|
|
|
|
Legal Resources
Business Contracts
MCLE Courses
Projects
Friends
|
Sample Business ContractsHome: Sample Business Contracts:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
BY AND BETWEEN
ARISTECH CHEMICAL CORPORATION
as Seller
AND
ASHLAND INC.
as Buyer
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
April 28, 1995
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. THE TRANSACTION
1.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Enumeration of Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Retained Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Physical Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.6 Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Determination of Working Capital . . . . . . . . . . . . . . . . . . . . . . . . 11
1.8 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.9 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.11 Certain Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.12 Continuing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.13 Certain Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Organization; Corporate Power and Authority . . . . . . . . . . . . . . . . . . 29
2.2 Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Certain Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.7 Certain Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . 33
2.8 Permits; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.9 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.10 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.11 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.12 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.14 Sufficiency of the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.15 Maintenance of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.16 Customers and Suppliers Relations . . . . . . . . . . . . . . . . . . . . . . . 39
2.17 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.18 Violation of Certain Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.19 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.20 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . 41
2.21 Limitation on Seller's Warranties . . . . . . . . . . . . . . . . . . . . . . . 41
2.22 Knowledge Concerning Buyer's Representations . . . . . . . . . . . . . . . . . . 42
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Organization; Corporate Power and
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
- i -
<PAGE> 3
Page
----
3.2 Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 42
3.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.4 Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.5 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.6 Knowledge Concerning Seller's
Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE IV. COVENANTS OF THE PARTIES
4.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.3 Access to and Preservation of Information
and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.4 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.5 Transition Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.6 Non-competition and Non-interference
by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.7 Non-Interference by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8 Identification of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.9 Return of Polyester Resins . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.10 Colton Resins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.11 Cleaning of Colton Tanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE V. CLOSING
5.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.4 Deliveries by Both Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VI. CERTAIN ADDITIONAL COVENANTS
6.1 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.2 Fulfillment of Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 64
6.3 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . 64
6.4 Use of Name "Aristech Chemical Corporation" . . . . . . . . . . . . . . . . . . 65
6.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.2 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.3 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.4 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.5 Limitations on Indemnification Obligations . . . . . . . . . . . . . . . . . . . 69
- ii -
<PAGE> 4
Page
----
ARTICLE VIII. ENVIRONMENTAL INDEMNIFICATION AND OTHER ENVIRONMENTAL MATTERS
8.1 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.3 Provisions Relating to All Properties . . . . . . . . . . . . . . . . . . . . . 85
8.4 Provisions Relating to Neville Island
Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.5 Provisions Relating to Other Production
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
8.6 Provisions Relating to Distribution
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.7 Environmental Indemnification Cap . . . . . . . . . . . . . . . . . . . . . . . 169
8.8 Transfer of Buyer's Environmental
Indemnification Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
ARTICLE IX. MISCELLANEOUS
9.1 Alternative Dispute Resolution Process . . . . . . . . . . . . . . . . . . . . . 181
9.2 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
9.3 Exclusion of Certain Damages . . . . . . . . . . . . . . . . . . . . . . . . . . 186
9.4 Survival of Indemnification Provisions . . . . . . . . . . . . . . . . . . . . . 187
9.5 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
9.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
9.7 Certain Understandings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
9.8 Sales and Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
9.9 Amendments, Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . 190
9.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
9.11 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.14 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
9.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
- iii -
<PAGE> 5
Page
----
SCHEDULES
Schedule 1.2(a) - Certain Real Estate
Schedule 1.2(b) - Buyer's Neville Island Plant
Schedule 1.2(c) - Excluded Equipment at Business Sites
Schedule 1.2(e) - Certain Equipment
Schedule 1.2(g) - Vehicles
Schedule 1.2(h) - Real Property Leases
Schedule 1.2(i) - Personal Property Leases
Schedule 1.2(j) - Permits
Schedule 1.2(k) - Certain Orders and Agreements
Schedule 1.2(l) - Purchased Intellectual Property
Schedule 1.3(d) - Retained Accounts Receivable
Schedule 1.3(k) - Retained Intellectual Property
Schedule 1.9 - Purchase Price Allocation
Schedule 1.10(a) - Assumed Collective Bargaining
(iii) Agreements
Schedule 1.11(a) - Business Employees
Schedule 1.11(b) - Employee Benefits
Schedule 2.3 - Consents and Approvals
Schedule 2.4 - Certain Financial Statements
Schedule 2.5 - Conduct of Business
Schedule 2.6 - Litigation
Schedule 2.7 - Certain Contracts and Commitments
Schedule 2.9 - Leased Real Estate
Schedule 2.10(a) - Encumbrances on Personal Property
Schedule 2.11 - Labor Relations
Schedule 2.13 - Environmental Matters
Schedule 4.5(a) - Transitional Employees
Schedule 8.7(e) - Escalation Methodology for
Environmental Cap, Retained Premises
Cap and UPR Cap
EXHIBITS
Exhibit "A" - Seller's Accounting Policies
Exhibit "B" - Form of Assumption and
Assignment Agreement
Exhibit "C" - Form of Seller's Supply Contract
Exhibit "D" - Form of Buyer's PA Supply Contract
Exhibit "E" - Form of Buyer's 2-EH Supply Contract
Exhibit "F" - Form of Opinion of Seller's
Counsel
Exhibit "G" - Form of Mitsubishi Corporation Letter
Agreement
Exhibit "H" - Form of Opinion of Buyer's Counsel
Exhibit "I" - Form of Services Agreement
Exhibit "J" - Form of Easement Agreement
Exhibit "K" - Form of Lease Agreement
Exhibit "L" - Form of Confidentiality Agreement
[The above Schedules and Exhibits to this Agreement are not being filed
herewith. The Registrant agrees to furnish supplementally a copy of any such
omitted Schedule or Exhibit to the Commission upon request.]
- iv -
<PAGE> 6
INDEX OF DEFINED TERMS
Defined Term Section In Which Defined
------------ ------------------------
1994 Daily Throughput Rates . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)(D)
Access Easement Areas . . . . . . . . . . . . . . . . . . . . . . Section 8.4(a)
Additional Operating Space . . . . . . . . . . . . . . . . . . . Section 8.2(a)
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Annual Deductible Amount . . . . . . . . . . . . . . . . . . . . Section 8.5(e)(i)
Appropriate and Reasonable Criteria . . . . . . . . . . . . . . . Section 8.2(b)
Arbitration Notice . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(v)(C)(1)
Aristech Environmental Condition . . . . . . . . . . . . . . . . Section 8.4(g)
Arrangement for treatment or disposal . . . . . . . . . . . . . . Section 8.2(c)
Assessed Environmental Conditions . . . . . . . . . . . . . . . . Section 8.4(p)(v)
Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a)
Assumption and Assignment Agreement . . . . . . . . . . . . . . . Section 5.2(d)
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Business Employees. . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(o)
Business Interruption Costs . . . . . . . . . . . . . . . . . . . Section 8.2(d)
Business Sites . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Buyer Damages . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.3
Buyer Environmental Conditions . . . . . . . . . . . . . . . . . Section 8.2(e)
Buyer Environmental Report . . . . . . . . . . . . . . . . . . . Section 2.13
Buyer Exacerbated Conditions . . . . . . . . . . . . . . . . . . Section 8.7(a)(iii)
Buyer Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . Section 7.3
Buyer Regulated Substance . . . . . . . . . . . . . . . . . . . . Section 8.2(f)
Buyer's 2-EH Supply Contract . . . . . . . . . . . . . . . . . . Section 5.2(h)
Buyer's Ancillary Documents . . . . . . . . . . . . . . . . . . . Section 3.1
Buyer's Environmental Indemnification Rights . . . . . . . . . . Section 8.8
Buyer's Neville Island Plant. . . . . . . . . . . . . . . . . . . Section 1.2(b)
Buyer's Operating Space . . . . . . . . . . . . . . . . . . . . . Section 8.2(g)
Buyer's PA Supply Contract . . . . . . . . . . . . . . . . . . . Section 5.2(g)
Buyer's Percentage . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(h)
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(i)
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(j)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1
Closing Inventory. . . . . . . . . . . . . . . . . . . . . . . . Section 1.5
COBRA Provisions. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(c)
Colton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)
Colton Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)(ii)(B)(1)
Colton Resins. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
Confidential Business Information . . . . . . . . . . . . . . . . Section 4.1(d)
Construction or Expansion Project . . . . . . . . . . . . . . . . Section 8.2(k)
- i -
<PAGE> 7
Defined Term Section In Which Defined
------------ ------------------------
Continuing Liability . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.7
Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(v)(A)
Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(iii)
Deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.2(a)
DER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(p)(iv)
Determination. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(e)
Direct Reports . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Distribution Facilities . . . . . . . . . . . . . . . . . . . . . Section 8.6
Easement Agreement . . . . . . . . . . . . . . . . . . . . . . . Section 5.4(b)
Environmental Assessment . . . . . . . . . . . . . . . . . . . . Section 8.2(k)
Environmental Cap . . . . . . . . . . . . . . . . . . . . . . . . Section 8.7(a)
Environmental Condition . . . . . . . . . . . . . . . . . . . . . Section 8.2(m)
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(n)
Environmental Professional . . . . . . . . . . . . . . . . . . . Section 8.2(o)
Environmental Study . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(o)(ii)
EPCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ac)(ii)
