglect of any Other Party or any agent or correspondent; (c)
any delay, error, omission or default of any mail, courier, telegraph, cable or
wireless agency or operator; or (d) the acts or edicts of any government or
governmental agency or other group or entity exercising
3
governmental powers. Escrow Agent is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity of the
subject matter of this Escrow Agreement or any part hereof or for the
transaction or transactions requiring or underlying the execution of this Escrow
Agreement, the form or execution hereof or for the identity or authority of any
person (other than any person acting on behalf of Escrow Agent) executing this
Escrow Agreement or any part hereof or depositing the Deposit.
8. Right of Interpleader. Should any controversy arise involving the
parties hereto or any of them or any other person, firm or entity with respect
to this Escrow Agreement or the Deposit, or should a substitute escrow agent
fail to be designated as provided in Section 15 hereof, or if Escrow Agent
should be in doubt as to what action to take, Escrow Agent shall have the right,
but not the obligation, either to (a) withhold delivery of the Deposit until the
controversy is resolved, the conflicting demands are withdrawn or its doubt is
resolved or (b) institute a petition for interpleader in any court of competent
jurisdiction to determine the rights of the parties hereto. Should a petition
for interpleader be instituted, or should Escrow Agent be threatened with
litigation or become involved in litigation in any manner whatsoever in
connection with this Escrow Agreement or the Deposit, the Other Parties hereby
jointly and severally agree to reimburse Escrow Agent for its reasonable
attorneys' fees and any and all other expenses, losses, costs and damages
incurred by Escrow Agent in connection with or resulting from such threatened or
actual litigation prior to any disbursement hereunder.
9. Indemnification. The Other Parties hereby jointly and severally agree
to indemnify and defend the Escrow Agent, its officers, directors, partners,
employees and agents (each herein called an "Indemnified Party") against, and
hold each Indemnified Party harmless from, any and all losses, liabilities and
expenses, including, but not limited to, reasonable fees and expenses of in
house or outside counsel, court costs, costs, damages and claims, costs of
investigation, litigation, tax liability (other than for income taxes on fees
earned hereunder) and loss on investments suffered or incurred by any
Indemnified Party in connection with or arising from or out of (i) the
execution, delivery or performance of this Escrow Agreement or (ii) the
compliance or attempted compliance by any Indemnified Party with any instruction
or direction upon which the Escrow Agent is authorized to rely under this Escrow
Agreement, except to the extent that any such loss, liability or expense may
result from the willful misconduct or gross negligence of such Indemnified
Party. IT IS THE EXPRESS INTENT OF EACH OF SELLERS AND BUYERS TO INDEMNIFY EACH
OF THE INDEMNIFIED PARTIES FOR, AND HOLD THEM HARMLESS AGAINST, THEIR OWN
NEGLIGENT ACTS OR OMISSIONS.
10. Compensation and Reimbursement of Expenses. Sellers, on the one hand,
and Buyers, on the other hand, hereby agree to pay one-half of the fees of
Escrow Agent for its services hereunder in accordance with Escrow Agent's fee
schedule as attached as Schedule I hereto as in effect from time to time and to
pay one-half of all expenses incurred by Escrow Agent in connection with the
performance of its duties and enforcement of its rights hereunder and otherwise
in connection with the preparation, operation, administration and enforcement of
this Escrow Agreement, including, without limitation, reasonable attorneys'
fees, brokerage costs and related expenses incurred by Escrow Agent. The
foregoing notwithstanding, the Other Parties shall be jointly and severally
liable to Escrow Agent for the payment of all such fees and expenses. In the
event the Other Parties for any reason fail to pay any such fees and expenses as
4
and when the same are due, such unpaid fees and expenses shall be charged to and
set-off and paid from the Deposit by Escrow Agent upon two (2) Business Days
notice to the Other Parties.
11. Funds Transfer. In the event funds transfer instructions are given by
both Sellers and Buyers pursuant to Section 4(a) (other than in writing at the
time of execution of this Escrow Agreement), whether in writing or by facsimile,
the Escrow Agent is authorized to seek confirmation of such instructions by
telephone call-back to the person or person designated on Schedule II hereto,
and the Escrow Agent may rely upon the confirmations of anyone purporting to be
the person or persons so designated. If the Escrow Agent is unable to contact
any of the authorized representatives identified in Schedule II for either
Sellers or Buyers, the Escrow Agent is hereby authorized to seek confirmation of
such instructions by telephone call-back to any one or more the executive
officers or managers of such Other Party ("Executive Officers"), which shall
include the titles of Vice President, as the Escrow Agent may select. The
persons and telephone numbers for call-backs may be changed only in writing
actually received and acknowledged by the Escrow Agent. The parties to this
Escrow Agreement acknowledge that such security procedure is commercially
reasonable.
