EXHIBIT 2.1
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SALE AND PURCHASE AGREEMENT
by and between
HERCULES INCORPORATED
and
GEO SPECIALTY CHEMICALS, INC.
Dated as of March 27, 2001
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Peroxides Division
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SALE AND PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS AND USE OF TERMS
1.1. Definitions....................................................... 1
1.2. Annexes........................................................... 1
1.3. Rules of Construction............................................. 1
1.4. Time of Day....................................................... 2
ARTICLE 2 - SALE AND PURCHASE
2.1. Sale and Purchase................................................. 2
2.2. Excluded Items.................................................... 4
2.3. Peroxides Business Items of Hercules Affiliates................... 5
2.4. Assumption of Liabilities......................................... 5
2.5. Retained Liabilities.............................................. 5
2.6. Beringen Option................................................... 6
2.7. Tolling Agreements................................................ 6
2.8. Plant Operating Agreement......................................... 6
2.9. Human Resources Agreement......................................... 6
2.10. Environmental Annex............................................... 6
2.11. Transition Services Agreement..................................... 6
2.12. Intercompany Accounts............................................. 6
2.13. Interim Operations................................................ 6
2.14. Ancillary Intellectual Property................................... 7
2.15. Commingled Items.................................................. 7
2.16. Amendment to Contracts............................................ 7
2.17. Peroxides Business Items Sold "As Is"............................. 8
2.18. Allocation; Taxes; Prorations..................................... 8
2.19. Third Persons..................................................... 8
ARTICLE 3 - PURCHASE PRICE
3.1. Purchase Price.................................................... 9
3.2. Post-Closing Adjustment........................................... 9
ARTICLE 4 - CLOSING
4.1. Time and Place.................................................... 9
4.2. Deliveries by Hercules............................................ 10
4.3. Deliveries by Buyer............................................... 11
4.4. Certain Assignments and Consents.................................. 12
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF HERCULES
5.1. Representations and Warranties of Hercules........................ 13
5.2. Organization, Good Standing and Corporate Power................... 13
5.3. Hercules Peroxides Affiliates..................................... 14
5.4. Financial Statements.............................................. 14
5.5. Absence of Changes in the Peroxides Business...................... 14
5.6. Conflicting Agreements; Restrictions.............................. 15
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5.7. Title............................................................. 15
5.8. Real Property..................................................... 15
5.9. Personal Property................................................. 16
5.10. Intellectual Property............................................. 17
5.11. Contracts and Agreements.......................................... 17
5.12. Inventories....................................................... 18
5.13. Accounts Receivable............................................... 19
5.14. [Intentionally Omitted.].......................................... 19
5.15. Customers......................................................... 19
5.16. Suppliers......................................................... 19
5.17. Consents.......................................................... 19
5.18. No Litigation..................................................... 19
5.19. Non-Environmental Laws; Permits................................... 19
5.20. Taxes............................................................. 20
5.21. Environmental Matters............................................. 20
5.22. Labor Matters..................................................... 20
5.23. Complete Purchased Assets......................................... 21
5.24. Insurance......................................................... 21
5.25. Disclosure........................................................ 21
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF BUYER
6.1. Representations and Warranties of Buyer........................... 21
6.2. Organization, Good Standing and Corporate Power................... 22
6.3. Conflicting Agreements; Restrictions.............................. 22
6.4. Insurance......................................................... 22
6.5. Consents.......................................................... 22
6.6. No Litigation..................................................... 23
ARTICLE 7 - PRE-CLOSING AGREEMENTS
7.1. Best Efforts...................................................... 23
7.2. Conduct of Business; Affirmative Covenants........................ 23
7.3. Conduct of Business; Negative Covenants........................... 24
7.4. Public Announcements.............................................. 25
7.5. Required Notices.................................................. 25
7.6. Access............................................................ 25
7.7. Acquisition Proposals............................................. 25
7.8. Casualty Loss..................................................... 26
7.9. Real Estate Matters............................................... 26
7.9.2. Franklin Plant.................................................... 29
ARTICLE 8 - POST-CLOSING AGREEMENTS
8.1. Non-Competition................................................... 30
8.2. Accounts Receivable............................................... 31
8.3. Further Assurances................................................ 31
8.4. Confidentiality Obligations....................................... 31
8.5. Mail; Payments.................................................... 32
8.6. Name Change....................................................... 32
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8.7. Retention of Books and Records; Further Information.............. 32
8.8. Engineering Manuals.............................................. 33
8.9. Brokers.......................................................... 33
ARTICLE 9 - BUYER'S CONDITIONS TO CLOSING
9.1. Representations and Warranties................................... 34
9.2. Compliance With Obligations and Conditions....................... 34
9.3. No Claims or Orders Affecting Closing............................ 34
9.4. Approvals and Consents........................................... 34
9.5. Super Contract Consents.......................................... 34
9.6. Deliveries....................................................... 34
9.7. Ancillary Documents.............................................. 34
9.8. No Peroxides Material Adverse Effect............................. 34
9.9. Title and Survey................................................. 35
ARTICLE 10 - HERCULES' CONDITIONS TO CLOSING
10.1. Representations and Warranties................................... 35
10.2. Compliance with Obligations and Conditions....................... 35
10.3. No Claims or Orders Affecting Closing............................ 35
10.4. Approvals and Consents........................................... 35
10.5. Deliveries....................................................... 35
10.6. Ancillary Documents.............................................. 35
10.7. No Buyer Material Adverse Effect................................. 35
ARTICLE 11 -TERMINATION AND REMEDIES
11.1. Termination...................................................... 36
11.2. Effect of Termination............................................ 36
ARTICLE 12 - SURVIVAL AND INDEMNIFICATION
12.1. Survival of Representations, Warranties and Covenants............ 36
12.2. Indemnification by Hercules...................................... 37
12.3. Indemnification by Buyer......................................... 37
12.4. Procedure for Indemnification.................................... 389
12.5. Limitation on Indemnification.................................... 39
12.6. Payment.......................................................... 40
12.7. Ancillary Documents.............................................. 40
12.8. Subrogation...................................................... 40
12.9. Exclusive Remedy................................................. 40
ARTICLE 13 - RESOLUTION OF DISPUTES
13.1. Resolution Procedure............................................. 40
13.2. Resolution Panel................................................. 41
13.3. Exchange of Written Statements................................... 41
13.4. Good Faith Negotiations.......................................... 41
13.5. Determination of Resolution Panel................................ 41
13.6. Arbitration...................................................... 41
13.7. Injunctive Relief................................................ 42
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ARTICLE 14 - MISCELLANEOUS
14.1. Entire Agreement............................................. 42
14.2. Successors and Assigns; Third Party Beneficiaries............ 42
14.3. Headings..................................................... 43
14.4. Modification and Waiver...................................... 43
14.5. Expenses..................................................... 43
14.6. Notices...................................................... 43
14.7. Specific Performance and Other Remedies...................... 45
14.8. Governing Law................................................ 45
14.9. Bulk Sales Laws.............................................. 45
14.10. Counterparts................................................. 45
14.11. Severability................................................. 45
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Annexes, Exhibits and Schedules:
Annex I Definitions and Use of Terms
Annex II Human Resources Agreement
Annex III Environmental Annex
Exhibit A Form of Plant Operating Agreement
Exhibit B-1 Form of Tolling Agreement (Brunswick)
Exhibit B-2 Form of Tolling Agreement (Beringen)
Exhibit C Form of Transition Services Agreement
Schedule 1.1 Knowledge Officers; Permitted Encumbrances
Schedule 2.1(a)(i) Real Property
Schedule 2.1(c) Equipment
Schedule 2.1(e)(1) Bids
Schedule 2.1(e)(ii) Product Contracts
Schedule 2.1(e)(iii) Leases and Licenses - personal property
Schedule 2.1(e)(iv) Leases and Licenses - real property
Schedule 2.1(g) Trademarks and Service Marks
Schedule 2.2(c) Excluded Equipment
Schedule 2.2(d) Excluded Items
Schedule 2.3 Hercules Affiliates
Schedule 2.4(a) Assumed Liabilities
Schedule 2.6 Intellectual Property Transfers
Schedule 2.13 Permits
Schedule 2.18(d) Taxes Allocation
Schedule 5.3 Affiliates
Schedule 5.4 Financial Statements
Schedule 5.5(a) Absence of Changes
Schedule 5.6 Conflicting Agreements - Hercules
Schedule 5.7 Title to Purchased Assets
Schedule 5.8(a) Description of Real Property and Purchased Buildings
Schedule 5.8(b) Leased Real Property
Schedule 5.8(c) Real Property Compliance
Schedule 5.9(a) Personal Property Locations
Schedule 5.9(b) Leased Personal Property
Schedule 5.10(a) Intellectual Property
Schedule 5.10(b) Intellectual Property Compensation
Schedule 5.11(a) Material Contracts
Schedule 5.11(c) Material Contract Assignability
Schedule 5.12 Inventories
Schedule 5.13 Accounts Receivable
Schedule 5.14 Accounts Payable
Schedule 5.15 Hercules Consents
Schedule 5.16 Hercules Litigation
Schedule 5.17(b) Permit Exceptions
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Schedule 5.17(c) Permit Transferability
Schedule 5.21 Complete Purchased Assets
Schedule 6.3 Conflicting Agreements - Buyer
Schedule 6.5 Buyer Consents
Schedule 6.6 Buyer Litigation
Schedule 7.2(a) Conduct of Business
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SALE AND PURCHASE AGREEMENT
THIS SALE AND PURCHASE AGREEMENT, dated as of March 27, 2001, is by
and between Hercules Incorporated, a Delaware corporation having offices at
Hercules Plaza, 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000
("Hercules"), and GEO Specialty Chemicals, Inc., an Ohio corporation, having
offices at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxx 00000 ("Buyer").
Hercules and Buyer are sometimes referred to herein individually as a "Party"
and collectively as the "Parties" to this Agreement. Hercules is entering into
this Agreement on behalf of itself and those of its Affiliates (as defined in
Annex I) possessing Peroxides Business Items (as defined in Annex I), and Buyer
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is entering into this Agreement on behalf of itself and any of its Affiliates
that will purchase such Peroxides Business Items.
WHEREAS, Buyer desires to purchase certain assets and assume certain
liabilities of the Hercules' Peroxides Business and Hercules desires to sell
such assets to Buyer, all upon the terms and subject to the conditions contained
in this Agreement and the other agreements described herein; and
WHEREAS, the Parties now desire to enter into this Agreement pursuant
to which, upon the terms and subject to the conditions contained in the
Definitive Agreements (as defined in Annex I), the Transactions (as defined in
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Annex I) will be effectuated;
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the Parties, intending to be legally bound, hereby
agree as follows:
ARTICLE 1 - DEFINITIONS AND USE OF TERMS
1.1. Definitions. For all purposes of this Agreement, the capitalized
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terms are defined as set forth in Annex I attached hereto.
1.2. Annexes. Exhibits, Schedules and Other References. References in
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this Agreement to any "Annex," "Exhibit" or "Schedule," unless otherwise
specified, refer to one of the Annexes, Exhibits or Schedules attached to this
Agreement, and references made to an "Article" or a "Section," unless otherwise
specified, refer to one of the Articles or Sections of this Agreement.
1.3. Rules of Construction. The plural form of any noun shall include
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the singular and the singular shall include the plural, unless the context
requires otherwise. Each of the masculine, neuter and feminine forms of any
pronoun shall include all such forms unless the context requires otherwise. The
terms "include", "includes", "including" and all other forms and derivations of
such term shall mean including without limitation. The terms "herein", "hereof",
"hereunder", "hereby", "hereto", "herewith" and words of similar import shall
refer to this Agreement as a whole and not to any particular article, section or
paragraph of this Agreement. The "(s)" shall mean any one or more.
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1.4. Time of Day. Unless otherwise provided herein, all references to
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a fixed time of day shall mean Eastern Standard Time or Eastern Daylight Savings
Time, whichever is in effect on the date in question.
ARTICLE 2 - SALE AND PURCHASE
2.1. Sale and Purchase. Upon the terms and subject to the conditions
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contained in this Agreement, at the Closing, Hercules shall (subject to Sections
2.16 and 4.4) sell, transfer, convey, assign and deliver to Buyer, free and
clear of all Encumbrances other than Permitted Encumbrances, and Buyer shall
purchase, acquire and accept from Hercules all of Hercules' right, title and
interest in (including licensing interest) and to all of the assets and
properties of any nature whatsoever, and wherever located, used solely or
substantially in the Peroxides Business (even if accounted for or carried at
zero value) other than the Excluded Items (each and all of the foregoing items
defined as the "Purchased Assets"), including all of Hercules' right, title to
and interest in and to the following:
(a) subject to Section 7.9, with respect to the Gibbstown Plant,
the land described on Schedule 2.1(a) and all rights, privileges, hereditaments
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and appurtenances appertaining thereto (the "Gibbstown Land"), together with all
buildings, facilities and other structures and improvements situated thereon
including, to the extent constituting real property under applicable law, all
fixtures, installations, equipment and other property attached thereto or
located thereon, or related thereto to be operated by Buyer pursuant to the
terms of the Gibbstown Ground Lease (the "Gibbstown Buildings") (the Gibbstown
Land and the Gibbstown Buildings are hereinafter collectively referred to as the
"Gibbstown Plant");
(b) with respect to the Franklin Plant, a leasehold interest in
the land described on Schedule 2.1(b), pursuant to the Franklin Ground Lease,
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and all rights, privileges, hereditaments and appurtenances appertaining thereto
(the "Franklin Land"), together with all buildings, facilities and other
structures situated thereon, including, to the extent constituting real property
under applicable law, all fixtures, installations, equipment and other property
attached thereto or located thereon and as generally set forth under the Fixed
Asset Schedule attached as Schedule 5.23, to be operated by Buyer pursuant to
the terms of the Franklin Ground Lease, and subject to the terms of the Plant
Operating Agreement (the "Franklin Buildings;" the Franklin Land and Franklin
Buildings are hereinafter sometimes collectively referred to as the "Franklin
Plant");
(c) except for the Excluded Equipment, all machinery, equipment,
fixtures, installations and other personal property, whether owned or leased,
relating solely or substantially to the Peroxides Business, including all
vehicles, furniture, tools, spare parts, supplies, items historically expensed,
office and laboratory equipment, research facilities, materials, fuel, computer
hardware, and other tangible personal property not normally included in
inventory, including the items identified on Schedule 2.1(c)(i) (collectively,
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the "Equipment"); provided, that any of the foregoing items that are now or have
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been located at the Gibbstown Plant within one year prior to the date of this
Agreement, but which are not deemed to relate solely or substantially to the
Peroxides Business, are listed in Schedule 2.1(c)(ii);
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(d) all inventory items (including raw materials, work in
process, samples, finished goods and products and storeroom and other supplies)
relating solely or substantially to the Peroxides Business, subject to
consumption (collectively, "Inventories"); provided, that any of the foregoing
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items that are now or have, within one year prior to the date of this Agreement,
been located at the Gibbstown Plant but which are not deemed to relate solely or
substantially to the Peroxides Business are listed in Schedule 2.1(d);
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(e) except for the Excluded Contracts, all rights in, to and
under the following contracts, agreements and commitments to the extent related
to the Peroxides Business: (i) all Bids identified on Schedule 2.1(e)(i); (ii)
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all contracts, agreements and commitments and purchase orders for the purchase
and sale of goods or services (including research, development, design and
manufacturing services) including the Peroxides Material Contracts identified on
Schedule 2.1(e)(ii) and entered into by Hercules in connection with the
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operation of the Peroxides Business, and which in any case are not yet fully
performed; (iii) all leases, subleases and licenses for the use of tangible
personal property including the Peroxides Material Contracts listed on Schedule
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2.1(e)(iii); (iv) all leases and licenses for the use of the Real Property or
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Purchased Buildings identified on Schedule 2.1(e)(iv) and (v) all such other
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contracts, agreements and commitments entered into by Hercules in the Ordinary
Course of whatever nature which relate solely to the Peroxides Business (all of
items (ii) through (iv), collectively, the "Contracts");
(f) subject to Sections 8.6 and 8.8, all sales and promotional
literature, books, records, files, plans, blueprints, drawings, designs,
specifications, business records, customer lists, pricing information, and
plans, studies, surveys, reports, correspondence, sales and promotional
literature and other selling material related solely or substantially to the
Peroxides Business;
(g) subject to Sections 2.16 and 4.4, all Intellectual Property
including all Peroxides Confidential Information, the patents, patent
applications, inventions, trademarks and service marks listed on Schedule 2.1(g)
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and all contracts, agreements and commitments pursuant to which Hercules or any
of its Affiliates obtains from any Person the right to use any of the
Intellectual Property and/or any of the Peroxides Confidential Information;
(h) the right to enforce (i) all confidential information
agreements restricting the right of any former or current employee or officer of
Hercules or any of its Affiliates to disclose Peroxides Confidential Information
and (ii) all "work for hire" and proprietary rights arrangements and agreements
with any former or current employee or officer of Hercules or any Affiliate
pursuant to which either (y) in accordance with applicable federal or state law,
Hercules or such Affiliate has been accorded any ownership or use interest to
the Intellectual Property thereby arising or (z) there has been conveyed to
Hercules or such Affiliate by appropriately executed instruments any ownership
or use interest to the Intellectual Property thereby arising;
(i) subject to Section 8.2, all accounts receivable and notes
receivable, together with any unpaid interest or fees accrued thereon or other
amounts due with respect thereto, and any other rights to receive payments
arising from customer accounts and all Claims arising therefrom (collectively,
the "Accounts Receivable");
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(j) all rights, claims, credits, causes of action or rights of
set-off against Third Persons relating to the Peroxides Business Items or the
Peroxides Business, whether known or unknown, liquidated or unliquidated, fixed
or contingent, and all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers, contractors and
other Third Persons in connection with products or services to the extent
purchased by or furnished to Hercules for use in the Peroxides Business, and to
the extent transferable by Hercules;
(k) all Permits, but only to the extent legally transferable by
Hercules;
(l) subject to Section 8.6, all stationery and other imprinted
material and office supplies, and packaging and shipping materials related
solely or substantially to the Peroxides Business;
(m) all goodwill associated with the Purchased Assets and the
Peroxides Business as a going concern;
(n) all Books and Records; and
(o) all other properties and assets of every kind and nature,
real or personal, tangible or intangible, related solely to the Peroxides
Business, other than the Excluded Items.