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(c)
Financial Statements . . . . . . . . . . . . . . . . . . . . . . Section 2.4
Governmental Approval . . . . . . . . . . . . . . . . . . . . . . Section 8.2(p)
HMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(b)(iii)
Identified Environmental Conditions . . . . . . . . . . . . . . . Section 8.5(d)
Indemnification Payments . . . . . . . . . . . . . . . . . . . . Section 8.7(a)(i)
Indemnification Obligations . . . . . . . . . . . . . . . . . . . Section 8.7(b)
Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(i)
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(f)
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(i)
Jacksonville Incinerator . . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(a)(iii)
Lead Party . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(j)(i)
Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(h)
MA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)(A)
MSDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ac)(i)
Neville Island Facility. . . . . . . . . . . . . . . . . . . . . Section 1.2(b)
Non-Competition Claims. . . . . . . . . . . . . . . . . . . . . . Section 1.2(o)
Non-Conforming Goods. . . . . . . . . . . . . . . . . . . . . . . Section 1.5
Non-Lead Party . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(j)(ii)
Off-Site Locations . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(q)
Operating Easement Areas . . . . . . . . . . . . . . . . . . . . Section 8.4(a)
Other Confidential Information . . . . . . . . . . . . . . . . . Section 4.1(d)
- ii -
<PAGE> 8
Defined Term Section In Which Defined
------------ ------------------------
Other Environmental Conditions . . . . . . . . . . . . . . . . . Section 8.5(e)
Other Production Facilities . . . . . . . . . . . . . . . . . . . Section 8.5
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(d)
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . Section 2.10(a)
Pre-Closing Environmental Condition . . . . . . . . . . . . . . . Section 8.2(s)
Pre-Closing Waste . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(t)
Project Affected Soils . . . . . . . . . . . . . . . . . . . . . Section 8.2(u)
Project Area . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(v)
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(w)
Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4
Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . . Section 1.6
Purchased Accounts Receivable. . . . . . . . . . . . . . . . . . Section 1.2(l)
Purchased Assets. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Purchased Intellectual Property. . . . . . . . . . . . . . . . . Section 1.2(n)
Purchased Inventory. . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
Raw Materials. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(x)
Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(b)
Regulated Substance . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(y)
Regulatory Remediation Standard . . . . . . . . . . . . . . . . . Section 8.2(z)
Regulatory Remediation Standards . . . . . . . . . . . . . . . . Section 8.4(p)(iii)
Release to the Environment . . . . . . . . . . . . . . . . . . . Section 8.2(aa)
Remaining UPR Cap . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)(ii)(B)(1)
Required by Law . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ab)
Required Regulated Substance Records . . . . . . . . . . . . . . Section 8.2(ac)
Retained Assets. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Retained Intellectual Property. . . . . . . . . . . . . . . . . . Section 1.3(k)
Retained Liabilities. . . . . . . . . . . . . . . . . . . . . . . Section 1.10(b)
Retained Premises . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ad)
Retained Premises Cap . . . . . . . . . . . . . . . . . . . . . . Section 8.7(e)
Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Seller Damages . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.4
Seller Indemnitees . . . . . . . . . . . . . . . . . . . . . . . Section 7.4
Seller's Ancillary Documents . . . . . . . . . . . . . . . . . . Section 2.1
Seller's Neville Island Plant. . . . . . . . . . . . . . . . . . Section 1.3(m)
Seller's Percentage . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ae)
Seller's Supply Contract . . . . . . . . . . . . . . . . . . . . Section 5.2(f)
Severance Payments. . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.10(b)
Terminated Direct Report . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Title Commitment Reports . . . . . . . . . . . . . . . . . . . . Section 2.10(b)
Transferred Employees. . . . . . . . . . . . . . . . . . . . . . Section 1.11(a)
- iii -
<PAGE> 9
Defined Term Section In Which Defined
------------ ------------------------
Transition Period . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(e)
Transitional Employee Payments . . . . . . . . . . . . . . . . . Section 4.5(d)
Transitional Employees . . . . . . . . . . . . . . . . . . . . . Section 4.5(a)
TSCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(n)
UPR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
USW Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a)(iii)
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(g)
Working Capital. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.6
- iv -
<PAGE> 10
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement ("AGREEMENT") is made as of
April 28, 1995, by and between Aristech Chemical Corporation, a Delaware
corporation ("SELLER"), and Ashland Inc., a Kentucky corporation ("BUYER"),
through its Ashland Chemical Company Division.
Seller is engaged in, among other things, the production and
sale of unsaturated polyester resins ("UPR") and maleic anhydride ("MA") and
the distribution of UPR and other polyester products ("DISTRIBUTION"). Seller
desires to sell and transfer to Buyer and Buyer desires to purchase from
Seller, certain assets relating to Seller's UPR, MA and Distribution businesses
(collectively, the "BUSINESS") on the terms and subject to the conditions
contained in this Agreement. In consideration of the mutual agreements
contained herein, Seller and Buyer, intending to be legally bound, agree as
follows:
ARTICLE I
THE TRANSACTION
---------------
1.1. SALE AND PURCHASE OF ASSETS. At the Closing referred to in
Section 5.1 below, Seller shall sell and transfer to Buyer, and Buyer shall
purchase from Seller, all of Seller's right,
<PAGE> 11
title and interest in and to the assets, properties and rights of Seller as of
the date of the Closing that are used in or directly relate to the conduct of
the Business, wherever such assets are located and whether real, personal or
mixed, tangible or intangible, and whether or not any of such assets have any
value for accounting purposes or are carried or reflected on or specifically
referred to in Seller's books or financial statements (the "PURCHASED ASSETS"),
except that the Purchased Assets shall not include any of the assets,
properties and rights described in Section 1.3 below (the "RETAINED ASSETS").
1.2. ENUMERATION OF PURCHASED ASSETS. Without limiting the
generality of the foregoing, the Purchased Assets shall include the following
assets owned by Seller and used in the Business (except to the extent that any
of the following assets are also enumerated in Section 1.3 below as being
Retained Assets):
(a) all those certain lots and pieces of ground, together with
the buildings, structures and other improvements erected thereon, and all
easements, rights and privileges appurtenant to any of the foregoing, owned by
Seller and located at Bartow, Florida, Jacksonville, Arkansas, and Colton,
California, each as more particularly described in Schedule 1.2(a);
(b) each of such buildings, structures and other improvements,
together with all easements, rights and privileges appurtenant thereto, owned
by Seller and located at Seller's
- 2 -
<PAGE> 12
facility at Neville Island, Pennsylvania (the "NEVILLE ISLAND FACILITY"), as
are described in Schedule 1.2(b) ("BUYER'S NEVILLE ISLAND PLANT"), (Buyer's
Neville Island Plant, together with the real property described in Section
1.2(a), are collectively referred to herein as the "REAL ESTATE");
(c) all of Seller's furniture, fixtures, equipment, machinery,
spare parts, tools, dies, supplies and all other tangible personal property
(other than inventory) located upon or affixed to Buyer's Neville Island Plant,
as are described in Schedule 1.2(b) or that are located upon or affixed to the
other Real Estate or the Leased Premises, except for those items set forth in
Schedule 1.2(c);
(d) those items of Seller's equipment, machinery, spare parts,
tools, dies, supplies and other tangible personal property (other than
inventory) described in Schedule 1.2(b) as are located at the Seller's Neville
Island Plant (as defined in Section 1.3(m));
(e) the equipment located at Seller's corporate research center
in Monroeville, Pennsylvania, used in connection with the molding group and
pilot plant operations of the polyester technical group of Seller, all as more
particularly described in Schedule 1.2(e);
- 3 -
<PAGE> 13
(f) Seller's inventory of resins being cured at the Colton,
California Business Site (as defined in Section 2.8) (the "COLTON RESINS"),
together with all those other items of Seller's inventory of raw materials
("RAW MATERIALS"), work-in-process, finished goods, packaging and supplies held
for use in the conduct of the Business, wherever located and whether or not
carried on Seller's books of account (collectively with the Colton Resins, the
"PURCHASED INVENTORY");
(g) each of such trucks, tractors, trailers and other vehicles
owned by Seller and used in the Business as is more particularly described in
Schedule 1.2(g) (the "VEHICLES");
(h) Seller's leasehold interest as lessee of the real property
(such real property, together with that described in Schedule 2.9, being
collectively referred to herein as the "LEASED PREMISES") subject to the leases
listed in Schedule 1.2(h);
(i) all of Seller's leasehold interest as lessee of the personal
property subject to the leases listed in Schedule 1.2(i);
(j) each of Seller's Permits (as hereinafter defined) listed in
Schedule 1.2(j);
- 4 -
<PAGE> 14
(k) all of Seller's sales orders and sales contracts, purchase
orders and purchase contracts, quotations and bids, license agreements, supply
agreements and other contracts and agreements to which Seller is a party and
that relate exclusively to the Business, including without limitation those
listed in Schedule 1.2(k);
(l) all of Seller's trade and other notes and accounts
receivable (collectively, the "PURCHASED ACCOUNTS RECEIVABLE"), advance
payments and prepaid items and expenses arising from the Business and existing
on the Closing Date, except for those listed in Schedule 1.3(d);
(m) all of Seller's books, records, manuals, documents, books of
account, correspondence, sales and credit reports, customer lists, literature,
brochures, advertising material and the like that relate exclusively to the
Business;
(n) those of Seller's intellectual property licenses, patents
and applications therefor, trade secrets, copyrights and applications therefor,
proprietary manufacturing processes and other intellectual property or
industrial property rights that are used in the Business and that are described
on Schedule 1.2(n), including the right to use the name "Aristech Chemical
Corporation" and derivatives thereof pursuant to Section 6.4 (collectively, the
"PURCHASED INTELLECTUAL PROPERTY"); and
- 5 -
<PAGE> 15
(o) Seller's causes of action, if any and to the extent
assignable, for enforcement of any agreement between Seller and any person
employed by Seller in the Business prior to the Closing ("BUSINESS EMPLOYEES")
restricting such person's right to engage in any activity competing with the
Business ("NON-COMPETITION CLAIMS"); provided, however, that if Buyer receives
any payment as a result of the enforcement of a Non-Competition Claim, whether
in settlement of or as damages for such claim, Buyer shall, upon receipt of
such payment, pay to Seller that part of such payment allocable to such
Business Employee's conduct prior to the Closing.
