ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 3, 1997
BY AND AMONG
PROTEIN (USA) COMPANY,
AMERICAN PROTEINS, INC.
AND
CHESAPEAKE BAY FISHING CO., L.C.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of
November 3, 1997 by and among Protein (USA) Company, a Delaware corporation
("Purchaser"), American Proteins, Inc., a Georgia corporation (the "Company"),
and Chesapeake Bay Fishing Co., L.C., a Virginia limited liability company of
which 98% of the membership interests are owned by the Company ("Vessel Sub").
PRELIMINARY STATEMENT
The Company, directly through its Ampro Fisheries Company
division (the "Ampro Division") and indirectly through Vessel Sub, is engaged in
menhaden fishing and the production and sale of fish meal, fish oil and fish
solubles (collectively, the "Business"). On the terms and subject to the
conditions set forth herein, the Company and Vessel Sub desire to sell, and
Purchaser desires to purchase, the properties and assets of the Business by
means of asset purchases (such asset purchases being the "Acquisition").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings contained herein, the parties
hereto hereby agree as follows:
Paragraph 1. Certain Defined Terms. As used in this Agreement,
the following terms have the meanings assigned to them below in this Paragraph
1. Capitalized terms used in this Agreement and not defined below in this
Paragraph 1 have the meanings assigned to them in the Preliminary Statement or
Article IX of the Standard Provisions, as the case may be.
"Acquired Business" means the Business.
"Acquisition Consideration" has the meaning specified in
Paragraph 2.
"Closing" has the meaning specified in Paragraph 3.
"Closing Date" means November 3, 1997 or such later date as to
which Purchaser and the Company may agree in writing.
"Company" means American Proteins, Inc., a Georgia corporation.
"Company Transfer Documents" has the meaning specified in
Paragraph 2.
"Current Balance Sheets" means the balance sheets of the Ampro
Division and Vessel Sub, respectively, as of October 5, 1997.
"Current Balance Sheet Date" means October 5, 1997.
-1-
"Effective Date" means the Closing Date.
"Financial Statements" means the respective balance sheets of the
Ampro Division and Vessel Sub as of October 5, 1997 and the related
statements of operations for the period commencing January 1, 1997
through the Current Balance Sheet Date, which the Company has delivered
to Purchaser.
"Retained Assets" has the meaning specified in Paragraph 2.
"Retained Liabilities" has the meaning specified in Paragraph 2.
"Standard Provisions" has the meaning specified in Paragraph 4.
Paragraph 2. (A) The Asset Purchase. At the Closing, on the terms
and subject to the conditions set forth herein, the Company and Vessel Sub will
sell, convey, assign and transfer to Purchaser, and Purchaser will purchase and
acquire from the Company and Vessel Sub, all the properties, rights and assets
of the Company and Vessel Sub, wherever situated, of every kind, nature and
description, tangible and intangible, which are used or held for use in
connection with the Acquired Business, whether arising by contract, law or
otherwise, including any such properties, rights or assets as have been written
off and not included on the books of the Company or Vessel Sub, except for the
Retained Assets, all as the same shall exist on the Closing Date (such
properties, rights and assets (other than the Retained Assets) being the
"Assets"), in each case free of all Liens except for Permitted Liens. The Assets
will include (i) all the foregoing (other than the Retained Assets) to the
extent used or held for use primarily in connection with the Acquired Business
and (ii) the following:
(a) all customer lists, sales records, credit data and other
information relating to present and past customers of the Acquired
Business;
(b) all maritime vessels used or held for use by the Company or
Vessel Sub in the Business, together with the related purse boats, nets,
machinery equipment and supplies, including those identified in Schedule
2(A)(ii)(b);
(c) all land, buildings and wharves used or held for use by the
Company in the Acquired Business, including those identified in Schedule
2(A)(ii)(c);
(d) all vehicles and other transportation equipment used or held
for use by the Company or Vessel Sub in the Acquired Business, including
those identified in Schedule 2(A)(ii)(d);
(e) all the equipment, machinery, tools, appliances, telephone
systems, copy machines, fax machines, implements, spare parts, supplies,
furniture and all other tangible personal property of every kind and
description used or held for use by the Company or Vessel Sub in the
Acquired Business, together with any rights or claims of the Company
-2-
or Vessel Sub arising out of the breach of any express or implied
warranty by the manufacturers or sellers of any of such assets;
(f) all inventories consisting of purchased parts, factory and
yard stores, fuel in the vessels (but not in storage), oil, shipping
containers and supplies used or held for use by the Company or Vessel
Sub in the Acquired Business, whether in the possession of the Company
or Vessel Sub, in the possession of third parties or in transit to or
from the Company or Vessel Sub;
(g) all operating data and operating records relating to or used
or held for use in the Acquired Business, including all records, notes,
sales and sales promotional data, advertising materials, credit
Information, cost and pricing Information, equipment maintenance data,
purchasing records and Information, supplier lists, business plans,
reference catalogs, payroll and personnel records, stationery, purchase
orders, sales forms, labels, catalogs, brochures, artwork, photographs,
product display and other similar property, rights and Information;
(h) all Proprietary Rights and all engineering, production and
other designs, drawings, specifications, formulas, technology,
inventions, processes and know-how used or held for use in connection
with the Acquired Business;
(i) any and all goodwill and going concern value of the Acquired
Business;
(j) all rights in, to and under all Governmental Approvals and
other rights under any Governmental Requirement relating to the Acquired
Business, including those listed in Schedule 2(A)(ii)(j);
(k) all other or additional privileges, rights, interests,
properties and assets of every kind and description and wherever located
(other than the Retained Assets) that are used or intended for use in
connection with, or that are necessary to the continued conduct of, the
Acquired Business as presently being conducted.
Without limiting the generality of the foregoing, the Assets will include those
assets reflected on the Current Balance Sheet, other than (i) those that have
been disposed of in the ordinary course of business since the Current Balance
Sheet Date and (ii) the Retained Assets.
(B) Retained Assets and Retained Liabilities. (i) The Assets will
not include, and Purchaser acknowledges that there shall be excluded from the
Assets, all the following of the Company and Vessel Sub (collectively, the
"Retained Assets"):
(a) the corporate seal, Charter Documents and minute books, stock
books and other corporate or similar records of the Company and Vessel
Sub;
(b) all product inventories consisting of fish meal, fish oil and
fish solubles;
-3-
(c) all bank accounts, including cash on deposit and uncleared
deposits, all xxxxx cash, temporary cash investments and instruments
representing the same, marketable securities and other cash and cash
equivalents;
(d) all accounts receivable, notes receivable, loans receivable
and advances, together with all instruments and all documents of title
representing any of the foregoing and all guaranties and security in
favor of the Company or Vessel Sub with respect to any of the foregoing;
(e) all rights to use the name "Ampro";
(f) all assets of the Company not located at or near Reedville,
Virginia that are not used in or held for use in the Acquired Business
and are not classified on the Company's books as part of its Ampro
Division;
(g) all deposits and prepaid insurance of the character included
in "Prepaids" on the respective Current Balance Sheets of the Company
and Vessel Sub;
(h) all land, buildings and wharves owned by Vessel Sub in the
Acquired Business.
(i) the rights that accrue or will accrue to the Company and
Vessel Sub under this Agreement.
(j) pledges or deposits by Company and Vessel Sub under workers'
compensation laws, including, without limitation, unemployment insurance
laws, social security laws, or similar legislation, or good faith
deposits in connection with debts, tenders, contracts (other than for
the payment of indebtedness of Company or Vessel Sub) or leases to which
Company or Vessel Sub are a party, or deposits to secure public or
statutory obligations of Company or Vessel Sub or deposits of cash or
United States government bonds to secure surety, appeal, performance or
other similar bonds to which Company or Vessel Sub are a party, or
deposits as security for contested taxes or import duties or for the
payment for rent;
(k) any and all rights of Company or Vessel Sub under any lease,
executory contract, or other agreement of Company or Vessel Sub relating
to the Acquired Business or the Assets;
(j) any and all rights, causes of action, claims and demands of
Company or Vessel Sub against third parties arising out of Seller's or
its Affiliates' conduct of the Acquired Business prior to the Closing
other than rights or claims of the Company or Vessel Sub arising out of
the breach of any express or implied warranty by the manufacturers or
sellers of any of the Assets;
-4-
(m) all licenses, permits and authorizations from governmental
authorities to conduct the Acquired Business that may not, as a matter
of law, be transferred to Purchaser (and for which Purchaser must make
independent application);
(n) all financial and accounting data and records relating to or
used or held for use in the Acquired Business, including all Returns,
schedules, work papers, books, records, notes, and related information;
(o) all computer and electronic data processing programs and
software;
(p) all insurance policies, insurance proceeds and insurance
claims relating to all or any part of the Acquired Business and, to the
extent transferable, the benefit of and the right to enforce the
covenants and warranties, if any, that the Company or Vessel Sub is
entitled to enforce against the insurer under such policies with respect
to the Acquired Business;
(q) fuel in storage and held for use in the Business;
(r) the 31 ft. Xxxxxxx powerboat and related equipment owned by
the Company; and
(s) all equipment, tools, parts and materials used for the
construction, maintenance and repair of vessels.