2.2. Excluded Items. Notwithstanding anything to the contrary in this
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Agreement, the Purchased Assets shall not include any of the following assets or
properties of Hercules or any of its Affiliates wherever located (collectively,
the "Excluded Items"):
(a) except for the Purchased Assets described in
Section 2.1(a), (b), Schedule 2.1(c)(i), Section 2.1(e), (g), (h), (i), (j), (k)
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and (m), any assets, properties or business not solely or substantially related
to the Peroxides Business, including the assets, properties or business related
to the Excluded Resins Businesses, and all contracts, agreements and
commitments, including the rights attributable to portions of any Contracts
which relate to such Excluded Resins Businesses;
(b) any assets, properties or business of Hercules, other than
Purchased Assets, at Hercules manufacturing plants and facilities located in
Brunswick, Georgia, Franklin, Virginia, U.S.A. and, subject to the Beringen
Option, Beringen, Belgium;
(c) any of the equipment identified on Schedule 2.2(c)
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(collectively, the "Excluded Equipment");
(d) the items set forth on Schedule 2.2(d);
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(e) cash, cash equivalents and any other current assets as set
forth on the Peroxides Business Financial Statements (except for Inventories and
Accounts Receivable);
(f) Hercules' Insurance;
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(g) except as set forth in Section 8.6, the right to use the
Hercules name, logos, trademarks (except for those part of the Purchased
Assets), toll-free telephone numbers and internet website;
(h) any computer software systems, programs and/or licenses used
by Hercules or its Affiliates other than those used solely by the Peroxides
Business;
(i) items retained by Hercules pursuant to one of the Annexes
hereto or to one of the Definitive Agreements; and
(j) any right, title and interest in and to any of the foregoing
items described in this Section 2.2, wherever located and whether now owned,
leased or licensed, or acquired prior to the Closing.
2.3. Peroxides Business Items of Hercules Affiliates. If Peroxides
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Business Items are in the possession of a Hercules Affiliate, then Hercules
shall take or cause to be taken all such actions as may be necessary to cause
such Peroxides Business Items to be conveyed to or assumed by Buyer, or a Buyer
Affiliate, as the case may be, at the Closing. The Hercules Affiliates having
possession of Peroxides Business Items and the Buyer Affiliates, if any,
purchasing or assuming such Peroxides Business Items are listed and described on
Schedule 2.3.
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2.4. Assumption of Liabilities. Effective as of the Closing, Buyer
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shall assume and agree to pay, perform, discharge and satisfy each and all of
the following liabilities set forth below in paragraphs (a) through (d) but only
to the extent that such liabilities were incurred in the Ordinary Course
(collectively the "Assumed Liabilities"):
(a) all liabilities and obligations, including those described
in Schedule 2.4(a) for goods and services relating solely or substantially to
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the Peroxides Business to be received by Buyer after the Closing incurred in the
Ordinary Course;
(b) that portion of the Bids and Contracts (assumed pursuant to
Section 2.1(e)) to be performed after the Closing;
(c) all liabilities and obligations expressly assumed by Buyer
pursuant to any provision of the Annexes hereto or of the Definitive Agreements,
including all employee-related liabilities and obligations assumed by Buyer
pursuant to the Human Resources Agreement; and
(d) any warranty obligations of Hercules to replace defective
goods sold or leased or re-perform services performed by or on behalf of
Hercules with respect to the Peroxides Business, but only to the extent that
reimbursement for such defective goods or the re-performance of such services is
provided therefor by Hercules to Buyer.
2.5. Retained Liabilities. The Assumed Liabilities shall not include,
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and Hercules shall retain, pay, perform, discharge and satisfy, all liabilities
or obligations, whether known or unknown, asserted or unasserted, accrued,
absolute, contingent or otherwise, whether due or to become due, of Hercules or
any of its Affiliates, whether arising prior to, on or after the Closing
(collectively, the "Retained Liabilities"), including:
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(a) any liabilities or obligations related to the Excluded
Items; and
(b) any federal, state, local or foreign Taxes payable with
respect to the Peroxides Business or the Purchased Assets before the Closing.
2.6. Beringen Option. At the Closing, Buyer shall be granted an
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option to purchase, for a purchase price equal to one dollar ($1.00), the plant
and equipment of the Peroxides Business located in Beringen, Belgium (the
"Beringen Option").
2.7. Tolling Agreements. At the Closing, the Parties will enter into
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the Tolling Agreements with respect to the ECHO A(R) vulcanizing agent and
other products manufactured by Hercules at its manufacturing plant in Brunswick,
Georgia, U.S.A. and the Beringen Plant, substantially in the form of
Exhibits B-1 and B-2 attached hereto. The Tolling Agreements will supersede any
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prior agreements or course of business between the Peroxides Business, on the
one hand, and Hercules and its Affiliates, on the other hand with respect to the
ECHO A(R) vulcanizing agent and such other products in effect prior to the
Closing.
2.8. Plant Operating Agreement. At the Closing, the Parties will
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enter into the Plant Operating Agreement substantially in the form of Exhibit A
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attached hereto.
2.9. Human Resources Agreement. In connection with the consummation
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of the Transactions, the Parties agree that the Human Resources Agreement
attached hereto as Annex II sets forth the terms under which Buyer or one of its
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Affiliates will offer employment to Persons now employed by Hercules or its
Affiliates in the Peroxides Business, and defining Buyer's and Hercules'
respective liabilities and obligations with respect to salary, benefits and
severance or other benefits of such employees.
2.10. Environmental Annex. In connection with the consummation of
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the Transactions, the Parties agree that the Environmental Annex attached hereto
as Annex III sets forth the obligations and liabilities of the Parties with
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respect to health, safety and environmental compliance.
2.11. Transition Services Agreement. At the Closing, the Parties
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will enter into the Transition Services Agreement substantially in the form of
Exhibit C attached hereto.
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2.12. Intercompany Accounts. Prior to or as of the Closing, Hercules
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will eliminate all outstanding amounts owing between the Peroxides Business on
the one hand, and Hercules or any of its Affiliates on the other hand.
2.13. Interim Operations. While the Parties will diligently attempt
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to have all necessary Permits transferred to Buyer effective as of the Closing
Date, it is possible that some of the permits identified on Schedule 2.13 as
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being required to be transferred or which must be obtained by Buyer will not
have been transferred as of the Closing Date. In the event that a Permit has not
been transferred as of such date, the Parties intend and acknowledge that Buyer,
although having financial responsibility for the Peroxides Business Items
(including the Gibbstown Plant and the Franklin Plant) as of the Closing, shall
not have operational control of such Peroxides Business Items for which a Permit
has not been transferred until the day
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following the transfer from Hercules to Buyer of such Permit. In the event that
such transfer becomes effective on a date after the Closing Date, Hercules shall
be deemed to operate the Gibbstown Plant and the Franklin Plant through the
effective date of such transfer of such Permits for the benefit of Buyer;
provided, that if Hercules incurs any costs or expenses during such interim
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period in connection with such operations of the Peroxides Business, Buyer shall
be responsible for payment of all such costs or expenses.
2.14. Ancillary Intellectual Property.
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(a) As of the Closing, Hercules grants to Buyer a royalty free,
nonexclusive, non-transferable license (in all instances, except in the case of
a sale by Buyer of all or substantially all of the Purchased Assets) with no
right to sublicense, to practice Hercules non-Peroxides Business know-how which
had been practiced incidentally by its Peroxides Business as a necessary (based
upon past practices) part of its business prior to the Closing Date, but only to
the extent to which this know-how was practiced by the Peroxides Business prior
to the Closing Date and only for use by Buyer to practice the Peroxides Business
subsequent to the Closing Date. The phrase "necessary (based upon past
practices)" means that, when the relevant item has been consistently used by
Hercules in the operation of the Peroxides Business, it shall be deemed
necessary for purposes of interpretation of this Agreement.
(b) As of the Closing, Hercules agrees not to assert against
Buyer any claim of infringement resulting from Buyer's making, using, selling or
offering for sale any article or process covered by one or more claims contained
in any patent which Hercules owns or is licensed under which had been practiced
incidentally by its Peroxides Business as a necessary (based upon past
practices) part of its business prior to the Closing Date, but only to the
extent to which such technology was practiced by the Peroxides Business prior to
the Closing Date and which is necessary (based upon past practices) for Buyer to
practice the Peroxides Business subsequent to the Closing Date.
2.15. Commingled Items. After the Closing Date, Buyer will have in
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its possession various non-public documents, records and other non-Peroxides
items relating to Hercules, and Hercules will have in its possession various
non-public documents, records and other items relating to Buyer or the Peroxides
Business (the "Commingled Items"). The Parties hereby acknowledge that it would
be impractical to remove, destroy or return to the disclosing Party such
Commingled Items; therefore, the Commingled Items will not be separated from or
segregated in the Buyer or Hercules files, as the case may be, but the non-
disclosing or relevant Party agrees that it shall not use or take any action to
use the Commingled Items or any information contained therein.
2.16. Amendment to Contracts. The Parties acknowledge that some of
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the Contracts may relate to the sale, distribution or supply of, or otherwise
relate, to both the Peroxides Business products and either Excluded Resins
Businesses products or services to facilities not included in the Real Property.
The Parties will cooperate and use reasonable commercial efforts to amend such
Contracts to delineate the rights and obligations related to Peroxides Business
products and to provide for the assignment of those rights and obligations to
Buyer. In the event Hercules does not amend all such Contracts prior to Closing,
it shall continue to perform the Peroxides Business components of such
Contracts, as agent for Buyer,
7
and in accordance with Section 4.4(a), until such amendment is made; provided,
--------
that in serving as agent, Hercules shall not be required to make any additional
payment or take any additional action not otherwise required under the terms of
the Contract. If such amendment is not obtained, the Contract will be treated as
subject to Section 4.4.
2.17. Peroxides Business Items Sold "As Is". EXCEPT AS PROVIDED
------------------------------------
OTHERWISE IN THE DEFINITIVE AGREEMENTS, THE PURCHASED ASSETS AND THE ASSUMED
LIABILITIES ARE BEING SOLD, PURCHASED, CONVEYED, ASSIGNED AND TRANSFERRED "AS
IS, WHERE IS" IN WHATEVER EXISTENCE AND CONDITION AS OF THE CLOSING DATE, AND
WITH NO OTHER REPRESENTATIONS AND/OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF ANY FUTURE
BENEFIT.
2.18. Allocation; Taxes; Prorations.
-----------------------------
(a) Subject to Section 2.18(b) each of Hercules and Buyer shall
pay one-half of all documentary, sales, use, filing, transfer and similar Taxes
payable as a result of the transfer of the Peroxides Business Items.
(b) Buyer shall pay all of the documentary, filing, transfer
and similar fees and costs, including Taxes, related to the transfer of the
Intellectual Property. The Parties agree that the consideration given in respect
of the transfer of the Peroxide Business Items is exclusive of any VAT (or
similar tax) which may be chargeable in respect to such transfer and to the
extent that VAT is so chargeable, then Buyer shall pay the amount properly
chargeable in respect thereof. Buyer shall be responsible for stamp, duty,
documentary taxes and similar taxes incurred, imposed, caused to become due or
payable as a result of the actions of the Buyer, including the introduction of
documents into a jurisdiction imposing such taxes.
(c) All Taxes on the ownership or operation of the Real
Property that accrue before the Closing shall be paid by Hercules and all such
Taxes that accrue after the Closing shall be paid by Buyer; provided, that all
--------
such Taxes shall be pro-rated to the Closing Date. Notwithstanding the
foregoing, any Taxes on or measured by the net income of any Party (including
income and net worth Taxes) imposed or levied by or payable to any Taxing
Authority shall be paid or payable by the Party upon which such Taxes are
imposed or levied.
(d) Hercules and the Buyer are free to take whatever position
they deem appropriate regarding and allocation of the Purchase Price. Hercules
and Buyer agree to meet twice within 45 days of Closing to discuss an allocation
of the Purchase Price. If Hercules and the Buyer are able to agree in writing to
an allocation of the Purchase Price, the Parties shall report the Transactions
for all Tax purposes in accordance with such allocation. In any proceeding
related to the determination of any Tax, neither Party shall contend or
represent that such agreed to allocation is not correct.
2.19. Third Persons. The Transactions shall not enlarge any rights of
-------------
any Third Person and nothing contained in the Definitive Agreements shall
prevent a Party from contesting
8
the rights or obligations of any Third Person, subject to such Party's
obligations under Article 12.
ARTICLE 3 - PURCHASE PRICE
3.1. Purchase Price. As full consideration for the transfer of the
--------------
Purchased Assets and the Peroxides Business from Hercules to Buyer, at the
Closing Buyer shall assume the Assumed Liabilities and shall pay a purchase
price (subject to adjustment as described in Section 3.2) in cash by wire
transfer to Hercules of Ninety-Two Million Two Hundred Thousand U.S. Dollars
($92,200,000.00) (the "Purchase Price").
3.2. Post-Closing Adjustment. To the extent that there is a
-----------------------
difference of greater than $100,000 (the "Deductible") between (i) the aggregate
amount of Accounts Receivable and Inventories (less the amount of Inventories of
the type described in Schedule 3.2) of the Peroxides Business as of the Closing,
------------
as reflected on the Closing Date Peroxides Business Balance Sheet, and (ii) the
aggregate amount of $11.1 million (i.e., the sum of the values of the Accounts
Receivable and Inventories as of December 31, 2000), then the Purchase Price
shall be adjusted up or down on a dollar-for-dollar basis for every dollar that
the difference between the amount described in clause (i) and the amount
described in clause (ii) exceeds the Deductible. If the aggregate amount
described in clause (i) is greater than the aggregate amount described in clause
(ii), Buyer will pay the difference to Hercules, together with simple interest
on such balance at the rate of eight percent (8%) per annum. If the aggregate
amount described in clause (i) is less than the aggregate amount described in
clause (ii), Hercules will pay the difference to Buyer, together with simple
interest on such balance at the rate of eight percent (8%) per annum. The
foregoing post-closing adjustment (the "Post-Closing Adjustment") shall be
effectuated no more than ninety (90) days after the Closing Date by delivery by
Hercules to Buyer of the Closing Date Peroxides Business Balance Sheet
(including any supporting documentation related thereto), and subsequent
payment, by Buyer or Hercules, as the case may be, of the Post-Closing
Adjustment. Hercules shall deliver the Closing Date Peroxides Business Balance
Sheet and such work papers to Buyer within sixty (60) days after the Closing
Date. Any disputes related to this process will be resolved in accordance with
the Dispute Resolution Procedure set forth in Article 13; provided, that
--------
following the Resolution Panel procedure, if the dispute remains unresolved, the
Parties will engage a mutually acceptable independent accounting firm to review
the documentation related to the Closing Date Peroxides Business Balance Sheet
and related documentation for final determination. The Parties shall fully and
timely cooperate, and shall cause their respective Affiliates to fully and
timely cooperate with such accounting firm. Such accounting firm will submit its
report to the Parties within sixty (60) days of being engaged and such report
shall be final and binding on the parties. The fees of the accounting firm shall
be borne by the Parties equally, said payments being due and payable thirty (30)
days after presentation of an invoice for such service, unless there is a good
faith contest to such invoice. Each Party and its representatives will make
available their respective work papers to the other Party and the independent
accounting firm.
ARTICLE 4 - CLOSING
4.1. Time and Place. Subject to the expiration of all applicable
--------------
waiting periods under the HSR Act and the satisfaction of the conditions set
forth in Articles 9 and 10, the
9
consummation of the Transactions (the "Closing") shall occur at Hercules Plaza,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000 at 10:00 a.m., local
time, on April 27, 2001, or at such other time and location as the Parties may
mutually agree. The date on which the Closing actually occurs is referred to in
this Agreement as the "Closing Date."
