STOCK PURCHASE AGREEMENT by and among PNA GROUP HOLDING CORPORATION, THE STOCKHOLDERS OF PNA GROUP HOLDING CORPORATION and RSAC MANAGEMENT CORP. Dated as of June 16, 2008
Exhibit 2.1
EXECUTION COPY
by and among
PNA GROUP HOLDING CORPORATION,
THE STOCKHOLDERS OF
PNA GROUP HOLDING CORPORATION
PNA GROUP HOLDING CORPORATION
and
RSAC MANAGEMENT CORP.
Dated as of June 16, 2008
TABLE OF CONTENTS
Page | ||||
ARTICLE I DEFINITIONS |
||||
SECTION 1.01. Certain Defined Terms |
1 | |||
SECTION 1.02. Definitions |
5 | |||
SECTION 1.03. Interpretation and Rules of Construction |
5 | |||
ARTICLE II PURCHASE AND SALE |
||||
SECTION 2.01. Purchase and Sale of the Shares |
6 | |||
SECTION 2.02. Closing |
6 | |||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS |
||||
SECTION 3.01. Organization and Authority of the Stockholders |
7 | |||
SECTION 3.02. Authorization, Execution and Enforceability |
7 | |||
SECTION 3.03. No Conflict |
7 | |||
SECTION 3.04. Governmental Consents and Approvals |
7 | |||
SECTION 3.05. Ownership of the Shares |
8 | |||
SECTION 3.06. Disclaimer |
8 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
||||
SECTION 4.01. Organization, Authority and Qualification of the Company |
8 | |||
SECTION 4.02. Authorization, Execution and Enforceability |
8 | |||
SECTION 4.03. No Conflict |
9 | |||
SECTION 4.04. Governmental Consents and Approvals |
9 | |||
SECTION 4.05. Organization and Qualification of the Subsidiaries |
9 | |||
SECTION 4.06. Capitalization; Ownership of Shares |
10 | |||
SECTION 4.07. Financial Information; SEC Reports |
10 | |||
SECTION 4.08. Absence of Undisclosed Material Liabilities |
10 | |||
SECTION 4.09. Conduct in the Ordinary Course |
11 | |||
SECTION 4.10. Litigation |
11 | |||
SECTION 4.11. Compliance with Laws; Permits |
11 | |||
SECTION 4.12. Environmental Matters |
11 | |||
SECTION 4.13. Intellectual Property |
12 | |||
SECTION 4.14. Real Property |
12 | |||
SECTION 4.15. Title to Properties; Sufficiency of Assets |
13 | |||
SECTION 4.16. Employee Benefit Matters |
13 |
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Page | ||||
SECTION 4.17. Taxes |
14 | |||
SECTION 4.18. Material Contracts |
15 | |||
SECTION 4.19. Labor |
16 | |||
SECTION 4.20. Brokers |
16 | |||
SECTION 4.21. Controls and Procedures |
16 | |||
SECTION 4.22. Disclaimer |
17 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER |
||||
SECTION 5.01. Organization and Authority of the Purchaser |
17 | |||
SECTION 5.02. Authorization, Execution and Enforceability |
17 | |||
SECTION 5.03. No Conflict |
17 | |||
SECTION 5.04. Governmental Consents and Approvals |
18 | |||
SECTION 5.05. Investment Purpose |
18 | |||
SECTION 5.06. Financing |
18 | |||
SECTION 5.07. Litigation |
18 | |||
SECTION 5.08. Brokers |
18 | |||
ARTICLE VI COVENANTS |
||||
SECTION 6.01. Conduct of Business Prior to the Closing |
18 | |||
SECTION 6.02. Access to Information |
20 | |||
SECTION 6.03. Employee Benefits |
20 | |||
SECTION 6.04. Indemnification of Directors and Officers |
21 | |||
SECTION 6.05. Participation Plan and Severance Payments |
21 | |||
SECTION 6.06. Confidentiality |
22 | |||
SECTION 6.07. Regulatory and Other Authorizations; Notices and Consents |
22 | |||
SECTION 6.08. Distribution of Travel Main |
23 | |||
SECTION 6.09. Resignations of Certain Officers and Directors |
24 | |||
SECTION 6.10. No Sales or Transfers of any of the Shares |
24 | |||
SECTION 6.11. Purchase Price Adjustment |
24 | |||
SECTION 6.12. Further Action |
24 | |||
ARTICLE VII CONDITIONS TO CLOSING |
||||
SECTION 7.01. Conditions to Obligations of the Parties |
24 | |||
SECTION 7.02. Conditions to Obligations of the Stockholders |
25 | |||
SECTION 7.03. Conditions to Obligations of the Purchaser |
25 | |||
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER |
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SECTION 8.01. Termination |
26 | |||
SECTION 8.02. Effect of Termination |
27 |
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ARTICLE IX GENERAL PROVISIONS |
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Page | ||||
SECTION 9.01. Non-Survival of Representations and Warranties |
27 | |||
SECTION 9.02. Expenses |
27 | |||
SECTION 9.03. Notices |
27 | |||
SECTION 9.04. Public Announcements |
28 | |||
SECTION 9.05. Severability |
28 | |||
SECTION 9.06. Entire Agreement |
29 | |||
SECTION 9.07. Assignment |
29 | |||
SECTION 9.08. Amendment |
29 | |||
SECTION 9.09. Waiver |
29 | |||
SECTION 9.10. Specific Performance |
29 | |||
SECTION 9.11. No Third Party Beneficiaries |
29 | |||
SECTION 9.12. Governing Law |
30 | |||
SECTION 9.13. Consent to Jurisdiction and Venue |
30 | |||
SECTION 9.14. WAIVER OF JURY TRIAL |
30 | |||
SECTION 9.15. Counterparts and Facsimile Signatures |
30 |
SCHEDULES
SCHEDULE OF STOCKHOLDERS
COMPANY DISCLOSURE SCHEDULE
COMPANY DISCLOSURE SCHEDULE
iii
This STOCK PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of June
16, 2008, by and among PNA Group Holding Corporation, a Delaware corporation (the
“Company”), the stockholders of the Company listed on the Schedule of Stockholders
attached hereto (each, a “Stockholder” and collectively, the “Stockholders”), and
RSAC Management Corp., a California corporation (the “Purchaser”).
A. The Stockholders own all of the issued and outstanding shares of capital stock of the
Company (the “Shares”).
B. The Purchaser desires to purchase the Shares from the Stockholders on the terms and
conditions set forth herein, and the Stockholders desire to sell the Shares to the Purchaser on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants
hereinafter set forth, and intending to be legally bound, the Stockholders and the Purchaser hereby
agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes of this Agreement:
“Action” means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
“Acquisition Date” means: (i), with respect to Sugar Steel Corporation and S&S Steel
Warehouse, Inc., March 14, 2008; (ii), with respect to Precision GP Holding, LLC and Precision
Flamecutting and Steel, L.P., December 24, 2007; (iii), with respect to Metals Supply Company, Ltd,
and MSC Management, Inc., May 31, 2006; and (iv), with respect to the Company and each Subsidiary
not named in clauses (i) through (iii) of this definition above, the later of (x) May 9, 2006 and
(y) the date of organization or formation, as applicable, of such Person.
“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person, where “control,” “controlled by” and “under common
control with” means the possession, directly or indirectly, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the ownership of voting
securities or otherwise.
“Business Day” means any day that is not a Saturday, Sunday or other day on which
banks are required or authorized by Law to be closed in New York, New York or Los Angeles,
California.
“Code” means the Internal Revenue Code of 1986, as amended through the date hereof
including the rules and regulations issued by the IRS pursuant to the Code or any successor Law.
“Company Intellectual Property” means all Intellectual Property owned or used by the
Company or a Subsidiary in connection with the operation of the business of the Company or such
Subsidiary as currently conducted.
“Compensation Payments Adjustment Amount” means the amount equal to 60% of the sum of
(i) the total amount to be paid under the Participation Plan in connection with the consummation of
the transactions contemplated hereby as provided in Section 6.05 plus (ii) the
total amount payable to the individuals described in Section 6.05 under their respective
employment agreements as severance payments if their employment is terminated without cause.
“Encumbrance” means any security interest, pledge, hypothecation, mortgage, charge,
lien or encumbrance on any property of the Company or any Subsidiary, other than licenses of
Intellectual Property and other than Encumbrances on the property of a Joint Venture arising out of
funded indebtedness of such Joint Venture that is non-recourse to the Company and the Subsidiaries
(other than such Joint Venture).
“Environment” means soil, land surface or subsurface strata, surface waters (including
navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters,
drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life,
or natural resource.
“Environmental Law” means any Law or Governmental Order relating to pollution or
protection of the Environment.
“Environmental Permits” means any permit, approval, identification number, license and
other authorization required under or issued pursuant to any applicable Environmental Law.
“GAAP” means United States generally accepted accounting principles and practices in
effect from time to time applied consistently throughout the periods involved.
“Governmental Authority” means any federal, national, supranational, state,
provincial, local, foreign or other government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral body.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
“Intellectual Property” means (i) inventions and all patents, patent applications and
patent disclosures, together with all reissuances, continuations, revisions, extensions and
reexaminations thereof, (ii) trademarks, service marks, trade names, trade dress and domain
2
names, logos, assumed names and corporate names, including all goodwill associated therewith,
and all applications, registrations and renewals in connection therewith, (iii) all copyrights and
applications, including copyrights in computer software, copyrightable works, registrations and
renewals in connection therewith (iv) confidential and proprietary information, including trade
secrets and know-how, (v) web sites and web site domain names, and (vi) registrations and
applications for registration of the foregoing.
“IRS” means the Internal Revenue Service of the United States.
“Joint Ventures” means the following entities in which the Company indirectly holds a
less than 100% interest: (i) Acero Prime S. de X.X. de C. V., (ii) Feralloy Processing Company,
(iii) Feralloy Wheeling Specialty Processing Company, (iv) Indiana Pickling and Processing Company,
and (v) Oregon Feralloy Partners LLC.