1.3. RETAINED ASSETS. Notwithstanding the provisions of Sections
1.1 and 1.2, all of the following assets, properties and rights of Seller shall
be excluded from the Purchased Assets and shall constitute the Retained Assets:
(a) all of Seller's assets, properties and rights related to
businesses of Seller other than the Business, including any assets located or
generally maintained at Seller's corporate headquarters in Pittsburgh,
Pennsylvania;
(b) all of Seller's cash on hand and in banks, cash equivalents,
deposits and investments;
(c) all of Seller's negotiable instruments and chattel paper;
- 6 -
<PAGE> 16
(d) those of Seller's accounts receivable relating to the
Business as are listed on Schedule 1.3(d);
(e) all of Seller's bank accounts, checkbooks and canceled
checks;
(f) Seller's minute book, corporate seal and federal, state and
local tax returns and accounting ledgers;
(g) all insurance policies of Seller and Seller's rights in
connection therewith;
(h) all of Seller's federal, state or local income tax benefits,
claims or receivables;
(i) all of Seller's rights of indemnification, claims and causes
of action of any nature whatsoever that relate to the conduct of the Business
prior to the Closing (other than the Non-Competition Claims);
(j) all of Seller's rights under this Agreement and under all
purchase orders, purchase contracts or other agreements, instruments or
contracts related to Seller's trade payables;
(k) such of Seller's intellectual property licenses, patents and
applications therefor, trade secrets, copyrights and applications therefor,
trade names and applications therefor,
- 7 -
<PAGE> 17
trade dress, and names and slogans, including without limitation, any rights to
use the name "Aristech Chemical Corporation" or any derivative thereof (except
as provided in Section 6.4), proprietary manufacturing processes and other
intellectual property rights used in the Business as are described in Schedule
1.3(k) (collectively, the "RETAINED INTELLECTUAL PROPERTY");
(l) all those certain lots and pieces of ground underlying
Buyer's Neville Island Plant, and all easements, rights and privileges
appurtenant thereto;
(m) all lots and pieces of ground owned by Seller, together with
the buildings, structures and other improvements erected thereon, that comprise
the Neville Island Facility (other than Buyer's Neville Island Plant), and all
easements, rights and privileges appurtenant thereto ("SELLER'S NEVILLE ISLAND
PLANT");
(n) all of Seller's furniture, fixtures, equipment, machinery,
spare parts, tools, dies, supplies and all other tangible personal property
located upon or affixed to Seller's Neville Island Plant other than that set
forth in Schedule 1.2(b); and
(o) those items of Seller's equipment, machinery, spare parts,
tools, dies, supplies, and other tangible personal property (other than
inventory) located upon or affixed to the
- 8 -
<PAGE> 18
Real Estate or the Leased Premises as are set forth in Schedule 1.2(c).
1.4. PURCHASE PRICE. The aggregate purchase price for the
Purchased Assets shall be $81,350,000 (the "PURCHASE PRICE"), subject to
adjustment as provided in Section 1.6, plus the assumption of certain
liabilities of Seller, as provided in Section 1.10.
1.5. PHYSICAL INVENTORY. The parties shall conduct a physical
count and inspection of the inventory of Seller held for use exclusively in the
Business as of the close of business on the Closing Date (the "CLOSING
INVENTORY"). During such process, Seller and Buyer shall identify the
following items of inventory, Seller's standard product cost of which, per
item, exceeds $25,000: (a) polyester resins and other polyester based products
that are more than seven (7) months old based on the batch record date of
production thereof, and (b) waxes, catalysts and mold care products that are
more than twelve (12) months old based on the date of shipment thereof to
Seller (collectively, the "NON-CONFORMING GOODS"). Buyer shall purchase all of
the Closing Inventory (including items described in clauses (a) and (b),
Seller's standard product cost of which is $25,000 or less). The parties shall
negotiate in good faith to determine within three (3) business days after the
Closing Date a mutually agreeable purchase price for all Non-Conforming Goods,
and Buyer shall purchase all of the Non-Conforming Goods at the agreed upon
- 9 -
<PAGE> 19
price. The purchase price for Non-Conforming Goods sold pursuant to this
Section 1.5 shall be paid by virtue of the Purchase Price Adjustment (as
defined below).
1.6. PURCHASE PRICE ADJUSTMENT. If the Working Capital (as
defined below) at the Closing Date, as determined in accordance with Section
1.7, is less than $26,400,000, then the Purchase Price shall be reduced
dollar-for-dollar by the amount of such deficiency. If the Working Capital at
the Closing Date, as so determined, is greater than $26,400,000, then the
Purchase Price shall be increased dollar-for-dollar by the amount of such
excess. For purposes hereof, "WORKING CAPITAL" means (i) the sum of (a) the
market value, as of the Closing Date, of the Raw Materials, (b) Seller's
standard product cost, as of August 1, 1994, of work-in-process and finished
goods being purchased by Buyer hereunder (other than Non-Conforming Goods),
adjusted dollar-for-dollar to reflect the increase or decrease in the market
value of the raw material component of such standard product cost from August
1, 1994 to the Closing Date, (c) the agreed upon purchase price for any Non-
Conforming Goods purchased by Buyer pursuant to Section 1.5, and (d) the face
amount, as of the Closing Date, of the Purchased Accounts Receivable less 3% of
such face amount, less (ii) 0.5% of the sum of (i)(a) and (b). "PURCHASE PRICE
ADJUSTMENT" means the post-closing adjustment to the Purchase Price pursuant to
this Section 1.6.
- 10 -
<PAGE> 20
1.7. DETERMINATION OF WORKING CAPITAL. (a) Promptly after the
Closing, Seller (with such assistance as Seller shall reasonably request of
Buyer and its representatives) shall calculate the amount of the Purchase Price
Adjustment based on its books and records of account maintained in accordance
with Seller's standard practices with respect to the Business. For purposes of
making such calculation, (i) the inventory to be taken into account in such
calculation shall not include any items that are not purchased by Buyer
pursuant to Section 1.5, (ii) the market value of raw materials shall be equal
to the price applicable to such raw materials, delivered to the appropriate
Business Site, as of the Closing Date, and (iii) the face amount of the
Purchased Accounts Receivable shall be computed without taking into account any
allowances against such accounts, including allowances for uncollectible
accounts, warranties and returns.
(b) As soon as reasonably practicable following the Closing
Date, but in no event later than twenty (20) days thereafter, Seller shall
deliver to Buyer notice of the amount of the Purchase Price Adjustment
calculated in accordance with Section 1.7(a), showing Seller's calculation in
reasonable detail. Buyer and its representatives shall be provided complete
access to Seller's books and records and all workpapers and other information
used by Seller to make such calculation. Such notice, when delivered by Seller
to Buyer, shall be conclusive and binding on the parties for purposes of
determining the
- 11 -
<PAGE> 21
Purchase Price Adjustment, unless Buyer notifies Seller within fifteen (15)
days after receipt of the notice of its disagreement therewith (stating with
reasonable specificity the reasons for any disagreement). If the disagreement
can not be resolved by the parties within thirty (30) days after Seller
receives notice thereof, payment of the undisputed amount shall be made in
accordance with Section 1.8 and the items in dispute shall be submitted to
arbitration conducted as provided in Section 9.1.
1.8. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid
by Buyer to Seller at the Closing as follows:
(a) $81,350,000 by wire transfer of federal funds to PNC Bank,
N.A., Pittsburgh, PA, ABA No. 043000096, Credit: Aristech Chemical Corporation
Concentration Account No. 2-948495; and
(b) by Buyer's assumption of Seller's liabilities as provided in
Section 1.10. Any amounts owing Buyer or Seller as a result of a Purchase
Price Adjustment shall be paid by Seller or Buyer to the other, as the case may
be, within ten (10) days after the amount is finally determined pursuant to
Section 1.7, by wire transfer of federal funds.
1.9. ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree that
the Purchase Price shall be allocated among the Purchased Assets in accordance
with the allocation set forth in Schedule 1.9. Buyer and Seller agree that
each will report the federal,
- 12 -
<PAGE> 22
state and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and that
neither will take any position inconsistent therewith upon examination of any
tax return, in any refund claim, in any litigation, or otherwise.
1.10. ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to discharge
and perform promptly when due the following liabilities and obligations of
Seller, whether direct or indirect, material or immaterial, known or unknown,
absolute, contingent or otherwise, to the extent such liabilities and
obligations accrue after the Closing (except as provided in Section
1.10(a)(vi)) (collectively, the "ASSUMED LIABILITIES"):
(i) all liabilities and obligations of Seller under the
contracts, leases and other agreements associated
with the Business Assets (but not including any
accounts payable or agreements relating to
employment, deferred compensation, welfare benefits,
independent contractors, consultants or any aspects
of the employment relationship, except to the extent
provided in Sections 1.10(a)(iii) and (vi) and in
Section 8.3(g) and except for the Distributorship/
Independent Contractor Agreements referred to on
- 13 -
<PAGE> 23
Schedule 2.7) or otherwise comprising part of the
Purchased Assets;
(ii) all liabilities and obligations of Seller under the
Permits listed in Schedule 1.2(j);
(iii) all of Seller's liabilities and obligations under the
collective bargaining agreements listed in Schedule
1.10(a)(iii) and any agreements related thereto, but
not that certain Agreement between Seller and the
United Steelworkers of America dated November 30,
1994, covering Business Employees at the Neville
Island Facility, and any related agreements
(collectively, the "USW AGREEMENT");
(iv) subject to Section 1.12, all claims, liabilities,
obligations, litigation, arbitration proceedings or
other actions in any way relating to the Business or
the Purchased Assets, arising out of occurrences,
transactions, events or incidents occurring after the
Closing Date (as hereinafter defined), including all
liabilities and obligations incurred after the Closing
Date as a result of Buyer's continuation of any
pattern or practice established or engaged in by
Seller prior to the Closing Date;
- 14 -
<PAGE> 24
(v) subject to Section 1.12, all occupational disease and
other workers' compensation claims (whether insured or
otherwise), and claims for employee pay (including
vacation pay and sick pay) and any other employee
benefits (except to the extent Seller remains liable
therefor pursuant to Section 1.11) by persons who at
or prior to the Closing Date are or were Business
Employees, arising while such persons are employed by
Buyer or otherwise arising out of events occurring on
or after the Closing Date; and
(vi) Seller's obligation to make severance payments to the
Terminated Direct Reports, to the extent provided in
Section 1.11(d), and Seller's obligations to make
severance payments to those Business Employees
employed as drivers in the Distribution component of
the Business as provided in Section 1.11(e). These
obligations shall constitute Assumed Liabilities,
notwithstanding the extent to which they may have
accrued prior to the Closing.
(b) All liabilities and obligations of Seller (whether direct or
indirect, material or immaterial, known or unknown, absolute, accrued,
contingent or otherwise) that do not
- 15 -
<PAGE> 25
constitute Assumed Liabilities shall be retained by Seller (collectively, the
"RETAINED LIABILITIES").