4.2. Deliveries by Hercules. At the Closing, Hercules shall:
----------------------
(a) execute and deliver to Buyer the following:
(i) the Plant Operating Agreement;
(ii) the Transition Services Agreement;
(iii) the Tolling Agreements;
(iv) the Franklin Ground Lease;
(v) the Franklin Declaration;
(vi) the Franklin Utility Supply Agreement;
(vii) the Gibbstown Ground Lease;
(viii) the Gibbstown Easements, as applicable;
(ix) the Xxxx of Sale;
(x) the Human Resources Agreement;
(xi) a certificate of a duly authorized officer of
Hercules, dated as of the Closing Date, reasonable in form and substance,
certifying as to the satisfaction of the conditions specified in Sections 9.1
and 9.2; and
(xii) such special warranty deeds, bills of sale,
endorsements, assignments, licenses and other instruments and documents,
reasonably satisfactory to Buyer, necessary or appropriate to vest in Buyer as
of the Closing Date good and marketable title to the Purchased Assets, free and
clear of any Encumbrances other than Permitted Encumbrances.
(b) in addition to the items referenced above, with respect to
the Owned Real Property and Leased Real Property, cause to be delivered the
following:
(i) a written certification ("FIRPTA Certificate") in a
form reasonably satisfactory to Buyer and dated no earlier than ten (10) days
prior to the Closing Date, which certification shall be in compliance with
Section 1445 of the Internal Revenue Code and the Treasury Regulations
thereunder that are imposed by the Foreign Investment in Real Property Tax Act
(the "Act"), certifying that Hercules is not a person or entity subject to
withholding under the Act, and containing Hercules' tax identification number
and address;
10
(ii) such instruments, affidavits and indemnifications as
may be reasonably required by the Title Company in order to issue the Title
Policies, including a so-called "GAP Indemnity," pursuant to which Hercules
shall indemnify the Title Company against any Liens, Encumbrances or other title
defects first placed of record following the Closing Date but arising from acts
or circumstances prior to the Closing Date; and
(iii) the instruments described in Section 7.9 and required
to be delivered by Hercules to Buyer on the Closing Date.
(c) simultaneously with the foregoing deliveries, take all
additional steps necessary or appropriate to put Buyer in possession and
operating control of the Peroxides Business as of the Closing; and
(d) deliver to Buyer all documents and certificates specifically
required by the Definitive Agreements to be delivered by Hercules at the Closing
or necessary to carry out the Closing as contemplated herein.
4.3. Deliveries by Buyer. At the Closing, Buyer shall:
-------------------
(a) execute and deliver to Hercules the following:
(i) the Plant Operating Agreement;
(ii) the Transition Services Agreement;
(iii) the Tolling Agreements;
(iv) the Franklin Ground Lease;
(v) the Franklin Utility Supply Agreement;
(vi) the Gibbstown Ground Lease;
(vii) the Gibbstown Easements, as applicable;
(viii) the Human Resources Agreement;
(ix) a certificate of a duly authorized officer of Buyer,
dated as of the Closing Date, reasonable in form and substance, certifying as to
the satisfaction of the conditions specified in Sections 10.1 and 10.2; and
(x) such agreements, receipts, instruments and documents,
reasonably satisfactory to Hercules, necessary to effectuate and evidence
Buyer's purchase, receipt and assumption of the Peroxides Business Items as of
the Closing.
(b) simultaneously with the foregoing deliveries, take all
additional steps necessary or appropriate to receive and assume possession and
operating control of the Peroxides Business as of the Closing;
11
(c) pay the Purchase Price, in United States dollars, by wire
transfer of immediately available funds to an account(s) of Hercules at a
bank(s) (with bank wire instructions) specified by Hercules, which specification
shall be made at least one (1) Business Day prior to the Closing Date; and
(d) deliver to Hercules all documents and certificates
specifically required by the Definitive Agreements to be delivered by Buyer at
the Closing or necessary to carry out the Closing as contemplated herein.
4.4. Certain Assignments and Consents.
--------------------------------
(a) Notwithstanding anything to the contrary contained in this
Agreement and, in the case of this Section 4.4 in its entirety, without limiting
any representation, warranty or covenant contained in this Agreement relating to
the Peroxides Business, the Purchased Assets or the Assumed Liabilities, the
Definitive Agreements shall not constitute an agreement to transfer any
Peroxides Business Item or grant any rights therein or thereto if an assignment
or attempted assignment or grant thereof, without the consent, approval,
novation or waiver ("Consent") of a Third Person, would constitute a breach or a
default thereof, cause or permit the acceleration or termination thereof, or in
any way materially and adversely affect the rights of Hercules or Buyer in
respect thereof, or the right of Buyer to conduct all or any part of the
Peroxides Business in the manner and on the terms presently enjoyed by Hercules.
Subject to the condition to Closing in Section 9.5, after the Closing, Hercules
shall use its best efforts, and Buyer shall cooperate with Hercules, each at
their own expense, to obtain Consents to all such Peroxides Business Items;
provided, however, that in obtaining such Consents, neither Hercules nor Buyer
-------- -------
shall be required to make any additional payment or take any additional action
not otherwise required under the terms of any Contract relating to the Peroxides
Business Items. If Consent is not obtained to the transfer of any Peroxides
Business Item, the Parties shall cooperate with each other in any reasonable
arrangement designed to provide Buyer the benefits and use of such Peroxides
Business Item to the greatest extent practicable, the same as if such Consent
had been obtained, and to provide Hercules the fulfillment of its duties and
obligations under such Peroxides Business Item to the greatest extent
practicable, the same as if such Peroxides Business Items had remained with
Hercules for the unexpired portion of the underlying contract term or obligation
period. Such arrangement shall remain in effect until the earlier of: (i) the
Contract or other items giving rise to the obligation to obtain such Consent
shall have been terminated or shall have expired; (ii) such Consent has been
obtained; or (iii) the Parties have agreed in writing that such Consent is no
longer necessary.
(b) The arrangements described in Section 4.4(a) may include (i)
entering into subleases, subcontracts, sale and leasebacks, use and service
agreements, supply agreements, license or sublicense or other contractual
arrangements, all upon terms and conditions no worse to Hercules than those
under the Peroxides Business Item in question, and (ii) enforcing for the
benefit of Buyer (at Buyer's expense) any and all rights of Hercules in respect
of such Peroxides Business Item (including, the enforcement rights granted to
Buyer pursuant to Section 2.1(h)); provided that Buyer shall not be required to
--------
accept or enter into, as a substitute for performance by Hercules under this
Agreement, any arrangement which would impose any material additional cost,
expense or liability on Buyer other than that which would have been incurred by
Buyer if the Peroxides Business Item had been transferred.
12
(c) The Parties recognize and acknowledge that in certain
instances item(s) (i.e., a Permit) may not be transferable (i.e., when a
transfer by Hercules is not legally possible or mutually agreed by Hercules and
Buyer to be impracticable), and that Buyer may have to apply for and obtain its
own item(s). In such instances, Buyer agrees to promptly make such applications)
and diligently pursue the obtainment of its own item(s); provided, however, that
-------- -------
if in making such application or in seeking such obtainment, Buyer seeks a
benefit or position substantially greater than that possessed or enjoyed by
Hercules in its use of such item(s) (unless required by Applicable Law or the
requirements of the Peroxides Business), Hercules shall be relieved forthwith of
any obligations related to such item(s).
(d) Notwithstanding any provision of this Section 4.4, nothing
herein shall be deemed to waive or excuse any obligation of Hercules to obtain
the Super Contract Consents, or waive or excuse any other applicable condition
for the benefit of Buyer.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF HERCULES
5.1. Representations and Warranties of Hercules. As of the date
------------------------------------------
hereof, Hercules makes the representations and warranties set forth in Sections
5.2 through 5.24 below to Buyer. The representations and warranties set forth in
Sections 5.2 through 5.24 shall survive the Closing for the applicable survival
period indicated in Section 12.1. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
SPECIFICALLY PROVIDED IN THIS ARTICLE 5, THE ENVIRONMENTAL ANNEX AND THE HUMAN
RESOURCES AGREEMENT, NO REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE,
WHETHER EXPRESS OR IMPLIED, IS MADE TO BUYER.
5.2. Organization, Good Standing and Corporate Power.
-----------------------------------------------
(a) Hercules is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business as a foreign corporation in New Jersey, Georgia and
Virginia. Except as set forth on Schedule 5.2(a), Hercules is duly qualified to
---------------
do business and is in good standing in each jurisdiction in which the Peroxides
Business Items or the nature of the Peroxides Business makes such qualification
and good standing necessary, except to the extent that the failure to be so
qualified and in good standing would not reasonably be expected to have a
Peroxides Material Adverse Effect.
(b) Hercules and each Hercules Peroxides Affiliate has the
requisite power and authority to own or lease and operate its assets and
properties, including the Purchased Assets and to conduct its businesses as
currently conducted, including the Peroxides Business. Hercules and each
Hercules Peroxides Affiliate has the requisite power and authority to execute
and deliver the Definitive Agreements, to perform its obligations thereunder and
to consummate the Transactions. The Transactions have been duly authorized by
all corporate action required to be taken on the part of Hercules and each
Hercules Peroxides Affiliate.
(c) The Definitive Agreements have been duly and validly
executed and delivered by Hercules and are valid and legally binding obligations
of Hercules and each Hercules Peroxides Affiliate, enforceable against it in
accordance with their respective terms
13
(subject to applicable bankruptcy, insolvency or other similar laws relating to
creditors' rights generally and to applicable general principles of equity).
5.3. Hercules Peroxides Affiliates. Schedule 5.3 sets forth the name
----------------------------- ------------
and jurisdiction of incorporation of the Hercules Affiliates owning or
possessing, directly or indirectly, Peroxides Business Items (each, a "Hercules
Peroxides Affiliate") and a description of the particular Peroxides Business
Items so owned or possessed respectively by each such Hercules Affiliate.
5.4. Financial Statements. Except as set forth in the notes thereto,
--------------------
the Peroxides Business Financial Statements have been prepared in accordance
with GAAP from the books and records kept by Hercules and present fairly in all
material respects the financial position of the Peroxides Business and the
results from operations of the Peroxides Business at the dates and for the
periods indicated therein. The reserves on the balance sheets of the Peroxides
Business, if any, included in the Peroxides Business Financial Statements are
adequate in all material respects as of the date of the respective statements
contained therein. The Closing Date Peroxides Business Balance Sheet, when
available and delivered in accordance with Section 3.2, shall have been prepared
on the same basis as the Peroxides Business Financial Statements.
5.5. Absence of Changes in the Peroxides Business.
--------------------------------------------
(a) Except as set forth on Schedule 5.5(a), since December 31,
---------------
2000, Hercules has operated the Peroxides Business in the Ordinary Course and
there has not occurred any change or event which, individually or in the
aggregate, could reasonably be expected to result in a Peroxides Material
Adverse Effect, or:
(i) any material damage or destruction, whether or not
covered by insurance, materially affecting the Purchased Assets or the
operations or properties, whether owned or leased, of the Peroxides Business;
(ii) any sale of (other than in the Ordinary Course),
transfer or assignment of, or imposition of any Encumbrance (other than
Permitted Encumbrances) on, any of the Purchased Assets;
(iii) any material transaction or commitment made, or any
material contract, agreement or arrangement entered into or amended, relating to
the Peroxides Business or any Purchased Asset or any relinquishment of any
material contract or other right, other than transactions and commitments made
in the Ordinary Course;
(iv) any change in any method of accounting or accounting
practice with respect to the Peroxides Business;
(v) any other event or condition of any character
pertaining to, and materially and adversely affecting the assets, liabilities,
financial position, results of operations or prospects of the Peroxides
Business; or
14
(vi) any agreement or commitment entered into to do any of
the foregoing.
(b) Hercules has not received, and has no reason to suspect that
it may receive any notices from any customers, suppliers, groups of employees,
licensors or licensees of the Peroxides Business, or any other Person, that has
resulted in or may reasonably be expected to result in a Peroxides Material
Adverse Effect.
5.6. Conflicting Agreements; Restrictions. Except as set forth on
------------------------------------
Schedule 5.6, neither the execution, delivery or performance of the Definitive
------------
Agreements nor the consummation of the Transactions by Hercules and each
Hercules Peroxides Affiliate will: (a) conflict with or constitute a breach by
Hercules of its Certificate of Incorporation or Bylaws or the articles of
incorporation or bylaws of any Hercules Peroxides Affiliate, (b) result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in the termination, cancellation or violation of, or give rise to the
acceleration of the time for performance or payment under, in any case, whether
with or without the passage of time or the giving of notice or both, any
material right, obligation, agreement, contract, instrument, or evidence of
indebtedness to which Hercules or any Hercules Peroxides Affiliate is a party or
by which Hercules is bound; (c) except for the applicable requirements of the
HSR Act and such Consents, approvals, Orders, authorizations, filings or notices
as set forth on Schedule 5.6, violate, in any material respect, any provision of
------------
any existing law, statute, rule or regulation of any jurisdiction or of any
Order to which Hercules or any of its assets or properties is subject; or (d)
result in the creation or imposition of any Encumbrance on any of the Peroxides
Business Items or the Purchased Assets.
5.7. Title. Subject to the provisions of Article 2, Hercules has or
-----
shall have on the Closing Date, and will transfer and deliver to Buyer on the
Closing Date, with respect to the Gibbstown Plant and Franklin Plant and other
owned Purchased Assets, good and marketable and, if applicable, fee simple title
to or a valid and enforceable leasehold estate, license in, or right to use the
Purchased Assets, free and clear of any Encumbrances, other than Permitted
Encumbrances. After giving effect to the consummation of the Transactions, Buyer
shall own and possess all right, title and interest in and to or, in the case of
Purchased Assets held under lease or license, a valid and enforceable leasehold
estate, license in, or right to use each and all of the Purchased Assets, free
and clear of any Encumbrances, other than Permitted Encumbrances.
5.8. Real Property.
--------------
(a) Except as set forth on Schedule 5.8(a), the Gibbstown Plant
---------------
and the Franklin Plant comprise all of the owned real property used by Hercules
or any Affiliates of Hercules necessary to conduct the Peroxides Business (the
"Owned Real Property"). Hercules has delivered or will promptly deliver to Buyer
correct and complete copies of any deeds, existing title policies, surveys or
other supporting documentation relating to the Owned Real Property, and correct
and complete copies of all leases demising the Leased Real Property. With
respect to the Owned Real Property, and except as disclosed on Schedule 5.8(a):
---------------
15
(i) the Owned Real Property is free and clear of any
mortgage lien, deed of trust, security interest or other similar lien (each, a
"Lien") except as to any Liens that shall be discharged of record by Hercules on
or before the Closing Date;
(ii) there are no leases or other agreements granting to any
party or parties the right of use or occupancy of any portion of the Owned Real
Property (each, a "Third Party Lease"), and there are no parties other than
Hercules or Affiliates of Hercules in possession of the Owned Real Property;
(b) Schedule 5.8(b) lists all of the Real Property leased to
---------------
Hercules or any of Hercules' Affiliates and used or occupied by Hercules or any
Affiliate of Hercules in connection with the conduct of the Peroxides Business
(collectively, the "Leased Real Property"). Neither Hercules nor any Affiliate
of Hercules is a tenant, tenant, subtenant or licensee under any leases or
licenses pertaining to the Peroxides Business other than the leases described on
Schedule 5.8(b) (each, a "Business Lease;" the Third Party Leases and Business
---------------
Leases being sometimes collectively referred to as the "Leases");
(c) Except as set forth on Schedule 5.8(c) or in the
---------------
Environmental Annex, to the Knowledge of Hercules, all of the Owned Real
Property, Purchased Buildings and Leased Real Property has been grandfathered,
has received and has in effect a valid variance or complies with all applicable
building and zoning laws, ordinances, regulations and Permits in effect on the
date hereof;
(d) To the Knowledge of Hercules, there has been no damage,
destruction or loss of any of the Owned Real Property. There are no
condemnation, appropriation or other proceedings involving any taking of any of
the Owned Real Property or any of the Leased Real Property pending or, to the
Knowledge of Hercules, threatened. This Section 5.8(d) is not a representation
with respect to environmental issues.
(e) The Owned Real Property has direct vehicular access to
public streets, or is benefited by valid and perpetual appurtenant easements
over private property for such ingress to and egress from all such plants,
buildings and structures. To the Knowledge of Hercules, the buildings,
structures and other improvements comprising the Owned Real Property do not
encroach upon any adjoining land, and no buildings, structures or other
improvements on any land adjoining the Owned Real Property encroaches upon any
of the Owned Real Property. Seller has received no notice of any outstanding or
alleged breach or failure to perform any covenant, obligation, condition,
agreement or restriction affecting the Owned Real Property.
5.9. Personal Property.
-----------------
(a) To the Knowledge of Hercules, Schedule 5.9(a) lists all
---------------
places where any Inventories, Equipment or items of personal property comprising
Purchased Assets.
(b) Except for the items of personal property leased by Hercules
or an Hercules Affiliate and identified as such on Schedule 5.9(b)
---------------
(collectively, the "Leased Personal Property"), no Third Person owns or holds
any interest in or to any of the personal property used by Hercules in the
operation of the Peroxides Business.
16
(c) Except as set forth on Schedule 5.9(c), all of the
---------------
Equipment, Inventory and items of personal property used in the Peroxides
Business have been maintained in a manner consistent with reasonable business
practice and are in good condition and repair, ordinary wear and tear excepted.