“Knowledge of the Company” means the actual knowledge of Xxxxxxx X. Xxxxxx, Xx.,
Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxx and Xxxxx Xxxxxxxx.
“Law” means any federal, national, supranational, state, provincial, municipal,
foreign, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or
rule of law (including common law) or interpretation by or under the authority of any Governmental
Authority.
“Leased Real Property” means the real property leased by the Company or any Subsidiary
as tenant, together with, to the extent leased by the Company or any Subsidiary, all buildings and
other structures, facilities or improvements currently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property of the Company or any Subsidiary attached or
appurtenant thereto and all easements, licenses, rights and appurtenances relating to the
foregoing.
“Liabilities” means any and all debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined or determinable, including those
arising under any Law, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
“Material Adverse Effect” means any circumstance, change in or effect, or the
cumulative effect of more than one circumstance, change in or effect, that is materially adverse to
the consolidated results of operations or the consolidated financial condition of the Company and
the Subsidiaries, taken as a whole; provided, however, in determining whether there
has occurred, or there has been, a breach of a representation, warranty, covenant or agreement that
is qualified by the term, “Material Adverse Effect” no circumstance, change or effect, either alone
or in combination, shall be considered that arises or results from (i) conditions or circumstances
in the industries in which the Company and the Subsidiaries operate, including without limitation
changes in the wholesale or retail prices of the raw materials and products that the Company and
the Subsidiaries purchase or sell from time to time, (ii) general economic or political conditions
or circumstances affecting the economy or financial markets in general, (iii) the announcement or
pendency of the transactions contemplated by this Agreement or from any action taken pursuant to or
in accordance with this Agreement, (iv) any action taken at the request of or with
3
the consent of the Purchaser, (v) changes in Law or GAAP, or (vi) an act of war, sabotage or
terrorism. In addition, the fact that the Company fails to meet any estimate or projection of
revenues, earnings or other economic performance for any period prior to Closing shall not, in and
of itself, constitute a Material Adverse Effect (it being understood and agreed that the facts and
circumstances giving rise to such failure may be taken into account in determining whether this has
been a Material Adverse Effect if such facts and circumstances are not otherwise excluded from
consideration pursuant to clauses (i) through (vi) of the immediately preceding sentence).
“Owned Real Property” means the real property in which the Company or any Subsidiary
has fee title (or equivalent) interest, together with all buildings and other structures,
facilities or improvements located thereon, all fixtures, systems, equipment and items of personal
property of the Company or any Subsidiary attached or appurtenant thereto and all easements,
licenses, rights and appurtenances relating to the foregoing.
“Participation Plan” means the Company’s 2007 Participation Plan.
“Permitted Encumbrances” means (i) statutory liens for current Taxes not yet due or
payable (or which may be paid without interest or penalties) or the validity or amount of which is
being contested in good faith by appropriate proceedings, (ii) mechanics’, carriers’, workers’,
repairers’ and other similar liens arising or incurred in the ordinary course of business relating
to obligations as to which there is no default on the part of the Company or any Subsidiary or the
validity or amount of which is being contested in good faith by appropriate proceedings, or
pledges, deposits or other liens securing the performance of bids, trade contracts, leases or
statutory obligations (including workers’ compensation, unemployment insurance or other social
security legislation), (iii) zoning, entitlement, conservation restriction and other land use and
environmental regulations by any Governmental Authority which do not substantially interfere with
the present use of the assets of the Company or any of the Subsidiaries, (iv) all covenants,
conditions, restrictions, easements, charges, rights-of-way, other Encumbrances and similar matters
of record set forth in any state, local or municipal franchise of the Company and the Subsidiaries
which do not substantially interfere with the present use of the assets of the Company or any of
the Subsidiaries, and (v) matters which do not substantially impair the occupancy or current use of
the property which they encumber.
“Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity including any Governmental
Authority.
“PNA SEC Reports” means (i) the Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 27, 2008, and the Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on May 15, 2008, by PNA Group, Inc., a Subsidiary, and (ii) the
Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2008, and
the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15,
2008, by PNA Intermediate Holding Corporation, a Subsidiary.
4
“Predecessor Company” means PNA Group, Inc., a Delaware corporation and a Subsidiary,
for any period ending on or prior to
May 9, 2006.
May 9, 2006.
“Regulations” means the Treasury Regulations promulgated by the United States
Department of Treasury with respect to the Code or other federal tax statutes.
“Subsidiary” or “Subsidiaries” means, individually, any direct or indirect
subsidiary of the Company or, collectively, all of the direct and indirect subsidiaries of the
Company, including the majority-owned Joint Ventures, but excluding Travel Main and its direct and
indirect subsidiaries and the Joint Ventures that are less than majority-owned.
“Tax” or “Taxes” means any and all taxes of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with respect thereto)
imposed, assessed or collected by any Governmental Authority or taxing authority.
“Tax Returns” means any and all returns, reports and forms (including elections,
declarations, amendments, schedules, information returns or attachments thereto) required to be
filed with a Governmental Authority with respect to Taxes.
“Travel Main” means Travel Main Corporation, a Delaware corporation.
SECTION 1.02. Definitions. The following terms have the meanings set forth in the
Sections set forth below:
Definition | Location | |
“Agreement” |
Preamble | |
“Closing” |
2.02 | |
“Company” |
Preamble | |
“Company Disclosure Schedule” |
Article IV | |
“Confidentiality Agreement” |
6.05 | |
“Covered Persons” |
6.04 | |
“D&O Insurance” |
6.04 | |
“ERISA” |
4.16(a) | |
“Financial Statements” |
4.07 | |
“Financing” |
5.06 | |
“Leases” |
4.14 | |
“Material Contracts” |
4.18(a) | |
“Multiemployer Plans” |
4.16(b) | |
“Plans” |
4.16(a) | |
“Purchaser” |
Preamble | |
“Purchase Price” |
2.01 | |
“Shares” |
Recital A | |
“Stockholders” |
Preamble |
SECTION 1.03. Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise
requires, (i) when a reference is made
5
in this Agreement to an Article, Section or Schedule, such
reference is to an Article or Section of, or a Schedule to, this Agreement unless otherwise
indicated, (ii) the table of contents and headings for this Agreement are for reference purposes
only and do not affect in any way the meaning or interpretation of this Agreement, (iii) whenever
the words “include,” “includes” or “including” are used, they are deemed to be followed by the
words “without limitation”, (iv) the words “hereof,” “herein” and “hereunder” and words of similar
import, refer to this Agreement as a whole, including any schedules or attachments hereto, and not
to any particular provision of this Agreement, (v) all terms defined in this Agreement have the
defined meanings when used in any certificate or other document made or delivered pursuant to this
Agreement, unless otherwise defined therein, (vi) the definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms, (vii) references to a Person
are also to its successors and permitted assigns, and (viii) the use of “or” is not intended to be
exclusive unless expressly indicated otherwise. The fact that any item of information is disclosed
in the Company Disclosure Schedule shall not be construed to mean that such information is required
to be disclosed by this Agreement and such information and the dollar thresholds set forth herein
shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or
other similar terms in this Agreement.
ARTICLE II
PURCHASE AND SALE
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing, each Stockholder shall sell, transfer and convey to
the Purchaser the Shares owned by such Stockholder, as set forth opposite such Stockholder’s name
on the Schedule of Stockholders attached hereto, and the Purchaser shall purchase and
accept such Shares from such Stockholder. Subject to Section 6.11 only, the aggregate
purchase price for the Shares (the “Purchase Price”) shall be equal to (i) $315,000,000
minus (ii) the Compensation Payments Adjustment Amount. The Purchase Price shall be allocated
among the Stockholders in proportion to the number of Shares held by each as set forth on the
Schedule of Stockholders attached hereto and shall be paid as provided in Section
2.02.
SECTION 2.02. Closing. Subject to the terms and conditions of this Agreement, the
sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the
“Closing”) to be held on a date that is the first business day of the month following the
satisfaction or waiver of the conditions to the obligations of the parties hereto set forth in
Article VII , or on such other date as the Stockholders and the Purchaser may mutually
agree in writing, but not earlier than August 1, 2008. At the Closing, (i) each Stockholder shall
deliver or cause to be delivered to the Purchaser the stock certificates evidencing the Shares to
be sold by such Stockholder, duly endorsed in blank, or accompanied by stock powers duly executed
in blank, and (ii) the Purchaser shall deliver to each Stockholder, by wire transfer in immediately
available funds (to a bank account designated in writing by such Stockholder to the Purchaser at
least two (2) Business Days before the Closing) the percentage of the Purchase Price to be paid to
such Stockholder as set forth opposite such Stockholder’s name on the Schedule of
Stockholders attached hereto.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to the Purchaser, as of the date hereof and as
of the Closing Date, or, if a representation or warranty is made as of a specified date, as of such
date, as follows:
SECTION 3.01. Organization and Authority of the Stockholders. Such Stockholder is a
limited partnership or limited liability company, as applicable, duly organized, validly existing
and in good standing under the Laws of the State of Delaware, and has all necessary partnership or
limited liability company, as applicable, power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions contemplated hereby.
SECTION 3.02. Authorization, Execution and Enforceability. The execution and delivery
of this Agreement by such Stockholder, the performance by such Stockholder of its obligations
hereunder and the consummation by such Stockholder of the transactions contemplated hereby have
been duly authorized by all requisite limited partnership or limited liability company, as
applicable, action on the part of such Stockholder. This Agreement has been duly executed and
delivered by such Stockholder. Assuming the due authorization, execution and delivery of this
Agreement by the Purchaser, this Agreement constitutes a legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its terms, except where
enforcement thereof may be limited by bankruptcy, reorganization, insolvency and similar Laws
affecting creditors’ rights generally, and general equitable principles.