(ii) Purchaser is not assuming and will not be obligated by this
Agreement or any other Transaction Document to pay, perform, discharge or
otherwise be responsible for any debts, liabilities or obligations of the
Company or of Vessel Sub, whether accrued, absolute, contingent or otherwise,
oral or written, disclosed or undisclosed and all such debts, liabilities and
obligations (the "Retained Liabilities") will remain the responsibility and
obligation of the Company and Vessel Sub, as applicable. Without limiting the
generality of the foregoing, it is expressly agreed that neither Purchaser nor
any Affiliate thereof will assume or incur any liabilities or obligations based
on, arising out of or in connection with:
(a) any Litigation, warranty claim, claim based on violation of
any Environmental Law or any other claim associated with or relating to
the Assets or the Acquired Business arising out of actions or omissions
occurring prior to the Effective Date;
(b) any obligations under any contract or other agreement with
customers, suppliers or any other party;
(c) any Taxes accruing prior to the Effective Date;
(d) except as provided herein any liabilities with respect to any
Plan,
-5-
Employment Agreement or Employee Policies and Procedures or any
claims for wages or other compensation, vacation pay, holiday pay or for
severance arising out of alleged or actual employment loss (other than
any liabilities for wages and benefits related to WARN notices described
in Section 6:04(f) hereof);
(e) any Indebtedness of the Company or of Vessel Sub;
(f) any liabilities, obligations or expenses of the Company or of
Vessel Sub for any broker's or finder's commission relating to this
Agreement or any of the transactions contemplated hereby;
(g) any liabilities or obligations of the Company or of Vessel
Sub arising from or incurred in connection with the negotiation,
preparation or execution of this Agreement or the transactions
contemplated hereby, including fees and expenses of counsel; or
(h) any liabilities, debts or obligations arising out of actions
taken or work done by the Company or by Vessel Sub prior to the
Effective Date, including liabilities or obligations arising out of any
failure by the Company to perform any contract, commitment or
arrangement, including those set forth in any contract with customers,
in accordance with its terms prior to the Effective Date.
(C) Acquisition Consideration. In consideration of the sale,
conveyance, assignment and transfer of the Assets by the Company and by Vessel
Sub to Purchaser and in reliance on the representations and warranties made
herein by the Company and by Vessel Sub, Purchaser agrees on the Closing Date to
pay to the Company (for its account and for the account of Vessel Sub),
immediately available funds in the amount of $14,400,000 (the "Assets
Consideration"). In consideration of the non-competition covenant set forth in
Article VIII of the Standard Provisions, Purchaser agrees on the Closing Date to
pay to the Selling Parties and the individual named in Article VIII of the
Standard Provisions, and aggregate immediately available funds in the amount of
$100,000 (together with the Assets Consideration, the "Acquisition
Consideration").
(D) Delivery of Documents. (ii) At the Closing, the Company and
Vessel Sub will each execute and deliver to Purchaser a general conveyance and
assignment agreement substantially in the form agreed to by the parties and any
other instruments of transfer deemed necessary or appropriate by Purchaser
(collectively, the "Company Transfer Documents").
(ii) At the Closing, the Company will execute and deliver to
Purchaser an Agreement for Right of First Refusal on Peruvian Production in the
form attached hereto as Schedule 2(E)(ii).
(F) The Effective Time. The effective time of the Acquisition
(the "Effective Time") will be 12:01 a.m., Reedville, Virginia time, on the
Effective Date.
-0-
Xxxxxxxxx 3. The Closing. On or before the Closing Date, the
parties hereto will take all actions necessary to (A) effect the Acquisition and
(B) satisfy the document delivery requirements on which the obligations of the
parties to effect the Acquisition and the other transactions contemplated hereby
are conditioned by the provisions of Article V (all those actions collectively
being the "Closing"). The Closing will take place at the offices of Long
Xxxxxxxx & Xxxxxx, LLP at 10:30 a.m., Atlanta time, or at such later time on the
Closing Date as Purchaser shall specify.
Paragraph 4. Incorporation of Standard Provisions. The Standard
Provisions for Asset Purchases attached hereto as Annex 1 (the "Standard
Provisions"), hereby are incorporated in this Agreement by this reference and
constitute a part of this Agreement with the same force and effect as if set
forth at length herein.
Paragraph 5. Special Provisions respecting Employment
Obligations. Without limiting the generality of the definition of Retained
Liabilities, the Company shall be responsible for, and shall pay and discharge
when due;
(a) all end-of-season bonuses for employees of Vessel Sub with
respect to the current fishing season (ending in or about December 1997)
with no proration based on the period between the Effective Date and the
end of such season; and
(b) all severance and vacation benefits, if any, attributable to
work by employees of the Company and Vessel Sub through the Effective
Date, based on the Company's Employee Policies and Procedures with no
proration based on the period between the Effective Date and the date of
such closing.
Liabilities included in clauses (a) and (b) of this Paragraph 5
shall, notwithstanding any provision to the contrary, be considered as Retained
Liabilities.
Paragraph 6. Counterparts. This Agreement may be executed in
multiple counterparts, each of which will be an original, but all of which
together will constitute one and the same instrument.
Paragraph 7. Notices. For purposes of Section 10.06, notices
shall be addressed to the Company as follows:
American Proteins, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
with copies (which shall not constitute notice for purposes of this
Agreement) to:
-0-
Xxxx Xxxxxxxx & Xxxxxx, LLP
One Peachtree Center
000 Xxxxxxxxx Xxxxxx, #0000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
(Signatures on following page)
-8-
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
PROTEIN (USA) COMPANY
By:
--------------------------------
Xxxxxx X. Xxxxxxxx
Senior Vice President and
Chief Financial Officer
AMERICAN PROTEIN, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
CHESAPEAKE BAY FISHING CO., L.C.
By:
---------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
---------------------------------
Xxxxxx X. Xxxxxxx, individually for purposes
of the Noncompetition Agreement in
Article VIII of Annex 1
-9-
Annex 1
ARTICLE I
[RESERVED]
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF
THE COMPANY AND VESSEL SUB
The Company and Vessel Sub (each, a "Selling Party") jointly
and severally represent and warrant to, and agree with, Purchaser that all the
following representations and warranties in this Article II are as of the date
of this Agreement, and will be, on the Closing Date and immediately prior to the
Effective Time, true and correct. Except for the representations contained in
Sections 2.01, 2.03, 2.07, 2.08, 2.12 and 2.23, all representations made herein
by Company and Vessel Sub are made only to the extent of the actual knowledge
(as opposed to constructive or other form of imputed knowledge) of Xxxxx
Xxxxxxx, Xxx Xxxxx and Xxxx Xxxxx, and for all purposes of this Agreement,
"knowledge" of Seller or one of its Affiliates shall mean the actual knowledge
(as opposed to constructive or other form of imputed knowledge) of Xxxxx
Xxxxxxx, Xxx Xxxxx and Xxxx Xxxxx:
Section 2.01. Organization. Schedule 2.01 sets forth the
Organization State of each Selling Party. Each Selling Party (a) is a
corporation or limited liability company, as applicable, duly organized, validly
existing and in good standing under the laws of its Organization State, (b) has
all requisite corporate or other power and authority under those laws and its
Charter Documents to own or lease and to operate its properties and to carry on
its business as now conducted and (c) is duly qualified and in good standing as
a foreign corporation or limited liability company, as applicable, in all
jurisdictions in which it owns or leases property or in which the carrying on of
its business as now conducted so requires except where the failure to be so
qualified, singly or in the aggregate, would not have a Material Adverse Effect.
Section 2.02. [Reserved.]
Section 2.03. Authorization; Enforceability; Absence of
Conflicts; Required Consents. (a) The execution, delivery and performance by
each Selling Party of this Agreement and each other Transaction Document to
which it is a party, and the carrying into effect of the Acquisition and the
other transactions contemplated hereby and thereby, are within its corporate or
other power under its Charter Documents and the applicable Governmental
Requirements of its Organization State and have been duly authorized by all
proceedings, including actions permitted to be taken in lieu of proceedings,
required under its Charter Documents and those Governmental Requirements.
(b) This Agreement has been, and each of the other Transaction
Documents to
-1-
which each Selling Party is a party, when executed and delivered to Purchaser,
will have been, duly executed and delivered by such Selling Party and is,
or when so executed and delivered will be, the legal, valid and binding
obligation of the such Selling Party, enforceable against such Selling Party in
accordance with its terms, except as that enforceability may be (i) limited by
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and (ii) subject
to general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by each Selling Party of the Transaction Documents to
which it is a party have not and will not (i) violate, breach or constitute a
default under (A) the Charter Documents of such Selling Party, (B) any Material
Governmental Requirement applicable to such Selling Party or (C) any Material
Agreement of such Selling Party or the Acquired Business, (ii) result in the
acceleration or mandatory prepayment of any Indebtedness, or any Guaranty not
constituting Indebtedness, of such Selling Party or afford any holder of any of
that Indebtedness, or any beneficiary of any of those Guaranties, the right to
require such Selling Party to redeem, purchase or otherwise acquire, reacquire
or repay any of that Indebtedness, or to perform any of those Guaranties, (iii)
cause or result in the imposition of, or afford any Person the right to obtain,
any Lien upon any of the Assets (or upon any revenues, income or profits of the
Acquired Business therefrom).
Section 2.04. [Reserved.]
Section 2.05. [Reserved.]
Section 2.06. [Reserved.]
Section 2.07. Title to the Assets. The Selling Parties have
and are transferring to Purchaser good, valid and marketable title to all the
Assets, free and clear of all Liens except for Permitted Liens.
Section 2.08. Company Transfer Documents. The Company Transfer
Documents are effective to vest in Purchaser good title to all the Assets, free
and clear of all Liens except for Permitted Liens.
Section 2.09. Sufficiency of the Assets. Except for the
Retained Assets, the Assets comprise all the properties, rights and assets of
every type and description, real, personal and mixed, tangible and intangible,
which have been used or employed or held for use by the Selling Parties
primarily in operating the Acquired Business during the past 12 months.
Section 2.10. [Reserved.]
Section 2.11. Litigation. Except as disclosed in Schedule
2.11, no Litigation is pending or, to the knowledge of any Selling Party,
threatened which relates to the Assets or the
-2-
Acquired Business.