5.10. Intellectual Property.
---------------------
(a) Schedule 5.10(a) lists all Intellectual Property used in the
----------------
Peroxides Business. To the Knowledge of Hercules, Hercules owns, or possesses
all adequate rights in, all the Intellectual Property, or shall so own or
possess such rights on the Closing Date. Except as set forth on Schedule
--------
5.10(a), (i) all patents, trademarks, service marks and other items of the
-------
Intellectual Property that are the subject of filing are in full force and
effect and have, to the Knowledge of Hercules, been validly issued, and (ii)
there is no Claim pending, or to the Knowledge of Hercules, threatened in
writing against Hercules and/or its Affiliates with respect to an alleged or
actual infringement, of any patent, trademark or intellectual property or rights
of Third Persons, and, to the Knowledge of Hercules, the Intellectual Property
does not infringe on any such property or rights.
(b) To the Knowledge of Hercules, except as otherwise expressly
provided in any contract, agreement or commitment identified on Schedule
--------
5.10(b), Hercules has no obligation to compensate others for the use of any of
-------
the Intellectual Property. In addition, except as otherwise expressly provided
in any contract, agreement or commitment identified on Schedule 5.10(b),
----------------
Hercules has not granted to any other Person any license or other right to use
any of the Intellectual Property, whether or not requiring payment.
5.11. Contracts and Agreements.
------------------------
(a) Schedule 5.11(a) contains a list of all contracts,
----------------
agreements and commitments to which Hercules is a party or is bound and which
are material to and/or necessary (based upon past practices) for the conduct of
the Peroxides Business in the Ordinary Course (each a "Peroxides Material
Contract" and collectively, the "Peroxides Material Contracts"), including:
(i) each order or contract for the purchase of raw
materials or supplies used by the Peroxides Business which provides for payments
in excess of $25,000 or has a remaining term of six months or more;
(ii) each order or contract with customers for the sale of
products or services by the Peroxides Business which provides for payments in
excess of $25,000 or has a remaining term of six months or more;
(iii) each agreement that restricts after the Closing the
right of Buyer to engage or compete in any type of business with any Person or
in any area or to own, operate, sell, transfer, pledge or otherwise dispose of
or encumber the Purchased Assets;
(iv) each agreement (whether of surety, guarantee, letter
of credit or indemnification), indenture, loan agreement, note or other
indebtedness which relates to the Purchased Assets and will be an Assumed
Liability;
17
(v) each distributorship, sales agency or sale
representative agreement with a term in excess of three (3) months or which is
not cancelable in one hundred and eighty (180) days or less without penalty or
premium;
(vi) each trade or barter contract, to be performed on or
after the Closing Date, that could impose more than $25,000 of obligations
(monetary or otherwise) on Hercules or Buyer;
(vii) each contract for the production of goods or the
provision of services that, under existing circumstances could reasonably be
expected to cause Buyer to incur a loss after the Closing Date in the
performance thereof which provides for payments in excess of $25,000; and
(viii) each contract with any Affiliate of Hercules or
agreement otherwise not negotiated at "arm's length";
(ix) each contract or agreement relating to the
maintenance or repair of the Equipment which provides for payments in excess of
$25,000; and
(x) each contract as to which the Consent of a Third
Person is required for the assignment thereof to Buyer or the grant of any
rights therein to Buyer and such assignment or grant is reasonably necessary for
the conduct of the Peroxides Business.
(b) Schedule 5.11(b) sets forth each Super Contract Consent.
----------------
(c) Notwihstanding anything to the contrary, Hercules is not
representing or warranting that every Peroxides Business Item to be assigned
hereunder is assignable. The Parties acknowledge that in the event of such non-
assignability, it will be covered by Section 4.4.
(d) Hercules has delivered or made available to Buyer copies of
all written Peroxides Material Contracts and descriptions of the terms of all
oral Peroxides Material Contracts. Except as set forth on Schedule 5.11(d), each
----------------
Peroxides Material Contract is in full force and is a valid and legally binding
agreement of Hercules and, to the Knowledge of Hercules, of the other parties
thereto. Except as set forth on Schedule 5.11(d), (i) neither Hercules nor any
----------------
other party thereto is in breach or default under any Peroxides Material
Contract, and (ii) there exists no condition or event (and Hercules has not
received written notice of any such condition or event) which on the date hereof
constitutes a breach or default, early termination or cancellation or which,
after notice or lapse of time or both, would constitute a breach or default,
early termination or cancellation in connection with any Peroxides Material
Contract.
5.12. Inventories. Except as set forth on Schedule 5.12, all
----------- -------------
Inventory, including raw materials, work-in-process and finished goods,
transferred to Buyer as part of the Purchased Assets consists of a quality and
condition usable, leasable or saleable in the Peroxides Business in the Ordinary
Course and is valued in accordance with GAAP.
18
5.13. Accounts Receivable. Schedule 5.13 sets forth, by debtor,
------------------- -------------
the amount and age of all Accounts Receivable as of December 31, 2000. Except as
set forth on Schedule 5.13 and subject to Section 8.2, all Accounts Receivable
-------------
transferred to Buyer as part of the Purchased Assets will have arisen out of the
sale of products in the Ordinary Course, consist of accounts that are good and
collectible in the Ordinary Course of the Peroxides Business, and have been
recorded in accordance with GAAP.
5.14. [Intentionally Omitted.]
5.15. Customers. Schedule 5.15(a) lists the 20 largest customers (by
--------- ----------------
dollar volume) of the Peroxides Business during the year ended December 31,
2000. Except as set forth on Schedule 5.15(b) or in any written contract or
----------------
arrangement disclosed in any Schedule to this Agreement, there are no special
payment terms for any of the customers listed on Schedule 5.15(a). To the
----------------
Knowledge of Hercules, there are no existing or anticipated changes in the
policies or conditions, financial or otherwise, of the customers of the
Peroxides Business which could reasonably be expected to have a Peroxides
Material Adverse Effect.
5.16. Suppliers. Schedule 5.16 sets forth a list of the 10
--------- -------------
largest suppliers (by dollar volume) of products and services to the Peroxides
Business during the year ended December 31, 2000. Since December 31, 2000, no
material supplier of the Peroxides Business has declined to continue to act as
such or indicated any present or future intention to cease to do so or to
materially change the terms of such arrangements.
5.17. Consents. Except as set forth on Schedule 5.17 and subject to
-------- -------------
Section 2.16 and 4.4, the execution, delivery and performance by Hercules of the
Definitive Agreements do not require the obtaining of any Consent or the taking
of other action of, or the making of any filing with or the giving of any Notice
to, any Authority or any other Person (including with respect to any Permit)
which have not been obtained, made or given, except (a) approvals under the HSR
Act and (b) where failure to obtain such Consents or actions, make such filings
or give such Notices (in each case from, with or to a Person, including any
Authority) would not have a Peroxides Material Adverse Effect.
5.18. No Litigation. Except for the matters set forth on Schedule
------------- --------
5.18, there is no Claim or investigation pending or, to the Knowledge of
----
Hercules, threatened against Hercules and, affecting any Peroxides Business Item
or which, individually or in the aggregate, would or could be reasonably
expected to give rise to an injunction to prevent or materially delay the
Transactions or challenge the validity of the Definitive Agreements or affect
the conduct of the Peroxides Business in the Ordinary Course.
5.19. Non-Environmental Laws; Permits.
-------------------------------
(a) Excluding Environmental Laws (as defined in the
Environmental Annex), Hercules has complied and is complying with all applicable
judgments, rulings, writs, injunctions, awards, decrees, laws, statutes, orders,
ordinances, rules and regulations promulgated by any Authority to which the
Purchased Assets or the Peroxides Business are subject. Except as set forth on
Schedule 5.19(a), none of Hercules, any of its Affiliates or the
----------------
19
Peroxides Business are subject to any material outstanding judgments, rulings,
writs, injunctions, awards, decrees or orders affecting the Peroxide Business
Items or the Peroxides Business.
(b) Schedule 5.19 (b) sets forth all Permits, particularly
-----------------
identifying each of the material Permits as to which Consent of a Third Person
is required for the assignment thereof to Buyer or the grant of any rights
therein to Buyer (the "Material Permits") and each of the Permits that are not
legally transferable to Buyer. Except as set forth on Schedule 5.19(b), all
-----------------
Permits necessary (based upon past practices) for the conduct of the Peroxides
Business have been duly obtained and are in full force and effect, and there are
no circumstances currently existing or proceedings pending or, to the Knowledge
of Hercules, threatened that could reasonably be expected to result in the
revocation, cancellation or suspension, or any adverse modification, of any
thereof which would, individually or in the aggregate, reasonably be expected to
result in a Peroxides Material Adverse Effect.
(c) In the event that any one or more of the Permits to be
transferred to Buyer are not transferred on or before the Closing Date, the
provisions of Section 2.13 relating to interim operations of the Peroxides
Business will be adequate to allow Buyer to operate the Peroxides Business
following the Closing Date in accordance with Applicable Laws.
5.20. Taxes.
-----
(a) Hercules has: (i) timely filed all returns required to be
filed prior to or on the Closing Date with respect to all Taxes; (ii) timely
paid all Taxes shown to have become due prior to or on the Closing Date pursuant
to such Tax returns; and (iii) timely paid (or appealed, protested or contested)
all other Taxes for which notice of assessment or demand for payment has been
made by any Authority and with respect to which the time in which to protest,
appeal or contest has lapsed.
(b) To the Knowledge of Hercules, the Tax returns filed by or on
behalf of Hercules have been prepared in accordance with all Applicable Laws and
requirements and accurately reflect the taxable income (or other measure of Tax)
of the Person filing the return.
(c) To the Knowledge of Hercules, there are no Tax liens upon
any of the Purchased Assets, except liens with respect to real property Taxes
not yet due with respect to the Real Property or the Purchased Buildings, and
there is no audit or other proceeding or investigation pending or, to Hercules'
Knowledge, threatened, or any position taken on any Tax return of Hercules which
is likely to give rise to a Tax lien upon any of the Purchased Assets.
5.21. Environmental Matters. Any representations, warranties and
---------------------
covenants applicable to environmental matters, except with respect to
environmental Permits, are set forth solely in the Environmental Annex.
5.22. Labor Matters. Except as set forth on Schedule 5.22, with
------------- -------------
respect to the Peroxides Business:
(a) Hercules is not a party to any labor or collective
bargaining agreement with respect to any employees, no employees are represented
by any labor
20
organization, no union has been certified as a collective bargaining
representative of any employees, Hercules has not recognized and is not
obligated to bargain with any union, and, to the Knowledge of Hercules, there
are no organizing activities (including any demand for recognition or
certification proceedings pending or threatened to be brought or filed with the
National Labor Relations Board or other labor relations tribunal) involving any
of its employees;
(b) there are no strikes, work stoppages, slowdowns,
lockouts, unfair labor practice charges, arbitrations, grievances, or any
actions by the Department of Labor or the National Labor Relations Board pending
or, to the Knowledge of Hercules, threatened against or involving Hercules;
(c) within the three (3) year period immediately preceding
the date of this Agreement, Hercules has not received: (i) any written complaint
from any current or former employee that Hercules or any of its current or
former employees, agents or consultants have engaged in unlawful harassment; or
(ii) any written complaint (from current or former employees) regarding
discrimination in employment; and
(d) during the three (3) year period immediately preceding
the date of this Agreement, there have been no layoffs of employees by Hercules
other than in the Ordinary Course.
5.23. Complete Purchased Assets. Except as set forth on Schedule
------------------------- --------
5.23 and except for the Excluded Items, the Purchased Assets include all of the
----
assets, properties and rights which were used by Hercules or its Affiliates in
the operation of the Peroxides Business in the Ordinary Course. The Purchased
Assets, together with the rights and obligations of Buyer under the Ancillary
Agreements, are sufficient to permit the continued operation of the Peroxides
Business by Buyer after the Closing in substantially the same manner as
currently conducted.
5.24. Insurance. Schedule 5.24 sets forth a description of the
--------- -------------
Hercules Insurance. None of the Hercules Insurance (including insurance coverage
of engineering services) shall accrue to Buyer's benefit or be applicable to the
Peroxides Business and/or any of the Peroxides Business Items after Closing.
5.25. Disclosure. To the Knowledge of Hercules, no representation
----------
or warranty by Hercules hereunder, or information contained in the Annexes,
Exhibits or Schedules hereto, contains any untrue statement of material fact or
omits to state a material fact that gives rise to a claim and was necessary in
order to make the statements contained therein or herein, in light of the
circumstances in which they were made, not misleading.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF BUYER
6.1. Representations and Warranties of Buyer. As of the date
---------------------------------------
hereof, Buyer hereby makes the representations and warranties set forth in
Sections 6.2 through 6.6 below to Hercules. The representations and warranties
set forth in Sections 6.2 through 6.6 shall survive the Closing for the
applicable survival period indicated in Section 12.1. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SPECIFICALLY PROVIDED IN THIS
21
ARTICLE 6, BUYER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE,
WHETHER EXPRESS OR IMPLIED, TO HERCULES.
6.2. Organization, Good Standing and Corporate Power.
-----------------------------------------------
(a) Buyer is a corporation, duly organized, validly existing and
in good standing under the laws of the State of Ohio. Buyer is duly qualified to
do business and is in good standing in each jurisdiction in which the character
of its assets, whether owned or leased, or the nature of its business makes such
qualification necessary, except to the extent that failure to be so qualified
has not had or would not reasonably be expected to have a Buyer Material Adverse
Effect.
(b) Buyer has the requisite power and authority to own or lease
and operate its assets and conduct its business. Buyer has the requisite power
and authority to execute the Definitive Agreements and to consummate the
Transactions. The execution, delivery and performance of the Definitive
Agreements and the Transactions have been duly authorized by all corporate
action required on the part of Buyer.
(c) The Definitive Agreements have been duly and validly
executed and delivered by Buyer, and are valid and legally binding obligations
of Buyer, enforceable against it in accordance with their respective terms
(subject to applicable bankruptcy, insolvency or other similar laws relating to
creditors' rights generally and to applicable general principles of equity).
6.3. Conflicting Agreements; Restrictions. Except as set forth on
------------------------------------
Schedule 6.3, neither the execution, delivery or performance of the Definitive
-------------
Agreements nor the consummation of the Transactions will: (i) conflict with or
constitute a breach of the Articles of Incorporation or Regulations of Buyer;
(ii) result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in a violation of, or give rise to the acceleration
of the time for performance or payment under, any agreement, contract,
instrument, evidence of indebtedness, or Order to which Buyer is a Party or by
which Buyer is bound; (iii) except for the applicable requirements of the HSR
Act, violate any provision of any existing law, statute, rule or regulation of
any jurisdiction or of any Order to which Buyer or any of its assets or
properties is subject; or (iv) result in the creation or imposition of any
material Encumbrance on any of Buyer's assets, properties or business.
6.4. Insurance. Buyer acknowledges and agrees that all Hercules
---------
Insurance maintained by Hercules on behalf of Hercules and related to the
Peroxides Business and/or the Purchased Assets shall be solely for Hercules'
benefit and, as of Closing Date, Buyer shall be responsible for all insurance
related to the Peroxides Business and/or the Purchased Assets thereafter. Buyer
shall have no right to seek coverage under and through any Hercules insurance
policy or self-insurance program.
6.5. Consents. Except as set forth on Schedule 6.5, the execution,
-------- ------------
delivery and performance by Buyer of the Definitive Agreements do not require
Buyer to obtain any Consent or take other action of, or make any filing with or
give any notice to, any Authority or any other
22
Person (including with respect to any Permit) which has not been obtained, made
or given, except approvals under the HSR Act.
6.6. No Litigation. Except for the matters set forth on Schedule 6.6,
------------- ------------
there is no Claim pending or, to the Knowledge of Buyer, threatened against
Buyer, including any Claim that could prevent or delay the Transactions or that
challenges the validity of the Definitive Agreements.
6.7. Buyer Due Diligence Buyer agrees that it will not bring any
-------------------
claim alleging a breach of the representation and warranty contained in Section
5.25 of this Agreement to the extent that the subject of the alleged breach is
or was covered in the written due diligence reports prepared by Buyer's
advisors, which reports summarize the results of their due diligence
investigation of Hercules and the Peroxides Business.
ARTICLE 7 - PRE-CLOSING AGREEMENTS
7.1. Best Efforts.
------------
(a) Promptly after the execution hereof and during the Pre-
Closing Period, each Party shall cooperate with the other Party and use all best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under any Applicable Laws, to
ensure that the conditions set forth in Articles 9 and 10 are satisfied and to
consummate and make effective the Transactions in accordance with the respective
terms and conditions of the Definitive Agreements.
(b) Prior to the date hereof, each Party has made filing(s)
under the HSR Act with respect to the consummation of the Transactions. Each
Party shall use all best efforts to respond promptly to any requests for
additional information made by the United States Federal Trade Commission or the
United States Department of Justice and to provide any supplemental information
which may be requested pursuant to the HSR Act. All such filings shall comply in
all material respects with the requirements of the respective laws or
regulations pursuant to which they are filed.
(c) In accordance with Sections 2.16 and 4.4, each Party shall
use all best efforts to obtain, and to cooperate with the other Party in
obtaining, all authorizations, consents, orders and approvals of any Authority
or other Person that may be or become necessary in connection with the
consummation of the Transactions prior to or after the Closing.