SECTION 3.03. No Conflict. Assuming that all consents, approvals, authorizations and
other actions described in Section 4.03 of the Company Disclosure Schedule have been made
and any applicable waiting period has expired or been terminated, and except as may result from any
facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of
this Agreement by such Stockholder do not and will not (i) violate, conflict with or result in the
breach of the partnership agreement, or certificate of formation and limited liability company
operating agreement, as applicable, of such Stockholder, (ii) conflict with or violate any Law or
Governmental Order applicable to such Stockholder or (iii) conflict with, result in any breach of,
constitute a default (or event which, with the giving of notice or lapse of time, or both, would
become a default) under, require any consent under, or give to others any rights of termination,
acceleration or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to which such Stockholder
is a party, except, in the case of clauses (ii) and (iii), as would not adversely affect the
ability of such Stockholder to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement or create a lien or cloud on Purchaser’s rights,
title or interest in the Shares.
SECTION 3.04. Governmental Consents and Approvals. The execution, delivery and
performance of this Agreement by such Stockholder do not and will not require any material consent,
approval, authorization or other order of, action by, filing with or notification to, any
Governmental Authority or any other Person, except (i) as described in the Section 4.04 of the
7
Company Disclosure Schedule, (ii) the premerger notification and waiting period requirements of
the HSR Act, (iii) where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent or materially delay the consummation by such
Stockholder of the transactions contemplated by this Agreement or (iv) as may be necessary as a
result of any facts or circumstances relating solely to the Purchaser or any of its Affiliates.
SECTION 3.05. Ownership of the Shares. Such Stockholder is the record holder of the
Shares set forth opposite such Stockholder’s name in the Schedule of Stockholders attached
hereto, free and clear of all Encumbrances. There are no options, warrants, convertible securities
or other rights, agreements, arrangements or commitments obligating any Stockholder to transfer or
sell any shares of capital stock, or any other interest in, the Company.
SECTION 3.06. Disclaimer. Except as set forth in this Article III, no
Stockholder, nor any representative of any Stockholder, makes any representation or warranty,
express or implied, at law or in equity, in respect of the Company, the Subsidiaries or the Shares.
Any such other representation or warranty is hereby expressly disclaimed by each Stockholder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as otherwise set forth in the disclosure schedule delivered by the Company to the
Purchaser concurrently with the execution and delivery of this Agreement (the “Company
Disclosure Schedule”), the Company hereby represents and warrants to the Purchaser, as of the
date hereof and as of the Closing Date, or, if a representation or warranty is made as of a
specified date, as of such date, as follows:
SECTION 4.01. Organization, Authority and Qualification of the Company. The Company
is a corporation duly organized, validly existing and in good standing under the Laws of the State
of Delaware and has all necessary corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on its business as it has
been and is currently conducted. The Company is duly licensed or qualified to do business and is
in good standing in each jurisdiction in which the properties owned or leased by it or the
operation of its business makes such licensing or
qualification necessary or desirable, except to the extent that the failure to be so licensed,
qualified or in good standing would not have a Material Adverse Effect. True and correct copies of
the certificate of incorporation and bylaws of the Company have been made available to the
Purchaser.
SECTION 4.02. Authorization, Execution and Enforceability. The execution and delivery
of this Agreement by the Company, the performance by the Company of its obligations hereunder and
the consummation by the Company of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company. Assuming the due authorization, execution and delivery of
this Agreement by the Purchaser, this Agreement constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms, except where
enforcement thereof may be limited by
8
bankruptcy, reorganization, insolvency and similar Laws
affecting creditors’ rights generally, and general equitable principles.
SECTION 4.03. No Conflict. Assuming that all consents, approvals, authorizations and
other actions described in Section 4.04 of the Company Disclosure Schedule have been made
and any applicable waiting period has expired or been terminated, and except as may result from any
facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of
this Agreement by the Company do not and will not (i) violate, conflict with or result in the
breach of the certificate of incorporation or bylaws (or similar organizational documents) of the
Company or any Subsidiary, (ii) conflict with or violate any Law or Governmental Order applicable
to the Company or any Subsidiary or (iii) conflict with, result in any breach of, constitute a
default (or event which, with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of termination,
acceleration or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to which the Company or any
Subsidiary is a party, except, in the case of clauses (ii) and (iii), as would not (x) adversely
affect the ability of the Stockholders or the Company to carry out their respective obligations
under, and to consummate the transactions contemplated by, this Agreement or (y) otherwise have a
Material Adverse Effect.
SECTION 4.04. Governmental Consents and Approvals. The execution, delivery and
performance of this Agreement by the Company do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to, any Governmental
Authority or any other Person, except (i) the premerger notification and waiting period
requirements of the HSR Act, (ii) where failure to obtain such consent, approval, authorization or
action, or to make such filing or notification, would not prevent or materially delay the
consummation by the Company of the transactions contemplated by this Agreement and would not have a
Material Adverse Effect or (iii) as may be necessary as a result of any facts or circumstances
relating solely to the Purchaser or any of its Affiliates.
SECTION 4.05. Organization and Qualification of the Subsidiaries. Section 4.05 of
the Company Disclosure Schedule lists each Subsidiary and its jurisdiction of incorporation or
organization, and the owner or owners of such Subsidiary’s capital stock or other ownership
interests. Each Subsidiary is duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or formation and has all necessary power and authority to
own, operate or lease the properties and assets now owned, operated or leased by it and to carry on
its business as it has been and is currently conducted. Each Subsidiary is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which the properties owned
or leased by it or the operation of its business makes such licensing or qualification necessary or
desirable, except to the extent that the failure to be so licensed, qualified or in good standing
would not have a Material Adverse Effect. True and correct copies of the organizational documents
of each Subsidiary have been made available to the Purchaser. Other than the Subsidiaries and the
Joint Ventures, neither the Company nor any Subsidiary is a member of any partnership nor is the
Company or any Subsidiary a participant in any joint venture or similar arrangement.
9
SECTION 4.06. Capitalization; Ownership of Shares. The authorized capital stock of
the Company consists of 10,000,000 shares of common stock, par value $0.01 per share, of which only
the Shares are issued and outstanding. The Shares are held of record by the Stockholders in the
respective amounts set forth in the Schedule of Stockholders attached hereto. The Shares
have been validly issued and are fully paid and nonassessable. There are no options, warrants,
convertible securities or other rights, agreements, arrangements or commitments obligating the
Company to issue or sell any shares of capital stock, or any other interest in, the Company. There
are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any
matters which stockholders of the Company, or the stockholders of any of the Subsidiaries, may vote
upon. None of the outstanding equity securities or other securities of the Company or any of the
Subsidiaries was issued in violation of the Securities Act of 1933, as amended, or any other Law.
None of the Company or any of the Subsidiaries owns, or has any contract to acquire, any equity
securities or other securities issued by any Person (other than the Company and the Subsidiaries
and the Joint Ventures) or any direct or indirect equity or ownership interest in any other
business.
SECTION 4.07. Financial Information; SEC Reports.
(a) The Company has provided the Purchaser with true and complete copies of (i) the audited
consolidated balance sheet of the Company as of December 31, 2007 and 2006, (ii) the audited
consolidated statements of income and cash flows of the Company for the fiscal year ended December
31, 2007 and for the period from May 10, 2006 through December 31, 2006 and (iii) the audited
consolidated statements of income and cash flows of the Predecessor Company for the period from
January 1, 2006 through May 9, 2006 and for the fiscal year ended December 31, 2005 and (ii) the
unaudited consolidated balance sheet of the Company and the Subsidiaries as of March 31, 2008 and
the related unaudited consolidated statements of income and cash flows of the Company for the
period from January 1 through March 31, 2008 (collectively the “Financial Statements”). The Financial Statements were prepared in
accordance with GAAP applied on a basis consistent with the past practices of the Company and, to
the extent applicable, the Predecessor Company, and present fairly in all material respects the
consolidated financial condition and results of operations of the Company or the Predecessor
Company, as the case may be, as of the dates thereof or for the periods covered thereby;
provided, however, that the unaudited Financial Statements are subject to normal
recurring year-end adjustments, the effect of which are not, individually or in the aggregate,
material, and the absence of certain footnotes.
(b) As of the time of filing, none of the PNA SEC Reports contained any untrue statement of a
material fact or omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading.
SECTION 4.08. Absence of Undisclosed Material Liabilities. The Company and the
Subsidiaries do not have any Liabilities other than Liabilities (i) reflected or reserved against
on the Financial Statements or the notes thereto, (ii) set forth in the Company Disclosure
Schedule, (iii) incurred since December 31, 2007 in the ordinary course of business of the
Company and the Subsidiaries and not otherwise prohibited pursuant to this Agreement, (iv)
Liabilities set forth in this Agreement or (v) that would not have a Material Adverse Effect.
10
SECTION 4.09. Conduct in the Ordinary Course. Since December 31, 2007, (i) the
Company and the Subsidiaries have conducted their respective businesses in the ordinary course,
(ii) neither the Company nor any Subsidiary has taken any of the actions set forth in Section
6.01, and (iii) there has not occurred any Material Adverse Effect.
SECTION 4.10. Litigation. Section 4.10 of the Company Disclosure Schedule
lists, as of the date hereof, all Actions by or against the Company or any Subsidiary pending
before any Governmental Authority, or, to the Knowledge of the Company, threatened in writing, that
could have a Material Adverse Effect or could affect the legality, validity or enforceability of
this Agreement or the consummation of the transactions contemplated hereby or thereby.
SECTION 4.11. Compliance with Laws; Permits.
(a) The Company and each Subsidiary has, since its respective Acquisition Date, conducted, and
each currently conducts, its respective businesses in compliance with all Laws and Governmental
Orders applicable to it, in all material respects, and neither the Company nor any Subsidiary has,
since its respective Acquisition Date, received any written notice of a violation of any such Law
or Governmental Order, and to the Knowledge of the Company, neither the Company nor any Subsidiary
conducted its business prior to its respective Acquisition Date in violation of any Law or Governmental Order applicable to it which would
reasonably be anticipated to result in any material Liability to the Company or such Subsidiary
after the Closing.