It is understood that the Escrow Agent and the beneficiary's bank in any
funds transfer may rely solely upon any account numbers or similar identifying
number provided by both Sellers and Buyers, to identify (i) the beneficiary,
(ii) the beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may
apply any of the Deposit for any payment order it executes using any such
identifying number, even where its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank, designated.
12. Notices. Any notice or other communication required or permitted to be
given under this Escrow Agreement by any party hereto to any other party hereto
shall be considered as properly given if in writing and (a) delivered against
receipt therefore, (b) mailed by registered or certified mail, return receipt
requested and postage prepaid or (c) sent by facsimile, in each case to the
address or fax number, as the case may be, set forth below:
If to Escrow Agent:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx
ITS/Escrow Section
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Sellers:
Mississippi Potash, Inc.
Xxxx Xxxxxx, Inc.
X.X. Xxx 000
Xxxxx Xxxx, Xxxxxxxxxxx 00000
5
Attention: Corporate Secretary
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Xxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. X'Xxxx
Fax: (000) 000-0000
If to Buyers:
Intrepid Mining NM LLC
XX Xxxxxx LLC
000 00/xx/ Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx III
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Except to the extent otherwise provided in the second paragraph of Section 3
hereinabove, delivery of any communication given in accordance herewith shall be
effective only upon actual receipt thereof by the party or parties to whom such
communication is directed. Any party to this Escrow Agreement may change the
address to which communications hereunder are to be directed by giving written
notice to the other party or parties hereto in the manner provided in this
section. All signatures of the parties to this Escrow Agreement may be
transmitted by facsimile, and such facsimile will, for all purposes, be deemed
to be the original signature of such party whose signature it reproduces, and
will be binding upon such party.
6
13. Consultation with Legal Counsel. Escrow Agent may consult with its
counsel or other counsel satisfactory to it concerning any question relating to
its duties or responsibilities hereunder or otherwise in connection herewith and
shall not be liable for any action taken, suffered or omitted by it in good
faith upon the advice of such counsel.
14. Choice of Laws; Cumulative Rights. This Escrow Agreement shall be
construed under, and governed by, the laws of the State of Texas, excluding,
however, (a) its choice of law rules and (b) the portions of the Texas Trust
Code Sec. 111.001, et seq. of the Texas Property Code concerning fiduciary
duties and liabilities of trustees. All of Escrow Agent's rights hereunder are
cumulative of any other rights it may have at law, in equity or otherwise. The
parties hereto agree that the forum for resolution of any dispute arising under
this Escrow Agreement shall be Xxxxxx County, Texas, and each of the Other
Parties hereby consents, and submits itself, to the jurisdiction of any state or
federal court sitting in Xxxxxx County, Texas.
15. Resignation. Escrow Agent may resign hereunder upon ten (10) Business
Days prior written notice to the Other Parties. Upon the effective date of such
resignation, Escrow Agent shall deliver the Deposit to any substitute escrow
agent designated by the Other Parties in writing. If the Other Parties fail to
designate a substitute escrow agent within ten (10) Business Days after the
giving of such notice, Escrow Agent may institute a petition for interpleader.
Escrow Agent's sole responsibility after such 10-Business Day notice period
expires shall be to hold the Deposit (without any obligation to reinvest the
same) and to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time of delivery Escrow Agent's obligations
hereunder shall cease and terminate.
16. Assignment. This Escrow Agreement may not be assigned by operation of
law or otherwise by Sellers without the prior written consent of Buyers and
Escrow Agent (such assigns of Sellers to which Escrow Agent and Buyer consent,
if any, "Sellers' Assigns") except that Sellers shall have the right to assign
any rights they have under this Escrow Agreement after the closing of the
transactions contemplated by the Agreement as required by any plan of
reorganization filed in the Bankruptcy Cases, as defined in the Agreement (such
assigns, the "Bankruptcy Assigns". This Escrow Agreement may not be assigned by
operation of law or otherwise by Buyers without the prior written consent of
Sellers and Escrow Agent (such assigns of Buyers to which Escrow Agent and
Sellers consent, if any, "Buyers' Assigns" and together with Sellers' Assigns
and the Bankruptcy Assigns, the "Permitted Assigns").
17. Severability. If one or more of the provisions hereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and this Escrow Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and the remaining provisions hereof shall be given full force and
effect.
18. Termination. This Escrow Agreement shall terminate upon the
disbursement, in accordance with Sections 4 or 15 hereof, of the Deposit in
full; provided, however, that in the event all fees, expenses, costs and other
amounts required to be paid to Escrow Agent hereunder are not fully and finally
paid prior to termination, the provisions of Section 10 hereof shall
7
survive the termination hereof and, provided further, that the provisions of
Section 8 and Section 9 shall, in any event, survive the termination hereof.