1.11. CERTAIN EMPLOYEE MATTERS.
(a) On or prior to the Closing Date, Buyer shall make offers of
employment, effective as of the Closing Date, to such salaried and hourly
Business Employees as are identified on Schedule 1.11(a) and who are actively
at work with Seller as of the Closing Date. Buyer shall prescribe the manner
by which such offers may be accepted. Seller has provided Buyer a written list
of all the Business Employees, which includes the employee's name, social
security number, hourly rate or bi-weekly salary, job title, annual earnings,
date of hire, years and types of service recognized by Seller as of November 9,
1994, as supplemented by the updates of such list as of January 31, 1995 and
March 20, 1995. Seller represents and warrants that the information on such
list was accurate as of the time specified in such list and, notwithstanding
anything to the contrary in Section 7.1, such representation and warranty shall
survive indefinitely beyond the Closing Date. Buyer has notified Seller of the
names of all the Business Employees, who have accepted offers of employment
(the "TRANSFERRED EMPLOYEES").
(b) Except as may otherwise be expressly provided in this
Section 1.11(b), the Transferred Employees shall be treated as newly hired
employees of Buyer.
- 16 -
<PAGE> 26
(i) The offer of employment, if accepted, will not
provide for any certain term of employment, and all
who accept such offer shall be employees-at-will of
Buyer. Buyer shall pay the Transferred Employees
wages that are substantially equivalent to those paid
the Transferred Employees by Seller immediately prior
to Closing, and shall assign each of the Transferred
Employees duties and responsibilities that are
substantially equivalent to those assigned such
Transferred Employee by Seller immediately prior to
Closing. Buyer shall also provide the Transferred
Employees a package of benefits that is suitable in
light of the Transferred Employees' particular
circumstances.
(ii) The Transferred Employees shall be eligible to
participate in the qualified and non-qualified
pension, stock bonus, profit sharing and retirement
plans (except for the Ashland Oil, Inc. Leveraged
Employee Stock Ownership Plan, unless and until some
or all of the Transferred Employees become members of
a designated eligible group for participation
thereunder under the procedures generally applicable
for acquired employees) in which similarly situated
employees of Buyer participate, and Buyer and such
plans shall recognize, solely for purposes of
eligibility and
- 17 -
<PAGE> 27
vesting (and not for benefit accrual) under Buyer's
said plans, the Transferred Employees' years of
credited service with Seller prior to the Closing
Date. Buyer shall amend said plans as of the Closing
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect.
(iii) The Transferred Employees shall be eligible to
participate in health and life plans (including
accidental death and dismemberment plans) in which
similarly situated employees of Buyer are eligible to
participate, and Buyer and such plans shall recognize,
solely for the purposes of eligibility under Buyer's
said health and life (and accidental death and
dismemberment) plans, the Transferred Employees'
employment with Seller prior to the Closing Date. Such
recognition of prior service shall also count for
purposes of determining whether any Transferred
Employee becomes eligible for any retiree health,
retiree life or retiree accidental death and
dismemberment plan benefits. Buyer shall amend said
plans as of the Closing
- 18 -
<PAGE> 28
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect. The eligibility of
Transferred Employees to participate in Buyer's health
and life plans shall not be delayed or limited in any
way by pre-existing conditions; provided, however,
that the applicable proof of health conditions in such
plans shall be applied pursuant to their terms if any
Transferred Employee fails to timely enroll himself or
herself or his or her dependents (when dependent
coverage is applicable and available) within thirty
(30) days of first becoming eligible. All claims
incurred with regard to any Transferred Employee
before the Closing Date and which are covered under
the applicable health, life or accidental death and
dismemberment plans of Seller shall be payable under
the terms of the applicable plan of Seller. All other
claims incurred with regard to any Transferred
Employee and which are covered under the applicable
health, life or accidental death or dismemberment
plans of Buyer shall be payable under the terms of the
applicable plan of Buyer. The Transferred
- 19 -
<PAGE> 29
Employees who participated in health maintenance
organizations ("HMOs") immediately prior to the
Closing shall be provided the opportunity to enroll in
the Buyer's indemnity plan on the same terms and
subject to the same conditions as the Transferred
Employees who did not so participate in HMOs. All the
Transferred Employees shall be offered participation
in the HMOs available to other similarly situated
employees of the Buyer at the time and in the same
manner as such participation is ordinarily offered.
(iv) The Transferred Employees shall be eligible to
participate in sick pay and short term and long term
disability plans in which similarly situated employees
of Buyer are eligible to participate. Buyer shall
recognize for purposes of such plans the Transferred
Employees' employment with Seller prior to the Closing
Date. Buyer shall amend said plans as of the Closing
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect.
- 20 -
<PAGE> 30
(v) The Transferred Employees shall be eligible for other
benefits in which or policies under which similarly
situated employees of Buyer are eligible. Buyer
shall recognize for purposes of such plans the
Transferred Employees' employment with Seller prior
to the Closing Date. Buyer shall amend said benefits
and policies as of the Closing Date to recognize such
service with Seller; provided, however, that nothing
herein shall be construed as conferring on any
Transferred Employee any right to, in or under any
such benefits and policies of Buyer other than
pursuant to the terms of such benefits and policies,
as so amended, and as from time to time in effect.
The Transferred Employees shall be eligible for paid
vacation benefits under the policies of the Buyer
that apply to similarly situated employees of the
Buyer and, for this purpose, the Transferred
Employees' service with the Seller prior to the
Closing Date shall be counted.
(vi) Buyer shall use its best efforts to notify Seller of
the termination of employment or reemployment of any
Transferring Employee. Such notification shall be
made within thirty (30) days of the date of
termination of employment or reemployment.
- 21 -
<PAGE> 31
(c) For purposes of the COBRA health continuation of coverage
provisions (hereafter referred to as the "COBRA PROVISIONS") contained in
Section 4980B(f) of the Internal Revenue Code of 1986 and in Sections 601
through 608 of the Employee Retirement Income Security Act of 1974 ("ERISA"),
the Transferred Employees shall be considered to have undergone a termination
of employment with Seller. It is the understanding and intention of the Seller
and Buyer that no group health plan maintained by Buyer shall constitute a
successor plan to any of the Seller's group health plans and the Buyer is not a
successor employer with respect to any of the Seller's group health plans and
the Seller is not a predecessor employer with respect to the Buyer's group
health plans, within the meaning of the COBRA Provisions. It is the further
understanding and intention of Seller and Buyer, however, that the health plan
coverage to be afforded to the Transferred Employees pursuant to Section
1.11(b)(iii) shall be coverage that, pursuant to Section 602(2)(D)(i) of ERISA,
terminates any continuation coverage rights the Transferred Employees might
otherwise have under the COBRA Provisions as a result of termination of
employment with Seller.
(d) (i) Subject to clause (ii) of this Section 1.11(d), the
parties agree that responsibility for all amounts paid ("SEVERANCE PAYMENTS")
to any Business Employee (including any Transitional Employee, as defined in
Section 4.5(a)) who is a Direct Report (as defined below) and who is ultimately
successful
- 22 -
<PAGE> 32
in collecting any benefits under Seller's severance plan or policies based on
such Business Employee's termination prior to January 1, 1997 in connection
with the transactions contemplated hereby ("TERMINATED DIRECT REPORT") shall be
allocated as follows: All Severance Payments made to the first fifty-five (55)
Terminated Direct Reports shall be for Seller's account, and all Severance
Payments made to all other Terminated Direct Reports shall be for Buyer's
account. Any Business Employees employed by Seller at the Neville Island
Facility who are terminated at any time before January 1, 1997 shall constitute
Terminated Direct Reports to the extent they are successful in collecting
Severance Payments as hereinabove provided. The drivers referred to in Section
1.11(e) shall not be deemed Terminated Direct Reports for purposes of this
paragraph (d). For purposes of this Section 1.11(d), the term "DIRECT REPORTS"
shall mean those employees of Seller 100% of whose time is charged to the
Business based on Seller's policies in effect immediately prior to Closing and
shall not include such employees as corporate attorneys, accounting staff and
information services personnel whose time is not charged 100% to the Business
on such basis.
(ii) (A) In the event that more than fifty-five (55)
Direct Reports who are entitled to Severance Payments are terminated within
thirty (30) days of Closing, the average Severance Payment payable to all such
Direct Reports terminated within thirty (30) days of Closing shall be
calculated, and Seller shall be deemed to have satisfied all of its obligations
- 23 -
<PAGE> 33
under Section 1.11(d) upon making Severance Payments to Terminated Direct
Reports (regardless of the number of such Terminated Direct Reports) in an
aggregate amount equal to fifty-five (55) times such average Severance Payment.
All Severance Payments in excess of the amount specified in the foregoing
sentence shall be paid by Buyer.
(B) In the event that less than fifty-five (55) Direct
Reports who are entitled to Severance Payments are terminated within thirty
(30) days of Closing, Seller shall pay the actual Severance Payments for the
first fifty-five (55) Terminated Direct Reports who shall be determined in
accordance with the order in which Seller makes Severance Payments to
Terminated Direct Reports, and Buyer shall pay the actual Severance Payments
for all other Terminated Direct Reports.
(iii) Seller shall notify Buyer of any Severance Payments
made to Terminated Direct Reports for Buyer's account pursuant to Section
1.11(d). Buyer shall reimburse Seller in full therefor within five (5) working
days after Buyer's receipt of such notice. Any amount not reimbursed within
such five-day period shall bear interest, from the date the corresponding
Severance Payment was made by Seller until the date such amount is reimbursed
to Seller, at the prime lending rate charged by Mellon Bank, N.A. during such
period.
(e) Buyer shall pay all amounts payable to any Business Employee
employed by Seller as a driver in connection with the
- 24 -
<PAGE> 34
Distribution component of the Business who is ultimately successful in
collecting any benefits under Seller's severance plan or policies based on such
Business Employee's termination in connection with the transactions
contemplated hereby. Seller shall notify Buyer of any such payments made to
such Business Employees, and Buyer shall reimburse Seller in full therefor
within five (5) working days after Buyer's receipt of such notice. Any amount
not reimbursed within such five-day period shall bear interest, from the date
the corresponding severance payment was made by Seller until the date such
amount is reimbursed to Seller, at the prime lending rate charged by Mellon
Bank, N.A. during such period.
(f) Except as provided in Section 1.10(a)(vi), it is expressly
agreed and acknowledged by the parties hereto that Buyer has assumed no
liability for any wages or benefits that Seller or any of its affiliates
provided to Seller's employees including, but not limited to, retiree medical
benefits, retiree life insurance benefits, benefits under the COBRA Provisions,
employment contracts, qualified or non-qualified retirement benefits, and
benefits which could be payable with respect to services, expenses or other
events that occurred prior to the Closing Date under any plan, policy or
program of the Seller.