7.2. Conduct of Business; Affirmative Covenants. During the Pre-
------------------------------------------
Closing Period, except as set forth on Schedule 7.2 or as Buyer may otherwise
------------
consent to in writing (which consent shall not be unreasonably withheld or
delayed) or as otherwise specifically contemplated by the Definitive Agreements,
with respect to the Peroxides Business and/or the Peroxides Business Items, as
applicable, Hercules shall:
(a) operate the Peroxides Business in the Ordinary Course, in
such a manner and to such an extent that neither such business nor any material
part thereof undergoes
23
or experiences a Peroxides Material Adverse Effect and in compliance with all
Applicable Laws, rules, regulations and Permits, and perform its obligations in
relation to the Contracts;
(b) use, repair and, if necessary, replace the Peroxide Business
Items in a reasonable manner consistent with past practice and maintain the
Peroxide Business Items in substantially their current condition, ordinary wear
and tear excepted;
(c) use all reasonable commercial efforts to preserve intact its
present business organization, keep available the services of its present
officers and employees, preserve its relationships with customers and others
having business relationships with it (which shall include an obligation to pay
suppliers, Taxes and other liabilities on a timely basis and consistent with
past practice), and refrain from changing any of its business policies except in
the Ordinary Course (including, without limitation, advertising, marketing,
pricing, purchasing, personnel, sales and budget policies);
(d) maintain its present insurance in full force and effect; and
(e) maintain its books of account and records in the usual and
ordinary manner and in accordance with its accounting principles as historically
applied.
7.3. Conduct of Business; Negative Covenants. During the Pre-Closing
---------------------------------------
Period, except as set forth on Schedule 7.3 or as Buyer may otherwise consent to
------------
in writing (which consent shall not be unreasonably withheld or delayed) or as
otherwise specifically contemplated by the Definitive Agreements, with respect
to the Peroxides Business and/or the Peroxides Business Items, as applicable
Hercules shall not:
(a) other than in the Ordinary Course, incur any debt,
obligation or liability (whether accrued, contingent, absolute, determined,
determinable or otherwise) that includes obligations (monetary or otherwise) to
be performed by Buyer after the Closing Date;
(b) other than in relation to sales of Inventories in the
Ordinary Course, sell, transfer, lease, mortgage, pledge or subject to an
Encumbrance (other than Permitted Encumbrances) any of the Purchased Assets;
(c) make any change in the accounting principles, methods or
practices followed by it or depreciation or amortization policies or rates;
(d) enter into any transaction, take any action, or by inaction
permit any event to occur, which results in (i) any of the representations and
warranties of Hercules contained in the Definitive Agreements not being true and
correct in all material respects immediately after the occurrence of such
transaction, action or event or on the Closing Date or (ii) a material breach of
any of the agreements and covenants of Hercules contained in the Definitive
Agreements; or
(e) agree or otherwise commit to take any of the actions
prohibited by the foregoing paragraphs.
24
7.4. Public Announcements. During the Pre-Closing Period, Hercules
--------------------
and Buyer shall not make any disclosure to Third Persons of the execution and
terms of the Definitive Agreements, including as may be required by law or by
the obligations pursuant to any agreement with any securities exchange, without
the consent of the other Party, which consent shall not be unreasonably
withheld. Following the Closing, Buyer and Hercules shall inform the other Party
prior to making any disclosure of the terms and conditions of the Definitive
Agreements.
7.5. Required Notices. At all times during the Pre-Closing Period,
----------------
Hercules shall, upon becoming aware thereof, promptly give written Notice to
Buyer of any facts or circumstances or the occurrence of any event or the
failure of any event to occur, which results in, which will result in or which
may reasonably be expected to result in a Peroxides Material Adverse Effect.
7.6. Access.
------
(a) During the Pre-Closing Period, each Party shall cause one or
more of its representatives to confer on a regular basis with representatives of
the other Party to report on the general and financial status of the ongoing
operations of the Peroxides Business.
(b) During the Pre-Closing Period, Hercules shall provide, or
cause to be provided to, Buyer and its representatives reasonable access
(without interference to normal business operations and subject to the rights of
Third Persons) to the properties, books, records, contracts, representatives,
officers and employees of Hercules. Hercules agrees that no such information or
access shall affect or limit the scope of the representations and warranties of
Hercules contained in the Definitive Agreements or limit liability for breach of
any such representation or warranty. Hercules agrees to prepare, or to provide
Buyer with reasonable assistance in preparing, "carved out" historical financial
statements for the Peroxides Business.
7.7. Acquisition Proposals.
---------------------
(a) From the date hereof through the Closing or the termination
of this Agreement, whichever occurs first, Hercules shall not, directly or
indirectly, solicit or encourage, any inquiries, discussions or proposals for,
furnish any information for the purpose of evaluating or determining whether to
make or pursue any inquiries or proposals with respect to, continue, propose or
enter into negotiations looking toward, enter into or consummate any agreement
or understanding providing for, or take any action with respect to, any sale,
transfer, assignment or disposition (including a repositioning) of any portion
of the Peroxides Business (other than in accordance with Section 7.2). Hercules
will promptly notify Buyer, upon a Hercules officer becoming aware thereof, if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated with, Hercules, any stockholder, officer, director, representative, or
agent of Hercules or any Hercules Affiliate.
(b) Notwithstanding anything to the contrary, Section 7.7(a)
shall not be applicable to matters relating to the non-Peroxides Business part
of Hercules, including the
25
Excluded Resins Businesses, or the composition, organization, or activities of
Hercules, without the Peroxides Business, following the Closing.
7.8. Casualty Loss.
-------------
(a) In the event that any Purchased Asset is destroyed or
substantially damaged by a fire or other casualty during the Pre-Closing Period,
then promptly after first having knowledge of such destruction or damage,
Hercules shall give Notice thereof to Buyer. Such Notice shall include the
particulars of the casualty, destruction or damage and the particulars and
estimated cost (based on replacement cost or another reasonable basis) of the
full correction or remediation thereof as proposed by Hercules.
(b) If the Peroxides Business can be conducted in the Ordinary
Course, including a reasonable operation of the Gibbstown Plant, notwithstanding
such destruction or damage, then the Purchase Price shall be adjusted in a
manner agreed by the Parties and the Closing shall be effectuated with such
adjusted Purchase Price and, in case of destruction, the destroyed item shall be
deemed deleted from the Purchased Assets, and, in case of damage, the damaged
item should be included in the Purchased Assets on an "as is, where is"
condition and basis.
(c) If the nature of the destroyed or damaged Purchased Asset is
such that the destruction or damage so suffered makes it reasonably
impracticable to operate the Peroxides Business in the Ordinary Course (which
shall include a material risk of failure to comply with Applicable Laws,
Permits, Contracts or Bids) and the destruction or damage cannot be practically
or reasonably remedied by an adjustment of the Purchase Price, then the Closing
shall be delayed and the Parties shall attempt in good faith to negotiate a fair
and equitable resolution of the correction or remediation of such destruction or
damage. If the Parties do not agree upon a resolution within thirty (30)
Business Days after receipt by Buyer of Notice of the destruction or damage,
then either Party may terminate this Agreement pursuant to Section 11.1(d). If
by the said thirtieth (30th) Business Day the Parties have agreed upon a
resolution, then this Agreement shall be amended to the extent necessary to
incorporate such resolution and the Closing shall be effectuated in accordance
with the amended Agreement.
7.9. Real Estate Matters.
-------------------
7.9.1. Gibbstown Plant.
------ ---------------
(a) The parties acknowledge that Hercules shall retain title to
the balance of the real estate owned by Hercules which is adjacent to the
Gibbstown Land (herein, the "Gibbstown Retained Property").
(b) Hercules has advised Buyer that, as a condition to the
conveyance of fee simple title to the Gibbstown Land, Hercules must obtain
subdivision approvals from the appropriate governmental authorities, in order to
separate the Gibbstown Land from the Gibbstown Retained Property, and that
Hercules does not expect to obtain such approvals until after the Closing Date.
Accordingly, Hercules and Buyer covenant and agree that on the Closing Date:
26
(i) Hercules shall convey to Buyer the Gibbstown Plant,
excluding the Gibbstown Land, by the Xxxx of Sale and special warranty deed (or
its equivalent) in accordance with the terms of this Agreement and Hercules
shall deliver zoning compliance letters or other reasonable evidence confirming
that the Owned Real Property is zoned to allow the operation of the Peroxides
Business;
(ii) Hercules, as landlord, and Buyer, as tenant, shall enter
into a ground lease agreement in the form and substance of Schedule 7.9.1(b)(ii)
---------------------
(the "Gibbstown Ground Lease");
(iii) at its cost, Hercules shall obtain and deliver to the Title
Company a release of the judgment lien presently encumbering the Gibbstown Land
(the "Judgment Lien"), or such other instruments and affidavits reasonably
required by the Title Company to affirmatively insure Buyer against such
Judgment Lien;
(iv) at Buyer's cost, Hercules shall cause the Lawyers Title
Insurance Company (the "Title Company") to deliver to Buyer an ALTA leasehold
policy of title insurance insuring Buyer's leasehold interest in the Gibbstown
Land, and fee simple title to the Gibbstown Plant excluding the Gibbstown Land,
free and clear of all Encumbrances other than the Permitted Encumbrances, in an
amount equal to that portion of the Purchase Price allocated to the Gibbstown
Plant in accordance with Section 2.18, with standard exceptions deleted, with
affirmative insurance as to any appurtenant easements, and such other
endorsements reasonably requested by Buyer (the "Gibbstown Leasehold Policy");
(v) Hercules shall convey to Buyer pursuant to the Xxxx of Sale
and a special warranty deed (or its equivalent) the existing water pipeline
running from the waste treatment plant on the Gibbstown Land to the Delaware
river and more particularly shown on Schedule 7.9.1(b)(v) (the "Water Line"),
--------------------
and Hercules shall grant to Buyer a twenty (20) foot wide perpetual, insurable
easement, appurtenant to the Gibbstown Land, to use, operate, maintain, repair
and replace the Water Line in the form and substance of Schedule 7.9.1(b)(v)
--------------------
(the "Water Line Easement");
(vi) Hercules shall grant to Buyer a reciprocal, perpetual,
insurable access easement appurtenant to the Gibbstown Land and the Gibbstown
Retained Property for vehicular and pedestrian ingress and egress over the
existing road shown on Schedule 7.9.1(b)(vi) (the "Gibbstown Reciprocal Access
---------------------
Easement"), in the form and substance of Schedule 7.9.1(b)(vi);
---------------------
(vii) at Hercules's cost, Hercules shall cause to be delivered to
Buyer a draft plat of subdivision, or similar map or survey, prepared in
accordance with applicable law and containing a metes and bounds description of
the Gibbstown Land, the Gibbstown Retained Property, the Waterline Easement, the
Gibbstown Reciprocal Access Easement, and any other recorded easements
appurtenant to the Gibbstown Land; provided however, Hercules shall not be
-------- -------
required or obligated to provide or deliver any scope or level of detail in the
survey other than the minimum standards required to obtain the Subdivision
Approvals (as defined below) and as may be required to lawfully record any of
the easements provided herein or the Gibbstown Ground Lease (the "Gibbstown
Survey"); and
27
(viii) to the extent Buyer requires an ALTA Survey which may
require additional detail other than as provided by the Gibbstown Survey, then
any such additional survey requirements shall be performed at Buyer's cost.
(ix) at its cost, Hercules shall obtain and deliver to Buyer a
release of mortgage releasing the existing mortgage lien encumbering the
Gibbstown Plant in favor of Bank of America, or such other instruments and
assurances reasonable required by the Title Company to issue the Gibbstown
Leasehold Policy to Buyer, and any lender's policy of title insurance to Buyer's
lender, on the Closing Date without exception for such mortgage lien.
(x) at its cost, Hercules shall record a Declaration to allow
Hercules to enter the Gibbstown Land to maintain the existing pump and treat
xxxxx and ground water monitoring xxxxx located thereon, and to access the
driveways, parking areas and such other areas comprising the Gibbstown Land to
the extent necessary to perform Hercules's remediation obligations in accordance
with the terms of this Agreement, provided that such activity shall not
unreasonably interfere with Buyer's business operations conducted thereon, and
shall be subject to Buyer's reasonable rules and regulations concerning plant
safety and security in the form and substance of Schedule 7.9.1(b)(x) (the
--------------------
"Gibbstown Declaration").
(c) Within twelve months following the Closing Date (the "Conveyance
Deadline"), Hercules shall:
(i) obtain and deliver to Buyer a plat of subdivision, or
similar map or survey, approved by all governmental authorities having
jurisdiction thereof, sufficient to permit Hercules to convey to Buyer fee
simple title to the Gibbstown Land as one or more separate legal lots or tax
parcels (the "Subdivision Approvals");
(ii) execute and deliver to Buyer a special warranty deed (or
its equivalent) conveying to Buyer the fee simple interest to the Gibbstown Land
free and clear of all Encumbrances other than the Permitted Encumbrances; and
(iii) at Buyer's cost, cause the Title Company to deliver to
Buyer an ALTA owners policy of title insurance insuring Buyer's fee simple
interest in the Gibbstown Land free and clear of all Encumbrances other than the
Permitted Encumbrances, in an amount equal to that portion of the Purchase Price
allocated to the Gibbstown Land in accordance with Section 2.18, with standard
exceptions deleted, with affirmative insurance as to any appurtenant easements,
and such other endorsements reasonably requested by Buyer (the "Gibbstown
Owner's Policy").
Upon delivery of such items by Hercules, Buyer shall execute and
deliver to Hercules a reciprocal perpetual easement, appurtenant to the
Gibbstown Retained Property, for vehicular and pedestrian ingress and egress
over that portion of the Gibbstown Land described on Schedule 7.9.1(c)
-----------------
(extending from the main access road gate easterly to the nearest point of the
Gibbstown Retained Property), which access easement shall be subject to Buyer's
reasonable rules and regulations concerning plant safety and security.
28
7.9.2. Franklin Plant. The parties acknowledge that the Franklin
--------------
Land is part of a larger industrial plant facility (the balance of the land
owned by Hercules and adjacent to the Franklin Land is hereinafter referred to
as the "Franklin Retained Property"). On the Closing Date:
(a) Hercules, as landlord, and Buyer, as tenant, shall enter
into a ground lease agreement on the terms and conditions set forth in Schedule
--------
7.9.2(a) (the "Franklin Ground Lease");
--------
(b) Hercules shall convey to Buyer by xxxx of sale and special
warranty deed (or its equivalent) all of Hercules's right, title and interest in
the Franklin Buildings and Hercules shall deliver zoning compliance letters or
other reasonable evidence confirming that the Owned Real Property is zoned to
allow the operation of the Peroxides Business;
(c) At its expense, Buyer shall have the right, but not the
obligation, to obtain an ALTA leasehold policy of title insurance from the Title
Company insuring Buyer's leasehold interest in the Franklin Land and fee simple
title to the Franklin Buildings, free and clear of all Encumbrances other than
the Permitted Encumbrances, in an amount equal to that portion of the Purchase
Price allocated to the Franklin Plant in accordance with Section 2.18, with
standard exceptions deleted, with affirmative insurance as to any recorded
appurtenant easements, and such other endorsements reasonably requested by Buyer
(the "Franklin Leasehold Policy");
(d) at Hercules's cost, Hercules shall deliver to Buyer a survey
of the Franklin Plant, which survey shall contain a metes and bounds description
of the entire land owned by Hercules or any Affiliate of Hercules and located in
Franklin, Southampton County, Virginia, the Franklin Land, the common access
areas serving the Peroxides Business (the "Franklin Common Areas") and all
utilities serving the Peroxides Business (the "Franklin Survey"). To the extent
Buyer requires an ALTA Survey which may require additional detail other than as
provided by the Franklin Survey, then any such additional survey requirements
shall be performed at Buyer's cost;
(e) Hercules shall cause to be executed and delivered to Buyer a
commercially reasonable non-disturbance agreement from the holder of any Lien
encumbering the Franklin Plant on the Closing Date in the form and substance of
Schedule 7.9.2(e);
-----------------
(f) Hercules shall cause to be executed and recorded a
Declaration of Cross Access and Utility Easements and Restrictions in the form
and substance of Schedule 7.9.2(f) for the use, maintenance and operation of the
-----------------
common access areas serving the Peroxides Business (the "Franklin Common
Areas"), any shared facilities, utility corridors, access areas, waste water
pipeline easement, and such other easements necessary for Buyer to conduct the
Peroxides Business after the Closing Date in the same manner as presently
conducted by Hercules or any Affiliate of Hercules (the "Franklin Declaration");
(g) Hercules and Buyer shall enter into a utilities services
agreement on the terms and conditions set forth on Schedule 7.9.2(g), and such
-----------------
other terms reasonably
29
acceptable to each party, for the provision of utilities to the Franklin Plant
(the "Utilities Services Agreement"); and
(h) Hercules shall deliver to Buyer and the Title Company
recordable evidence of the merger of Hercules Powder Company into Hercules
Incorporated.