19. General. The section headings contained in this Escrow Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement. This Escrow Agreement and any
affidavit, certificate, instrument, agreement or other document required to be
provided hereunder may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
but one and the same instrument. Unless the context shall otherwise require, the
singular shall include the plural and vice-versa, and each pronoun in any gender
shall include all other genders. The terms and provisions of this Escrow
Agreement constitute the entire agreement among the parties hereto in respect of
the subject matter hereof (except for the Agreement among the Other Parties),
and neither the Other Parties nor Escrow Agent has relied on any representations
or agreements of the other with respect to this Escrow Agreement, except as
specifically set forth herein. This Escrow Agreement or any provision hereof may
be amended, modified, waived or terminated only by written instrument duly
signed by the parties hereto. This Escrow Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors,
trustees, receivers and Permitted Assigns. This Escrow Agreement is for the sole
and exclusive benefit of the Other Parties and the Escrow Agent, and nothing in
this Escrow Agreement, express or implied, is intended to confer or shall be
construed as conferring upon any other person any rights, remedies or any other
type or types of benefits.
[Remainder of page intentionally left blank]
8
In Witness Whereof, the parties hereto have executed this Escrow Agreement
to be effective as of the date first above written.
MISSISSIPPI POTASH, INC.
By: Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Title: General Counsel
----------------------------------
"MPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury, Mississippi Potash, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
9
XXXX XXXXXX, INC.
By: Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Title: General Counsel
----------------------------------
"EPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury, Xxxx Xxxxxx, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
10
INTREPID MINING NM LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"IMNM"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury Intrepid Mining NM LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
11
XX XXXXXX LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"HBLLC"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury XX Xxxxxx LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
12
JPMORGAN CHASE BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
"Escrow Agent"
13
Exhibit B-3
Adjustment Amount Escrow Agreement
This Adjustment Amount Escrow Agreement (as the same may be amended or
modified from time to time and including any and all written instructions given
to "Escrow Agent" (hereinafter defined) pursuant hereto, this "Escrow
Agreement") is made and entered into as of March 1, 2004 by and among
Mississippi Potash, Inc., a Mississippi corporation ("MPI"), Xxxx Xxxxxx, Inc.,
a Mississippi corporation ("EPI," and together with MPI, the "Sellers"),
Intrepid Mining NM LLC, a New Mexico limited liability company "IMNM"), XX
Xxxxxx LLC, a New Mexico limited liability company ("HBLLC," and together with
IMNM, Buyers"), and JPMorgan Chase Bank, a New York State bank with an office in
Houston, Xxxxxx County, Texas (the "Bank"). Sellers and Buyers are sometimes
collectively referred to herein as the "Other Parties".
W I T N E S S E T H:
Whereas, the Other Parties entered into the Asset Purchase Agreement, dated
as of November 26, 2003 (the "Agreement"), whereby Sellers agreed to sell,
assign, transfer and convey to Buyers certain of their properties, assets and
liabilities.
Whereas, in the Agreement, Buyers agreed to establish with the Bank an
interest-bearing joint order escrow account for the Adjustment Amount Escrow (as
defined in the Agreement).
Whereas, Sellers and Buyers have requested Bank to act in the capacity of
escrow agent under this Escrow Agreement, and Bank, subject to the terms and
conditions hereof, has agreed so to do.
Now, Therefore, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. Each of Sellers and Buyers hereby
appoints the Bank as the escrow agent under this Escrow Agreement (the Bank in
such capacity, the "Escrow Agent"), and Escrow Agent hereby accepts such
appointment.
2. Deposits. Upon execution of this Escrow Agreement, Buyers will deliver
to the Escrow Agent the sum of $300,000 (as said amount may increase or decrease
as a result of the investment and reinvestment thereof and as said amount may be
reduced by charges thereto and payments and setoffs therefrom to compensate or
reimburse Escrow Agent for amounts owing to it pursuant hereto, the "Deposit")
to be held by Escrow Agent in accordance with the terms hereof. Subject to and
in accordance with the terms and conditions hereof, Escrow Agent agrees that it
shall receive, hold in escrow, invest and reinvest and release or distribute the
Deposit. It is hereby expressly stipulated and agreed that all interest and
other earnings on the Deposit shall become a part of the Deposit for all
purposes, and that all losses resulting from the investment or reinvestment
thereof from time to time and all amounts charged thereto to compensate or
1
reimburse the Escrow Agent from time to time for amounts owing to it hereunder
shall from the time of such loss or charge no longer constitute part of the
Deposit.