- 25 -
<PAGE> 35
1.12. CONTINUING LIABILITIES.
(a) The term "CONTINUING LIABILITY" shall mean any liability
that commences, or that arises from facts in existence, prior to the Closing
and that continues, or the facts giving rise to which continue, to exist after
the Closing. Subject to clause (b), Seller is indemnifying Buyer against
Continuing Liabilities to the extent arising from Seller's operation of the
Business prior to Closing pursuant to Section 7.3(e), and Buyer is indemnifying
Seller against Continuing Liabilities to the extent arising from Buyer's
operation of the Business after Closing pursuant to Section 7.4(d).
(b) Within ten (10) days after either party receives notice or
otherwise becomes aware of the existence of a Continuing Liability as to which
such party intends to seek indemnification from the other party, such party
shall notify the other party. Either party's failure to so notify the other
of a Continuing Liability, shall constitute a waiver by the failing party of
all rights to indemnification by the other arising from such Continuing
Liability. Promptly after the delivery of such notice, Seller and Buyer shall
consult with each other in good faith to develop a joint strategy for defending
against the Continuing Liability, including allocation of the costs of such
defense.
(c) In the event that a claim is made against only one of the
parties as a result of a Continuing Liability, such party
- 26 -
<PAGE> 36
shall not be entitled to any indemnification by the other party with respect to
such claim unless such party permits the other party to participate in and
control the defense of such claim jointly and equally with it. Notwithstanding
the foregoing, the party against which the claim is made may, after consulting
the other party, settle such claim in its sole discretion; provided that such
party obtains as a condition to such settlement a full and complete release of
the other party from all claims arising from such Continuing Liability.
(d) If a third party makes a claim against both Seller and
Buyer, or if both Seller and Buyer are otherwise called upon to defend a claim
arising from a Continuing Liability, each of Seller and Buyer shall separately
defend itself against such claim with representatives of its choosing, unless
the parties otherwise agree.
(e) Any determination of the extent to which a Continuing
Liability arises from Seller's operation of the Business prior to Closing or
Buyer's operation of the Business after Closing (a "DETERMINATION"), shall be
subject to the following:
(i) To the extent that a court hearing a claim arising from
a Continuing Liability makes a final, non-appealable
Determination, the parties shall be bound thereby.
(ii) In all other cases, the parties shall attempt in good
faith to agree upon a Determination. If the parties are
unable jointly to make a Determination, the matter
- 27 -
<PAGE> 37
shall be submitted to the alternative dispute resolution
procedure described in Section 9.1.
(iii) Any Determination shall be made by consideration of
all the factors relevant to the causation of such Continuing
Liability. For purposes of illustration and not in
limitation of the foregoing, in the case of a Continuing
Liability arising from occupational injury or disease to
persons employed by both Seller and Buyer the relevant
factors shall include without limitation the duration and
extent of exposure to operative conditions while an employee
of each party. The date of manifestation of injury or
disease shall not be solely determinative of the date on
which the exposure commenced, but shall be a relevant factor
for consideration.
1.13. CERTAIN CONSENTS. Nothing in this Agreement shall be
construed as an attempt to assign any contract, agreement, permit, franchise,
or claim included in the Purchased Assets which is by its terms or in law
nonassignable without the consent of the other party or parties thereto, unless
such consent shall have been given, or as to which all the remedies for the
enforcement thereof enjoyed by Seller would not, as a matter of law, pass to
Buyer as an incident of the assignments provided for by this Agreement. In
order, however, to provide Buyer the full benefits of every contract,
agreement, permit, franchise and claim of the character described in the
immediately preceding sentence, Seller shall, to the extent reasonably
necessary and at Buyer's cost, cooperate with Buyer in any reasonable
arrangement designed to provide the benefits thereof to Buyer. Without
limiting the generality of any provision contained elsewhere herein, the
non-assignment of the foregoing shall not, to the
- 28 -
<PAGE> 38
extent the liabilities hereunder would have been Assumed Liabilities but for
this Section 1.13, affect the status of such liabilities as Assumed
Liabilities. Nothing in this Section shall in any way diminish Seller's
obligations hereunder to obtain all consents and approvals prior to or at
Closing as are necessary to enable Seller to convey or assign good and valid
title to all the Purchased Assets to Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows:
2.1. ORGANIZATION; CORPORATE POWER AND AUTHORITY. Seller is a
corporation duly organized, existing and in good standing under the laws of the
State of Delaware. Seller has all requisite corporate power and authority to
conduct the Business as it is now being conducted and to make, execute, deliver
and perform this Agreement and each agreement, document or instrument to be
delivered by Seller pursuant to this Agreement (collectively, the "SELLER'S
ANCILLARY DOCUMENTS").
2.2. AUTHORIZATION AND ENFORCEABILITY. Seller has full corporate
power and authority to enter into and perform this Agreement and Seller's
Ancillary Documents. This Agreement has been duly executed and delivered by
Seller and constitutes, and
- 29 -
<PAGE> 39
each of Seller's Ancillary Documents, when executed and delivered by Seller
shall constitute, the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms.
2.3. CONSENTS AND APPROVALS. (a) Except for (i) applicable
requirements of the HSR Act (as hereinafter defined) and (ii) governmental
permits, authorizations, consents and approvals that have been obtained or will
be obtained on or prior to the Closing Date, there is no requirement applicable
to Seller to make any material filing with, or to obtain any material permit,
authorization, consent or approval of, any governmental or regulatory authority
as a condition to the lawful consummation by Seller of the sale of the
Purchased Assets pursuant to this Agreement. Except as set forth in Schedule
2.3, no consent, approval or authorization of, or registration or filing with,
any other person or entity is required in connection with the execution and
delivery by Seller of this Agreement and Seller's Ancillary Documents and the
consummation by Seller of the transactions contemplated hereby and thereby.
(b) Except as provided in Schedule 2.3 (and assuming compliance
with the HSR Act), neither the execution and delivery of this Agreement and
Seller's Ancillary Documents, nor the consummation by Seller of the
transactions contemplated hereby or thereby, will, at the date hereof (i)
contravene any provision of Seller's Certificate of Incorporation or Bylaws,
(ii) result in a
- 30 -
<PAGE> 40
breach of or constitute a default under any material license, franchise, note,
bond, mortgage, indenture, loan or credit agreement or other material agreement
or instrument related to the Business to which Seller is a party or by which
Seller or any of the Purchased Assets may be bound, or (iii) violate any
statute or administrative regulation, or any order, writ, injunction, judgment
or decree of any court or of any governmental authority applicable to the
Business or by which any of the Purchased Assets may be bound, which in either
of the foregoing cases (ii) or (iii) would have a material adverse effect on
the business, operations or financial condition of the Business, taken as a
whole, or of any element of the Business, i.e., UPR, MA or Distribution.
2.4. CERTAIN FINANCIAL STATEMENTS. Seller has previously
delivered to Buyer certain financial statements reflecting the historical
financial results of the Business for each of the calendar years from 1989
through 1994, inclusive, and for each of the months and for the year to date
from January 1 through March 31, 1995 (collectively, the "FINANCIAL
STATEMENTS"). Except as provided in Schedule 2.4, the Financial Statements
have been prepared in accordance with Seller's internal accounting policies and
procedures, a summary of which is attached hereto as Exhibit A, which Exhibit A
includes a description of the respects in which such policies and procedures
deviate from generally accepted accounting policies as in effect on the date
hereof.
- 31 -
<PAGE> 41
2.5. CONDUCT OF BUSINESS. Except as contemplated by this
Agreement or as set forth in Schedule 2.5, since March 31, 1995, Seller has
not, with respect to the Business:
(a) Sold or transferred any material portion of its assets or
property, except for (i) sales of inventory in the usual and ordinary course of
business and (ii) cash applied in payment of Seller's liabilities in the usual
and ordinary course of business;
(b) Suffered any material loss, or any material interruption in
use, of any material assets or property (whether or not covered by insurance),
on account of fire, flood, riot, strike or other hazard or act of God;
(c) Suffered any material adverse change to the operations,
properties, assets, liabilities or financial condition of the Business, taken
as a whole, or of any element thereof; i.e., UPR, MA or Distribution (other
than changes affecting the Business' industry, or any such element's industry,
generally);
(d) Waived any material right other than in the ordinary course
of business;
(e) Without limitation by the enumeration of any of the
foregoing, entered into any transaction other than in the usual
- 32 -
<PAGE> 42
and ordinary course of business without Buyer's consent, which consent shall be
deemed to have been granted if Buyer has failed to object to such transaction
in writing within five (5) days after receipt of written notice thereof from
Seller; or
(f) Suffered any disposition or lapse of any of the Purchased
Intellectual Property.
2.6. LITIGATION. Except as set forth in Schedule 2.6, (a) no
notice or service of process has been received by Seller with respect to any
material claim, action, suit, proceeding or investigation pending against
Seller with respect to the Business, or the use of the Purchased Assets, or the
transaction contemplated hereby, and (b) to the best of Seller's knowledge, no
such claim, action, suit, proceeding or investigation is threatened, in either
case at law or in equity or before or by any federal, state or other
governmental authority that (i) relates directly to the Business, or (ii) would
prevent consummation of the transaction contemplated hereby. Except as set
forth in Schedule 2.6, Seller is not subject to any outstanding order, writ,
injunction or decree that (i) relates directly to the Business, or (ii) would
prevent consummation of the transaction contemplated hereby.
2.7. CERTAIN CONTRACTS AND COMMITMENTS. Except as set forth in
Schedules 1.2(h), 1.2(i), 1.2(k), 1.10(a)(iii), 2.7 and 2.9, Seller is not a
party to or bound by any lease, contract or
- 33 -
<PAGE> 43
commitment, oral or written, formal or informal, of the following types
relating to the Business:
(a) Union or other collective bargaining agreements;
(b) Licenses or other agreements relating to patent, trademark
and other intellectual property rights;
(c) Lease or sublease agreements under which it is either lessor
or sublessor or lessee or sublessee;
(d) Sales agency and distributorship agreements or agreements
providing for the services of an independent contractor; or
(e) Agreements under which any products of the Business are
manufactured by others for sale by Seller.
Each agreement, contract, lease, license, commitment or instrument of
Seller being assumed by Buyer hereunder (collectively, the "CONTRACTS") is in
full force and effect. Seller is not and, to the knowledge of Seller without
investigation, no other party is, in material default or breach under any of
the Contracts.