Section 2.12. Financial Statements; Disclosure. (a) Financial
Statements. (i) The Financial Statements (including in each case the related
schedules and notes, if any) delivered to Purchaser present fairly, in all
material respects, the financial position of the Acquired Business at the
respective dates of the balance sheets included therein and the results of
operations and cash flows of the Acquired Business for the respective periods
set forth therein and have been prepared in accordance with the past practices
of the Selling Parties (subject, in the case of interim financial statements, to
normal and recurring year-end adjustments and the absence of footnote
disclosure). As of the date of any balance sheet of each Selling Party included
in the Financial Statements delivered to Purchaser, such Selling Party then had
no outstanding Indebtedness to any Person and no liabilities of any kind
(including contingent obligations, tax assessments or unusual forward or
long-term commitments), or any unrealized or anticipated loss, which in the
aggregate then were Material to the Acquired Business and required to be
reflected in those Financial Statements or in the notes related thereto in
accordance with GAAP which were not so reflected.
(ii) Since the Current Balance Sheet Date, no change has
occurred in the business, operations, properties or assets, liabilities,
condition (financial or other) or results of operations of the Acquired Business
that could reasonably be expected, either alone or together with all other such
changes, to have a Material Adverse Effect.
(b) Disclosure. As of the date hereof, all Information that
has been made available to Purchaser by or on behalf of the Company prior to the
date of this Agreement in connection with the transactions contemplated hereby
is, taken together, true and correct in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not Materially
misleading in light of the circumstances under which those statements were made.
Section 2.13. [Reserved.]
Section 2.14. [Reserved.]
Section 2.15. [Reserved.]
Section 2.16. [Reserved.]
Section 2.17. Real Properties. (a) Schedule 2.17 lists and
correctly describes in all material respects: (i) all real properties owned by
either Selling Party and included in the Assets and, for each of those
properties, the address thereof and the use thereof in the Acquired Business,
and (ii) all real properties of which either Selling Party is the lessee under a
lease included in the Assets and, for each of those properties, the address
thereof and the lease (including its expiration date and any renewal options)
relating thereto.
-3-
(b) The Company has provided Purchaser with true, complete and
correct copies of all title reports and insurance policies owned or in the
possession of any of the Selling Parties and relating to any of the real
properties listed as being owned in Schedule 2.17. Except as set forth in
Schedule 2.17 or those reports and policies, and except for Permitted Liens, the
Selling Party designated in Schedule 2.17 owns in fee, and has good, valid and
marketable title to, free and clear of all Liens, each property listed in
Schedule 2.17 as being owned.
(c) The Company has provided Purchaser with true, correct and
complete copies of all leases under which a Selling Party is leasing any of the
properties listed in Schedule 2.17 as being leased and, except as set forth in
Schedule 2.17, (i) each of those leases is, to the knowledge of such Selling
Party, valid and binding on the lessor party thereto, and (ii) such Selling
Party has not sublet any of the leased space to any Person.
(d) The fixed assets of the Company which are included in the
Assets are affixed only to one or more of the real properties listed in Schedule
2.17 and EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT OR THE COMPANY TRANSFER AGREEMENTS, SELLERS MAKE NO WARRANTIES,
EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIM ANY SUCH WARRANTIES WITH RESPECT TO
THE CONDITION, MERCHANTABILITY OR FITNESS GENERALLY OR FOR A PARTICULAR PURPOSE,
OF THE FIXED ASSETS. PURCHASER HAS BEEN AND WILL BE AFFORDED AN OPPORTUNITY TO
SATISFY ITSELF WITH RESPECT TO THE FOREGOING. PURCHASER ACCEPTS THE FIXED ASSETS
"AS-IS, WHERE-IS".
Section 2.18. Other Tangible Assets. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT OR THE COMPANY
TRANSFER AGREEMENTS, SELLERS MAKE NO WARRANTIES, EXPRESS OR IMPLIED, AND
EXPRESSLY DISCLAIM ANY SUCH WARRANTIES WITH RESPECT TO THE CONDITION,
MERCHANTABILITY OR FITNESS GENERALLY OR FOR A PARTICULAR PURPOSE, OF THE ASSETS
COMPRISED OF PROPERTY, PLANT AND EQUIPMENT. PURCHASER HAS BEEN AND WILL BE
AFFORDED AN OPPORTUNITY TO SATISFY ITSELF WITH RESPECT TO THE FOREGOING.
PURCHASER ACCEPTS THE ASSETS "AS-IS, WHERE-IS", EXCEPT THAT THE VESSELS SHALL BE
DELIVERED AT THE PORT OF Reedville, Virginia.
Section 2.19. Proprietary Rights. Except as set forth in
Schedule 2.19, the Selling Parties own, free and clear of all Liens other than
Permitted Liens, or have the legal right to use, all Proprietary Rights that are
necessary to the conduct of the Acquired Business as now conducted, in each case
free, to their knowledge, of any claims or infringements, and these Proprietary
Rights are included in the Assets. Schedule 2.19 (a) lists these Proprietary
Rights and (b) indicates those owned by a Selling Party and, for those not
listed as so owned, the agreement or other arrangement pursuant to which they
are possessed. Except as set forth in Schedule 2.19, (a) no consent of any
Person will be required for the use of any of these Proprietary Rights by
Purchaser or any Subsidiary of Purchaser following the Effective Time and (b)
no governmental registration of any of these Proprietary Rights has lapsed or
expired or been
-4-
canceled, abandoned, opposed or the subject of any reexamination request.
Section 2.20. [Reserved.]
Section 2.21. [Reserved.]
Section 2.22. [Reserved.]
Section 2.23. Employee Matters. (a) Cash Compensation.
Schedule 2.23 sets forth a complete written list of the names, titles and rates
of annual salary at the Current Balance Sheet Date and at the date hereof of all
employees of the Selling Parties who are actively employed in the Business
(other than employees employed in the shipyard and diesel operations)
(hereinafter, the "Transferred Employees").
Section 2.24. [Reserved.]
Section 2.25. [Reserved.]
Section 2.26. [Reserved.]
Section 2.27. Absence of Changes. Since the Current Balance
Sheet Date, except as set forth in Schedule 2.27, none of the following has
occurred with respect to the Acquired Business:
(a) any circumstance, condition, event or state of facts
(either singly or in the aggregate), which has caused, is causing or
will cause a Material Adverse Effect;
(b) any increase in, or any commitment or promise to increase,
the rates of cash compensation as of the date hereof, except for
ordinary and customary bonuses and salary increases for employees at
the times and in the amounts consistent with its past practice;
(c) any work interruptions, labor grievances or claims filed
that will have a Material Adverse Effect following the Effective Time;
(d) any distribution, sale or transfer of, or any commitment
to distribute, sell or transfer, any of the Assets of any kind which
singly is or in the aggregate are Material to the Acquired Business;
(e) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the
Assets or requiring consent of any Person to the transfer and
assignment of any of the Assets;
(f) any purchase or acquisition of, or agreement, plan or
arrangement to
-5-
purchase or acquire, any property, rights or assets outside of the
ordinary course of operating the Acquired Business consistent with
its past practices;
(g) any waiver of any of any Selling Party's rights or claims
that singly is or in the aggregate are Material to the Acquired
Business; or
(h) any transaction by a Selling Party outside the ordinary
course of operating the Acquired Business or not consistent with the
past practices of the Acquired Business.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to each Selling Party that
all the following representations and warranties in this Article III are as of
the date of this Agreement, and will be on the Closing Date and immediately
prior to the Effective Time, true and correct:
Section 3.01. Organization; Power. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser has all requisite corporate power and authority
under the laws of its Organization State and its Charter Documents to own or
lease and to operate its properties presently and following the Effective Time
and to carry on its business as now conducted and as proposed to be conducted
following the Effective Time.
Section 3.02. Authorization; Enforceability; Absence of
Conflicts; Required Consents. (a) The execution, delivery and performance by
Purchaser of this Agreement and each other Transaction Document to which it is a
party, and the effectuation of the Acquisition and the other transactions
contemplated hereby and thereby, are within its corporate power under its
Charter Documents and the applicable Governmental Requirements of its
Organization State and have been duly authorized by all proceedings, including
actions permitted to be taken in lieu of proceedings, required under its Charter
Documents and the applicable Governmental Requirements of its Organization
State.
(b) This Agreement has been, and each of the other Transaction
Documents to which Purchaser is a party, when executed and delivered to the
other parties thereto, will have been, duly executed and delivered by it and is,
or when so executed and delivered will be, its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as that
enforceability may be (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law).
(c) The execution, delivery and performance in accordance with
their
-6-
respective terms by Purchaser of the Transaction Documents to which it is
a party have not and will not violate, breach or constitute a default under (i)
its Charter Documents, (ii) any Governmental Requirement applicable to it or
(iii) any of its Material Agreements.
(d) Except as may be required by the HSR Act or the applicable
state securities or blue sky laws, no Governmental Approvals are required to be
obtained, and no reports or notices to or filings with any Governmental
Authority are required to be made, by Purchaser for the execution, delivery or
performance by Purchaser of the Transaction Documents to which it is a party,
the enforcement against Purchaser, of its obligations thereunder or the
effectuation of the Acquisition and the other transactions contemplated thereby.
Section 3.03. [Reserved.]
Section 3.04. [Reserved.]
ARTICLE IV
[RESERVED]
ARTICLE V
CONDITIONS TO CLOSING AND CONSUMMATION
Section 5.01. Conditions to the Obligations of Each Party
The obligation of each party hereto to take the actions contemplated to be
taken by that party at the Closing is subject to the satisfaction on or before
the Closing Date of each of the following conditions or waiver pursuant to
Section 10.04:
(a) No Litigation. No Litigation shall be pending on the
Closing Date to restrain, prohibit or otherwise interfere with, or to
obtain material damages or other relief from Purchaser or any
Subsidiary of Purchaser in connection with, the consummation of the
Acquisition.