(b) Neither the Company nor any Subsidiary has, since its respective Acquisition Date, failed
in any material respect to obtain or adhere to the requirements of any license, permit, or other
governmental authorization necessary to the ownership of its assets and properties or to the
conduct of its businesses, and all of such licenses, permits and other governmental authorizations
are and will continue to be after giving effect to the Closing in full force and effect, and to the
Knowledge of the Company, neither the Company nor any Subsidiary failed, prior to its respective
Acquisition Date, in any material respect to obtain or adhere to the requirements of any license,
permit, or other governmental authorization necessary to the ownership of its assets and properties
or to the conduct of its businesses, which failure would reasonably be anticipated to result in any
material Liability to the Company or such Subsidiary after the Closing.
(c) Without limiting the foregoing, neither the Company nor any Subsidiary has, since its
Acquisition Date, violated in any material respect any Law or Governmental Order governing the
export or sale of any products to a foreign purchaser or end user, or failed to obtain any material
license, permit or other governmental authorization that is required in connection with the export
or the sale of any products to a foreign purchaser or end user.
SECTION 4.12. Environmental Matters. To the Knowledge of the Company, the Company and
the Subsidiaries have conducted their businesses in material compliance with all applicable
Environmental Laws and have obtained and are in material compliance with all Environmental Permits
that are necessary to conduct their businesses in the manner in which they are currently being
conducted. There are no claims pending against the Company or any Subsidiary under any
Environmental Laws, and the Company has not received any written
11
claims alleging that the Company
or any Subsidiary is in violation of any Environmental Laws or Environmental Permits. The Company
has not released or disposed of any Hazardous Materials on any property owned or leased by the
Company or any Subsidiary in material violation of any applicable Environmental Laws. Other than
pursuant to any Lease or other agreement entered into in the ordinary course of business, the
Company has not entered into any written agreement to indemnify any Person against any Liability
that would reasonably be expected to arise under any Environmental Law. The Company has made
available to the Purchaser copies of any environmental assessment or audit reports relating to the
real property used by the Company that have been prepared by or for the Company or any Subsidiary
or are in the possession of the Company or any Subsidiary. The Purchaser acknowledges that (i) the
representations and warranties contained in this Section 4.12 are the only representations
and warranties being made with respect to compliance with or liability under Environmental Laws or
with respect to any environmental matter related in any way to the Company and the Subsidiaries or
their respective businesses, except as may be set forth in any lease with respect to any property
and (ii) no other representation contained in this Agreement shall apply to any such matters and no
other representation or warranty, express or implied, is being made with respect thereto.
SECTION 4.13. Intellectual Property. Section 4.13 of the Company Disclosure
Schedule sets forth a true and complete list of all of the Company Intellectual Property that
is registered with (or with respect to which an application to so register has been submitted to) a
Governmental Authority. To the Knowledge of the Company, (i) no Person is engaging in any activity
that infringes any Company Intellectual Property, and (ii) no claim has been asserted to the
Company or any Subsidiary that the use by the Company or any Subsidiary of any Company Intellectual
Property infringes the patents, trademarks, copyrights or other intellectual property rights of any
third party. To the Knowledge of the Company, the Company or a Subsidiary is the owner of the
right, title and interest in and to, or licenses or otherwise has the right to use, all Company
Intellectual Property used by the Company or any Subsidiary in the conduct of its business, and the
consummation of the transactions contemplated by this Agreement will not adversely affect in any
material respect the use by the Company or any Subsidiary of any of the Company Intellectual
Property used by the Company or any Subsidiary in the conduct of its business.
SECTION 4.14. Real Property.
(a) Section 4.14(a) of the Company Disclosure Schedule lists the street address and
current owner of each parcel of Owned Real Property. The Company or a Subsidiary has good and
marketable title in fee simple to each parcel of Owned Real Property free and clear of all
Encumbrances, except Permitted Encumbrances.
(b) Section 4.14(b) of the Company Disclosure Schedule lists the street address and
the identity of the lessee and lessor of each parcel of Leased Real Property, and, with respect to
such Leased Real Property, (i) there has not been any sublease or assignment entered into by the
Company or any Subsidiary in respect of the leases in effect at the date hereof relating to the
Leased Real Property (the “Leases”), (ii) none of the Company or any Subsidiary is in
default in the performance of any material obligation under the Leases, and to the Knowledge of the
Company, none of the other parties to the Leases is in default in performance of their material
obligations thereunder, (iii) the Leases are in full force and effect, and none of
12
the Company or
any Subsidiary has assigned its rights under the Leases, (iv) the Company and the Subsidiaries, as
applicable, have a valid leasehold estate in all Leases free and clear of all Encumbrances other
than Permitted Encumbrances, and (v) no consents to or approval of the transactions contemplated by
this Agreement are required from any Person or entity under the terms of the Leases. Except as
provided herein, there are no options to purchase, rights of first refusal or other rights or
obligations requiring the transfer or sale of any of the Leased Real Property.
SECTION 4.15. Title to Properties; Sufficiency of Assets. The Company or one of the
Subsidiaries owns, leases or has the legal right to use all the assets (whether real, personal, or
mixed and whether tangible or intangible) that they purport to own, including all of the properties
and assets reflected in the Financial Statements, and all of the assets purchased or otherwise
acquired by the Company or any Subsidiary since December 31, 2007 (except for assets sold since such date in the ordinary course of business).
All assets reflected in the Financial Statements are free and clear of all Encumbrances other than
Permitted Encumbrances or Encumbrances reflected in the Financial Statements. The assets that the
Company and the Subsidiaries own, or have the lawful right to use, are sufficient for the continued
conduct of their respective businesses after the Closing in substantially the same manner as
conducted prior to the Closing. All inventory (net of reserves for obsolete and slow moving
inventory as reflected in the Financial Statements) of the Company and the Subsidiaries reflected
in the Financial Statements consists of a quality and quantity usable and salable in the ordinary
course of business.
SECTION 4.16. Employee Benefit Matters.
(a) Section 4.16(a) of the Company Disclosure Schedule lists (i) all employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all employment, termination,
severance or other contracts or agreements, to which the Company or any Subsidiary is a party, with
respect to which the Company or any Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Subsidiary for the benefit of any current or
former employee, officer or director of the Company or any Subsidiary (in each case, other than
collective bargaining agreements), (ii) each employee benefit plan for which the Company or any
Subsidiary could incur liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated and (iii) any plan in respect of which the Company or any Subsidiary could
incur liability under Section 4212(c) of ERISA (individually, a “Plan” or, collectively, the
“Plans”).
(b) Each Plan (other than a Plan that is a multiemployer Plan as defined in Section 3(37) of
ERISA (a “Multiemployer Plan”)) has been operated in all material respects in accordance
with its terms and the requirements of all applicable Laws. The Company and each Subsidiary has
performed all material obligations required to be performed by it under, is not in any material
respect in default under or in material violation of, and neither the Company nor any Subsidiary is
in material default or violation of the requirements of any Plan. No Action (other than for claims
for benefits in the ordinary course) is pending or, to the Knowledge of the
13
Company, threatened
with respect to any Plan (other than a Multiemployer Plan). Without limiting the foregoing, each
Plan that is a deferred compensation plan is in compliance with Section 409A of the Code, and each
Plan that is a defined benefit plan is in compliance with the Pension Protection Act of 2006,
except for such non-compliance as would not reasonably be anticipated to result in any material
penalties or other Liabilities.
(c) Each Plan (other than a Multiemployer Plan) that is intended to be qualified under Section
401(a) of the Code or Section 401(k) of the Code has timely received a favorable determination
letter or opinion letter, as applicable, from the IRS covering all of the provisions applicable to
the Plan for which determination letters or opinion letters are currently available that the Plan
is so qualified and each trust established in connection with any Plan
which is intended to be exempt from federal income taxation under Section 501(a) of the Code
has received a determination letter or opinion letter, as applicable, from the IRS that it is so
exempt.
(d) Except for the payments under the Participation Plan, and as provided in the Material
Contracts, the consummation of the transactions described in this Agreement will not by itself
entitle any current or former employee of the Company or any Subsidiary to severance pay,
unemployment compensation or any other similar payment, or accelerate the time of payment or
vesting, or increase the amount of compensation due to any such employee or former employee.
SECTION 4.17. Taxes.
(a) All Tax Returns required to have been filed by or with respect to the Company or any
Subsidiary have been timely filed (taking into account any extension of time to file that have been
granted or obtained) and all Taxes shown to be payable on such Tax Returns and all Taxes owed by
the Company or any Subsidiary have been paid or will be timely paid.
(b) Except as set forth on Section 4.17 of the Company Disclosure Schedule, there are
no ongoing federal, state, local or foreign audits, examinations or proposed adjustments of any Tax
Return of the Company or its Subsidiaries or any other proceedings, asserted material deficiencies
or refund litigation with respect to any such Tax Return, and to the Knowledge of the Company no
such matters have been threatened.
(c) There are no outstanding written requests, agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment of any Taxes or deficiencies against
the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is a party
to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement.
(d) There are no material Tax deficiencies or liens for Taxes upon the assets of the Company
and the Subsidiaries that are not set forth in the PNA SEC Reports, except liens for Taxes not yet
due and payable and liens for Taxes that are being contested in good faith.
(e) The Company and its Subsidiaries have (i) collected all material Taxes that they are
required to collect under applicable Law and have remitted or are holding and will remit on a
timely basis all such Taxes that become due and payable, to the appropriate
14
Governmental Authority
and (ii) properly withheld all income, social security and similar material Taxes and paid all
payroll Taxes with respect to all persons properly characterized as employees of the Company or its
Subsidiaries for Tax purposes, (iii) accrued for Taxes on the Financial Statements in amounts that
are adequate to cover any Tax liability of the Company or any Subsidiaries as of the dates set
forth in the Financial Statements and (iv) accrued for Taxes on the Company’s books in amounts that
are adequate to cover any Tax liability of the Company or any Subsidiaries that are reasonably
anticipated to be incurred as a result of the transactions contemplated by this Agreement.