ARTICLE 8 - POST-CLOSING AGREEMENTS
8.1. Non-Competition.
---------------
(a) Hercules covenants and agrees that, from and after the
Closing and until the fifth (5th) anniversary of the Closing Date, Hercules
shall not, except pursuant to the Tolling Agreements, and will cause its
Affiliates not to, directly or indirectly, engage anywhere in the world in, or
own, manage, operate or control any entity which engages anywhere in the world
in, the manufacture or sale of organic peroxide products used for the purpose of
vulcanization, catalysis or processing of polymers and elastometric compounds (a
"Competing Business"); provided, however, that Hercules or its Affiliates shall
-------- -------
not be prohibited from, directly or indirectly, (i) owning, for investment
purposes, an interest in the aggregate of seven percent (7%) or less of any
class of securities of an entity which, to the knowledge of Hercules, is engaged
in a material way in a Competing Business, or (ii) merging with or acquiring any
business in which a Competing Business constitutes twenty percent (20%) or less
of the earnings or revenues of such business (so long as (A) Hercules shall use
reasonable efforts to divest, as soon as reasonably practicable and in any event
within one year of the date of such transaction, its interest in such enterprise
relating to the Competing Business and (B) GEO shall have a right of first
refusal to purchase such interest on terms no less favorable than Hercules could
obtain from a third party in an arms' length transaction); provided, further,
-------- -------
however, that in the event either Hercules, or any significant portion of the
-------
Hercules business is acquired by an entity in an asset acquisition, merger,
consolidation or other change of control transaction (an "Acquisition
Transaction") the non-compete covenant of Hercules and its Affiliates in this
Section 8.1. shall not apply to the acquiring or resulting entity (an "Acquiring
Entity"), if at such time such Acquiring Entity is already engaged, directly or
indirectly, in a Competing Business, following the consummation of the
Acquisition Transaction; provided, however, that the Acquiring Entity shall not
-------- -------
be entitled or otherwise authorized to use any of the assets or Intellectual
Property of Hercules or its Affiliates to develop plans to or to engage in a
Competing Business during such five-year period following the Closing Date.
(b) For a period of twenty-four (24) months after the Closing
Date, neither Hercules nor its Affiliates shall directly or indirectly solicit
for employment any of the Buyer's employees who were transferred to Buyer
pursuant to the Human Resources Agreement.
(c) Hercules and the Buyer agree that the restrictions set forth
in Sections 8.1(a) and (b) above are reasonable under the circumstances.
However, if, at the time of enforcement of this Section 8.1, a court of
competent jurisdiction holds that the restrictions stated herein are
unreasonable under the circumstances then existing, Hercules and the Buyer agree
that the maximum duration and scope under such circumstances shall be
substituted for the stated duration and scope and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration and scope permitted by law. In any such case, such
30
determination shall not affect any other provision of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect.
8.2. Accounts Receivable.
-------------------
(a) Hercules hereby irrevocably appoints Buyer as its attorney
and agent commencing at the Closing for the purpose of collecting all
outstanding Accounts Receivable transferred as part of the Purchased Assets,
with full authority in Buyer to take any and all lawful steps reasonably
necessary to accomplish said purpose; provided, however, that Buyer is not
-------- -------
hereby authorized to bring any legal actions without Hercules' consent, which
consent will not be unreasonably withheld or delayed; provided, further, that in
-------- -------
the event that Hercules does not consent to a legal action with respect to an
Account Receivable, Buyer may transfer such Account Receivable to Hercules at
any time thereafter, notwithstanding any other provision of this Agreement.
Hercules shall pay to Buyer by check within thirty (30) Business Days following
such transfer an amount equal to the value of such uncollected Account
Receivable as reflected in the Accounts Receivable portion of the Closing Date
Peroxides Business Financial Statements, plus any interest accrued under the
terms of any statute or relevant contract, but less all amounts collected by
Buyer on such Account Receivable after the Closing Date. Buyer shall protect,
defend, indemnify and hold harmless Hercules from any unlawful collection
activities taken by or on behalf of Buyer. Hercules shall reasonably cooperate
with Buyer in collecting said Accounts Receivable and shall perform all acts and
execute all instruments reasonably necessary or proper in order to accomplish
the purposes and objectives of this Section.
(b) Buyer shall use reasonable efforts to collect following the
Closing Date all uncollected Accounts Receivable transferred to Buyer as part of
the Purchased Assets. In the event that any such Accounts Receivable remain
uncollected one hundred eighty (180) days after the expiration of the normal
historic collection period set forth on Schedule 8.2 for such Account Receivable
------------
if the Peroxides Business has a collection history with the other parties to
such Accounts Receivable, or for Accounts Receivable of a similar nature if the
Peroxides Business does not have a collection history with the other parties to
such Accounts Receivable, Buyer may transfer such Accounts Receivable to
Hercules at any time thereafter. Hercules shall pay to Buyer by check within
thirty (30) Business Days following such transfer an amount equal to the value
of such uncollected Accounts Receivable as reflected in the Accounts Receivables
portion of the Closing Date Peroxides Business Financial Statements less all
amounts collected by Buyer on such Accounts Receivable after the Closing Date.
8.3. Further Assurances. At any time and from time to time after the
------------------
Closing, the Parties agree to cooperate with each other, to execute and deliver
such other documents, instruments of transfer, assignment, assumption or
novation, files, Books and Records and do all such further acts and things as
shall reasonably be necessary or desirable to carry out Definitive Agreements,
the Transactions and the intent of the Parties as reflected herein or therein.
8.4. Confidentiality Obligations.
---------------------------
(a) Buyer shall maintain the confidentiality of all Evaluation
Material (as such term is defined in the Confidentiality Agreement) of Hercules
or any of Hercules'
31
Affiliates that does not relate solely to the Purchased Assets, including all
commingled know-how and other intellectual property, for a term of five (5)
years after the Closing Date.
(b) Hercules shall, and shall cause its Affiliates to, maintain
the confidentiality of all Evaluation Material (as such term is defined in the
Confidentiality Agreement) relating to the Purchased Assets, including all
commingled know-how and other intellectual property, for a term of five (5)
years after the Closing Date.
8.5. Mail; Payments.
--------------
(a) Each Party authorizes and empowers the other Party on and
after the Closing Date to receive and open all mail and other communications
received by it relating to the Peroxides Business and to determine whether the
contents are a matter rightfully belonging to or appropriately to be dealt with
by the other Party, and if so, such mail or communications shall be promptly
delivered to such other Party.
(b) If after the Closing, a Party discovers or receives an item
which rightfully belongs to the other Party or such other Party's Affiliates, it
shall promptly notify said other Party and deliver such item(s) to said other
Party. Each Party agrees promptly (but, in any event, not more than five
Business Days after receipt thereof) to pay when received and cleared or deliver
to the other Party any monies or checks which have been mistakenly sent to it
and which should properly have been sent to such other Party.
8.6. Name Change. From and after the Closing, Buyer shall have the
-----------
right to use the name "Hercules" and any variation thereof, on existing supplies
of Inventory, labels, product literature, signage and stationery, in connection
with Buyer's operation of the Peroxides Business for as long as reasonably
necessary, but in no event longer than eight weeks following the Closing Date.
During such eight-week period, Buyer shall promptly commence and diligently
pursue until completion the cessation of such use at the earliest practicable
time. Hercules hereby grants to Buyer a non-exclusive royalty free license for
such eight-week transition period to any and all trademarks containing the
"HERC" or "Hercules" designation; provided, that nothing herein grants to Buyer
--------
any ongoing right or license to such trademarks at the end of the transition
period.
8.7. Retention of Books and Records; Further Information.
---------------------------------------------------
(a) For a period of eight (8) years after the Closing, each of
Hercules and Buyer shall retain all Books and Records. Each of Hercules and
Buyer may dispose of or destroy such Books and Records prior to the end of the
such eight (8) year period after advance written Notice to the other Party,
subject to the provisions of the next sentence. Within sixty (60) days after
such other Party's receipt of such written Notice, such other Party may notify
Hercules or Buyer, as the case may be, in writing of such other Party's desire
to retain one or more items to be destroyed or disposed of, whereupon the Party
desiring to dispose of or destroy such Books and Records shall, at the other
Party's expense, deliver or cause to be delivered such items to such other
Party. Buyer and Hercules shall cooperate in returning to such other Party any
items so requested. After the expiration of the eight (8) year period referred
to in this
32
Section 8.7(a), neither Hercules or Buyer shall have any further duty to retain
any of the Books and Records or to notify the other Party before the disposition
or destruction thereof.
(b) After the Closing, upon reasonable Notice given in
accordance with this Agreement, each of Buyer and Hercules shall give, or cause
to be given, to the representatives, employees, counsel and accountants of the
other Party reasonable access, during normal business hours, to all books and
records relating to periods prior to the Closing, and shall permit such persons
to examine and copy such books and records to the extent reasonably requested by
the other Party in connection with the preparation of Tax, securities or
financial reporting matters, audits, legal proceedings, or governmental
investigations relating to the Transactions or periods before the Closing Date;
provided, however, that nothing herein shall obligate either Party to (i) take
-------- -------
actions that would unreasonably disrupt its normal course of business, (ii)
violate the terms of any contract to which it is a party or to which it or any
of its assets is subject or (iii) except as required to comply with the last
sentence of this Section 8.7(b), grant access to any of its proprietary,
confidential or classified information. In addition, each of Hercules and Buyer
shall make witnesses reasonably available to the other Party in connection with
the defense of any Third Person Claim and provide reasonable cooperation to the
other in connection therewith upon Hercules' or Buyer's request, as applicable;
provided that the provision of such witnesses and cooperation shall be at the
--------
requesting Party's sole expense and in a manner not disruptive to the business
or operations of the other Party. Hercules agrees to provide Buyer with
reasonable assistance in connection with Buyer's efforts to prepare "carved out"
audited historical financial statements for the Peroxides Business.
8.8. Engineering Manuals. The Parties acknowledge that certain
-------------------
Hercules manuals, including its Engineering Department Manuals, Design Manuals,
Project Management Manuals, Construction Guidelines Manuals, and Hercules
Standards (collectively the "Hercules Manuals") may be in the possession of the
Excluded Resins Businesses' employees after the Closing. Buyer acknowledges that
Hercules will not provide revisions to the Hercules Manuals after the Closing.
Buyer hereby releases, and agrees to protect, defend, indemnify and hold
harmless the Hercules Indemnitees from and against any and all Claims arising
out of or resulting from use of the Hercules Manuals by Buyer or any of its
Affiliates after the Closing Date. Further, notwithstanding anything to the
contrary herein, Buyer agrees to hold the Hercules Manuals in confidence and
only use them on a need-to-know basis with respect to the operation of the
Peroxides Business.
8.9. Brokers. Buyer shall not, as a result of the Transactions or
-------
otherwise, have any obligation in respect of any broker's or finder's fee or any
other commission or financial advisory fee based on any agreement or undertaking
made by Hercules or any of its Affiliates in connection with the Transactions,
and Hercules shall protect, defend, indemnify and hold harmless the Buyer
Indemnitees against such fees and commissions. Hercules shall not, as a result
of the Transactions or otherwise, have any obligation in respect of any broker's
or finder's fee or any other commission or financial advisory fee based on any
agreement or undertaking made by Buyer or any of its Affiliates in connection
with the Transactions, and Buyer shall protect, defend, indemnify and hold
harmless the Hercules Indemnitees against such fees and commissions.
33
ARTICLE 9 - BUYER'S CONDITIONS TO CLOSING
Buyer's obligation to consummate the Transactions is subject to the
satisfaction of, or waiver in writing by Buyer of, prior to or at the Closing,
each and every one of the following conditions precedent:
9.1. Representations and Warranties. Each of the representations and
------------------------------
warranties of Hercules contained in this Agreement shall have been true and
correct when made and shall be true and correct on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date. Hercules shall deliver to Buyer a
certificate, dated as of the Closing Date and executed by a duly authorized
officer of Hercules, certifying to that effect.
9.2. Compliance With Obligations and Conditions. Hercules shall have
------------------------------------------
performed and complied with each and every obligation and condition required by
this Agreement to be performed or satisfied by Hercules at or prior to the
Closing Date. Hercules shall deliver to Buyer a certificate, dated as of the
Closing Date and executed by a duly authorized officer of Hercules, certifying
to that effect.
9.3. No Claims or Orders Affecting Closing. There shall not have been
-------------------------------------
instituted and there shall not be pending or threatened any Claims, and no Order
shall have been entered, (a) imposing or seeking to impose limitations on the
ability of Buyer to acquire or hold or to exercise full rights of ownership of
any of the Peroxides Business Items; (b) imposing or seeking to impose
limitations on the ability of Buyer to operate the Peroxides Business; (c)
imposing or seeking to impose other sanctions, damages or liabilities arising
out of the Transactions on Buyer or any of Buyer's directors, officers or
employees; (d) requiring or seeking to require divestiture by Buyer of all or
any material portion of any of the Peroxides Business Items; or (e) restraining,
enjoining or prohibiting or seeking to restrain, enjoin or prohibit the
consummation of the Transactions.
9.4. Approvals and Consents. Subject to Section 4.4, all Consents
----------------------
required for the consummation of the Transactions shall have been obtained or
made and any applicable waiting period under the HSR Act (and any extension
thereof) shall have expired or been terminated.
9.5. Super Contract Consents. All Super Contract Consents shall have
-----------------------
been obtained.
9.6. Deliveries. Hercules shall have delivered or caused to be
----------
delivered to Buyer, the agreements, instruments, documents, certificates and
other items required to be delivered to Buyer pursuant to Section 4.2.
9.7. Ancillary Documents. Each and all of the Ancillary Documents
-------------------
shall have been executed and delivered by all parties thereto other than Buyer.
9.8. No Peroxides Material Adverse Effect. No Peroxides Material
------------------------------------
Adverse Effect shall have occurred and continue to exist as of the Closing Date.
34
9.9. Title and Survey. Buyer shall have received the Gibbstown
----------------
Leasehold Policy, Gibbstown Survey, Franklin Leasehold Policy and Franklin
Survey in accordance with Section 7.9 above.
ARTICLE 10 - HERCULES' CONDITIONS TO CLOSING
Hercules' obligation to consummate the Transactions is subject to the
satisfaction of, or waiver in writing by Hercules of, prior to or at the
Closing, each and every one of the following conditions precedent:
10.1. Representations and Warranties. Each of the representations and
------------------------------
warranties of Buyer contained in this Agreement shall have been true and correct
when made and shall be true and correct on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date. Buyer shall deliver to Hercules a
certificate, dated as of the Closing Date and executed by a duly authorized
officer of Buyer, certifying to that effect.
10.2. Compliance with Obligations and Conditions. Buyer shall have
------------------------------------------
performed and complied with each and every obligation and condition required by
this Agreement to be performed or satisfied by Buyer at or prior to the Closing
Date. Buyer shall deliver to Hercules a certificate, dated as of the Closing
Date and executed by a duly authorized officer of Buyer, certifying to that
effect.
10.3. No Claims or Orders Affecting Closing. There shall not have
-------------------------------------
been instituted and there shall not be pending or threatened any Claims, and no
Order shall have been entered, (a) imposing or seeking to impose limitations on
the ability of Hercules to sell and transfer full rights of ownership of any of
the Peroxides Business Items; (b) imposing or seeking to impose other sanctions,
damages or liabilities arising out of the Transactions on Hercules or any of
Hercules' directors, officers or employees; or (c) restraining, enjoining or
prohibiting or seeking to restrain, enjoin or prohibit the consummation of the
Transactions.
10.4. Approvals and Consents. Subject to Section 4.4, all Consents
----------------------
required for the consummation of the Transactions shall have been obtained or
made and any applicable waiting period under the HSR Act (and any extension
thereof) shall have expired or been terminated.
10.5. Deliveries. Buyer shall have delivered or caused to be
----------
delivered to Hercules, the agreements, instruments, documents, certificates and
other items required to be delivered to Hercules pursuant to Section 4.3.
10.6. Ancillary Documents. Each and all of the Ancillary Documents
-------------------
shall have been executed and delivered by all parties thereto other than
Hercules.
10.7. No Buyer Material Adverse Effect. No Buyer Material Adverse
--------------------------------
Effect shall have occurred and be existing as of the Closing Date.
35
ARTICLE 11 - TERMINATION AND REMEDIES
11.1. Termination. This Agreement may be terminated, and the
-----------
Transactions may be abandoned:
(a) at any time before the Closing, by the mutual written
agreement of Hercules and Buyer;
(b) at any time before the Closing, by Buyer upon any material
breach by Hercules of its obligations contained in this Agreement and the
failure of Hercules to cure such breach, if curable, within ten (10) days after
written Notice thereof is given by Buyer to Hercules and such uncured breach
causes a Peroxides Material Adverse Effect;
(c) at any time before the Closing, by Hercules upon any
material breach by Buyer of its obligations contained in this Agreement and the
failure of Buyer to cure such breach, if curable, within ten (10) days after
written Notice thereof is given by Hercules to Buyer and such uncured breach
causes a Buyer Material Adverse Effect;
(d) Notice given by Buyer to Hercules that a casualty loss as
described in Section 7.8 has occurred and has not been resolved to the
reasonable satisfaction of Buyer; or
(e) by either of the Parties, if such Party is not in material
breach of this Agreement, and if the Closing shall not have occurred by June 28,
2001.