Section 5.02. Conditions to the Obligations of the Selling
Parties. The obligations of each Selling Party with respect to actions to be
taken by them at or before the Closing Date and the actions to be taken on the
Closing Date are subject to the satisfaction, or the waiver by such
Selling Party pursuant to Section 10.04 on or before the Closing Date, of (a)
all the conditions set forth in Schedule 5.02, if any, and (b) the condition
that all the representations and warranties of Purchaser in Article III shall be
true and correct as of the Closing Date as though made at that time.
Section 5.03. Conditions to the Obligations of Purchaser. The
obligations of Purchaser with respect to actions to be taken by it at or before
the Closing Date are subject to the
-7-
satisfaction, or the waiver by Purchaser pursuant to Section 10.04, on or
before the Closing Date of (a) all the conditions set forth in Schedule 5.03,
if any, and (b) all the following conditions:
(1) Representations and Warranties. All the representations
and warranties of the Selling Parties in Article II shall be true and
correct as of the Closing as though made at that time;
(2) Delivery of Documents. The Selling Parties shall have
delivered to Purchaser a secretary's certificate, in substantially the
form agreed to by Purchaser signed by the Secretary of each Selling
Party, respecting the Charter Documents of such Selling Party,
resolutions of the Board of Directors and stockholders of such Selling
Party and the incumbency and signatures of certain officers of such
Selling Party.
ARTICLE VI
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section 6.01. [Reserved.]
Section 6.02. [Reserved.]
Section 6.03. [Reserved.]
Section 6.04. Transferred Employees. (a) As of the Effective
Time, Purchaser will hire each Transferred Employee shown on Schedule 2.23, and
the terms of any such employment for each such employee, including cash
compensation and benefits, will be substantially the same in the aggregate as
the compensation and benefits received by each such employee prior to the
Closing. Purchaser agrees to continue employment for any Transferred Employees
who normally work on the vessels operated in the Business at least through the
end of the 1997 fishing season and as long as Purchaser continues to run its own
vessels in the 1997 season, and to continue the employment of all other
Transferred Employees through at least December 31, 1997, subject in any case to
the right to terminate any such Transferred Employee for cause.
(b) Without the prior written consent of Purchaser, no Selling
Party will make, or permit any of its Affiliates to make, at any time after the
date hereof any representations or promises, written or oral, to any employee of
any Selling Party concerning that employee's employment by Purchaser or any
Subsidiary of Purchaser or any compensation payable by Purchaser or any
Subsidiary of Purchaser to that employee following the Effective Time. At
reasonable times after the date hereof, Purchaser will be entitled to (i)
interview such of the employees of the Selling Parties who are involved in the
Acquired Business as it wishes and (ii) review and retain copies of the
Company's personnel records and performance evaluations of
-8-
those employees. At the request of Purchaser, each Selling Party will make its
employees available to provide reasonable assistance to Purchaser in such
interview process.
(c) No Transfer of Plans. No portion of the assets of any
ERISA Employee Benefit Plan, or Employee Policies and Procedures, heretofore
sponsored or maintained by either Selling Party or any Selling Party Subsidiary
(and no amount attributable to any such ERISA Employee Benefit Plan or Employee
Policies and Procedures) shall be transferred to Purchaser, and Purchaser shall
not be required to continue any such Plan or Employee Policies and Procedures
after the Effective Time. All amounts payable by either Selling Party under any
such Plan or Employment Policies and Procedures directly to any employees of the
Selling Party who become employees of Purchaser or any Subsidiary of Purchaser
shall be paid or caused to be paid by the Company within 30 days after the
Effective Time to the extent that such payment is not inconsistent with the
terms of such ERISA Employee Benefit Plan or Employee Policies and Procedures.
(d) Transferred Employee Bonuses. Pursuant to provisions of
certain collective bargaining agreements, employment arrangements or other
agreements with the Selling Parties, certain of the Transferred Employees may be
eligible for bonuses upon the completion of the 1997 fishing season. Pursuant to
those agreements and the Selling Parties' desire to accommodate the transfer of
these employees, the Selling Parties agree to pay (or to reimburse the Purchaser
for payment of) 100 percent of such bonuses for the 1997 fishing season. Because
portions of the bonuses payable may be earned after the Closing Date and will be
based on volumes of fish caught and/or processed after the Closing Date, the
Purchaser agrees to make its books and records regarding volumes caught and/or
processed by the Acquired Business from the Closing Date through the end of the
1997 fishing season available to the Selling Parties for the necessary
calculation of such bonuses.
(e) Insurance Coverages for Transferred Employees. Purchaser
agrees to provide immediate coverage for the Transferred Employees as of the
Effective Time under a group health insurance plan sponsored by the Purchaser or
a substantially similar plan. The group health insurance coverage will provide
major medical and catastrophic coverages similar to those provided by the
Selling Parties' plan. The Purchaser agrees to waive all waiting or elimination
periods and preexisting condition limitations of such plan for the Transferred
Employees and to equalize deductibles for the year for the Transferred
Employees.
(f) Worker Adjustment and Retraining Notification Act. The
Selling Parties will terminate the employment of the Transferred Employees as of
the Effective Time. Purchaser agrees to provide, on or before the Effective
Time, notice to the Transferred Employees, appropriate union representatives and
appropriate local government officials of its acquisition of the Acquired
Business and the resulting impact on the employment of the Transferred
Employees, as required by the Worker Adjustment and Retraining Notification Act,
29 U.S.C. 'SS''SS'2101-2109 (the "WARN Act"), including any anticipated dates of
plant shutdown or mass layoffs. Purchaser agrees to indemnify and hold harmless
the Selling Parties from and against any liability arising under the WARN Act
with respect to the employees of the Selling Parties
-9-
whose termination of employment occurs on the Closing Date. This indemnification
provision shall survive the Closing and shall remain effective concurrent with
the legal limitations period applicable to such WARN Act liability.
Section 6.05. Tax Matters. (a) Ad valorem or other property
Taxes respecting the Assets will be allocated between the portion of any taxable
period that is prior to the Effective Date and the portion of that period
extending from and including the Effective Date on a daily basis. The Selling
Parties will be liable for the payment of (i) all ad valorem or other property
Taxes respecting the Assets which are allocable to the portion of the taxable
period that is prior to the Effective Date and (ii) all ad valorem or other
property Taxes respecting the Retained Assets for all taxable periods. Purchaser
will be liable for the payment of all ad valorem or other property Taxes
respecting the Assets which are allocable to the portion of the taxable period
from and including the Effective Date. Purchaser will provide to the Company a
copy of each ad valorem or other property Tax assessment on, or notice of
assessed value and ad valorem or other property Taxes due respecting, the Assets
Purchaser receives for each taxable period in which the Effective Date occurs,
whereupon the applicable Selling Party promptly will pay to Purchaser its
portion of those ad valorem or other Property Taxes, determined as provided
above; thereafter, Purchaser will pay that amount when due to the appropriate
Taxing Authority. Except as provided in this Section 6.05(a), Purchaser will not
have any liability for Taxes payable by the Company (including income, sales or
transfer taxes) with respect to the operations or assets of the Company or the
Acquired Business or the consummation of the Acquisition or the other
transactions contemplated hereby.
(b) Purchaser and the Company will allocate the Acquisition
Consideration in accordance with Section 1060 of the Code.
(c) Notwithstanding anything in this Agreement to the
contrary, the Purchaser shall, upon reasonable request, promptly cause to be
made available to the Company (or its agent), in the form and manner of such
request, any and all operating information, including (without limitation) all
data, records, and reports, any of which were included within the Assets, which
are the subject of this Agreement.
Section 6.06. [Reserved.]
Section 6.07. Compliance With Bulk Sales Laws. The parties
hereby waive compliance by the parties with any applicable bulk sales laws and
any other similar laws in any applicable jurisdiction in respect of the
transactions contemplated by this Agreement. The Selling Parties jointly and
severally will indemnify Purchaser from, and hold them harmless against, any
Damages or Damage Claims relating from or arising out of the parties' failure to
comply with any of such laws in respect of the transactions contemplated by this
Agreement.
Section 6.08. [Reserved.]
Section 6.09. Certain Transfers Requiring Consents. In the
event that an attempted conveyance, assignment, transfer or delivery of any
claim, contract, license, lease,
-10-
sales order, purchase order, commitment, consent, franchise, privilege or any
other asset, claim, right or benefit to be assigned to Purchaser as provided in
this Agreement (collectively, the "Rights") would be ineffective without the
consent of a third party or any other Person or would affect the rights of
Purchaser thereunder so that Purchaser would not receive all the Rights, the
Selling Parties shall make commercially reasonable efforts cause the benefits of
the Rights (or the economic equivalent thereof) to be provided to Purchaser as
appropriate, and will cooperate with Purchaser in any commercially reasonable
arrangement required to provide Purchaser with the benefits of all such Rights,
including (i) maintenance by a Selling Party of a Right in its name in trust for
the benefit of Purchaser, (ii) at the sole option of Purchaser, enforcement for
the benefit of Purchaser of any and all such Rights against a third party.
Section 6.10. Further Assurances. The Selling Parties on
request by Purchaser from time to time after the Effective Date, will execute,
acknowledge and deliver to Purchaser such other instruments of conveyance and
transfer and will take such other actions as Purchaser may reasonably require in
order to vest more effectively in Purchaser, or to put Purchaser more fully in
possession of, any of the Assets. From and after the Effective Date, the Selling
Parties will promptly refer all inquiries with respect to ownership of the
Assets or the Acquired Business to Purchaser.
Section 6.11. [Reserved.]
Section 6.12. [Reserved.]