(f) Neither the Company nor any of its Subsidiaries has engaged in a transaction that the
United States Internal Revenue Service has identified by regulation or other form of published
guidance as a listed transaction, as set forth in Regulations Section 1.6011-4(b)(2).
(g) Neither the Company nor any Subsidiary is a party to any agreement providing for the
allocation or payment of Tax liabilities or the allocation of Tax benefits or any Tax Agreement.
SECTION 4.18. Material Contracts.
(a) Section 4.18(a) of the Company Disclosure Schedule lists each of the following
contracts and agreements of the Company or any Subsidiary (such contracts and agreements, together
with the Leases, being “Material Contracts”):
(i) all employment contracts that are not cancelable without penalty or further payment
and without more than 30 days’ notice (other than standard offer letters to employees being
paid on an hourly basis or with an annual base salary of less than $100,000 which do not
contain provisions for any payments upon a change of control);
(ii) all contracts and agreements relating to indebtedness for borrowed money,
guaranty, notes, purchase money debt or other similar undertaking;
(iii) all contracts and agreements that limit or purport to limit in any material
respect the ability of the Company or any Subsidiary to compete in any line of business or
with any Person or in any geographic area or during any period of time;
(iv) all contracts and agreements involving total annual payments or receipts in excess
of $2,500,000, other than purchase orders issued or received in the ordinary course of
business;
(v) all joint venture, partnership or similar contracts between the Company or any
Subsidiary and a third party;
(vi) all licenses of Intellectual Property to the Company or a Subsidiary (other than
ordinary course “shrinkwrap” and other over-the-counter commercially available licenses),
and all licenses of Intellectual Property by the Company or a Subsidiary to third parties;
15
(vii) all contracts or agreements providing for the indemnification of any person with
respect to material liabilities or such person’s service as an officer or director or the
Company or any Subsidiary; and
(viii) all contracts and agreements between or among the Company or any Subsidiary, on
the one hand, and a Stockholder or any Affiliate of a Stockholder, other than the Company or
a Subsidiary, on the other hand, other than commercial
agreements entered into with an Affiliate that is an operating company on an
arms-length basis in the ordinary course of business.
(b) Each Material Contract is valid and binding on the Company or a Subsidiary, as the case
may be, and, to the Knowledge of the Company, the counterparties thereto, and is in full force and
effect. Neither the Company nor any Subsidiary is in breach of, or default under, in any material
respects, any Material Contract to which it is a party, and, to the Knowledge of the Company, no
other Person is in breach of, or default under, in any material respects, any Material Contract.
SECTION 4.19. Labor. Section 4.19 of the Company Disclosure Schedule lists
each collective bargaining agreement or other labor union contract applicable to employees of the
Company or any Subsidiary to which the Company or a Subsidiary is a party or by which the Company
or a Subsidiary is bound. As of the date of this Agreement, there are no strikes, slowdowns or
work stoppages pending or, to the Knowledge of the Company, threatened against the Company or any
Subsidiary by any employees. The Company and each Subsidiary is currently in material compliance
with all applicable Laws relating to the employment of labor, including those related to wages,
hours, collective bargaining and the payment and withholding of taxes.
SECTION 4.20. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company, any Stockholder or any
Affiliate of the Company or any Stockholder, other than any such fees and commissions that will be
paid by the Stockholders. The Stockholders shall indemnify Purchaser to the extent that any person
makes a claim for such fees as a result of actions by the Company or any Stockholder.
SECTION 4.21. Controls and Procedures. Except as disclosed in the PNA SEC Reports,
PNA Group, Inc., and PNA Intermediate Holding Corporation have (i) implemented and maintained
disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange
Act) reasonably designed to provide reasonable assurance that material information required to be
disclosed by them in the reports that they file with or furnish to the SEC under the Exchange Act
pursuant to certain contractual obligations is communicated to their management by others within
the Company and the Subsidiaries as appropriate to allow timely decisions and disclosure, (ii)
implemented and maintained a system of internal control over financial reporting (as defined in
Rule 12a-15(f) promulgated under the Exchange Act) reasonably designed to provide reasonable
assurance concerning the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP and (iii) disclosed to their auditors any
fraud, whether or not material, that involves
16
management or other employees who have a significant
role in its internal controls or financial reporting.
SECTION 4.22. Disclaimer. Except as set forth in Article III and this Article IV, neither the Company
nor any officer, director, employee or representative of the Company makes any representation or
warranty, express or implied, at law or in equity, in respect of the Company, the Subsidiaries, the
Joint Ventures, the Shares or any of the assets of the Company or any Subsidiary or Joint Venture,
including with respect to merchantability or fitness for any particular purpose of any such assets.
Any such other representation or warranty is hereby expressly disclaimed by the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser hereby represents and warrants to the Stockholders and the Company as follows:
SECTION 5.01. Organization and Authority of the Purchaser. The Purchaser is a
corporation duly incorporated, validly existing and in good standing under the Laws of the State of
California and has all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions contemplated hereby.
SECTION 5.02. Authorization, Execution and Enforceability. The execution and delivery
by the Purchaser of this Agreement, the performance by the Purchaser of its obligations hereunder
and the consummation by the Purchaser of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of the Purchaser. This Agreement has been
duly executed and delivered by the Purchaser, and (assuming due authorization, execution and
delivery by the Stockholders and the Company) constitutes a legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with its terms, except where
enforcement thereof may be limited by bankruptcy, reorganization, insolvency and similar Laws
affecting creditors’ rights generally, and general equitable principles.
SECTION 5.03. No Conflict. Assuming compliance with the premerger notification and
waiting period requirements of the HSR Act and the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to in
Section 5.04, the execution, delivery and performance by the Purchaser of this Agreement do
not and will not (i) violate, conflict with or result in the breach of any provision of the
articles of incorporation or bylaws of the Purchaser, as amended and restated, (ii) conflict with
or violate any Law or Governmental Order applicable to the Purchaser or its assets, properties or
businesses or (iii) conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a
party, except, in the case of clauses (ii)
and (iii), as would not materially and adversely affect the ability
17
of the Purchaser to carry
out its obligations under, and to consummate the transactions contemplated by, this Agreement.
SECTION 5.04. Governmental Consents and Approvals. The execution, delivery and
performance by the Purchaser of this Agreement do not and will not require any consent, approval,
authorization or other order of, action by, filing with, or notification to, any Governmental
Authority, except (i) the premerger notification and waiting period requirements of the HSR Act,
(ii) the filing with the Securities and Exchange Commission of one or more Current Reports on Form
8-K reporting the execution, delivery and performance by Purchaser of this Agreement or (iii) where
failure to obtain such consent, approval, authorization or action, or to make such filing or
notification, would not prevent or materially delay the consummation by the Purchaser of the
transactions contemplated by this Agreement.
SECTION 5.05. Investment Purpose. The Purchaser is acquiring the Shares solely for
the purpose of investment and not with a view to, or for offer or sale in connection with, any
distribution thereof other than in compliance with all applicable Laws, including United States
federal securities Laws.
SECTION 5.06. Financing. The Purchaser will have sufficient available funds to pay at
the Closing, in cash, the full amount of the Purchase Price and all other amounts necessary to
consummate the transactions contemplated hereby (the “Financing”), including all funds
necessary to (A) repay all amounts outstanding under the Company’s senior credit facility, (B)
repurchase all of the outstanding 10-3/4% Senior Notes due 2016 issued by PNA Group, Inc., (C)
repurchase all of the outstanding Senior Floating Rate Toggle Notes due 2013 issued by PNA
Intermediate Holding Corporation, (D) repay all amounts outstanding under the $12 million
promissory note dated May 9, 2006 issued by the Company to Preussag North America, Inc. and (E) pay
all expenses and other amounts required to be paid by the Purchaser, the Company or any Subsidiary
in connection with the consummation of the transactions contemplated hereby. Upon the consummation
of such transactions, (i) the Purchaser will not be insolvent, (ii) the Purchaser will not be left
with unreasonably small capital, (iii) the Purchaser will not have incurred debts beyond its
ability to pay such debts as they mature and (iv) the capital of the Purchaser will not be
impaired.
SECTION 5.07. Litigation. As of the date hereof, no Action by or against the
Purchaser is pending or, to the knowledge of the Purchaser, threatened, which could affect the
legality, validity or enforceability of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
SECTION 5.08. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Purchaser.
ARTICLE VI
COVENANTS
COVENANTS
SECTION 6.01. Conduct of Business Prior to the Closing. The Company covenants and
agrees that, except as described in Section 6.01 of the Company Disclosure Schedule,
18
between the date hereof and the Closing, (i) the Company shall, and shall cause each Subsidiary to,
conduct its business in the ordinary course in all material respects and use its reasonable efforts
to preserve intact in all material respects its business organization, including without limitation
its relationships with customers, suppliers and employees, and (ii) without the prior written
consent of the Purchaser, the Company shall not, and shall not permit any Subsidiary to:
(a) issue or sell any capital stock, notes, bonds or other securities (or any option, warrant
or other right to acquire the same) or effect any recapitalization, reclassification of shares,
stock split, reverse stock split or similar transaction;
(b) redeem any of the capital stock or declare, make or pay any dividends or distributions to
the holders of capital stock (other than dividends and distributions declared, made or paid by any
Subsidiary to the Company or another Subsidiary and except for the distribution of Travel Main
contemplated by Section 6.08);
(c) incur any indebtedness for borrowed money other than borrowings under a Material Contract
disclosed in Section 4.18(a) of the Company Disclosure Schedule;
(d) amend its charter or bylaws (or similar organizational documents);
(e) grant or announce any increase in the salaries, bonuses or other benefits to any employees
other than (i) modifications of the terms of, or participants in, the Participation Plan that are
disclosed to the Purchaser, provided that no such modification may adversely affect the Purchaser
without the Purchaser’s consent, such consent not to be unreasonably withheld, (ii) as required by
Law, pursuant to any plans, programs or agreements existing on the date hereof or (iii) ordinary
increases consistent with the past practices;
(f) change any method of accounting or accounting practice or policy, other than such changes
required by GAAP; or
(g) settle or compromise any material claims or Actions;
(h) effect or become a party to any transaction to acquire any other Person (including by way
of merger, asset purchase, business combination or otherwise);
(i) pledge or hypothecate any assets or otherwise permit any assets to become subject to any
Encumbrance other than in the ordinary course of business;
(j) enter into any related party transactions that would be required to be disclosed under
GAAP or increase amounts being paid pursuant to an existing agreement or make any additional
payment to any Stockholder or an Affiliate of any Stockholder; or
(k) agree to take any of the actions specified in the foregoing clauses (a) through (j).