11.2. Effect of Termination.
---------------------
(a) Subject to Section 11.2(b), if this Agreement is validly
terminated pursuant to Section 11.1, then this Agreement shall forthwith become
void, and, subject to Section 11.2(b), there shall be no liability under this
Agreement on the part of either Hercules or Buyer and all rights and obligations
of each Party under this Agreement shall cease; provided, that (i) the
--------
provisions with respect to expenses in Section 14.5 shall indefinitely survive
any such termination and (ii) this Section 11.2 shall indefinitely survive such
termination.
(b) If this Agreement is validly terminated as a result of a
material breach by either Hercules or Buyer of any of its obligations contained
in this Agreement, or, if all conditions to the obligations of either Hercules
or Buyer at Closing contained in Articles 9 or 10, as applicable, have been
satisfied (or waived by the Party entitled to the benefit of such condition) and
the other Party does not proceed with the Closing, then any and all rights and
remedies available to the non-breaching Party, whether under this Agreement, at
law or in equity or otherwise shall be preserved and shall survive the
termination of this Agreement.
ARTICLE 12 - SURVIVAL AND INDEMNIFICATION
12.1. Survival of Representations, Warranties and Covenants.
-----------------------------------------------------
(a) Each representation and warranty made in the Definitive
Agreements shall survive the Closing and remain in full force and effect for a
period of eighteen (18) months thereafter; provided, that (i) the
--------
representations and warranties contained in
36
Section 5.18 (Taxes) of this Agreement shall survive the Closing until the
expiration of the statute of limitations applicable to the subject matter
addressed thereunder, (ii) any representations and warranties concerning
environmental matters or matters regarding employees, employee benefits and
human resource matters contained in the Environmental Annex or Human Resources
Agreement, as the case may be, shall survive for the period set forth in such
annex or agreement, and (iii) the representations and warranties contained in
Sections 5.2 (Hercules Organization), 5.7 (Title) and 6.2 (Buyer Organization)
of this Agreement shall indefinitely survive the Closing. The covenants, duties
and obligations contained in the Definitive Agreements shall survive the Closing
and continue until such covenants, duties and obligations have been fully
performed in accordance with their respective terms.
(b) Any representation or warranty that would otherwise
terminate in accordance with Section 12.1(a) will continue to survive, if Notice
of any indemnification claim for breach of such representation or warranty
(indicating with reasonable specificity the basis for such indemnification
claim) shall have been delivered by the Indemnitee to the Indemnitor within the
survival period provided for in Section 12.1(a), until the related claim for
indemnification has been satisfied or otherwise resolved.
12.2. Indemnification by Hercules. Except as provided in the
---------------------------
Environmental Annex, Hercules shall indemnify and hold harmless Buyer, its
Affiliates, and their respective officers, directors, employees, agents,
consultants, representatives and successors (collectively, the "Buyer
Indemnitees") from and against any and all Claims asserted against, imposed upon
or incurred by any of the Buyer Indemnities arising out of or resulting from any
of the following:
(a) any breach by Hercules of any of the representations or
warranties made by Hercules in any of the Definitive Agreements;
(b) any failure by Hercules to perform any of its covenants or
agreements contained in any of the Definitive Agreements;
(c) any failure by Hercules to pay, perform, discharge or
satisfy when due any liability or obligations of Hercules and its Affiliates
other than the Assumed Liabilities; and/or
(d) any Claim by Hercules stockholders asserted against Buyer
to the extent that such Claim relates to the Transactions; provided, that it is
--------
not judicially determined that such Claim is based on the violation by Buyer of
Applicable Law.
12.3. Indemnification by Buyer. Except as provided in the
------------------------
Environmental Annex, Buyer shall indemnify and hold harmless Hercules, its
Affiliates, and their respective officers, directors, employees, agents,
consultants, representatives and successors (collectively, the "Hercules
Indemnitees") from and against any and all Claims asserted against, imposed upon
or incurred by any of the Hercules Indemnitees arising out of or resulting from
any of the following:
(a) any breach by Buyer of any of the representations or
warranties made by Buyer in any of the Definitive Agreements;
37
(b) any failure by Buyer to perform any of its covenants or
agreements contained in any of the Definitive Agreements;
(c) any failure of Buyer to pay, perform, discharge or satisfy
when due any liability or obligation of Buyer or any of its Affiliates,
including any of the Assumed Liabilities; and/or
(d) any Claims arising during the time Hercules is deemed to
operate the Gibbstown Plant and/or the Franklin Plant for the benefit of Buyer
pursuant to Section 2.13 or serve as agent for Buyer under Contracts as
described in Section 2.16, provided, that Hercules so operates and serves
--------
without material fault and consistent with past practices; and/or
(e) matters arising as a result of Buyer's operation of the
Peroxides Business after the Closing.
12.4. Procedure for Indemnification.
-----------------------------
(a) In the event that any Person seeking indemnity under this
Article 12 (the "Indemnitee") shall incur or suffer any Claim in respect of
which indemnification may be sought hereunder against Hercules, on the one hand,
or Buyer, on the other hand (as applicable, the "Indemnitor"), the Indemnitee
shall assert a claim for indemnification by written Notice with reasonable
information and details of the Claim as then known (the "Notice of Claim") to
the Indemnitor stating the nature and basis of such Claim.
(b) Within thirty (30) days after receipt by an Indemnitee of
written Notice of the assertion of a Claim or the commencement of any action,
litigation or proceeding by any Third Person (a "Third Person Claim") with
respect to any matter for which indemnification is or may be owing pursuant to
either Section 12.2 or Section 12.3, as applicable, the Indemnitee shall give a
Notice of Claim to the Indemnitor and shall thereafter keep the Indemnitor
reasonably informed with respect thereto. The failure of the Indemnitee to give
the Indemnitor a Notice of Claim within such thirty (30) day period shall not
release the Indemnitor of liability under this Article 12 with respect to such
Third Person Claim unless the failure to give such Notice of Claim has
substantially prejudiced the Indemnitor, in which case, Indemnitor shall be
released of such liability to the extent of such prejudice. The Indemnitor shall
have the right, at its option and at its own expense, to participate in or, by
giving written Notice to the Indemnitee no later than thirty (30) days after
delivery of the Notice of Claim, to take exclusive control of the defense and
negotiations of the settlement of any such Third Person Claim with counsel
reasonably satisfactory to the Indemnitee, whereupon the Indemnitor shall assume
all Claims incurred by the Indemnitee with respect to such Third Person Claim.
If the Indemnitor so assumes control, then the Indemnitee shall have the right
to participate in the defense and negotiation of any such Third Person Claim
with counsel of its own choosing; provided, that after timely Notice from the
--------
Indemnitor to the Indemnitee of the Indemnitor's election to take control of the
defense and negotiation of any Third Person Claim, the Indemnitor shall not be
liable to the Indemnitee for any legal or other expenses incurred by the
Indemnitee in connection with such participation (except reasonable expenses in
connection with any hand-over of such action or cessation of the Indemnitee's
involvement in such matter); provided, further that if the applicable Third
-------- -------
Person Claim is against, or if the defendants in any such
38
action, litigation or proceeding shall include, both the Indemnitor and the
Indemnitee and the Indemnitee reasonably concludes that there are defenses
available to it that are different from or additional to those available to the
Indemnitor or if the interests of the Indemnitee may be reasonably deemed to
conflict with those of the Indemnitor, then the Indemnitee shall have the right
to select one separate counsel and to assume and control the defense thereof
with the reasonable fees, expenses and disbursements of such counsel to be
reimbursed by the Indemnitor as incurred. At the expense of the Indemnitor, the
Indemnitee and the Indemnitor shall cooperate with and render to each other such
assistance as may reasonably be requested in order to insure the proper and
adequate defense of any such Third Person Claim or proceeding which assistance
shall include making appropriate personnel reasonably available for any
investigation, discovery or trial (the reasonable costs of such personnel to be
borne by the Indemnitor). If the Indemnitor fails or refuses to undertake the
defense of any such Third Person Claim within thirty (30) days after delivery of
the Notice of Claim, then the Indemnitee shall have the right to take exclusive
control of the defense and negotiation of the settlement of such Third Person
Claim at the Indemnitor's expense and Indemnitor shall reimburse Indemnitee for
all reasonable fees, expenses and disbursements of one counsel as incurred. In
no event shall the party controlling the defense or negotiations in respect of
any Third Person Claim settle or compromise such Third Person Claim without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed.
(c) If the Notice of Claim does not relate to a Third Person
Claim, then the Indemnitor shall have thirty (30) days after receipt of such
Notice of Claim to object to the subject matter and the amount of the Claim for
indemnification set forth in such Notice of Claim by delivering notice of
objection thereof to the Indemnitee. The failure of the Indemnitee to give the
Indemnitor a Notice of Claim shall not release the Indemnitor of liability under
this Article 12 with respect to such Claim unless the Indemnitee has been aware
of the nature and extent of such Claim for the relevant period and the failure
to give such Notice of Claim has substantially prejudiced the Indemnitor, in
which case, Indemnitor shall be released of such liability to the extent of such
prejudice. If the Indemnitor sends notice to the Indemnitee objecting to the
matters set forth in such Notice of Claim, then the Parties shall use their
commercially reasonable efforts to settle (without an obligation to settle) such
claim for indemnification. If the Indemnitee and the Indemnitor are unable to
settle such dispute within thirty (30) days after the Indemnitee's receipt of
the Indemnitor's notice objecting to the matters set forth in the Notice of
Claim, then either the Indemnitee or the Indemnitor may initiate a proceeding in
a court in the State of Delaware.
12.5. Limitation on Indemnification.
-----------------------------
(a) Hercules' indemnification obligations under Section
12.2(a) (with respect to Claims under this Agreement (including with respect to
representations and warranties under the Environmental Annex and the Human
Resources Agreement) only and not with respect to any of the Ancillary
Documents) shall not arise for individual Claims in an amount less than twenty-
five thousand dollars ($25,000) and until the sum of the aggregate amount of
Claims for which Hercules is so required to indemnify exceeds one percent (1%)
of the Purchase Price (the "Threshold Loss Amount"). Individual Claims that are
similar in subject matter or that arise out of like or similar circumstances
shall, where appropriate (based on all facts and circumstances including the
nature and timing of the relevant Claim) constitute a single Claim for the
purpose
39
of this Section 12.5(a). Once the aggregate amount of Claims for which Hercules
is so required to indemnify exceeds the Threshold Loss Amount, the Buyer
Indemnitees shall be entitled to recover all Claims in excess of the Threshold
Loss Amount. The foregoing Threshold Loss Amount restriction shall not apply to
Claims for indemnification based upon any provision of any of Sections 5.2
(Hercules Organization) or 5.18 (Taxes) or based upon any information furnished
by or on behalf of Hercules fraudulently.
(b) Hercules' aggregate liability under Section 12.2(a) (with
respect to Claims under this Agreement (including with respect to
representations and warranties under the Environmental Annex and the Human
Resources Agreement) only and not with respect to any of the Ancillary
Documents) shall not exceed an amount equal to twenty-five percent (25%) of the
Purchase Price. The foregoing limitation of liability shall not apply to claims
for indemnification based upon either of the provisions of Sections 5.2
(Hercules Organization) or 5.18 (Taxes) or based upon any information furnished
by or on behalf of Hercules fraudulently.
12.6. Payment. With respect to Third Person Claims for which
-------
indemnification is payable under this Article 12, such indemnification shall be
paid by the Indemnitor promptly upon: (i) the entry of a judgment against the
Indemnitee in respect to such Third Person Claim and the expiration of any
applicable appeal period without an appeal having been filed; (ii) the entry of
a non-appealable judgment or final appellate decision against the Indemnitee in
respect to such Third Person Claim; (iii) the closing under any settlement or
similar agreement in respect to such Third Person Claim; or (iv) the entry of
any final non-appealable consent order or decree binding upon the Indemnitee in
respect to such Third Person Claim. Reasonable costs for expenses shall be paid
by the Indemnitor as and when incurred by the Indemnitee.
12.7. Ancillary Documents. The applicable provisions of this Article
-------------------
12 shall also govern any right of indemnification granted by any provision of
any of the Ancillary Documents and any indemnification procedure related thereto
unless such provision or agreement specifically provides for a different
indemnification right and/or procedure.
12.8. Subrogation. To the extent that an Indemnitor shall make
-----------
payment to an Indemnitee pursuant to this Agreement, the Indemnitor shall be
subrogated to any and all rights and claims which the Indemnitee may have with
respect to such indemnified Claims, but only to the extent of such payment. If
any such amount shall be paid to the Indemnitor on account of any subrogation
rights while the Indemnitee has outstanding any Claim for an indemnifiable loss,
such amount shall be received in trust for the benefit of the Indemnitee and
shall forthwith be applied to the satisfaction of such indemnifiable losses.
12.9. Exclusive Remedy. For those matters covered by Sections 12.2
----------------
and 12.3, the indemnification provided for under this Article 12 shall be the
exclusive remedy for monetary damages to the extent practicable.
ARTICLE 13 - RESOLUTION OF DISPUTES
13.1. Resolution Procedure. Each Party agrees to resolve disputes
--------------------
under this Agreement as provided for in this Article 13.
40
13.2. Resolution Panel. The resolution panel shall consist of two
----------------
members, i.e., a corporate officer of Hercules and a corporate officer of Buyer
(the "Resolution Panel"). The Resolution Panel may act only by the affirmative
and unanimous vote of both its members.
13.3. Exchange of Written Statements. In the event of a dispute
------------------------------
under this Agreement, either Party may give a Notice to the other Party
requesting that the Resolution Panel in good faith try to resolve (but without
any obligation to resolve) such dispute. Not later than fifteen (15) days after
said Notice, each Party shall submit to the other Party a written statement
setting forth such Party's description of the dispute and of the respective
positions of the Parties on such dispute; and such Party's recommended
resolution and the reasons why such Party feels its recommended resolution is
fair and equitable. The Parties shall make appropriate arrangements so that the
submission and exchange of such written statements of the Parties shall be
simultaneous. Such statements represent part of a good-faith effort to resolve a
dispute and as such, neither statement may be introduced as evidence or used as
an admission against interest in any arbitral or judicial resolution of such
dispute.
13.4. Good Faith Negotiations. If the dispute continues unresolved
-----------------------
for a period of fifteen (15) days (or such longer period as the Resolution Panel
may otherwise agree upon) after the simultaneous exchange of such written
statements, then the Resolution Panel shall promptly commence good-faith
negotiations to resolve such dispute but without any obligation to resolve it.
The initial negotiating meeting shall be held in Cleveland, Ohio, if Hercules
sent said Notice, and in Wilmington, Delaware, if Buyer sent said Notice.
13.5. Determination of Resolution Panel. If the Resolution Panel
---------------------------------
renders an agreed resolution on the matter in dispute, then both Parties shall
be bound thereby. If the Resolution Panel does not render an agreed resolution
within sixty (60) days after the commencement of good-faith negotiations, then
either Party may submit the dispute to binding arbitration in accordance with
Section 13.6 hereof.
13.6. Arbitration. A matter in dispute hereunder submitted for
-----------
resolution by arbitration shall be arbitrated in accordance with the then
existing commercial arbitration rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof, subject to (a) through (h) below.
(a) Upon the request of either Party, the Arbitration shall
be conducted under the expedited rules of the American Arbitration Association
for commercial arbitrations.
(b) The Arbitrators shall be three (3) independent
arbitrators, with one appointed by each Party, and the two appointees selecting
the third arbitrator in accordance with the said Rules. If either Party fails to
select an arbitrator within ten (10) days after Notice of such failure from the
other Party or the American Arbitration Association, then the American
Arbitration Association shall appoint such arbitrator. If the two appointees are
unable to agree on the third arbitrator, then the American Arbitration
Association shall select the same.
(c) The arbitration hearing shall be held in Wilmington,
Delaware, if the arbitration relates to a claim by Buyer, or Cleveland, Ohio, if
the arbitration relates to a claim by Hercules, in either case at such date,
time and place as established by the Arbitrators.
41
(d) The Arbitrators shall have power to rule on their own
competency and on the validity of this Agreement to make reference to
arbitration.
(e) Not later than fifteen (15) days after the conclusion of
the arbitration hearing, but prior to the rendering of any arbitral decision and
award, each Party may submit to the Arbitrators a written statement of such
Party's (i) understanding and view of the Parties' respective positions on the
dispute, and (ii) recommendation as to an appropriate resolution of the dispute
and the reasons why it believes such resolution is appropriate. In reaching a
decision on any dispute hereunder, the Arbitrators may take into account such
statement.
(f) The Arbitrators must render their arbitral decision and
award, which shall be final and binding on the Parties, and give a written
opinion setting forth the basis of their decision, all not later than forty-five
(45) days after the conclusion of the Arbitration.
(g) Each Party shall take or cause to be taken all reasonable
action to facilitate the conduct of the arbitration and the rendering of the
arbitral award at the earliest possible date.
(h) The costs of the Arbitration shall be borne and paid
equally by the Parties.