ARTICLE VII
INDEMNIFICATION
Section 7.01. Survival of Representations and Warranties. All
the provisions of this Agreement will survive the Closing and Effective Time
indefinitely notwithstanding any investigation at any time made by or on behalf
of any party hereto, provided that the representations and warranties set forth
in (or deemed by any of the Special Provisions to be set forth in) Articles II
and III and in any certificate delivered in connection herewith with respect to
any of those representations and warranties will terminate and expire on the
first anniversary of the Effective Date, except that the representations and
warranties of the Selling Parties in Section 2.07 will survive forever. After a
representation and warranty has terminated and expired, no indemnification will
or may be sought pursuant to this Article VII on the basis of that
representation and warranty by any Person who would have been entitled pursuant
to this Article VII to indemnification on the basis of that representation and
warranty prior to its termination and expiration, provided that in the case of
each representation and warranty that will terminate and expire as provided in
this Section 7.01, no claim presented in writing for indemnification pursuant to
this Article VII on the basis of that representation and warranty prior to its
termination and expiration will be affected in any way by that termination and
expiration.
Section 7.02. Indemnification of Purchaser Indemnified
Parties. Subject to the
-11-
applicable provisions of Sections 7.01 and 7.06, the Selling Parties covenant
and agree that they, jointly and severally, will indemnify each Purchaser
Indemnified Party against, and hold each Purchaser Indemnified Party harmless
from and in respect of, all Damage Claims that arise from, are based on or
relate or otherwise are attributable to (i) any breach of the representations
and warranties of the Selling Parties set forth herein or in certificates
delivered in connection herewith, or (ii) any nonfulfillment of any covenant or
agreement on the part of the Selling Parties under this Agreement (each such
Damage Claim and each Damage Claim described in Section 7.02(b) being an
"Purchaser Indemnified Loss"); provided, however, that in no event shall the
Selling Parties be obligated to indemnify any Purchaser Indemnified Party for
any Damages incurred pursuant to clauses (i) or (ii) above if such Purchaser
Indemnified Party had actual knowledge of such breach of the representations and
warranties of the Selling Parties set forth herein or any non-fulfillment of any
covenant or agreement on the part of the Selling Parties under this Agreement
and failed to notify the Selling Parties of such knowledge prior to Closing. Any
indemnification provided to any Purchaser Indemnified Party by the Selling
Parties hereunder for Damages shall be determined net of (x) any Tax benefit
actually recognized which reduced, or will reduce when a Tax return is filed,
the Tax liability of such Purchaser Indemnified Party, or (y) any insurance
coverage with respect thereto which reduces Damages of such Purchaser
Indemnified Party that would otherwise be sustained.
Section 7.03. Indemnification of Seller Indemnified Parties.
Purchaser covenants and agrees that it will indemnify each Seller Indemnified
Party against, and hold each Seller Indemnified Party harmless from and in
respect of, all Damage Claims that arise from, are based on or relate or
otherwise are attributable to (a) any breach by Purchaser of its representations
and warranties set forth herein or in its certificates, if any, delivered to the
Selling Parties in connection herewith or (b) any nonfulfillment of any covenant
or agreement on the part of Purchaser in this Agreement (each such Damage Claim
being a "Seller Indemnified Loss").
Section 7.04. Indemnification of Purchaser Indemnified Parties
for Certain Environmental Matters.
(a) The Selling Parties agree to indemnify, reimburse, defend
and hold harmless the Purchaser Indemnified Parties from and against Damages
arising from Environmental Claims relating to the real property Assets (but not
the fixed or other Tangible Assets). Upon demand by the Purchaser Indemnified
Parties, the Selling Parties shall diligently defend any such Environmental
Claim commenced against the Purchaser Indemnified Parties, at the Selling
Parties' own cost and expense and by counsel chosen by the Selling Parties.
(b) In no event shall the Selling Parties be obligated to
indemnify, reimburse, defend or hold harmless any Purchaser Indemnified Party in
relation to any investigation, cleanup, removal, containment, or remedial action
(referred to individually or collectively as "Response Action") to the extent
any such Response Action is not required by applicable Environmental Law
assuming use of the property that does not differ materially from use of the
property as of the Closing Date.
-12-
(c) The Selling Parties shall have no obligation to indemnify,
reimburse, defend, or hold harmless any Purchaser Indemnified Party for any
Environmental Claim described in Section 7.04(a) above that arises as a result
of any Purchaser Indemnified Party providing notice to a Governmental Authority
or any party not affiliated with any Selling Party of any act or omission of any
Selling Party or any environmental condition on any site that is part of the
Assets, where such Purchasing Party was not required by law to provide such
notice.
(d) The provisions of this Section shall be subject to the
conditions on indemnification contained in Section 7.05 of this Agreement, and
shall be the exclusive remedy available to the Purchaser Indemnified Parties
relating to any Environmental Claim or other environmental matter.
(e) As to any Environmental Claim for which any Purchaser
Indemnified Party seeks indemnification, such Purchaser Indemnified Party shall
promptly (and prior to the performance of any Response Action) provide the
Selling Parties with all information known to the Purchaser Indemnified Parties
relating to such Environmental Claim, report regularly to the Selling Parties
regarding the performance of any Response Action and make available to the
Selling Parties all documents pertaining to such Environmental Claim.
(f) The obligations of the Selling Parties under this Section
shall terminate on the second anniversary of the Closing Date except with
respect to Environmental Claim of which a Purchaser Indemnified Party gave
notice to the Company prior to such date.
Section 7.05. Conditions of Indemnification. (a) All claims
for indemnification under this Agreement shall be asserted and resolved as
follows in this Section 7.05.
(b) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall within thirty calendar days of learning of the
existence of a claim for which indemnification could be sought (i) notify the
party from whom indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims asserted against the Indemnified Party ("Third Party
Claim") that could give rise to a right of indemnification under this Agreement
and (ii) transmit to the Indemnifying Party a written notice ("Claim Notice")
describing in reasonable detail the nature of the Third Party Claim, a copy of
all papers served with respect or relating to that claim (if any), an estimate
of the amount of damages attributable to the Third Party Claim to the extent
feasible (which estimate shall not be conclusive of the final amount of that
claim) and the basis for the Indemnified Party's request for indemnification
under this Agreement. The failure to deliver a Claim Notice shall not within
thirty calendar days, as specified herein shall not relieve the Indemnifying
Party of its obligations to the Indemnified Party with respect to the related
Third Party Claim except to the extent that the resulting delay is materially
prejudicial to the defense of that claim. Within 15 days after receipt of any
Claim Notice (the "Election Period"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its potential
liability to the Indemnified Party under this Article VII with respect to that
Third Party Claim and (ii) if the Indemnifying Party does not dispute its
potential liability to the Indemnified Party with respect to that Third Party
Claim, whether the Indemnifying Party
-13-
desires, at the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against that Third Party Claim.
(c) If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified Party within the
Election Period that the Indemnifying Party elects to assume the defense of the
Third Party Claim, then the Indemnifying Party shall have the right to defend,
at its sole cost and expense, that Third Party Claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 7.05(c), and the Indemnified
Party will furnish the Indemnifying Party with all information in its possession
with respect to that Third Party Claim and otherwise fully cooperate with the
Indemnifying Party in the defense of that Third Party Claim; provided, however,
that the Indemnifying Party shall not enter into any settlement with respect to
any Third Party Claim that purports to limit the lawful activities of any
Indemnified Party or any Affiliate of any Indemnified Party without the prior
consent of that Indemnified Party (which consent may be withheld in the sole
discretion of that Indemnified Party). The Indemnified Party is hereby
authorized, at the sole cost and expense of the Indemnifying Party, to file,
during the Election Period, any motion, answer or other pleadings that the
Indemnified Party shall deem essential to protect its interests or those of the
Indemnifying Party, and to preserve any and all applicable claims and defenses;
provided that the Indemnified Party shall make no admission of liability during
such Election Period. Should Indemnified Party make such an admission of
liability, the obligation to indemnify under this Agreement shall end. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to this
Section 7.05(c) and will bear its own costs and expenses with respect to that
participation; provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Indemnifying Party, then the Indemnified
Party may employ separate counsel at its own expense.
(d) If the Indemnifying Party has delivered a written notice
to the Indemnified Party to the effect that the Indemnifying Party disputes its
liability to the Indemnified Party under this Article VII, and if that dispute
is resolved by a court of competent jurisdiction or by agreement in favor of the
Indemnifying Party, the Indemnified Party shall bear the costs and expenses of
its own defense of a Third Party Claim, as well as all fees and expenses
incurred by the Indemnifying Party in connection with such litigation and in
connection with defending the claim for indemnification. If the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect that
the Indemnifying Party disputes its liability to the Indemnified Party under
this Article VII and if that dispute is resolved by a court of competent
jurisdiction or by agreement in favor of the Indemnified Party, the Indemnifying
Party shall bear the costs and expenses of its owndefense of a Third Party
Claim, as well as all fees and expenses incurred by the Indemnified Party in
connection with such litigation and in connection with pursuing the claim for
indemnification.
-14-
(e) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder that does not involve a Third Party
Claim, the Indemnified Party shall transmit to the Indemnifying Party within
thirty business days of first learning of such claim a written notice (the
"Indemnity Notice") describing in reasonable detail the nature of the claim, an
estimate of the amount of Damages attributable to that claim to the extent
feasible (which estimate shall not be conclusive of the final amount of that
claim) and the basis of the Indemnified Party's request for indemnification
under this Agreement. If the Indemnifying Party does not notify the Indemnified
Party within 15 days from its receipt of the Indemnity Notice that the
Indemnifying Party disputes the claim specified by the Indemnified Party in the
Indemnity Notice, that claim shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed that claim, as
provided above, that dispute shall be resolved by proceedings in an appropriate
court of competent jurisdiction if the parties do not reach a settlement of that
dispute within 30 days after notice of that dispute is given.
(f) Payments of all amounts owing by an Indemnifying Party
pursuant to this Article VII relating to a Third Party Claim shall be made
within 30 days after the latest of (i) the settlement of that Third Party Claim,
(ii) the expiration of the period for appeal of a final adjudication of that
Third Party Claim or (iii) the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement in respect of that Third Party Claim. Payments of all
amounts owing by an Indemnifying Party pursuant to Section 7.04(e) shall be made
within 30 days after the later of (i) the expiration of the 30-day Indemnity
Notice period or (ii) the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement.