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SECTION 6.02. Access to Information.
(a) From the date hereof until the Closing, upon reasonable notice, the Company shall, and
shall cause each Subsidiary to (i) afford the Purchaser and its authorized representatives
reasonable access to the offices, properties, books and records and key employees of the Company
and each Subsidiary and (ii) furnish to the Purchaser such additional financial and other
information regarding the Company and the Subsidiaries as the Purchaser may from time to time
reasonably request; provided, however, that any such access or furnishing of
information shall be conducted at the Purchaser’s expense, during normal business hours, under the
supervision of the Company’s or a Subsidiary’s personnel and in such a manner as not to
unreasonably interfere with the normal operations of the businesses of the Company and the
Subsidiaries. The Purchaser acknowledges and agrees that all notices of requests by the Purchaser
or its authorized representatives for access to offices, properties or books or records of the
Company or any Subsidiary or additional financial and other information shall be directed solely to
Xxxxx Xxxxxxxx, or such other person as he may designate and approve. Notwithstanding anything to
the contrary in this Agreement, neither the Company nor any Subsidiary shall be required to
disclose any information to the Purchaser if such disclosure could, in the Company’s reasonable
business judgment, (x) cause material competitive harm to the Company and the Subsidiaries, on a
consolidated basis, if the transactions contemplated hereby are not consummated, (y) jeopardize any
attorney-client or other legal privilege or (z) contravene any applicable Laws, fiduciary duty or
binding agreement entered into prior to the date hereof.
(b) The Purchaser shall cause the Company and the Subsidiaries to retain their respective
books and records for a period of seven years following the Closing and shall make such books and
records available to the Stockholders and their agents and representatives upon reasonable request
in connection with a specified purpose reasonably requiring access to such books and records (other
than disputes between the parties). The Stockholders shall cause Travel Main and its subsidiaries
to retain their respective books and records for a period of seven years following the Closing and
shall make such books and records available to the Purchaser and its agents and representatives
upon reasonable request in connection with a specified purpose reasonably requiring access to such
books and records.
SECTION 6.03. Employee Benefits. From and after the Closing, (i) the employees of the Company or any Subsidiary shall
receive credit for purposes of eligibility, participation and vesting under any employee benefit
plan, program or arrangement established or maintained by the Purchaser or any of its Affiliates
for service accrued or deemed accrued prior to the Closing with the Company or any Subsidiary or
any predecessor company and the Purchaser shall waive, or cause to be waived, any limitations on
benefits relating to any pre-existing conditions to the same extent such limitations are waived
under any comparable plan of the Purchaser or its Affiliates and recognize, for purposes of annual
deductible and out-of-pocket limits under its medical and dental plans, deductible and
out-of-pocket expenses paid by employees of the Company and the Subsidiaries in the calendar year
in which the Closing occurs, and (ii) the Purchaser shall cause the Company and its Subsidiaries to
honor, and to not modify or amend, the terms and conditions of the 2008 employee and management
bonus and incentive bonus plans of the Company and its Subsidiaries as in effect on the date hereof
and disclosed in Section 4.16 of the Company Disclosure Schedules, absent the consent of
the participants therein.
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SECTION 6.04. Indemnification of Directors and Officers. For not less than six years
from and after the Closing, the Purchaser shall (i) cause the Company and the Subsidiaries to
indemnify and hold harmless all past and present directors, officers, employees and agents of the
Company or any Subsidiary (“Covered Persons”) to the same extent as such persons are
indemnified as of the date of this Agreement by the Company or any Subsidiary pursuant to the
charter or bylaws of the Company or any Subsidiary or pursuant to any indemnification agreement
with any Covered Persons in existence on the date hereof for acts or omissions occurring at or
prior to the Closing, (ii) not permit the Company or any Subsidiary to amend its charter or bylaws
to make less favorable to the Covered Persons any provision with respect to indemnification,
advancement of expenses and exculpation and (iii) provide to the directors and officers of the
Company and each Subsidiary as of the date hereof an insurance and indemnification policy that
provides coverage for events occurring on or before the Closing Date (“D&O Insurance”) that
is no less favorable than the Company’s existing policy or, if substantially equivalent insurance
coverage is unavailable, the best available coverage that can be obtained for an annual premium of
not more than 150% of the last annual premium paid prior to the date of this Agreement, but in such
case shall purchase as much coverage as reasonably practicable for such amount. The provisions of
clause (iii) of the immediately preceding sentence shall be deemed to have been satisfied if
prepaid policies have been obtained as of the Closing Date which provide such directors and
officers with coverage for an aggregate period of at least six years with respect to claims arising
from facts or events that occurred on or before the Closing Date. Each Covered Person shall be
entitled to advancement of expenses incurred in the defense of any claim, action, suit, proceeding
or investigation with respect to any matters subject to indemnification, provided that any person
to whom expenses are advanced undertakes, to the extent required by applicable Law, to repay such
advanced expenses if it is ultimately determined that such person is not entitled to
indemnification. The obligations under this Section 6.04 may not be terminated or modified
in such a manner as to affect adversely any Covered Person without the consent of such Covered
Person.
SECTION 6.05. Participation Plan and Severance Payments.
(a) No later than two Business Days prior to the Closing, the Company shall deliver to the
Purchaser a certificate signed by an officer of the Company setting forth in reasonable detail (i)
the names of all persons entitled to payments in connection with the consummation of the
transactions contemplated by this Agreement, and the aggregate amount to be paid to such persons,
under the Participation Plan, (ii) the aggregate amount of the severance payments that would be
payable to the two employees identified in the letter delivered by the Purchaser to the Company
concurrently with the execution of this Agreement under their respective employment agreements if
such employees are terminated without cause, (iii) the computation of the Compensation Payments
Adjustment Amount and (iv) if and to the extent that the Company has not taken the actions
contemplated by Section 6.05(d) to ensure that no person receiving payments under the Participation
Plan could reasonably be deemed to receive a “parachute payment” under Section 280G of the Code, a
calculation of the amount of the “parachute payment” for any such person who could reasonably be
deemed to be receiving a “parachute payment” in connection with the transactions contemplated by
this Agreement.
(b) The Company shall take such steps as shall be necessary to provide for payroll checks to
be delivered on the Closing Date to the participants in the Participation Plan for
21
the payments to
be made to such participants set forth in the certificate delivered pursuant to
Section 6.05(a) in connection with the transactions contemplated by this Agreement, subject
in each case to all required tax and other withholdings. The payments provided for in this
Section 6.05(b) shall be made subject to receipt by the Company of a release executed by the payee in form and substance that is customary and reasonable.
Section 6.05(b) shall be made subject to receipt by the Company of a release executed by the payee in form and substance that is customary and reasonable.
(c) If either or both of the individuals described in clause (ii) of Section 6.05(a)
remains employed on the six-month anniversary of the Closing Date, then the Purchaser shall pay to
the Stockholders on such anniversary date the portion of the Compensation Payments Adjustment
Amount deducted from the Purchase Price that is attributable to such individual(s) (for the
avoidance of doubt, such amount being calculated as 60% of the amount payable to such individual(s)
set forth in the certificate delivered by the Company to the Purchaser pursuant to clause (ii) of
Section 6.05(a)).
(d) Prior to the Effective Time, the Company shall use all reasonable efforts, including
seeking all necessary waivers from any individual entitled to any such payments in the absence of a
waiver, to obtain a favorable stockholder vote establishing the right of any “disqualified
individual” (as defined in Section 280G(c) of the Code) to receive or retain any and all payments
that could reasonably be deemed “parachute payments” under Section 280G of the Code.
SECTION 6.06. Confidentiality. The terms of that certain Confidentiality Agreement
dated as of May 12, 2008 (the “Confidentiality Agreement”) between PNA Group Holding
Corporation (a representative of the Company and the Stockholders) and Reliance Steel & Aluminum
Co. (a representative of the Purchaser) are hereby incorporated herein by reference and shall
continue in full force and effect until the Closing, at which time such Confidentiality Agreement
and the obligations of the Purchaser under this Section 6.06 shall terminate. If for any
reason this Agreement is terminated prior to the Closing or the Closing does not otherwise take
place, the Confidentiality Agreement
shall nonetheless continue in full force and effect. From the date hereof and following the
Closing, the Stockholders shall hold in strict confidence all Confidential Information of the
Company (as defined in the Confidentiality Agreement), except for disclosures to the Purchaser as
provided herein. Notwithstanding the foregoing, the parties acknowledge and agree that they will
announce the signing of this Agreement pursuant to a mutually acceptable press release and each
party will make all required filings with the SEC in connection therewith.