3. Investment of the Deposit. Escrow Agent shall invest and reinvest the
Deposit in the JPMorgan's Cash Escrow Product as detailed on Schedule III
hereto, unless otherwise instructed in writing by all of the Other Parties. Such
written instructions, if any, referred to in the foregoing sentence shall
specify the type and identity of the investments to be purchased and/or sold and
shall also include the name of the broker-dealer, if any, which the Other
Parties direct the Escrow Agent to use in respect of such investment, any
particular settlement procedures required, if any (which settlement procedures
shall be consistent with industry standards and practices), and such other
information as Escrow Agent may require. Escrow Agent shall not be liable for
failure to invest or reinvest funds absent sufficient written direction. Unless
Escrow Agent is otherwise directed in such written instructions, Escrow Agent
may use a broker-dealer of its own selection, including a broker-dealer owned by
or affiliated with Escrow Agent or any of its affiliates. The Escrow Agent or
any of its affiliates may receive reasonable compensation with respect to any
investment directed hereunder. It is expressly agreed and understood by the
parties hereto that Escrow Agent shall not in any way whatsoever be liable for
losses on any investments, including, but not limited to, losses from market
risks due to premature liquidation or resulting from other actions taken
pursuant to this Escrow Agreement.
Receipt, investment and reinvestment of the Deposit shall be confirmed by
Escrow Agent as soon as practicable by account statement, and any discrepancies
in any such account statement shall be noted by either Sellers or Buyers to
Escrow Agent within 30 calendar days after receipt thereof. Failure to inform
Escrow Agent in writing of any discrepancies in any such account statement
within said 30-day period shall conclusively be deemed confirmation of such
account statement in its entirety. For purposes of this paragraph, (a) each
account statement shall be deemed to have been received by the party to whom
directed on the earlier to occur of (i) actual receipt thereof and (ii) three
"Business Days" (hereinafter defined) after the deposit thereof in the United
States Mail, postage prepaid and (b) the term "Business Day" shall mean any day
of the year, excluding Saturday, Sunday and any other day on which national
banks are required or authorized to close in Houston, Texas.
4. Disbursement of Deposit. Escrow Agent is hereby authorized to make
disbursements of the Deposit only as follows:
(a) Upon receipt of written instructions signed by both Sellers and Buyers
and otherwise in form and substance reasonably satisfactory to Escrow Agent, in
accordance with such instructions;
(b) As permitted by this Escrow Agreement, to Escrow Agent; and
(c) Into the registry of the court in accordance with Sections 8 or 15
hereof.
Notwithstanding anything contained herein or elsewhere to the contrary, the
Other Parties hereby expressly agree that the Escrow Agent shall be entitled to
charge the Deposit for, and pay and set-off from the Deposit, any and all
amounts, if any, then owing to the Escrow Agent pursuant
2
to this Escrow Agreement prior to the disbursement of the Deposit in accordance
with clauses (a) through (c) of this Section 4.
5. Tax Matters. Sellers and Buyers shall provide Escrow Agent with their
respective taxpayer identification numbers on the signature page hereto. Failure
to provide such may prevent or delay disbursements from the Deposit and may also
result in the assessment of a penalty and Escrow Agent's being required to
withhold tax on any interest or other income earned on the Deposit. All income
earned on the Deposit shall be reported as taxable income of Sellers, and
Sellers shall pay all taxes due on income accrued thereon. Any payments of
income shall be subject to applicable withholding regulations then in force in
the United States or any other jurisdiction, as applicable.
6. Scope of Undertaking. Escrow Agent's duties and responsibilities in
connection with this Escrow Agreement shall be purely ministerial and shall be
limited to those expressly set forth in this Escrow Agreement. Escrow Agent is
not a principal, participant or beneficiary in any transaction underlying this
Escrow Agreement and shall have no duty to inquire beyond the terms and
provisions hereof. Escrow Agent shall have no responsibility or obligation of
any kind in connection with this Escrow Agreement or the Deposit and shall not
be required to deliver the Deposit or any part thereof or take any action with
respect to any matters that might arise in connection therewith, other than to
receive, hold, invest, reinvest and deliver the Deposit as herein provided.
Without limiting the generality of the foregoing, it is hereby expressly agreed
and stipulated by the parties hereto that Escrow Agent shall not be required to
exercise any discretion hereunder and shall have no investment or management
responsibility and, accordingly, shall have no duty to, or liability for its
failure to, provide investment recommendations or investment advice to the Other
Parties or any of them. Escrow Agent shall not be liable for any error in
judgment, any act or omission, any mistake of law or fact, or for anything it
may do or refrain from doing in connection herewith, except for, subject to
Section 7 hereinbelow, its own willful misconduct or gross negligence. It is the
intention of the parties hereto that Escrow Agent shall never be required to
use, advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.