Section 7.06. Exclusive Remedy. Except as otherwise provided
in Sections 8.02 or 10.01 hereof or pursuant to the terms of any Company
Transfer Document, the indemnification provided to any Purchaser Indemnified
Party by the Selling Parties hereunder shall be the sole and exclusive remedy of
such Purchaser Indemnified Party for Damages arising out of the breach of this
Agreement or any of the transactions contemplated herein by the Selling Parties.
ARTICLE VIII
LIMITATIONS ON COMPETITION
Section 8.01. Prohibited Activities. Each Selling Party and
Xxxxx Xxxxxxx, individually agrees, severally and not jointly with any other
Person, that it will not, during the period beginning on the date hereof and
ending on the second anniversary of the Closing Date, directly or indirectly,
for any reason, for his own account or on behalf of or together with any other
Person:
(i) engage as a director, officer or in any similar executive
capacity or as an owner, co-owner, financier or other investor of or in
any business engaged in menhaden
-15-
fishing and the production of fish meal and fish oil and fish solubles
from such fishing (collectively, the "Restricted Business") in the
area from Rhode Island to South Carolina and in the area from
Mississippi to Texas and the territorial waters of the United States
adjacent thereto (the "Territory"). For purposes hereof the Restricted
Business does not include the blending of fish meal purchased from
Persons not affiliated with any of the Selling Parties and the sale of
such fish meal products;
(ii) call on any natural person who is at that time employed
by the Acquired Business or Purchaser in any managerial capacity with
the purpose or intent of attracting that person from the employ of the
Acquired Business or Purchaser;
(iii) call on, or solicit, either directly or indirectly, any
Person that at that time is, or at any time within one year prior to
that time was, a customer of the Acquired Business or Purchaser or any
prospective customer that had or, to the knowledge of the Selling
Parties, was about to receive a business proposal from Purchaser, in
any case within any Territory (A) for the purpose of engaging in the
Restricted Business in that Territory and (B) with the knowledge of
that customer relationship; or
(iv) call on any Entity which to Selling Party's knowledge has
been called on by Purchaser in connection with a possible acquisition
by Purchaser, with the knowledge of that Entity's status as such an
acquisition candidate, for the purpose of acquiring that Entity or
arranging the acquisition of that Entity by any Person other than
Purchaser.
Notwithstanding the foregoing, the Selling Parties may own and hold as a passive
investment up to 5% of the outstanding capital stock of a competing Entity if
that class of capital stock is listed on a national stock exchange or included
in the Nasdaq National Market.
Section 8.02. Damages. Because of the difficulty of measuring
economic losses to Purchaser as a result of any breach by the Selling Parties of
their covenants in Section 8.01, and because of the immediate and irreparable
damage that could be caused to Purchaser for which it would have no other
adequate remedy, the Company and each Selling Party agree that Purchaser may
enforce the provisions of Section 8.01 by injunctions and restraining orders
against any Selling Party or above-identified individual if it or he breaches
any of those provisions.
Section 8.03. Reasonable Restraint. The parties hereto each
agree that Sections 8.01 and 8.02 impose reasonable restraints in light of the
activities and business of Purchaser on the date hereof and the current business
plans of Purchaser.
Section 8.04. Severability; Reformation. The covenants in this
Article VIII are severable and separate, and the unenforceability of any
specific covenant in this Article VIII is not intended by any party hereto to,
and shall not, affect the provisions of any other covenant in this Article VIII.
If any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth in Section 8.01 are unreasonable as applied
to any Selling Party or
-16-
the above identified individual, acknowledge their mutual intention and
agreement that those restrictions be enforced to the fullest extent the court
deems reasonable, and thereby shall be reformed to that extent as applied to the
Company or that Selling Party or other Person, as the case may be.
Section 8.05. Independent Covenant. All the covenants in this
Article VIII are intended by each party hereto to, and shall, be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of any Selling Party against
Purchaser, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Purchaser of any covenant in this
Article VIII. It is specifically agreed that the period specified in Section
8.01 shall be computed in the case of the Selling Parties by excluding from that
computation any time during which a Selling Party [or other Person], as the case
may be, is in violation of any provision of Section 8.01. The covenants
contained in this Article VIII shall not be affected by any breach of any other
provision hereof by any party hereto.
Section 8.06. Materiality. Each Selling Party, severally and
not jointly with any other Person, hereby agree that this Article VIII is a
material and substantial part of the transactions contemplated hereby.
ARTICLE IX
DEFINITIONS AND DEFINITIONAL PROVISIONS
Section 9.01. Defined Terms. As used in this Agreement, the
following terms have the meanings assigned to them below:
"Acquired Business" has the meaning specified in Paragraph 1.
"Acquisition" has the meaning specified in the Preliminary
Statement.
"Acquisition Consideration" has the meaning specified in
Paragraph 2.
"Agreement" means this Agreement, including all attached
Schedules, Annexes, Addenda and Exhibits, as each of the same may be
amended, modified or supplemented from time to time pursuant to the
provisions hereof or thereof.
"Affiliate" means, as to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries
or otherwise, controls, is controlled by or is under common control
with the specified Person. As used in this definition, "control" means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person (whether
through ownership of Capital Stock of that Person, by contract or
otherwise).
-17-
"Assets" has the meaning specified in Paragraph 2 of the
Preliminary Statement.
"Asset Purchase" means a transaction in which the Company or
Vessel Sub sells, and Purchaser purchases, assets constituting the
Acquired Business.
"Capital Stock" means, with respect to: (a) any corporation,
any share, or any depositary receipt or other certificate representing
any share, of an equity ownership interest in that corporation; and (b)
any other Entity, any share, membership or other percentage interest,
unit of participation or other equivalent (however designated) of an
equity interest in that Entity.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Charter Documents" means, with respect to any Entity at any
time, in each case as amended, modified and supplemented at that time,
the articles or certificate of formation, incorporation or organization
(or the equivalent organizational documents) of that Entity, (b) the
bylaws or limited liability company agreement or regulations (or the
equivalent governing documents) of that Entity and (c) each document
setting forth the designation, amount and relative rights, limitations
and preferences of any class or series of that Entity's Capital Stock
or of any rights in respect of that Entity's Capital Stock.
"Claim Notice" has the meaning specified in Section 7.05.
"Closing" has the meaning specified in Paragraph 3.
"Closing Date" has the meaning specified in Paragraph 1.
"Code" means the Internal Revenue Code of 1986.
"Company" has the meaning specified in Paragraph 1.
"Company Transfer Documents" has the meaning specified in
Paragraph 2.
"Confidential Information" means, with respect to any Person,
all trade secrets and other confidential, nonpublic and/or proprietary
information of that Person, including information derived from reports,
investigations, research, work in progress, codes, marketing and sales
programs, capital expenditure projects, cost summaries, pricing
formulae, contract analyses, financial information, projections,
confidential filings with any Governmental Authority and all other
confidential, nonpublic concepts, methods of doing business, ideas,
materials or information prepared or performed for, by or on behalf of
that Person.
-18-
"Current Balance Sheet" has the meaning specified in
Paragraph 1.
"Current Balance Sheet Date" has the meaning specified in
Paragraph 1.
"Damage" to any specified Person means any cost, damage
(including any consequential, exemplary, punitive or treble damage) or
expense (including reasonable fees and actual disbursements by
attorneys, consultants, experts or other Representatives and Litigation
costs) to, any fine of or penalty on or any liability (including loss
of earnings or profits) of any other nature of that Person; provided,
that if any Indemnified Party should have a claim against any
Indemnifying Party that does not involve a Third Party Claim and for
which the Indemnified Party seeks indemnification pursuant to Section
7.05(e), the amount of Damages attributable to that claim will not
include any amount representing consequential, exemplary, punitive or
treble damage.
"Damage Claim" means, as asserted (a) against any specified
Person, any claim, demand or Litigation made or pending against the
specified Person for Damages to any other Person, or (b) by the
specified Person, any claim or demand of the specified Person against
any other Person for Damages to the specified Person.
"Effective Date" has the meaning specified in Paragraph 1.
"Effective Time" has the meaning specified in Paragraph 2.
"Election Period" has the meaning specified in Section 7.05.
"Employee Policies and Procedures" means at any time all
employee manuals and all material written policies, procedures and
work-related rules that apply at that time to any employee, nonemployee
director or officer of, or any other natural person performing
consulting or other independent contractor services for, a Selling
Party or any Selling Party Subsidiary.
"Employment Agreement" means at any time any (a) agreement to
which a Selling Party or any Selling Party Subsidiary is a party which
then relates to the direct or indirect employment or engagement, or
arises from the past employment or engagement, of any natural person by
the Company or any Selling Party Subsidiary, whether as an employee, a
nonemployee officer or director, a consultant or other independent
contractor, a sales representative or a distributor of any kind,
including any employee leasing or service agreement and any
noncompetition agreement, and (b) agreement between a Selling Party or
any Selling Party Subsidiary and any Person which arises from the sale
of a business by that Person to the Selling Party or any Selling Party
Subsidiary and limits that Person's competition with a Selling Party or
any Selling Party Subsidiary.
"Entity" means any sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited
liability company, business trust, unincorporated
-19-
organization or association, mutual company, joint stock company or
joint venture.