SECTION 6.07. Regulatory and Other Authorizations; Notices and Consents. The Company
and the Purchaser shall use commercially reasonable efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be or become necessary
for its execution and delivery of, and the performance of its obligations pursuant to, this
Agreement and will cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. Each party hereto agrees to make its filing
pursuant to the HSR Act with respect to the transactions contemplated by this Agreement within ten
Business Days of the date hereof and to supply as promptly as practicable to the appropriate
Governmental Authority any information and documentary material that may be requested pursuant to
the HSR Act. Without limiting the generality of the foregoing, the Purchaser shall use
commercially reasonable efforts to (i) avoid or eliminate any
22
impediment under any antitrust,
competition or trade regulation Law that may be asserted by any United States governmental
antitrust authority or any other party so as to enable the transactions contemplated hereby to be
consummated as promptly as practicable, and (ii) defend through litigation on the merits any claim
asserted in court by any party in order to avoid entry of, or to have vacated or terminated, any
decree, order or judgment (whether temporary, preliminary or permanent) that would prevent the
Closing from occurring as promptly as practicable; provided that the Purchaser’s board of directors
determines in its reasonable business judgment that it is more likely than not that the Purchaser
will prevail in such litigation. The Company and the Purchaser shall promptly notify each other of
any communication that it or any of its Affiliates receives from any Governmental Authority
relating to the matters that are the subject of this Agreement and shall permit the other party to
review in advance any proposed communication by such party responding to any Governmental Authority
inquiry. Neither the Company nor the Purchaser shall agree to participate in any meeting with any
Governmental Authority in respect of any filings, investigation or other inquiry unless it consults
with the other party in advance and, to the extent permitted by such Governmental Authority, gives
the other party the opportunity to attend and participate at such meeting. The Company and the
Purchaser will coordinate and cooperate fully with each other in exchanging such information and
providing such assistance as the other party may reasonably request in connection with the
foregoing and in seeking early termination of any applicable waiting periods, including under the
HSR Act, and will provide each other with copies of all correspondence, filings or communications
between them or any of their representatives, on the one hand, and any Governmental Authority or
members of its staff, on the other hand, with respect to this Agreement and the transactions
contemplated by this Agreement (other than any such matters relating to disputes between the
parties).
SECTION 6.08. Distribution of Travel Main. Prior to the Closing, the Company shall take all action as shall be required to distribute
all of the ownership interests in Travel Main to the Stockholders or to an entity formed by the
Stockholders to hold such ownership interests. The Company shall bear all costs, including, but
not limited to, any Taxes that may become payable by the Company or any Subsidiary as a result of
or in connection to such distribution and the Stockholders shall not bear any liability in
connection therewith; provided that: (i) if and to the extent that the amount of net
taxable gain realized by the Company and its Subsidiaries in connection with such distribution, as
shown on the Company’s consolidated Tax Return for the period in which such distribution occurs,
exceeds $25,000,000, the Stockholders shall pay to the Company an amount equal to 40% of the dollar
amount of such excess; and (ii) in no event shall the distribution hereunder cause or result in a
“Default” or an “Event of Default” under any of the Company’s debt instruments described in clauses
(A) through (D) of Section 5.06 when all other distributions or payments to be made by the Company
in connection with this Agreement (including, but not limited to, the payments to be made under and
pursuant to the Participation Plan) and any Tax liability arising in connection therewith have been
accrued, made and/or paid. If the Stockholders are required to make a payment to the Company
pursuant to clause (i) above, the Company shall deliver to the Stockholders an as-filed copy of the
Tax Return applicable thereto together with a calculation of such net taxable gain in reasonable
detail, and the Stockholders shall pay the amount to the Company within five Business Days
following receipt of such Tax Return and such calculation. Any amounts paid by the Stockholders
under this Section 6.08 shall be treated by the parties as an adjustment to the Purchase
Price for all Tax purposes.
23
SECTION 6.09. Resignations of Certain Officers and Directors. The Company shall cause
each of the individuals serving as officers and/or directors of the Company and of each of the
Subsidiaries that are agents or representatives of, or otherwise primarily affiliated with, the
Stockholders to resign in writing from such officer and director positions, effective as of and
conditioned upon the Closing, and to promptly deliver copies of such resignations to Purchaser.
SECTION 6.10. No Sales or Transfers of any of the Shares. Each Stockholder covenants
and agrees that, from the date hereof through the Closing, such Stockholder shall continue to hold
the Shares held by such Stockholder as of the date hereof, as set forth on the Schedule of
Stockholders attached hereto, and shall not sell, transfer or hypothecate any of such Shares
and shall preserve such Shares free and clear of all Encumbrances.
SECTION 6.11. Purchase Price Adjustment. On the second Business Day prior to the
anticipated Closing Date, the Company shall deliver to the Purchaser a written statement of the
average aggregate balance of the borrowings under the debt instruments described in clauses (A)
through (D) of Section 5.06, less the consolidated cash of the Company (excluding any
consolidated debt or consolidated cash of Travel Main), over the fifteen (15) Business Days ending
on the third Business Day prior to the anticipated Closing Date. The Purchase Price shall be
increased by the amount equal to the amount, if any, by which such average is less than
$750,000,000. Without limiting its other
obligations hereunder, except as expressly permitted by this Agreement, the Company shall
manage its current assets and current liabilities in the ordinary course of business.
Notwithstanding anything herein, in no event will the aggregate balance of the borrowings under the
debt instruments described in clauses (A) through (D) of Section 5.06, less the consolidated cash
of the Company (excluding any consolidated debt or consolidated cash of Travel Main), exceed
$755,000,000 as of immediately prior to the Closing.
SECTION 6.12. Further Action. The parties hereto shall use commercially reasonable
efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things
necessary, proper or advisable under applicable Law, and to execute and deliver such documents and
other papers, as may be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Parties. The obligations of the
parties to consummate the transactions contemplated by this Agreement shall be subject to the
fulfillment or written waiver, at or prior to the Closing, of each of the following conditions:
(a) Governmental Approvals. Any waiting period (and any extension thereof) under the
HSR Act applicable to the purchase of the Shares contemplated by this Agreement shall have expired
or shall have been earlier terminated; and
(b) No Order. No Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law or Governmental Order (whether temporary, preliminary or permanent)
that has the effect of making the transactions contemplated by this Agreement illegal or otherwise
prohibiting the consummation of such transactions.
24
SECTION 7.02. Conditions to Obligations of the Stockholders. The obligations of the
Stockholders to consummate the transactions contemplated by this Agreement shall be subject to the
fulfillment or written waiver, at or prior to the Closing, of each of the following conditions,
and, at the Closing, the Purchaser shall provide an officer’s certificate confirming that the
conditions (a) and (b) have been fulfilled:
(a) Representations and Warranties. The representations and warranties of the
Purchaser contained in this Agreement shall be true and correct (without giving effect to
“materiality” qualifiers), on and as of the Closing, with the same force and effect as though such
representations and warranties had been made on and as of the Closing (other than those
representations and warranties that are made as of another date, in which case such representations
and warranties shall be true and correct as of such other date), except to the extent such failure
to be true and correct does not, individually or in the aggregate, adversely
affect the ability of the Purchaser to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement.
(b) Covenants. The Purchaser shall have duly performed and complied with, in all
material respects, the covenants and agreements contained in this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) Consent. The Company shall have obtained the requisite consent of Bank of
America, N.A., and shall have fulfilled any requirements of such consent, to permit the
distribution of the ownership interests in Travel Main contemplated by Section 6.08.
SECTION 7.03. Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the
fulfillment or written waiver, at or prior to the Closing, of each of the following conditions,
and, at the Closing, the Stockholders and the Company shall provide an officer’s certificate
confirming that the conditions (a) through (c) have been fulfilled:
(a) Representations and Warranties. (i) The representations and warranties of the
Stockholders and the Company contained in this Agreement shall be true and correct (without giving
effect to “materiality” or “Material Adverse Effect” qualifiers), on and as of the Closing, with
the same force and effect as though such representations and warranties had been made on and as of
the Closing (other than those representations and warranties that are made as of another date, in
which case such representations and warranties shall be true and correct as of such other date),
except to the extent such failure to be true and correct does not, individually or in the
aggregate, result in a Material Adverse Effect.
(b) Covenants. The Company and each of the Stockholders shall have duly performed and
complied with, in all material respects, the covenants and agreements contained in this Agreement
to be performed or complied with by it prior to or at the Closing.
(c) No Material Adverse Effect. There shall have been no Material Adverse Effect
since the date of this Agreement.
(d) Certificate of Secretary and Good Standing Certificates. The Stockholders and the
Company shall provide a Certificate of Secretary in form reasonably acceptable to the
25
Purchaser to
certify the certificate of incorporation and bylaws of the Company that are in effect, the
resolutions duly adopted by the board of directors of the Company and by the general partner or
manager, as the case may be, of each of the Stockholders authorizing the execution of this
Agreement and the transactions contemplated by this Agreement and incumbency certificates
identifying the officers authorized to act on behalf of the Company and each of the Stockholders
and attaching certificates of status for the Company and each of the Subsidiaries in the
jurisdictions where they were incorporated, formed or organized.
(e) Platinum Equity Advisors Agreement. The Amended and Restated Corporate Advisory
Services Agreement by and between Platinum Equity Advisors, LLC and PNA Group, Inc. dated as of
July 18, 2006, shall have been terminated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any time prior to the
Closing:
(a) by either the Company or the Purchaser if the Closing shall not have occurred before
October 2, 2008; provided, however, that the right to terminate this Agreement
under this Section 8.01(a) shall not be available to the Company if the Closing has not
occurred prior to such date due to the breach by the Company or any Stockholder of any
representation or warranty in this Agreement or the failure by the Company or any Stockholder to
fulfill its obligations under this Agreement, and such right shall not be available to the
Purchaser if the Closing has not occurred prior to such date due to the breach by the Purchaser of
any representation or warranty in this Agreement or the failure by the Purchaser to fulfill its
obligations under this Agreement;
(b) by either the Company or the Purchaser if a Governmental Order restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement shall have become final and
nonappealable;
(c) by the Company if the Purchaser shall have breached any of its representations,
warranties, covenants or agreements contained in this Agreement which would give rise to the
failure of a condition set forth in Article VII, which breach cannot be or has not been
cured within 30 days after the giving of written notice by the Company to the Purchaser specifying
such breach, provided, however, that no such cure period shall be required to be
provided to the Purchaser in the event that the Purchaser, in breach of its representation and
warranty in Section 5.06, does not have the Financing as of the date that the Closing is
otherwise required to take place as provided in Section 2.02;
(d) by the Purchaser if the Company or any Stockholder shall have breached any of its
representations, warranties, covenants or agreements contained in this Agreement which would give
rise to the failure of a condition set forth in Article VII, which breach cannot be or has
not been cured within 30 days after the giving of written notice by the Purchaser to the Company
and the Stockholders specifying such breach; or
(e) by the mutual written consent of the Company and the Purchaser.