2.8. PERMITS; COMPLIANCE WITH LAW. Seller possesses all licenses,
permits, registrations and governmental approvals (the
- 34 -
<PAGE> 44
"PERMITS") that are required in order for Seller to conduct the Business as
presently conducted, except for those the failure to possess which would not
materially impair Seller's ability to conduct the Business at any of its plants
in Bartow, Florida, Jacksonville, Arkansas, Colton, California or Neville
Island, Pennsylvania, or at any of its Distribution facilities (collectively,
the "BUSINESS SITES"). Seller is not aware that it has failed to comply with
any laws and regulations applicable to the Business or the Purchased Assets,
except for failures to comply that do not presently materially impair Seller's
ability to conduct the Business at any of the Business Sites. The
representation and warranty provided in this Section 2.8 do not apply to
Permits required under applicable Environmental Law, which are exclusively
provided for under Section 8.3(d). The representation and warranty provided
under this Section 2.8 do not apply to compliance with laws and regulations
relating to the environment; matters relating to compliance with Environmental
Law are exclusively provided for under Sections 2.13, 8.3(e) and 8.3(f). For
purposes of this Agreement, "ENVIRONMENTAL LAW" shall have the meaning given in
Section 8.2(n).
2.9. REAL ESTATE. Except as set forth on Schedule 2.9, the
Leased Premises are leased to Seller pursuant to written leases, true and
correct copies of which have been delivered to Buyer. There are no
condemnation proceedings pending, or to Seller's knowledge threatened, with
respect to any portion of the Real Estate.
- 35 -
<PAGE> 45
2.10. TITLE. (a) Seller has good title to all of the Purchased
Assets (other than real property and interests therein and the Purchased
Intellectual Property), and none of such property is subject to any mortgage,
pledge, lien, restriction, encumbrance, license, covenant, claim, security
interest, charge or any other matter affecting title, except (i) minor items,
none of which materially detracts from the value of or impairs the use of the
affected property, (ii) mechanics', carriers', workmen's, repairmen's or other
like liens arising in the ordinary course of business, (iii) liens for current
taxes, assessments and other governmental charges not yet due and payable, and
(iv) as disclosed on Schedule 2.10(a) (all of the foregoing referred to
collectively as the "PERMITTED ENCUMBRANCES"). This paragraph (a) does not
apply to real property or interests in real property, such items being the
subject of Section 2.10(b), or to the Purchased Intellectual Property, which is
the subject of Section 2.12 below. Seller acknowledges that it shall remain
responsible for satisfying the obligations secured by the liens referred to in
clauses (ii), (iii) and (to the extent not assumed by Buyer hereunder) (iv),
when and as such obligations become due and payable.
(b) Schedules 1.2(a), 1.2(b), 1.2(h) and 2.9 set forth a correct
description of all real property and interests in real property included in the
Purchased Assets. Buyer has received a title commitment report for and survey
of each parcel of land included in the Real Estate (collectively, the "TITLE
COMMITMENT
- 36 -
<PAGE> 46
REPORTS" and the "SURVEYS," respectively). Seller has (a) good fee title to
all real property and interests in real property shown on Schedules 1.2(a) and
1.2(b) owned by it and (b) to Seller's knowledge, good leasehold interests in
all real property subject to the leases described in Schedules 1.2(h) and 2.9
and leased by it, in each case free and clear of all mortgages, liens, security
interests, easements, covenants, rights-of-way and other encumbrances or
restrictions of any nature whatsoever, except (i) Permitted Encumbrances, (ii)
easements, covenants, rights-of-way and other encumbrances or restrictions of
record, (iii) zoning and other similar restrictions, (iv) unrecorded easements,
covenants, rights-of-way or other restrictions that do not materially impair
the use of the property to which they relate in the Business as presently
conducted and (v) as otherwise shown on the Title Commitment Reports and the
Surveys. Seller acknowledges that it shall remain responsible for satisfying
the obligations secured by the liens referred to in clauses (ii), (iii) and (to
the extent not assumed by Buyer hereunder) (iv), of Section 2.10(a), when and
as such obligations become due and payable.
2.11. LABOR RELATIONS. Except as disclosed in Schedule 2.11, (a)
no Business Employee is represented by a union or other labor organization; (b)
there is no unfair labor practice complaint pending before the National Labor
Relations Board, or to Seller's knowledge threatened, against Seller with
respect to the Business; (c) there is no labor strike or stoppage
- 37 -
<PAGE> 47
by Business Employees pending, or to the knowledge of Seller, threatened; and
(d) there is no pending labor grievance by any Business Employee.
2.12. INTELLECTUAL PROPERTY RIGHTS. The Purchased Intellectual
Property, together with the Retained Intellectual Property, constitutes all
intellectual property rights that are owned, licensed or used by Seller and
that are material to the Business. Seller's retention of the Retained
Intellectual Property will not materially impair Buyer's ability to conduct the
Business. Seller owns, or has the right to use without interference from any
other party, all of the Purchased Intellectual Property. No claim, suit or
action is pending, or, to the knowledge of Seller, threatened, against Seller,
alleging that Seller is infringing upon the intellectual property rights of
others in the conduct of the Business or challenging the validity of the
Purchased Intellectual Property, or alleging that Seller's use of the Purchased
Intellectual Property infringes or conflicts with the rights of others. Seller
is not aware that it is infringing upon the intellectual property rights of
others in the conduct of the Business.
2.13. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 2.13
and except for those matters referred to in Buyer's document entitled "Project
A Site Issues" dated December 16, 1994 with respect to the Business Sites (the
"BUYER ENVIRONMENTAL REPORT"), Seller has not, with respect to the Real Estate,
the
- 38 -
<PAGE> 48
Leased Premises or the conduct of the Business, received within the last two
(2) years any written notice of violation of any Environmental Laws (as defined
in Section 8.2) from any federal, state or other governmental authority, which
violation is currently existing and has caused, or if not corrected, will
cause, a material adverse change to the operations, properties, assets,
liabilities or financial condition of the Business or of any element thereof,
i.e., UPR, MA or Distribution.
2.14. SUFFICIENCY OF THE ASSETS. The Purchased Assets, together
with the Retained Assets, constitute sufficient assets for Seller's operation
of the Business as presently conducted.
2.15. MAINTENANCE OF EQUIPMENT. The equipment being purchased by
Buyer hereunder has been maintained by Seller in all material respects in
accordance with the standard maintenance policies of Seller in effect during
Seller's ownership thereof.
2.16. CUSTOMERS AND SUPPLIERS RELATIONS. Seller has not received
any notice that (a) any single customer of the Business that accounted for more
than 5% of the total net sales of the Business for the twelve-month period
ended on December 31, 1994, or (b) any current supplier that is material to the
Business and could not be replaced by Seller at substantially comparable cost,
will terminate its business relations with Seller.
- 39 -
<PAGE> 49
2.17. Tax Matters. Seller has timely paid all federal, state and
local income, profit, franchise, sales, use, employment and similar taxes, and
all interest and penalties thereon due and payable by it as of the Closing
Date, and has filed all federal, state and local tax returns which have been
required to be filed on or prior to the Closing Date, the non-payment of or
failure to file which would result in a lien or encumbrance on any Purchased
Asset, or would result in Buyer becoming liable or responsible therefor.
Seller will timely pay all tax liabilities, assessments, and interest and
penalties thereon that have accrued but that are not yet due and payable, the
non-payment of which would result in a lien or encumbrance on any Purchased
Asset or would result in Buyer becoming liable therefor. All ad valorem and
other taxes (excluding income taxes) assessed against the Purchased Assets and
payable as of the Closing Date have been paid. Seller shall file all ad
valorem tax returns for the Purchased Assets held by Seller on assessment date
January 1, 1995, or on any other assessment date occurring prior to the
Closing.
2.18. VIOLATION OF CERTAIN LAWS. To its knowledge, Seller has
not, with respect to the Business, taken or agreed to take any action in
violation of the Foreign Corrupt Practices Act or the Export Administration
Act.
2.19. FINDERS' FEES. Neither Seller nor any of its officers,
directors or employees has made any agreement or taken
- 40 -
<PAGE> 50
any other action that might cause Buyer to become liable for any brokerage
fees, commissions or finders' fees in connection with the transaction
contemplated hereby and by Seller's Ancillary Documents.
2.20. ACCURACY OF REPRESENTATIONS AND WARRANTIES. No
representation or warranty by Seller in this Agreement or in any of Seller's
Ancillary Documents, or in any Exhibit, certificate or other instrument
furnished to Buyer by Seller pursuant hereto or thereto, contains or will
contain, as of the time made, any untrue statement of a material fact;
provided, however, that Seller shall not be deemed to have breached this
representation as a result of any inaccuracy arising from (a) facts that
generally apply to or affect businesses in the industries in which the Business
is operated, or (b) facts or matters that are the subject of, or that are
purported to be excluded from, any other representation or warranty made by
Seller in any such agreement or instrument.
2.21. LIMITATION ON SELLER'S WARRANTIES. BUYER AGREES THAT IT IS
PURCHASING THE PURCHASED ASSETS "AS IS", "WHERE IS" WITHOUT ANY REPRESENTATION
OR WARRANTY AS TO CONDITION, VALUE, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PURCHASED ASSETS OR THE FUTURE PROFITABILITY OR
FUTURE EARNINGS PERFORMANCE OF THE BUSINESS OR THE PURCHASED ASSETS.
- 41 -
<PAGE> 51
2.22. KNOWLEDGE CONCERNING BUYER'S REPRESENTATIONS. Neither
Seller nor any of its representatives has knowledge of any breach by Buyer or
the failure to be true and correct of any of Buyer's representations or
warranties set forth in this Agreement or in Buyer's Ancillary Documents (as
defined below) or in any Exhibit, Schedule, certificate or other instrument
furnished pursuant hereto or thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1. ORGANIZATION; CORPORATE POWER AND AUTHORITY. Buyer is a
corporation duly organized, existing and in good standing under the laws of the
Commonwealth of Kentucky. Buyer has full corporate power and authority to
make, execute, deliver and perform this Agreement and each agreement, document
or instrument to be delivered by Buyer pursuant to this Agreement
(collectively, the "BUYER'S ANCILLARY DOCUMENTS").