"Environmental Claim" means a claim or demand for the costs or
Damages incurred in any investigative, enforcement, cleanup, removal,
containment, remedial or other private or governmental or regulatory
action threatened, instituted or completed by any Governmental
Authority or third party (which shall not include any Purchaser
Indemnified Party, any affiliate of any Purchaser Indemnified Party,
any party with whom any Purchaser Indemnified Party has a contractual
relationship, or any party that is in the chain of title for any site
that is part of the Assets) against any Purchaser Indemnified Party,
arising out of the acts or omissions of any Selling Party, relating to
the environment or natural resources. In addition, as to claims for
which demand for indemnification is made by any Purchaser Indemnified
Party within six (6) months of the Closing Date, "Environmental Claim"
also shall mean the cost of any investigation, cleanup, removal,
containment, or remediation relating to the environment or natural
resources, necessitated by facts or conditions discovered during
Purchaser's environmental investigation of the real property Assets.
"Environmental Laws" means any and all Governmental
Requirements relating to the environment, including ambient air,
surface water, land surface or subsurface strata, or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes (including Solid Wastes, Hazardous Wastes or Hazardous
Substances) or noxious noise or odor into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, recycling, removal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including petroleum, petroleum distillates,
asbestos or asbestos-containing material, polychlorinated biphenyl's,
chlorofluorocarbons (including chlorofluorocarbon-12) or
hydrochlorofluorocarbons) in effect as of the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means, with respect to any specified Person
at any time, any other Person, including an Affiliate of the specified
Person, that is, or at any time within six years of that time was, a
member of any ERISA Group of which the specified Person is or was a
member at the same time.
"ERISA Employee Benefit Plan" means any "employee benefit
plan" as defined in Section 3(3) of ERISA and includes any ERISA
Pension Benefit Plan.
"ERISA Pension Benefit Plan" means any "employee pension
benefit plan", as defined in Section 3(2) of ERISA, including any plan
that is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code (excluding any Multiemployer
Plan).
-20-
"Financial Statements" means the Initial Financial Statements.
"GAAP" means generally accepted accounting principles and
practices in the United States as in effect from time to time which
have been applied on a basis consistent with the most recent Financial
Statements delivered to Purchaser prior to the Effective Time.
"Governmental Approval" means at any time any authorization,
consent, approval, permit, franchise, certificate, license,
implementing order or exemption of, or registration or filing with, any
Governmental Authority, including any certification or licensing of a
natural person to engage in a profession or trade or a specific
regulated activity, at that time.
"Governmental Authority" means (a) any national, state,
county, municipal or other government, domestic or foreign, or any
agency, board, bureau, commission, court, department or other
instrumentality of any such government, or (b) any Person having the
authority under any applicable Governmental Requirement to assess and
collect Taxes for its own account.
"Governmental Requirement" means at any time (a) any law,
statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, writ, edict, award, authorization or other requirement of
any Governmental Authority in effect at that time or (b) any obligation
included in any certificate, certification, franchise, permit or
license issued by any Governmental Authority or resulting from binding
arbitration, including any requirement under common law, at that time.
"Guaranty" means, for any specified Person, without
duplication, any liability, contingent or otherwise, of that Person
guaranteeing or otherwise becoming liable for any obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any liability of the specified Person, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) that obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of
that obligation, (b) to purchase property, securities or services for
the purpose of assuring the owner of that obligation of its payment or
(c) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay that obligation; provided, that the term
"Guaranty" does not include endorsements for collection or deposit in
the ordinary course of the endorser's business.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976.
"Indebtedness" of any Person means, without duplication, (a)
any liability of that Person (i) for borrowed money or arising out of
any extension of credit to or for the account of that Person (including
reimbursement or payment obligations with respect to surety bonds,
letters of credit, banker's acceptances and similar instruments), for
the
-21-
deferred purchase price of property or services or arising under
conditional sale or other title retention agreements, other than trade
payables arising in the ordinary course of business, (ii) evidenced by
notes, bonds, debentures or similar instruments, (iii) in respect of
capital leases or (iv) in respect of interest rate protection
agreements, (b) any liability secured by any Lien upon any property or
assets of that Person (or upon any revenues, income or profits of that
Person therefrom), whether or not that Person has assumed that
liability or otherwise become liable for the payment thereof or (c) any
liability of others of the type described in the preceding clause (a)
or (b) in respect of which that Person has incurred, assumed or
acquired a liability by means of a Guaranty.
"Indemnity Notice" has the meaning specified in Section 7.05.
"Indemnified Party" has the meaning specified in Section 7.05.
"Indemnifying Party" has the meaning specified in Section
7.05.
"Information" means written information, including (a) data,
certificates, reports and statements (excluding Financial Statements)
and (b) summaries of unwritten agreements, arrangements, contracts,
plans, policies, programs or practices or of unwritten amendments or
modifications of, supplements to or waivers under any of the foregoing
documents.
"IRS" means the Internal Revenue Service.
"Lien" means, with respect to any property or asset of any
Person (or any revenues, income or profits of that Person therefrom)
(in each case whether the same is consensual or nonconsensual or arises
by contract, operation of law, legal process or otherwise), (a) any
mortgage, lien, security interest, pledge, attachment, levy or other
charge or encumbrance of any kind thereupon or in respect thereof or
(b) any other arrangement under which the same is transferred,
sequestered or otherwise identified with the intention of subjecting
the same to, or making the same available for, the payment or
performance of any liability in priority to the payment of the
ordinary, unsecured creditors of that Person, including any "adverse
claim" (as defined in the applicable Uniform Commercial Code) in the
case of any Capital Stock. For purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset that it has acquired
or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement relating to that asset.
"Litigation" means any action, case, proceeding, claim,
grievance, suit or investigation or other proceeding conducted by or
pending before any Governmental Authority or any arbitration
proceeding.
"Material" means, as applied to any Entity or the Acquired
Business, material to the business, operations, property or assets,
liabilities, financial condition or results of
-22-
operations of that Entity and its Subsidiaries considered as a whole
or the Acquired Business, as the case may be.
"Material Adverse Effect" means, with respect to the
consequences of any fact or circumstance (including the occurrence or
non-occurrence of any event) to the Acquired Business, that such fact
or circumstance has caused, is causing or will cause, directly,
indirectly or consequentially, singly or in the aggregate with other
facts and circumstances, any Damages in excess of $250,000.
"Material Agreement" of any Entity means any contract or
agreement (a) to which that Entity or any of its Subsidiaries is a
party, or by which that Entity or any of its Subsidiaries is bound or
to which any property or assets of that Entity or any of its
Subsidiaries is subject and (b) which is Material to that Entity.
"Multiemployer Plan" means a "multiemployer" plan as defined
in Section 4001(a)(3) of ERISA, Section 414 of the Code or Section
3(37) of ERISA.
"Organization State" means, as applied to (a) any corporation,
its state or other jurisdiction of incorporation, (b) any limited
liability company or limited partnership, the state or other
jurisdiction under whose laws it is organized and existing in that
legal form, and (c) any other Entity, the state or other jurisdiction
whose laws govern that Entity's internal affairs.
"Other Compensation Plan" means any compensation arrangement,
plan, policy, practice or program established, maintained or sponsored
by a Selling Party or any Selling Party Subsidiary, or to which such
Selling Party or any Selling Party Subsidiary contributes, on behalf of
any of its employees, nonemployee directors or officers or other
natural persons performing consulting or other independent contractor
services for the Selling Party or any Selling Party Subsidiary, (a)
including all such arrangements, plans, policies, practices or programs
providing for severance pay, deferred compensation, incentive, bonus or
performance awards or the actual or phantom ownership of any Capital
Stock or options, warrants or rights to acquire Capital Stock of the
Company or any Company Subsidiary, but (b) excluding all Selling Party
ERISA Pension Plans and Employment Agreements.
"Permitted Liens" means, as applied to the property or assets
of any Person (or any revenues, income or profits of that Person
therefrom): (a) Liens for Taxes if the same are not at the time due and
delinquent; (b) Liens of carriers, warehousemen, mechanics, laborers
and materialmen for sums not yet due; (c) Liens incurred in the
ordinary course of that Person's business in connection with workmen's
compensation, unemployment insurance and other social security
legislation (other than pursuant to ERISA or Section 412(n) of the
Code); (d) Liens incurred in the ordinary course of that Person's
business in connection with deposit accounts or to secure the
performance of bids, tenders, trade contracts, statutory obligations,
surety and appeal bonds, performance and
-23-
return-of-money bonds and other obligations of like nature; (e)
easements, rights-of-way, reservations, restrictions and other similar
encumbrances incurred in the ordinary course of that Person's business
or existing on property and not materially interfering with the
ordinary conduct of that Person's business or the use of that property;
(f) defects or irregularities in that Person's title to its real
properties which do not materially (i) diminish the value of the
surface estate or (ii) interfere with the ordinary conduct of that
Person's business or the use of any of such properties; (g) any
interest or title of a lessor of assets being leased by any Person
pursuant to any capital lease disclosed in Schedule 2.18 or any lease
that, pursuant to GAAP, would be accounted for as an operating lease;
and (h) Liens securing purchase money Indebtedness disclosed in
Schedule 2.17 or 2.18 so long as such Liens do not attach to any
property or assets other than the properties or assets purchased with
the proceeds of such Indebtedness.
"Person" means any natural person, Entity, estate, trust,
union or employee organization or Governmental Authority.
"Proprietary Rights" means (a) patents, applications for
patents and patent rights, (b) in each case, whether registered,
unregistered or under pending registration, trademark rights, trade
names, trade name rights, corporate names, business names, trade styles
or dress, service marks and logos and other trade designations and
copyrights and (c), in the case of a Selling Party, all agreements
relating to the technology, know-how or processes used in the Acquired
Business.
"Purchaser Indemnified Loss" has the meaning specified in
Section 7.02.
"Purchaser Indemnified Party" means Purchaser and its
Affiliates and each of their respective officers, directors, employees,
agents and counsel.
"Records" means all agreements, commitments, computer programs
and other software, contracts, books, records, files and other written
data relating to the Acquired Business.