7. Reliance; Liability. Escrow Agent may rely on, and shall not be liable
for acting or refraining from acting in accordance with, any written notice,
instruction or request or other paper furnished to it hereunder or pursuant
hereto and believed by it to have been signed or presented by the proper party
or parties. Escrow Agent shall be responsible for holding, investing,
reinvesting and disbursing the Deposit pursuant to this Escrow Agreement;
provided, however, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action and
provided, further, that Escrow Agent shall have no liability for any loss
arising from any cause beyond its control, including, but not limited to, the
following: (a) acts of God, force majeure, including, without limitation, war
(whether or not declared or existing), revolution, insurrection, riot, civil
commotion, accident, fire, explosion, stoppage of labor and strikes; (b) the
act, failure or neglect of any Other Party or any agent or correspondent; (c)
any delay, error, omission or default of any mail, courier, telegraph, cable or
wireless agency or operator; or (d) the acts or edicts of any government or
governmental agency or other group or entity exercising
3
governmental powers. Escrow Agent is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity of the
subject matter of this Escrow Agreement or any part hereof or for the
transaction or transactions requiring or underlying the execution of this Escrow
Agreement, the form or execution hereof or for the identity or authority of any
person (other than any person acting on behalf of Escrow Agent) executing this
Escrow Agreement or any part hereof or depositing the Deposit.
8. Right of Interpleader. Should any controversy arise involving the
parties hereto or any of them or any other person, firm or entity with respect
to this Escrow Agreement or the Deposit, or should a substitute escrow agent
fail to be designated as provided in Section 15 hereof, or if Escrow Agent
should be in doubt as to what action to take, Escrow Agent shall have the right,
but not the obligation, either to (a) withhold delivery of the Deposit until the
controversy is resolved, the conflicting demands are withdrawn or its doubt is
resolved or (b) institute a petition for interpleader in any court of competent
jurisdiction to determine the rights of the parties hereto. Should a petition
for interpleader be instituted, or should Escrow Agent be threatened with
litigation or become involved in litigation in any manner whatsoever in
connection with this Escrow Agreement or the Deposit, the Other Parties hereby
jointly and severally agree to reimburse Escrow Agent for its reasonable
attorneys' fees and any and all other expenses, losses, costs and damages
incurred by Escrow Agent in connection with or resulting from such threatened or
actual litigation prior to any disbursement hereunder.
9. Indemnification. The Other Parties hereby jointly and severally agree
to indemnify and defend the Escrow Agent, its officers, directors, partners,
employees and agents (each herein called an "Indemnified Party") against, and
hold each Indemnified Party harmless from, any and all losses, liabilities and
expenses, including, but not limited to, reasonable fees and expenses of in
house or outside counsel, court costs, costs, damages and claims, costs of
investigation, litigation, tax liability (other than for income taxes on fees
earned hereunder) and loss on investments suffered or incurred by any
Indemnified Party in connection with or arising from or out of (i) the
execution, delivery or performance of this Escrow Agreement or (ii) the
compliance or attempted compliance by any Indemnified Party with any instruction
or direction upon which the Escrow Agent is authorized to rely under this Escrow
Agreement, except to the extent that any such loss, liability or expense may
result from the willful misconduct or gross negligence of such Indemnified
Party. IT IS THE EXPRESS INTENT OF EACH OF SELLERS AND BUYERS TO INDEMNIFY EACH
OF THE INDEMNIFIED PARTIES FOR, AND HOLD THEM HARMLESS AGAINST, THEIR OWN
NEGLIGENT ACTS OR OMISSIONS.
10. Compensation and Reimbursement of Expenses. Sellers, on the one hand,
and Buyers, on the other hand, hereby agree to pay one-half of the fees of
Escrow Agent for its services hereunder in accordance with Escrow Agent's fee
schedule as attached as Schedule I hereto as in effect from time to time and to
pay one-half of all expenses incurred by Escrow Agent in connection with the
performance of its duties and enforcement of its rights hereunder and otherwise
in connection with the preparation, operation, administration and enforcement of
this Escrow Agreement, including, without limitation, reasonable attorneys'
fees, brokerage costs and related expenses incurred by Escrow Agent. The
foregoing notwithstanding, the Other Parties shall be jointly and severally
liable to Escrow Agent for the payment of all such fees and expenses. In the
event the Other Parties for any reason fail to pay any such fees and expenses as
4
and when the same are due, such unpaid fees and expenses shall be charged to and
set-off and paid from the Deposit by Escrow Agent upon two (2) Business Days
notice to the Other Parties.