3.2. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery
and performance by Buyer of this Agreement and Buyer's Ancillary Documents have
been duly authorized by all necessary action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes, and
each of Buyer's Ancillary Documents, when executed and delivered by Buyer
- 42 -
<PAGE> 52
shall constitute, the legal, valid and binding obligations of Buyer,
enforceable against it in accordance with their respective terms.
3.3. CONSENTS AND APPROVALS. (a) Except for (i) applicable
requirements of the HSR Act and (ii) governmental permits, authorizations,
consents and approvals that have been obtained or will be obtained on or prior
to the Closing Date, there is no requirement applicable to Buyer to make any
material filing with, or to obtain any material permit, authorization, consent
or approval of, any governmental or regulatory authority as a condition to the
lawful consummation by Buyer of the purchase of the Purchased Assets pursuant
to this Agreement. No consent, approval or authorization of, or registration
or filing with, any other person or entity is required in connection with the
execution and delivery by Buyer of this Agreement and Buyer's Ancillary
Documents and the consummation by Buyer of the transactions contemplated hereby
and thereby.
(b) Assuming compliance with the HSR Act, neither the execution
and delivery of this Agreement and Buyer's Ancillary Documents, nor the
consummation by Buyer of the transaction contemplated hereby, will to the
knowledge of Buyer, at the date hereof (i) contravene any provision of Buyer's
Articles of Incorporation or Bylaws, (ii) result in a breach of or constitute a
default under any material note, bond, mortgage indenture, loan or credit
agreement or other material agreement or instrument to
- 43 -
<PAGE> 53
which Buyer is a party or by which Buyer's assets may be bound, or (iii)
violate any statute or administrative regulation, or of any order, writ,
injunction, judgment or decree of any court or of any governmental authority
applicable to Buyer or by which any of Buyer's assets may be bound.
3.4. ABSENCE OF PROCEEDINGS. No action or proceeding has been
instituted against Buyer before any court or other governmental body (a)
seeking to restrain or prohibit the execution and delivery of this Agreement or
any of Buyer's Ancillary Documents or the consummation of the transactions
contemplated hereby or thereby, or (b) that could if decided adversely to
Buyer, have a material adverse effect on Buyer's ability to perform its
obligations under this Agreement or any of Buyer's Ancillary Documents.
3.5. FINDERS' FEES. Neither Buyer nor any of its officers,
directors or employees has made any agreement or taken any other action that
might cause Seller to become liable for any brokerage fees, commissions or
finders' fees in connection with the transaction contemplated hereby and by
Buyer's Ancillary Documents.
3.6. KNOWLEDGE CONCERNING SELLER'S REPRESENTATIONS. Neither
Buyer nor any of its representatives has knowledge of any breach by Seller or
the failure to be true and correct of any of Seller's representations or
warranties set forth in this
- 44 -
<PAGE> 54
Agreement or in Seller's Ancillary Documents or in any Exhibit, Schedule,
certificate or other instrument furnished pursuant hereto or thereto.
ARTICLE IV
COVENANTS OF THE PARTIES
4.1. CONFIDENTIAL INFORMATION. (a) Seller agrees that it shall
not use the Confidential Business Information for any purpose hereafter and
that it shall use its best efforts to maintain the confidentiality of the
Confidential Business Information.
(b) Buyer agrees that it shall not use the Other Confidential
Information for any purpose hereafter and that it shall use its best efforts to
maintain the confidentiality of the Other Business Information.
(c) In the event that Seller or Buyer is requested or required
(by oral question or request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar process) to
disclose any Confidential Business Information or Other Confidential
Information, respectively, Seller or Buyer, as the case may be, shall provide
the other party with prompt notice of any such request or requirement so that
the other party may seek an appropriate protective order. If the other party
fails to seek
- 45 -
<PAGE> 55
or obtain such order prior to the time disclosure is required, Seller or Buyer,
as the case may be, shall be free to comply with any such request or
requirement at that time without limitation under the provisions of this
Section 4.1.
(d) For purposes of this Section 4.1, the term "CONFIDENTIAL
BUSINESS INFORMATION" means all information of any kind relating directly to
the Business, including the Purchased Intellectual Property, financial data,
projections, marketing information, reports, process designs, economics, and
any and all drawings, engineering, data specifications and other information
regarding the Business. The term "OTHER CONFIDENTIAL INFORMATION" means the
Retained Intellectual Property and all information of any kind relating to
Seller's businesses other than the Business, wherever obtained and regardless
of the manner in which it is obtained. Neither the term "Confidential Business
Information" nor the term "Other Confidential Information" includes information
which (i) becomes generally available to the public other than as a result of a
disclosure by Seller or Buyer, respectively, or their respective
representatives, or (ii) becomes available to Seller or Buyer, respectively, on
a non-confidential basis from a source other than Buyer or Seller,
respectively, or their respective representatives, provided that such source is
not bound by a confidentiality agreement with Buyer or Seller, respectively.
The term "Other Confidential Information" also excludes information which was
available to
- 46 -
<PAGE> 56
Buyer on a non-confidential basis prior to its disclosure to Buyer by Seller or
its representatives.
(e) Without limiting any other rights or remedies available to
the parties, each of Seller and Buyer will be entitled to equitable relief
(including without limitation injunctive relief) for any breach or failure to
abide by the provisions of this Section 4.1.
4.2. PUBLICITY. Except as may be required by applicable law or
by applicable stock exchange rules, press releases and other publicity
concerning this transaction (including without limitation statements to
customers) shall be made only with the prior agreement of Seller and Buyer as
to the form, content and timing thereof (and, in any event, Seller and Buyer
shall use all best efforts to consult and agree with each other with respect to
the form, content and timing of any such required press release or other
publicity). The foregoing shall not apply to Buyer's communications with
investment bankers and other professionals in the investment community.
4.3. ACCESS TO AND PRESERVATION OF INFORMATION AND RECORDS. For
a period of ten (10) years following the Closing Date or for the period
indicated by the respective party's record retention policy, whichever is
shorter, each of Buyer and Seller shall preserve the books and records of the
Business and shall provide such access to such books and records as the other
party shall
- 47 -
<PAGE> 57
reasonably request for purposes of preparing tax reports or returns required to
be filed by each other party, and responding to audits thereof. Buyer and
Seller shall also provide written notice to the other party not less than
thirty (30) days prior to destroying any such books or records, and shall
permit such other party to take possession thereof. Buyer and Seller shall
also provide the other party such information as such other party shall
reasonably request for such purposes.
4.4. COOPERATION. From and after the Closing Date, each of Buyer
and Seller shall provide to the other such assistance and such access to its
employees and to the records referred to in Section 4.3, and shall otherwise
cooperate fully with the other, as shall be reasonably necessary in connection
with any threatened, pending or future demand, claim, action, cause of action,
suit or proceeding related to the Business, whether or not arising out of
events occurring prior to, on or after the Closing Date.
4.5. TRANSITION PERIOD.
(a) During the Transition Period (as hereinafter defined),
Seller shall provide to Buyer the services on a full-time basis of the
employees of Seller identified in Schedule 4.5(a) (the "TRANSITIONAL
EMPLOYEES"); provided, that such persons do not elect, of their own initiative,
to terminate their employment with Seller during such period. During the
Transition Period, the Transitional Employees shall perform such services
related to
- 48 -
<PAGE> 58
the conduct of the Business as Buyer shall determine from time to time. Seller
shall be responsible for all personnel matters regarding the Transitional
Employees. Such matters shall include, but not be limited to, promotions,
transfers, compensation, employee benefits, performance evaluations, all
disciplinary actions up to and including termination of employment and
compliance with all applicable employment and tax laws and related regulations
at the federal, state and local level, including income tax withholding and
payment of the employer and employee share of employment and unemployment tax.
Seller shall have the final decision to terminate employment of any
Transitional Employees. Notwithstanding the foregoing sentence, Buyer retains
the right to cease using the services of any particular Transitional Employee
at any time as Buyer deems appropriate. Seller agrees that the Transitional
Employees shall observe those work hours at work locations of the Business as
determined by Buyer's on-site supervisory officials. Seller shall consult with
Buyer in order to attempt to resolve all questions and needs of Buyer regarding
the work hours of the Transitional Employees. During the Transition Period,
Seller may redeploy any Transitional Employee within Seller's own organization;
provided that Seller places another of Seller's employees in the position from
which the Transitional Employee is so redeployed.
(b) It is expressly acknowledged by the parties hereto that
nothing in this Agreement is intended or shall be construed
- 49 -
<PAGE> 59
to create an employer/employee relationship between Buyer and the Transitional
Employees and it is expressly agreed and acknowledged by the parties that
Seller is the common law employer of the Transitional Employees. In the event
the Internal Revenue Service or any other governmental agency should question
or challenge the employment status of the Transitional Employees, the parties
hereto agree that both Seller and Buyer shall have the right to participate in
any discussion or negotiation occurring with such agency or agencies,
irrespective of with whom or by whom such discussion or negotiation is
initiated.
(c) During the Transition Period, Seller shall use commercially
reasonable efforts to provide such additional assistance to Buyer as Buyer
shall request in order to effect the orderly transition from Seller's to
Buyer's operation of the Business. Such assistance may include receiving
orders and inquiries from customers of the Business and directing such orders
and inquiries to Buyer, assisting Buyer in developing computer services to
support the Business and providing such interim computer services to Buyer.
(d) Seller shall not charge Buyer any fee for the services of
the Transitional Employees provided pursuant to Section 4.5(a) or for any
transitional assistance provided by Seller pursuant to Section 4.5(c), except
that within thirty (30) days after demand therefor, Seller shall reimburse
Buyer for all reasonable travel expenses incurred by Transitional Employees or
any other employee
- 50 -
<PAGE> 60
in providing services to or for the benefit of Seller pursuant to Section
4.5(a) or 4.5(c).
(e) The "TRANSITION PERIOD" shall be the ninety (90) day period
immediately following the Closing Date; provided, however, that Buyer may
extend the Transition Period for additional thirty (30) day periods by giving
written notice to Seller at least ten (10) days prior to the date that the
Transition Period would otherwise expire; provided further, however, that in no
event shall the Transition Period extend beyond one hundred and eighty (180)
days following the Closing Date.