"Representatives" means, with respect to any Person, the
directors, officers, employees, Affiliates, accountants (including
independent certified public accountants), advisors, attorneys,
consultants or other agents of that Person, or any other
representatives of that Person or of any of those directors, officers,
employees, Affiliates, accountants (including independent certified
public accountants), advisors, attorneys, consultants or other agents.
"RCRA" means the Resource Conservation and Recovery Act of
1976.
"Retained Assets" has the meaning specified in Paragraph 2 of
the Preliminary Statement.
"Retained Liabilities" has the meaning specified in Paragraph
2 of the Preliminary
-24-
Statement.
"Returns" of any Person means the returns, reports or
statements (including any Information returns) any Governmental
Requirement requires to be filed by that Person for purposes of any
Tax.
"Seller Indemnified Loss" has the meaning specified in Section
7.03.
"Seller Indemnified Party" means (a) each Selling Party and
each of that Selling Party's Affiliates, officers, directors, agents
and counsel.
"Selling Party Subsidiary" means at any time any Entity that
is a Subsidiary of the Company at that time.
"Solid Wastes, Hazardous Wastes or Hazardous Substances" have
the meanings ascribed to those terms in CERCLA, RCRA or any other
Environmental Law applicable to the business or operations of the
Company or any Company Subsidiary which imparts a broader meaning to
any of those terms than does CERCLA or RCRA.
"Subsidiary" of any specified Person at any time, means any
Entity a majority of the Capital Stock of which is at that time owned
or controlled, directly or indirectly, by the specified Person.
"Supplemental Information" has the meaning specified in
Section 4.07.
"Tax" or "Taxes" means all net or gross income, gross
receipts, net proceeds, sales, use, ad valorem, value added, franchise,
bank shares, withholding, payroll, employment, excise, property, deed,
stamp, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges or
assessments of any nature whatever imposed by any Governmental
Requirement, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Taxing Authority" means any Governmental Authority having or
purporting to exercise jurisdiction with respect to any Tax.
"Third Party Claim" has the meaning specified in Section 7.05.
"Transaction Document" means this Agreement and the other
written agreements, documents, instruments and certificates executed
pursuant to or in connection with this Agreement including those
specified or referred to in Article V to be delivered at or before the
Closing, all as amended, modified or supplemented from time to time.
Section 9.02. Other Defined Terms. Words and terms used in
these Standard
-25-
Provisions which are defined elsewhere in this Agreement are used herein as
therein defined.
Section 9.03. Other Definitional Provisions. (a) Except as
otherwise specified herein, all references herein to any Governmental
Requirement defined or referred to herein, including the Code, CERCLA, ERISA,
the Exchange Act, RCRA and the Securities Act, shall be deemed references to
that Governmental Requirement or any successor Governmental Requirement, as the
same may have been amended or supplemented from time to time, and any rules or
regulations promulgated thereunder.
(b) When used in this Agreement, the words "herein," "hereof"
and "hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any provision of this Agreement, and the words "Article,"
"Paragraph," "Section," "Annex," "Addendum," "Schedule" and "Exhibit" refer to
Articles, Paragraphs and Sections of, and Annexes, Addenda, Schedules and
Exhibits to, this Agreement unless otherwise specified.
(c) Whenever the context so requires, the singular number
includes the plural and vice versa, and a reference to one gender includes the
other gender and the neuter.
(d) The word "including" (and, with correlative meaning, the
word "include") means including, without limiting the generality of any
description preceding such word, and the words "shall" and "will" are used
interchangeably and have the same meaning.
Section 9.04. Captions. Captions to Articles, Paragraphs,
Sections and subsections of, and Annexes, Addenda, Schedules and Exhibits to,
this Agreement or any other Transaction Document are included for convenience of
reference only, and such captions shall not constitute a part of this Agreement
or any other Transaction Document for any other purpose or in any way affect the
meaning or construction of any provision of this Agreement or any other
Transaction Document.
ARTICLE X
GENERAL PROVISIONS
Section 10.01. Treatment of Confidential Information. (a) Each
Selling Party acknowledges that it has or may have had in the past, currently
has and in the future may have access to Confidential Information of the Selling
Parties relating to the Acquired Business and/or Confidential Information of
Purchaser and its Subsidiaries. Each Selling Party agrees that it will keep
confidential all such Confidential Information furnished to it and, except with
the specific prior written consent of Purchaser, will not disclose such
Confidential Information to any Person except (a) Representatives of Purchaser
and (b) its own Representatives, provided that these Representatives (other than
counsel) agree to the confidentiality provisions of this Section 10.01;
provided, however, that Confidential Information shall not include such
information as (i) becomes known to the public generally through no fault of any
Selling Party, (ii) is required to be
-26-
disclosed by law or the order of any Governmental Authority under color of law,
provided, that prior to disclosing any information pursuant to this clause (ii),
each Selling Party shall, if possible, give prior written notice thereof to
Purchaser and provide Purchaser with the opportunity to contest such disclosure,
or (iii) the disclosing party reasonably believes is required to be disclosed in
connection with the defense of a lawsuit against the disclosing party. In the
event of a breach or threatened breach by any Selling Party of the provisions of
this Section 10.01 with respect to any Confidential Information, Purchaser shall
be entitled to seek an injunction restraining such Selling Party from
disclosing, in whole or in part, that Confidential Information. Nothing herein
shall be construed as prohibiting Purchaser from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
(b) Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Section 10.01(a), and
because of the immediate and irreparable damage that would be caused to
Purchaser for which it would have no other adequate remedy, each Selling Party
agrees that Purchaser may seek to enforce the provisions of Section 10.01(a) by
injunctions and restraining orders against each of them who breaches any of
those provisions.
(c) The obligations of the parties under this Section 10.01
shall survive the termination of this Agreement.
Section 10.02. Brokers and Agents. Each Selling Party
represents and warrants to Purchaser that such Selling Party has not directly or
indirectly employed or become obligated to pay any broker or similar agent in
connection with the transactions contemplated hereby and agrees to indemnify
Purchaser against all Damage Claims arising out of claims for any and all fees
and commissions of brokers or similar agents employed or promised payment by
such Selling Party.
Section 10.03. Assignment; No Third Party Beneficiaries. This
Agreement and the rights of the parties hereunder may not be assigned (except by
operation of law) and shall be binding on and inure to the benefit of the
parties hereto, the successors of Purchaser. Neither this Agreement nor any
other Transaction Document is intended, or shall be construed, deemed or
interpreted, to confer on any Person not a party hereto or thereto any rights or
remedies hereunder or thereunder, except as provided in Article VII or as
otherwise provided expressly herein or therein.
Section 10.04. Entire Agreement; Amendment; Waivers. This
Agreement and the documents delivered pursuant hereto constitute the entire
agreement and understanding among the Selling Parties, Purchaser and Purchaser
and supersede all prior agreements and understandings, both written and oral,
relating to the subject matter of this Agreement. This Agreement may be amended,
modified or supplemented, and any right hereunder may be waived, if, but only
if, that amendment, modification, supplement or waiver is in writing and signed
by Selling Parties and Purchaser. The waiver of any of the terms and conditions
hereof shall not be construed or interpreted as, or deemed to be, a waiver of
any other term or condition hereof.
-27-
Section 10.05. Expenses. Whether or not the transactions
contemplated hereby are consummated, (a) Purchaser will pay the fees, expenses
and disbursements of Purchaser and its Representatives which are incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance of and compliance
with all conditions to be performed by Purchaser under this Agreement, and (b)
the Selling Parties will pay all sales, use, transfer and other similar taxes
and fees incurred in connection with the transactions contemplated hereby
including the fees, expenses and disbursements of counsel for the Selling
Parties incurred in connection with the subject matter of this Agreement. The
Selling Parties will file all necessary documentation and Returns with respect
to all sales, use, transfer and other similar taxes and fees it is required by
this Section 10.05 to pay. In addition, the Selling Parties, and not Purchaser,
will pay all Taxes due upon receipt of the consideration payable to the Company
pursuant to the transactions contemplated by this Agreement.
Section 10.06. Notices. All notices required or permitted
hereunder shall be in writing, and shall be deemed to be delivered and received
(a) if personally delivered or if delivered by telex, telegram, facsimile or
courier service, when actually received by the party to whom notice is sent or
(b) if delivered by mail (whether actually received or not), at the close of
business on the third Houston, Texas business day next following the day when
placed in the mail, postage prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such party set forth below (or
at such other address as such party may designate by written notice to all other
parties in accordance herewith):
(i) if to Purchaser, addressed to it at:
Xxxxxx Corporation
0000 Xx. Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
; and
(ii) if to a Selling Party, addressed to such Person as set
forth in Paragraph 7.
Section 10.07. Governing Law. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF VIRGINIA
WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
Section 10.08. Exercise of Rights and Remedies. Except as
otherwise provided herein, no delay or omission in the exercise of any right,
power or remedy accruing to any party hereto as a result of any breach or
default hereunder by any other party hereto shall impair any such right, power
or remedy, nor shall it be construed, deemed or interpreted as a waiver of or
-28-
acquiescence in any such breach or default, or of any similar breach or default
occurring later; nor shall any waiver of any single breach or default be
construed, deemed or interpreted as a waiver of any other breach or default
hereunder occurring before or after that waiver.
Section 10.09. Time. Time is of the essence in the performance
of this Agreement in all respects.
Section 10.10. Reformation and Severability. If any provision
of this Agreement is invalid, illegal or unenforceable, that provision shall, to
the extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties hereto as
expressed herein, and if such a modification is not possible, that provision
shall be severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
Section 10.11. [Reserved.]
Section 10.12. [Reserved.]
Section 10.13. Risk of Loss. Legal title, equitable title and
risk of loss respecting the Assets will not pass to Purchaser until the Assets
are sold, conveyed, assigned and transferred to Purchaser on the Closing Date.
ARTICLE XI
[RESERVED]
-29-