26
SECTION 8.02. Effect of Termination. In the event of termination of this Agreement as
provided in Section 8.01, this Agreement shall forthwith terminate and have no further
force and effect, and there shall be no liability on the part of either party hereto except (i) as
set forth in Section 6.06 and Article IX and (ii) that nothing herein shall relieve
either party from liability for any breach of this Agreement occurring prior to such termination.
Without limiting the generality of the foregoing, the parties expressly acknowledge and agree that
the consummation of the transactions contemplated by this Agreement is not subject to any condition
that the Purchaser obtain the Financing, or that the Purchaser obtain any consent required as a
condition to obtaining the Financing and,
accordingly, that the failure by the Purchaser to have the Financing as of the date that the
Closing is otherwise required to take place as provided in Section 2.02 shall constitute a breach
of this Agreement by the Purchaser.
ARTICLE IX
GENERAL PROVISIONS
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties. The representations and
warranties contained in this Agreement shall not survive the Closing.
SECTION 9.02. Expenses. Except as otherwise specified in this Agreement, all costs
and expenses, including, fees and disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transactions contemplated by this Agreement
shall be borne by the party incurring such costs and expenses, whether or not the Closing shall
have occurred.
SECTION 9.03. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, by an internationally recognized
overnight courier service, by facsimile or registered or certified mail (postage prepaid, return
receipt requested) to the respective parties hereto at the following addresses (or at such other
address for a party as shall be specified in a notice given in accordance with this
Section 9.03):
(a) if to the Company or the Stockholders:
c/o Platinum Equity Advisors, LLC
000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Loss
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Loss
27
(b) if to the Purchaser:
RSAC Management Corp.
000 X. Xxxxx Xxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
000 X. Xxxxx Xxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
with a copy to:
RSAC Management Corp.
000 X. Xxxxx Xxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxx
000 X. Xxxxx Xxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxx
All notices hereunder shall be deemed to have been duly given: when received if personally
delivered; when transmitted by telecopy; the day after it is sent, if sent for next day delivery to
a domestic address by an internationally recognized overnight delivery service; and upon receipt,
if sent by certified or registered mail, return receipt requested.
SECTION 9.04. Public Announcements. Neither party to this Agreement shall issue any
press release or public announcement in respect of this Agreement or the transactions contemplated
by this Agreement or otherwise communicate with any news media without the prior written consent of
the other party unless otherwise required by Law or applicable stock exchange regulation, and the
parties to this Agreement shall cooperate as to the timing and contents of any such press release,
public announcement or communication. Notwithstanding anything stated above, after the initial
announcement each party may issue tombstones and similar announcements without the consent of the
other party provided such announcement is consistent with the information contained in the initial
announcement. Neither party shall trade in any securities of the other party prior to the closing
or termination of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this Agreement is
finally declared to be invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in full force and effect
for so long as the economic or legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to either party hereto. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable manner in order that the transactions
contemplated by this Agreement are consummated as originally contemplated to the greatest extent
possible.
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SECTION 9.06. Entire Agreement. This Agreement, including the Company Disclosure
Schedule, and the Confidentiality Agreement constitute the final and entire agreement between the
parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and undertakings, both written and oral, between the parties with respect to the subject matter
hereof and thereof. Without limiting the generality of the foregoing, the parties agree that no
information provided to the Purchaser, its Affiliates or its representatives, outside of this
Agreement and the Company Disclosure Schedule, including any information made available to the
Purchaser, whether orally or in writing, in any data rooms, management presentation, or discussion,
or response to any question submitted on behalf of the Purchaser in connection with the
transactions contemplated by this Agreement, shall form the basis for any claim against the
Company, any Stockholder or any of their respective Affiliates, officers, directors, employees or
other representatives.
SECTION 9.07. Assignment. This Agreement may not be assigned by any party without the
written consent of the other parties.
SECTION 9.08. Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, the parties hereto.
SECTION 9.09. Waiver. The Company may waive compliance by the Purchaser with any of
the agreements of the Purchaser and the Purchaser may waive compliance by the Company or the
Stockholders with any of the agreements of the Company or the Stockholders, but any such waiver
shall be valid only if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a waiver of any other term or
condition of this Agreement. The failure of any party hereto to assert any of its rights hereunder
shall not constitute a waiver of any of such rights.
SECTION 9.10. Specific Performance. Any party to this Agreement shall be entitled to
seek an injunction to prevent any breach or threatened breach of this Agreement by any other party
and to enforce specifically the terms and provisions hereof, in addition to any other remedy to
which such party is entitled at law or in equity. In any such action for equitable relief, no
party shall assert as a defense to such action that, or seek to oppose such action on that grounds
that, a remedy at law is available or that money damages will be a sufficient remedy.
SECTION 9.11. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto
and nothing herein, express or implied, is intended to or shall confer upon any other Person,
including without limitation any employee of the Company or any Subsidiary, any legal or equitable
right, benefit or remedy of any nature whatsoever, including any rights of employment for any
specified period, under or by reason of this Agreement, including without limitation under
Section 6.03; provided, however, that the agreements of the Purchaser set
forth in Section 6.04 are intended for the benefit of the Covered Persons, each of whom
shall be an express third party beneficiary of such agreement and shall be entitled to enforce such
agreements in his or her own name as if he or she were a party to this Agreement.
29
SECTION 9.12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the Laws of the State of California applicable to contracts executed and performed
entirely within the State of California.
SECTION 9.13. Consent to Jurisdiction and Venue. Each of the parties irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of the state or
Federal courts in the State of California in any action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby or for recognition or enforcement of any
judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (i)
agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any
claim in respect of any such action or proceeding may be heard and determined in such courts, (iii)
waives, to the fullest extent it may legally and effectively do so, any objection which it may now
or hereafter have to the laying of venue of any such action or proceeding in any of such courts,
and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in such courts. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party to
this Agreement irrevocably consents to service of process in the manner provided for notices in
Section 9.03. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by Law.
SECTION 9.14. WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER. EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, MAKES SUCH WAIVER
VOLUNTARILY, AND HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
AGREEMENTS AND WAIVERS IN THIS SECTION 9.14.
SECTION 9.15. Counterparts and Facsimile Signatures. This Agreement may be executed
and delivered (including by electronic or facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement. This Agreement and any other document or agreement executed in connection herewith
(other than the stock powers or other instruments of transfer delivered with the Shares) may be
executed by delivery of an electronic or a facsimile copy of an executed signature page with the
same force and effect as the delivery of an originally executed signature page. In the event any
party delivers an electronic or a facsimile copy of a signature page to this Agreement or any other
document or agreement executed in connection herewith, such party shall deliver an originally
executed signature page within three Business Days of delivering such
30
electronic or facsimile
signature page or at any time thereafter upon request; provided, however, that the failure to
deliver any such originally executed signature page shall not affect the validity of the signature
page delivered by facsimile, which has and shall continue to have the same force and effect as the
originally executed signature page.
[The remainder of this page has been intentionally left blank. The signature page follows.]
31
[Signature page to Stock Purchase Agreement]
IN WITNESS WHEREOF, the Company, the Stockholders and the Purchaser have caused this Agreement
to be executed as of the date first written above.
“PURCHASER”:
RSAC MANAGEMENT CORP.
By:
|
/s/ Xxxxx X. Xxxxxx
|
|||
Name: Xxxxx X. Xxxxxx | ||||
Title: Chief Executive Officer | ||||
By:
|
/s/ Xxxxx Xxxxx | |||
Name: Xxxxx Xxxxx | ||||
Title: Executive Vice President, Chief Financial Officer and Assistant Secretary |
“STOCKHOLDERS”:
PLATINUM EQUITY CAPITAL PARTNERS, L.P.
PLATINUM EQUITY CAPITAL PARTNERS — A, L.P.
PLATINUM EQUITY CAPITAL PARTNERS — PF, L.P.
PLATINUM EQUITY CAPITAL PARTNERS — A, L.P.
PLATINUM EQUITY CAPITAL PARTNERS — PF, L.P.
By: | Platinum Equity Partners, LLC, its general partner |
|||||||
By: | Platinum Equity Investment Holdings, LLC, its senior managing member |
|||||||
By: | Xxxx Xxx Xxxxxx | |||||||
Name: | Xxxx Xxx Xxxxxx | |||||||
Title: | Vice President |
PLATINUM TRAVEL PRINCIPALS, LLC
By: | Platinum Equity Investment Holdings, LLC, its senior managing member |
|||||
By: | /s/ Xxxx Xxx Xxxxxx | |||||
Name: | Xxxx Xxx Xxxxxx | |||||
Title: | Vice President |
S-1
SCHEDULE OF STOCKHOLDERS
Name of Stockholder | Number of Shares Held | |||
PLATINUM EQUITY CAPITAL PARTNERS, L.P. |
5,148,684.50 Shares | |||
PLATINUM EQUITY CAPITAL PARTNERS — A, L.P. |
1,414,473.50 Shares | |||
PLATINUM EQUITY CAPITAL PARTNERS — PF, L.P. |
961,842.00 Shares | |||
PLATINUM TRAVEL PRINCIPALS, LLC |
1,225,000.00 Shares | |||
TOTALS |
8,750,000.00 Shares |
Schedule of Stockholders