11. Funds Transfer. In the event funds transfer instructions are given by
both Sellers and Buyers pursuant to Section 4(a) (other than in writing at the
time of execution of this Escrow Agreement), whether in writing or by facsimile,
the Escrow Agent is authorized to seek confirmation of such instructions by
telephone call-back to the person or person designated on Schedule II hereto,
and the Escrow Agent may rely upon the confirmations of anyone purporting to be
the person or persons so designated. If the Escrow Agent is unable to contact
any of the authorized representatives identified in Schedule II for either
Sellers or Buyers, the Escrow Agent is hereby authorized to seek confirmation of
such instructions by telephone call-back to any one or more the executive
officers or managers of such Other Party ("Executive Officers"), which shall
include the titles of Vice President, as the Escrow Agent may select. The
persons and telephone numbers for call-backs may be changed only in writing
actually received and acknowledged by the Escrow Agent. The parties to this
Escrow Agreement acknowledge that such security procedure is commercially
reasonable.
It is understood that the Escrow Agent and the beneficiary's bank in any
funds transfer may rely solely upon any account numbers or similar identifying
number provided by both Sellers and Buyers, to identify (i) the beneficiary,
(ii) the beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may
apply any of the Deposit for any payment order it executes using any such
identifying number, even where its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank, designated.
12. Notices. Any notice or other communication required or permitted to be
given under this Escrow Agreement by any party hereto to any other party hereto
shall be considered as properly given if in writing and (a) delivered against
receipt therefore, (b) mailed by registered or certified mail, return receipt
requested and postage prepaid or (c) sent by facsimile, in each case to the
address or fax number, as the case may be, set forth below:
If to Escrow Agent:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx
ITS/Escrow Section
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Sellers:
Mississippi Potash, Inc.
Xxxx Xxxxxx, Inc.
X.X. Xxx 000
Xxxxx Xxxx, Xxxxxxxxxxx 00000
5
Attention: Corporate Secretary
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Xxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. X'Xxxx
Fax: (000) 000-0000
If to Buyers:
Intrepid Mining NM LLC
XX Xxxxxx LLC
000 00/xx/ Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx III
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Fax No.: (000) 000-0000
Telephone No.:(000) 000-0000
Except to the extent otherwise provided in the second paragraph of Section 3
hereinabove, delivery of any communication given in accordance herewith shall be
effective only upon actual receipt thereof by the party or parties to whom such
communication is directed. Any party to this Escrow Agreement may change the
address to which communications hereunder are to be directed by giving written
notice to the other party or parties hereto in the manner provided in this
section. All signatures of the parties to this Escrow Agreement may be
transmitted by facsimile, and such facsimile will, for all purposes, be deemed
to be the original signature of such party whose signature it reproduces, and
will be binding upon such party.
6
13. Consultation with Legal Counsel. Escrow Agent may consult with its
counsel or other counsel satisfactory to it concerning any question relating to
its duties or responsibilities hereunder or otherwise in connection herewith and
shall not be liable for any action taken, suffered or omitted by it in good
faith upon the advice of such counsel.
14. Choice of Laws; Cumulative Rights. This Escrow Agreement shall be
construed under, and governed by, the laws of the State of Texas, excluding,
however, (a) its choice of law rules and (b) the portions of the Texas Trust
Code Sec. 111.001, et seq. of the Texas Property Code concerning fiduciary
duties and liabilities of trustees. All of Escrow Agent's rights hereunder are
cumulative of any other rights it may have at law, in equity or otherwise. The
parties hereto agree that the forum for resolution of any dispute arising under
this Escrow Agreement shall be Xxxxxx County, Texas, and each of the Other
Parties hereby consents, and submits itself, to the jurisdiction of any state or
federal court sitting in Xxxxxx County, Texas.
15. Resignation. Escrow Agent may resign hereunder upon ten (10) Business
Days prior written notice to the Other Parties. Upon the effective date of such
resignation, Escrow Agent shall deliver the Deposit to any substitute escrow
agent designated by the Other Parties in writing. If the Other Parties fail to
designate a substitute escrow agent within ten (10) Business Days after the
giving of such notice, Escrow Agent may institute a petition for interpleader.
Escrow Agent's sole responsibility after such 10-Business Day notice period
expires shall be to hold the Deposit (without any obligation to reinvest the
same) and to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time of delivery Escrow Agent's obligations
hereunder shall cease and terminate.
16. Assignment. This Escrow Agreement may not be assigned by operation of
law or otherwise by Sellers without the prior written consent of Buyers and
Escrow Agent (such assigns of Sellers to which Escrow Agent and Buyers consent,
if any, "Sellers' Assigns") except that Sellers shall have the right to assign
any rights they have under this Escrow Agreement after the closing of the
transactions contemplated by the Agreement as required by any plan of
reorganization filed in the Bankruptcy Cases, as defined in the Agreement (such
assigns, the "Bankruptcy Assigns". This Escrow Agreement may not be assigned by
operation of law or otherwise by Buyers without the prior written consent of
Sellers and Escrow Agent (such assigns of Buyers to which Escrow Agent and
Sellers consent, if any, "Buyers' Assigns" and together with Sellers' Assigns
and the Bankruptcy Assigns, the "Permitted Assigns").