(f) Buyer agrees to release, indemnify, defend, save and hold
Seller and its officers, directors, employees, agents, successors and permitted
assigns (any or all of the foregoing hereinafter referred to as an "INDEMNIFIED
PERSON"), harmless from and against any and all demands, claims, actions or
causes of action, assessments, losses, damages, deficiencies, liabilities,
costs and expenses (including but not limited to reasonable attorneys' fees and
expenses, and the aggregate amount paid in reasonable settlement of any
actions, suits, proceedings, or claims, or threats thereof, to which any
Indemnified Person may become subject under any statute or common law or
otherwise), asserted against, imposed upon, resulting to or incurred by any
Indemnified Person, directly or indirectly, as a result of or in connection
with any claim directly or indirectly based on or arising from the performance
of services for Buyer by Seller or
- 51 -
<PAGE> 61
the Transitional Employees pursuant to this Section 4.5. The parties
acknowledge that it is the intent of this Section 4.5(f) that Seller bear no
cost or liability of any nature whatsoever (whether arising from claims made by
the Transitional Employees or by others as a result of the acts of Transitional
Employees or otherwise) as a consequence of Seller's provision of transitional
services to Buyer pursuant to this Section 4.5. The foregoing indemnification
provisions shall survive the Closing and completion of the services rendered to
Buyer by Seller and the Transitional Employees hereunder, shall be in addition
to any other liability which Buyer may otherwise have to Seller, and shall
inure to the benefit of the heirs, personal representatives, successors and
assigns of each Indemnified Person.
4.6. NON-COMPETITION AND NON-INTERFERENCE BY SELLER.
(a) Except as otherwise required by law, regulation or a court
of competent jurisdiction, Seller shall not, for a period of two (2) years
after the Closing Date, without the prior written consent of Buyer, either (i)
directly or indirectly provide any advisory or consulting services for, invest
in (other than stock in a publicly held corporation which is traded on a
recognized securities exchange) or otherwise operate any corporation,
partnership, organization, proprietorship, or other entity which develops,
manufactures, sells or distributes unsaturated polyester resins or maleic
anhydride in competition with the Business in each of the states in the United
States in
- 52 -
<PAGE> 62
which Seller conducted the Business and each element thereof, i.e., UPR, MA and
Distribution, or (ii) intentionally and knowingly induce or attempt to induce
any supplier, employee, agent or other representative or associate of Buyer
involved in the Business as conducted by Buyer to terminate its relationship
with Buyer.
(b) Notwithstanding the foregoing, the following shall not
constitute a breach by Seller of Section 4.6(a): (i) Seller's production,
whether through its ownership of Avonite, Inc. or otherwise, of solid surfacing
materials using polyester resins as feedstock; or (ii) Seller's hiring of any
person who voluntarily, and without inducement by Seller, seeks employment by
Seller.
(c) Notwithstanding Section 4.6(a), Seller shall have complete
freedom to develop, patent, test market, produce, have toll produced, market,
license others, sell and conduct all other business related to all Retained
Intellectual property as contained in Schedule 1.3(k) as well as any
continuations, divisions, reissues, continuations-in-part, foreign counterpart
applications thereof, and improvements thereon, and any patents issuing
therefrom including, but not limited to (i) compositions containing maleimides,
such as in U.S. Patent 5,983,669, (ii) methods of inhibiting the growth of
zebra mussels, such as in U.S. Patent 5,288,409, (iii) water blown,
thermosetting, unsaturated polyester-polyurethane hybrid foam formulations and
components as described in U.S. Patent 5,344,852 hereinafter
- 53 -
<PAGE> 63
referred to as "Hyrizon" and (iv) unsaturated laminating resins having low
organic emissions and their constituent monomers comprising epoxylated and/or
alkoxylated bisphenol-A acrylates, methacrylates, diacrylates and
dimethacrylates, hereinafter referred to as "LOER" such as described in U.S.
Patent 5,292,841 and patent applications listed on Schedule 1.3(k) having the
title "Laminating Resins Having Low Organic Emissions." Seller shall provide
Buyer the opportunity to produce LOER under non-exclusive license and shall
give Buyer an opportunity to toll produce Hyrizon and LOER for market
development if Seller desires such production or toll production and the
parties agree to the terms thereof. Buyer shall be considered to have received
confidential information associated with products included in Schedule 1.3(k)
by nature of this transaction and shall keep confidential all related
information and shall not produce, sell, or otherwise practice business related
to products described in Schedule 1.3(k) without written consent from Seller.
(d) Seller acknowledges that in the event of any breach of the
covenants set forth in clause (a) of this Section 4.6, Buyer and its successors
and permitted assigns shall be entitled to injunctive relief and to such other
and further relief as is proper in the circumstances.
4.7. NON-INTERFERENCE BY BUYER. Buyer shall not, for a period of
two (2) years after the Closing Date, without the prior written consent of
Seller, intentionally and knowingly induce or
- 54 -
<PAGE> 64
attempt to induce any supplier, employee, agent or other representative or
associate of Seller to terminate its relationship with Seller. Notwithstanding
the foregoing, Buyer's hiring of any person who voluntarily and without
inducement by Buyer, seeks employment with Buyer shall not constitute a breach
by Buyer of this Section 4.7. Buyer acknowledges that in the event of any
breach of this Section 4.7, Seller and its successors and permitted assigns
shall be entitled to injunctive relief and to such other and further relief as
is proper in the circumstances.
4.8. IDENTIFICATION OF GOODS. Buyer shall assure that any goods
and all packaging materials related to the Business shipped after the Closing
Date shall clearly identify Buyer as the producer or distributor thereof and
shall bear no marks or other features identifying Seller as the producer or
distributor thereof or otherwise referring to Seller in any way.
4.9. RETURN OF POLYESTER RESINS.
(a) Buyer shall notify Seller if any customer of the Business,
claiming that polyester resins shipped by Seller prior to
the Closing Date do not conform to the specifications
applicable thereto, returns such resins to Buyer within
ninety (90) days after Seller's shipment thereof. Upon
receipt of such notification, Seller may request such
verification and documentation
- 55 -
<PAGE> 65
of the alleged non-conformity and the return date as Seller
shall reasonably request.
(b) Seller shall have no liability for any polyester resins so
returned that are returned more than ninety (90) days after
Seller's shipment thereof or that conform to applicable
specifications. Any credit offered the customer, other
concession made or any cost incurred by Buyer in connection
with such resins shall be solely for the account of Buyer.
(c) Subject to the following sentence, if the returned polyester
resins do not conform to applicable specifications, Buyer
shall re-work the returned resin, and Seller shall pay Buyer
$.30 per pound of resin so re-worked, plus reasonable
freight charges for the original shipment of the resins to
the customer and for the customer's return, plus an amount
equal to Seller's standard product cost of the resin as of
the date of Closing based on Seller's accounting records.
With respect to resins shipped in tank wagons that are not
accepted by customers due to deviations from applicable
specifications, but which resins can be adjusted and
reshipped, Seller shall pay Buyer $.15 per pound of affected
resins, plus reasonable freight charges for the customer's
return and for reshipping the adjusted resin to the
- 56 -
<PAGE> 66
customers. The final disposition of all material that does
not conform with applicable specifications shall be the sole
responsibility of Buyer and any credits or other concessions
granted to the customer by Buyer in respect of the returned
resins shall be solely for the account of Buyer.
4.10. COLTON RESINS. The Colton Resins are Purchased Inventory
being transferred to Buyer at Closing. Buyer shall be solely responsible for
completing the curing of the Colton Resins and for disposing of them after
Closing.
4.11. CLEANING OF COLTON TANKS. Seller shall be responsible for
cleaning the five (5) tanks located at the Colton, California Business Site
that contain gelled heels. To the extent that such cleaning has not been
completed as of the Closing, Buyer shall permit Seller, at Seller's option, to
supervise and direct such cleaning after Closing. In consideration of such
cleaning, Buyer shall pay Seller at Closing $50,000 in addition to the Purchase
Price. Any costs incurred for such cleaning in excess of such amount shall be
solely for Seller's account. Any waste generated as a result of such cleaning
shall be considered Pre-Closing Waste (as defined in Section 8.2(t)) and shall
be subject to the provisions of Sections 8.3(a) and (b).
- 57 -
<PAGE> 67
ARTICLE V
CLOSING
-------
5.1. CLOSING. The closing of the purchase and sale of the
Purchased Assets and the other transactions contemplated hereby (the "CLOSING")
is taking place at 10:00 a.m., local time, on April 28, 1995 at the offices of
Kirkpatrick & Lockhart, 1500 Oliver Building, Pittsburgh, Pennsylvania, or at
such other time, date or place as the parties mutually agree (the "CLOSING
DATE").
5.2. DELIVERIES BY SELLER. At the Closing, Seller is also
delivering to Buyer each of the following:
(a) a special warranty deed or deeds to the Real Estate, duly
executed and acknowledged by Seller and in recordable form (collectively, the
"DEEDS");
(b) a special warranty bill of sale and instrument of assignment
with respect to the other Purchased Assets, duly executed by Seller;
(c) an assignment or assignments of the Purchased Intellectual
Property, duly executed by Seller;
(d) an Assignment and Assumption Agreement in substantially the
form attached hereto as Exhibit B (the "ASSUMPTION AND ASSIGNMENT AGREEMENT"),
duly executed by Seller;
- 58 -
<PAGE> 68
(e) an assignment of all transferable or assignable licenses,
permits and warranties relating to the Purchased Assets, duly executed by
Seller;
(f) a long-term supply agreement, whereby Seller shall purchase
MA from Buyer, in substantially the form attached hereto as Exhibit C
("SELLER'S SUPPLY CONTRACT"), duly executed by Seller;
(g) a long-term supply agreement, whereby Buyer shall purchase
phthalic anhydride from Seller, in substantially the form attached hereto as
Exhibit D ("BUYER'S PA SUPPLY CONTRACT"), duly executed by Seller;
(h) A long-term supply agreement, whereby Buyer shall purchase 2
ethyl-hexanol from Seller, in substantially the form attached hereto as Exhibit
E ("BUYER'S 2-EH SUPPLY CONTRACT"), duly executed by Seller;
(i) title certificates to each of the Vehicles (together with
any other transfer forms necessary to transfer title to the Vehicles), duly
executed by Seller;
(j) a Good Standing Certificate of Seller in the State of
Delaware as of a date within ten (10) days prior to the Closing Date;
- 59 -
<PAGE> 69
(k) an incumbency and specimen signature certificate signed by
the officers of Seller who execute this Ag |