17. Severability. If one or more of the provisions hereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and this Escrow Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and the remaining provisions hereof shall be given full force and
effect.
18. Termination. This Escrow Agreement shall terminate upon the
disbursement, in accordance with Sections 4 or 15 hereof, of the Deposit in
full; provided, however, that in the event all fees, expenses, costs and other
amounts required to be paid to Escrow Agent hereunder are not fully and finally
paid prior to termination, the provisions of Section 10 hereof shall
7
survive the termination hereof and, provided further, that the provisions of
Section 8 and Section 9 shall, in any event, survive the termination hereof.
19. General. The section headings contained in this Escrow Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement. This Escrow Agreement and any
affidavit, certificate, instrument, agreement or other document required to be
provided hereunder may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
but one and the same instrument. Unless the context shall otherwise require, the
singular shall include the plural and vice-versa, and each pronoun in any gender
shall include all other genders. The terms and provisions of this Escrow
Agreement constitute the entire agreement among the parties hereto in respect of
the subject matter hereof (except for the Agreement among the Other Parties),
and neither the Other Parties nor Escrow Agent has relied on any representations
or agreements of the other with respect to this Escrow Agreement, except as
specifically set forth herein. This Escrow Agreement or any provision hereof may
be amended, modified, waived or terminated only by written instrument duly
signed by the parties hereto. This Escrow Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors,
trustees, receivers and Permitted Assigns. This Escrow Agreement is for the sole
and exclusive benefit of the Other Parties and the Escrow Agent, and nothing in
this Escrow Agreement, express or implied, is intended to confer or shall be
construed as conferring upon any other person any rights, remedies or any other
type or types of benefits.
[Remainder of page intentionally left blank]
8
In Witness Whereof, the parties hereto have executed this Escrow Agreement
to be effective as of the date first above written.
MISSISSIPPI POTASH, INC.
By: Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Title: General Counsel
----------------------------------
"MPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_]Other _________________
Under the penalties of perjury, Mississippi Potash, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
9
XXXX XXXXXX, INC.
By: Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Title: General Counsel
----------------------------------
"EPI"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[X] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury, Xxxx Xxxxxx, Inc. certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
10
INTREPID MINING NM LLC
By:
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"IMNM"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury Intrepid Mining NM LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
11
XX XXXXXX LLC
By:
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"HBLLC"
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
NOTE: The following certification shall be used by and for a U.S. resident only.
--------------------------------------------------------------------------------
Non-residents must use and provide Form W8-BEN
----------------------------------------------
Customer is a (check one)
[_] Corporation [_] Municipality [_] Partnership [_] Non-profit or Charitable
Org
[_] Individual [_] REMIC [_] Trust [_] Other _________________
Under the penalties of perjury XX Xxxxxx LLC certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Individuals or entities who do not supply a tax identification number will be
subject to backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
12
JPMORGAN CHASE BANK
By:
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"Escrow Agent"
13
Exhibit C
Example 3.2(a)
Purchase Price
as of
September 30,
2003
---------------
Base Price $ 20,000,000.00
Total Accounts Receivable ( See Assumption 1) 5,381,742.00
x 96% x 96%
-------------------------------------------------------------------------------
Receivables Value 5,166,472.32
Product Inventory Value
Tons of Product Inventory (See Assumption 2) 21,070.00
x $80 x $80
-------------------------------------------------------------------------
Total 1,685,600.00
Tons of red fines (See Assumption 2) 4,200.00
x $55 x $55
-------------------------------------------------------------------------
Total 231,000.00
Tons of white fines (See Assumption 2) --
x $78 x $78
-------------------------------------------------------------------------
Total --
Product Inventory Value 1,916,600.00
Less Accounts Payable Value (See Assumption 3) (1,768,763.00)
---------------
---------------
Purchase Price $ 25,314,309.32
===============
Assumptions
-----------
(1) Accounts Receivable include the following:
Account # Account Name 9/30/03 Balance
--------- ------------------------------- ---------------
A12010 A/R - Trade $ 5,771,263.00
A12020 Allowance for doubtful accounts (389,521.00)
---------------
Total accounts receivable $ 5,381,742.00
===============
(2) Product Inventory and fines based on actual 9/30 levels as follows:
Product Inventory Tons
West 12,834.00
East 8,236.00
---------------
Total 21,070.00
Red fines (tons) 4,200.00
White fines (tons) --
(3) Accounts Payable includes the following:
Account # Account Name 9/30/03 Balance
--------- ------------------------------- ---------------
A31010 A/P - Trade $ 478,619.00
A31020 A/P - Rec'd Not Paid 316,621.00
A31025 A/P - Consigment Parts (17,759.00)
A31050 A/P - Freight 175,562.00
A31210 A/P - Other 815,720.00
---------------
Total accounts payable $ 1,768,763.00
===============
Exhibit C
Example 3.3
Closing Payment based on
Projected Preliminary Statement
-------------------------------
Base Price $ 20,000,000.00
Total Accounts Receivable 7,197,978.70
x 96% x 96%
----------------------------- -------------------------------
Plus Receivables Value 6,910,059.55
Tons of Product Inventory 48,394.00
x $80 x $80
----------------------------- -------------------------------
Plus Product Inventory Value 3,871,520.00
Less Accounts Payable Value (3,650,763.00)
-------------------------------
Closing Purchase Price $ 27,130,816.55
Less Sellers' Proration Amount (75,000.00)
Plus Buyers' Proration Amount 75,000.00
Less Indemnification Holdback (500,000.00)
Less Adjustment Amount Holdback (300,000.00)
Less Xxxxxxx Money (1,500,000.00)
Less Cure Amounts (500,000.00)
Closing Payment $ 24,330,816.55
Exhibit C
Example 3.4(d)
Projected Projected
Preliminary Statement Final Statement Adjustment Amount
--------------------- ----------------- -------------------
Base Price $ 20,000,000.00 $ 20,000,000.00 $ -
Plus Receivables Value 6,910,059.55 7,010,059.55 100,000.00
Plus Product Inventory Value 3,871,520.00 3,971,520.00 100,000.00
Less Accounts Payable Value (3,650,763.00) (3,850,763.00) (200,000.00)
--------------------- ----------------- -------------------
Purchase Price $ 27,130,816.55 $ 27,130,816.55 $ -
EXHIBIT D
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (the "Assumption Agreement") is made and entered
into as of March 1, 2004, by and among Mississippi Potash, Inc., a
Debtor-in-Possession and Mississippi corporation ("MPI"), Xxxx Xxxxxx, Inc., a
Debtor-in-Possession, a Mississippi corporation and a direct wholly owned
subsidiary of MPI ("EPI" and, together with MPI, the "Sellers"), Intrepid Mining
NM LLC, a New Mexico limited liability company ("IMNM"), and XX Xxxxxx LLC, a
New Mexico limited liability company ("HBLLC," and together with IMNM, the
"Buyers").
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of
November 26, 2003, by and among the Sellers and the Buyers, as amended by the
First Amendment to Purchase Agreement dated as of March 1, 2004, among the
Sellers and the Buyers, and the letter agreement dated February 3, 2004 among
the Sellers and the Buyers regarding certain purchase orders (collectively, the
"Agreement"), (i) MPI has sold and assigned to IMNM the MPI Transferred Assets,
and (ii) EPI has sold and assigned to HBLLC the EPI Transferred Assets (terms
used but not defined herein have the meaning set forth in the Agreement); and
WHEREAS, pursuant to the Agreement, (i) IMNM has agreed to assume, pay,
perform or discharge in accordance with their terms the IMNM Assumed
Liabilities, and (ii) HBLLC has agreed to assume, pay, perform or discharge in
accordance with their terms the HBLLC Assumed Liabilities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Buyers hereby covenant and agree
with the Sellers as follows:
1. Effective as of the date hereof, (a) IMNM hereby agrees to assume,
pay, perform or discharge in accordance with their terms the IMNM Assumed
Liabilities, and (b) HBLLC hereby agrees to assume, pay, perform or discharge in
accordance with their terms the HBLLC Assumed Liabilities.
2. This Assumption Agreement shall be subject to the terms and conditions
set forth in the Agreement, and nothing contained in this Assumption Agreement
shall be construed to limit, terminate or expand the representations, warranties
and covenants set forth in the Agreement.
3. This Assumption Agreement shall be binding upon and shall inure to the
benefit of each of the parties hereto and to their respective successors and
permitted assigns.
4. This Assumption Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, including all
matters of construction, validity and performance.
IN WITNESS WHEREOF, the parties hereto have caused this Assumption
Agreement to be duly executed as of the day and year first above written.
MISSISSIPPI POTASH, INC.
Debtor-in-Possession
By: Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
General Counsel
XXXX XXXXXX, INC.
Debtor-in-Possession
By: Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
General Counsel
INTREPID MINING NM LLC
By: Xxxxxx X. Xxxxxxxxx III
-----------------------------------
Xxxxxx X. Xxxxxxxxx III
Manager
XX XXXXXX LLC
By: Xxxxxx X. Xxxxxxxxx III
-----------------------------------
Xxxxxx X. Xxxxxxxxx III
Manager
2