13.7. Injunctive Relief. The Parties recognize and acknowledge that
-----------------
in the event of a potential, anticipatory or actual breach of any of this
Agreement, it may be necessary or appropriate for the non-breaching Party to
seek injunctive relief, if and to the extent legally available, in order to
avoid harm or further harm to the non-breaching Party. If a Party desires
injunctive relief, it may pursue the same in any court of competent
jurisdiction; provided, however, that, if granted, such injunctive relief shall
-------- -------
apply only to prevent a breach or further breaches and shall remain in effect
only so long as the court deems necessary or appropriate to permit resolution of
the underlying disputes in accordance with this Article 13. Neither the seeking
of injunctive relief nor the granting thereof is intended or shall result in the
application of a substantive or procedural law other than the applicable
governing law pursuant to Section 14.8 hereof.
ARTICLE 14 - MISCELLANEOUS
14.1. Entire Agreement. The Confidentiality Agreement and the
----------------
Definitive Agreements (including the Annexes, Exhibits, Schedules and other
documents referred to or contemplated herein or therein) constitute the entire
agreement between the Parties and supersede all prior agreements and
understandings, oral and written, between the Parties with respect to the
subject matter hereof and thereof.
14.2. Successors and Assigns; Third Party Beneficiaries. The terms
-------------------------------------------------
and conditions of the Definitive Agreements shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties thereto;
provided, however, that none of the Definitive Agreements in whole, in material
-------- -------
part or otherwise may be assigned by any party thereto without the prior written
consent of the other party. Notwithstanding the foregoing, (a)
42
each party to any of the Definitive Agreements shall be entitled to assign all
or any part of its rights and obligations under the Definitive Agreements to one
or more of its Affiliates which, in the reasonable opinion of the relevant
assignor, is capable of discharging any liabilities or obligations hereunder,
and (b) each party to any of the Definitive Agreements shall be entitled to
assign all or any part of its rights and obligations under the Definitive
Agreements (i) to any purchaser of such party or of the business to which this
Agreement relates and to any successors or assigns thereof, (ii) as a matter of
law to the surviving entity in any merger, consolidation, equity exchange or
reorganization involving such party or any of its successors or assigns, and
(iii) as collateral security to any lender, lenders or agent therefor. Nothing
in the Definitive Agreements, express or implied, is intended to confer any
rights or remedies thereunder on any Person other than Buyer or Hercules and
their respective Affiliates or any Buyer Indemnitee or Hercules Indemnitee, or
any of their respective successors and permitted assigns.
14.3. Headings. The headings of the articles, sections and
--------
paragraphs contained in the Definitive Agreements and the Table of Contents,
including the List of Annexes, Exhibits and Schedules are inserted for
convenience only and shall not be deemed to constitute part thereof or to affect
the construction thereof.
14.4. Modification and Waiver. No amendment, modification or
-----------------------
alteration of the terms or provisions of any of the Definitive Agreements shall
be binding unless the same shall be in writing and duly executed by the parties
thereto, except that any of the terms or provisions of the Definitive Agreements
may be waived in writing at any time by the party which is entitled to the
benefits of such waived terms or provisions. No waiver of any of the provisions
of the Definitive Agreements shall be deemed to or shall constitute a waiver of
any provision hereof or in any of the other Definitive Agreements (whether or
not similar). No delay on the part of any party to any of the Definitive
Agreements in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.
14.5. Expenses. Except as otherwise expressly provided in the
--------
Definitive Agreements, each Party shall pay all costs and expenses of every kind
incurred by it or on its behalf in connection in any way with the preparation
and negotiation of the Definitive Agreements and/or the Transactions, including
all fees and expenses of its own financial consultants, accountants and counsel
fees.
14.6. Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any Party to any other Party shall be in writing and
delivered personally, by telecopy and confirmed by mail, or sent by registered
or certified mail, postage prepaid, or sent by overnight courier (e.g., Federal
Express, Airborne or UPS) (a "Notice"):
43
(a) if to Hercules to:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: General Counsel
with a copy to:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Chief Counsel, Dispute Resolution
(b) if to Buyer to:
GEO Specialty Chemicals, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, President
and with a copy to:
Xxxxxxxx Xxxx & Xxxxx LLP
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
or at such other address for a Party as shall be specified by like Notice. Any
Notice which is delivered in the manner provided herein shall be deemed to have
been duly given to the Party to whom it is directed upon actual receipt by such
Party (evidenced, in the case of a telecopy, by the receipt of the correct
telecopier confirmation).
44
14.7. Specific Performance and Other Remedies.
---------------------------------------
(a) Subject to Article 13, each and all of the rights and
remedies of a Party provided in or under the Definitive Agreements shall be in
addition to all rights and remedies provided at law, in equity or otherwise.
Such rights and remedies shall be cumulative, and the use of any right or remedy
at any time or from time to time shall not preclude or affect the use of the
same or any other similar or dissimilar right or remedy.
(b) In no event shall any Party be liable for punitive,
consequential, special, incidental or similar damages under or in connection
with this Agreement.
14.8. Governing Law. The validity, performance and enforcement of
-------------
the Definitive Agreements shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflict of laws of
Delaware or any other jurisdiction, except that (a) with respect to matters
regarding the transfer of title to the Real Property or Purchased Buildings, the
laws of the state or jurisdiction where any Real Property or Purchased Building
is located shall govern, without giving effect to the principles of conflict of
laws of such state or jurisdiction, and (b) with respect to matters regarding
the transfer of right, title to and interest in any Contract or any Permit, the
laws governing such Contract or Permit shall govern, without giving effect to
the principles of conflicts of law thereof.
14.9. Bulk Sales Laws. The Parties waive compliance with the so
---------------
called "bulk sales" provisions of Article 6 of the Uniform Commercial Code as it
is in effect in the states where applicable to the Purchased Assets and any
other "bulk sales" provisions or laws of any jurisdiction that may be applicable
to the Transactions.
14.10. Counterparts. The Definitive Agreements may be executed in
------------
one or more counterparts, each of which shall for all purposes be deemed to be
an original and all of which together shall constitute one and the same
instrument.
14.11. Severability. If any provision of the Definitive Agreements
------------
or the application of any such provision to any Person(s) or circumstance(s)
shall be held invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision thereof and the affected Definitive Agreements
shall remain in force and be effectuated as if such illegal, invalid or
unenforceable provision is not part thereof.
[SIGNATURE PAGE FOLLOWS]
45
IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by
its duly authorized officer on its behalf as of the date first above written.
HERCULES INCORPORATED
By: /s/ Xxxxxxxx X. XxXxxxx
--------------------------------
Name: Xxxxxxxx X. XxXxxxx
Title: Executive Vice President,
Corporate Development
GEO SPECIALTY CHEMICALS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
President & Chief Executive Officer
46
Annex I
DEFINITIONS
-----------
"Accounts Receivable" has the meaning set forth in Section 2.1(i).
"Act" has the meaning set forth in Section 4.2(b)(i).
"Affiliates" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this Agreement,
"control" when used with respect to any specified Person (i) means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and (ii) shall be presumed if a Person has the direct or indirect power to
appoint or have elected more than fifty percent (50%) of the governing body
(e.g., board of directors) of such Person or has direct or indirect ownership of
more than fifty percent (50%) of the voting shares or securities of such Person.
Sometimes herein Affiliate(s) of Buyer or of Hercules are referred to
individually and collectively as a Buyer Affiliate, Buyer Affiliates, Hercules
Affiliate or Hercules Affiliates, as the case may be.
"Agreement" means this Sale and Purchase Agreement and each and all of
the other schedules, annexes and exhibits referred to herein or attached hereto.
"Ancillary Documents" means, collectively, the Xxxx of Sale, Plant
Operating Agreement, the Tolling Agreements, the Transition Services Agreement
and all other documents and certificates delivered by either Party at the
Closing.
"Applicable Laws" means any applicable law, ordinance, regulation, or
other requirement, including Environmental Laws,(as defined in the Environmental
Annex) having the effect of law, of any Governmental Agency in effect and as
interpreted or enforced from time to time.
"Assumed Liabilities" has the meaning set forth in Section 2.4.
"Authority" means any foreign, national, federal, state or local
governmental, judicial or regulatory body or agency or authority within or
without the United States.
"Beringen Plant" means the Hercules manufacturing plant in Beringen,
Belgium.
"Beringen Option" has the meaning set forth in Section 2.6.
"Bid" means any quotation, bid or proposal of any nature whatsoever,
whether written or oral, and including all modifications and amendments thereof
and supplements thereto, that if accepted or awarded would lead to a Contract
with any Person for the development, design, manufacture and/or sale of products
or the provision of services by the Peroxides Business.
1
"Xxxx of Sale" means the Xxxx of Sale to be executed and delivered at
the Closing and in form and substance reasonably acceptable to Hercules and
Buyer with respect to the Purchased Assets.
"Books and Records" means all carved out books, paper and print-outs
of Hercules' electronic records and data, including correspondence, bookkeeping
and accounting papers, invoices, bills of sale and other instruments and
documents of title to Peroxides Business Items that relate solely to the
Purchased Assets.
"Business Day" means any day other than a Saturday, Sunday or federal
or state holiday or day on which banks in Delaware are required or permitted by
law to be closed.
"Business Lease" has the meaning set forth in Section 5.8(b).
"Buyer Material Adverse Effect" means any material adverse effect upon
or change in (i) the business, assets, liabilities, properties, condition
(financial or otherwise), operations or results of operations of Buyer, or (ii)
Buyer's ability to consummate its part of the Transactions.
"Buyer Indemnitees" has the meaning set forth in Section 12.2.
"Claims" means any and all damages, deficiencies, demands, debts,
obligations, losses, claims, product liability claims, actions, suits,
arbitrations, proceedings, liabilities, actual damages, fines, penalties,
assessments, Orders, costs and expenses (including reasonable expenses,
reasonable settlement payments, reasonable investigation expenses and reasonable
attorney's fees) of every kind (whether absolute, accrued, contingent or other).
The foregoing described items include those asserted against or incurred by an
Indemnitee from an Indemnitor. Any payments made as a Post-Closing Adjustment
of the Purchase Price in accordance with Section 3.2 shall not be a Claim for
purposes of this Agreement.
"Closing" has the meaning set forth in Section 4.1.
"Closing Date" has the meaning set forth in Section 4.1.
"Closing Date Peroxides Business Balance Sheet" means the internally
prepared, carved-out, unaudited balance sheet of the Peroxides Business as of
the Closing Date.
"Commingled Items" has the meaning set forth in Section 2.15.
"Competing Business" has the meaning set forth in Section 8.1.
"Confidentiality Agreement" means the letter agreement between the
Parties dated October 16, 2000, as supplemented by the letter dated January 30,
2001.
"Consent" has the meaning set forth in Section 4.4(a).
"Contracts" has the meaning set forth in Section 2.1(e).
2
"Conveyance Deadline" has the meaning set forth in Section 7.9.1(c).
"Definitive Agreements" means, individually and collectively, this
Agreement and the Ancillary Documents.
"Dispute Resolution Procedure" means the process described in Article
13 of this Agreement.
"Encumbrances" means all liens, Claims, charges, security interests,
pledges, mortgages or other conditions, restrictions, rights of way,
limitations, agreements and encumbrances or rights or Claims of others
(including, without limitation, any options or similar rights) of any character
whatsoever.
"Environmental Annex" means the Environmental Annex attached to this
Agreement as Annex III.
---------
"Equipment" has the meaning set forth in Section 2.1(c).
"Excluded Contract" means any agreement, or right or obligation within
any agreement, not relating or pertaining to the Peroxides Business or other
contract listed on Schedule 1.1.
------------
"Excluded Equipment" has the meaning set forth in Section 2.2(c).
"Excluded Items" has the meaning set forth in Section 2.2.
"Excluded Resins Businesses" means the business (including research,
development, distribution, manufacturing, sales and marketing) of Hercules'
Resins Division related to hydrocarbon resins, gum rosin resins, terpene
specialties and terpene resins, including resins and liquids, wood rosins and
by-products and derivatives of each of them and toner resins, and all rights,
title and interest related thereto.
"FIRPTA Certificate" has the meaning set forth in Section 4.2(b)(i).
"Franklin Buildings" has the meaning set forth in Section 2.1(b).
"Franklin Common Areas" has the meaning set forth in Section 7.9.2(e).
"Franklin Declaration" has the meaning set forth in Section 7.9.2(g).
"Franklin Ground Lease" has the meaning set forth in Section 7.9.2(a).
"Franklin Land" has the meaning set forth in Section 2.1(b).
"Franklin Leasehold Policy" has the meaning set forth in Section
7.9.2(d).
"Franklin Memorandum of Lease" has the meaning set forth in Section
7.9.2(b).
"Franklin Plant" has the meaning set forth in Section 2.1(b).
3
"Franklin Retained Property" has the meaning set forth in Section
7.9.2.
"Franklin Survey" has the meaning set forth in Section 7.9.2(e).
"GAAP" means U.S. generally accepted accounting principles,
consistently applied, except for certain required footnotes, schedules and
disclosures that the Parties agree in writing, in a schedule to the Agreement,
to exclude.
"Gibbstown Declaration" has the meaning set forth in Section
7.9.1(b)(xi).
"Gibbstown Easements" means the Gibbstown Wastewater Pipeline
Easement, the Gibbstown Permanent Roadway Easement and the Gibbstown
Environmental Access Easement.
"Gibbstown Ground Lease" has the meaning set forth in Section
7.9.1(b)(iii).
"Gibbstown Memorandum of Lease" has the meaning set forth in Section
7.9.1(b)(iii).
"Gibbstown Land" has the meaning set forth in Section 2.1(a).
"Gibbstown Leasehold Policy" has the meaning set forth in Section
7.9.1(b)(v).
"Gibbstown Owner's Policy" has the meaning set forth in Section
7.9.1(c)(iii).
"Gibbstown Plant" has the meaning set forth in Section 2.1(a).
"Gibbstown Reciprocal Access Easement" has the meaning set forth in
Section 7.9.1(b).
"Gibbstown Retained Property" has the meaning set forth in Section
7.9.1(a).
"Gibbstown Survey" has the meaning set forth in Section
7.9.1(b)(viii).
"Governmental Agency" means any foreign, national, federal, state or
local governmental, judicial, regulatory or administrative body, board,
commission, court, panel, tribunal, agency, instrumentality, authority, or
political subdivision thereof within or without the United States.
"Hercules Insurance" means any and all insurance policies, self-
insurance programs and other forms of insurance purchased, acquired, accepted or
maintained by Hercules to cover risks to or losses of any Peroxides Business
Item prior to the Closing.
"Hercules Manuals" has the meaning set forth in Section 8.8.
"Hercules Peroxides Affiliate" has the meaning set forth in Section
5.3.
4
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Human Resorces Agreement" means the Human Resources Agreement
attached to this Agreement as Annex II.
--------
"Indemnitee" has the meaning set forth in Section 12.4(a).
"Indemnitor" has the meaning set forth in Section 12.4(a).
"Intellectual Property" means (a) all inventions and discoveries
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all re-issuance, continuations, continuations-in-
part, revisions, extensions and reexaminations thereof listed on Schedule
--------
2.1(g), (b) all trademarks and service marks listed on Schedule 2.1(g), together
------ ---------------
with all translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications, registrations
and renewals in connection therewith, (c) all copyrightable works, all
copyrights and all applications, registrations and renewals in connection
therewith, (d) all mask works and all applications, registration, and renewals
in connection therewith, (e) all know-how, trade secrets, technical information
and confidential business information (whether patentable or unpatentable and
whether or not reduced to practice), including, ideas, research and development,
formulas, compositions, manufacturing and production processes, techniques and
methods, technical data, designs, drawings, blue prints, patterns,
specifications, assembly procedures, test procedures, instruction manuals,
operation manuals, maintenance manuals, reliability data, quality control data,
customer and supplier lists, parts lists, pricing and cost information and
business and marketing plans and proposals, (f) all computer software (excluding
corporate standard software) used solely in the Peroxides Business (including
data and related documentation), (g) all other proprietary rights and (h) all
copies and tangible embodiments thereof (in whatever form or medium).
"Inventories" has the meaning set forth in Section 2.1(d).
"Judgment Liens" has the meaning set forth in Section 7.9.1(b)(iv).
"Knowledge" means, with respect to any representation, warranty or
statement of any Person in any of the Definitive Agreement that is qualified by
such Person's "knowledge:" (a) in the case of Hercules, the actual knowledge of
any of the individuals identified on Schedule 1.1 and (b) in the case of Buyer,
------------
the actual knowledge of any of the individuals identified on Schedule 1.1.
------------
"Leases" has the meaning set forth in Section 5.8(b).
"Leased Personal Property" has the meaning set forth in Section
5.9(b).
"Leased Real Property" has the meaning set forth in Section 5.8(b).
"Liens" has the meaning set forth in Section 5.8(a)(i).
5
"Material Permits" has the meaning set forth in Section 5.19(b).
"Notice" has the meaning set forth in Section 14.6.
"Notice of Claim" has the meaning set forth in Section 12.4(a).
"Order" means any judgment, order, writ, decree, injunction or other
determination of any Authority or arbitrator or similar body whose finding,
ruling or holding is legally binding or is enforceable as a matter of right (in
any case, whether preliminary or final).
"Ordinary Course" means any and all conduct or operation of the
Peroxides Business or of a business, item, matter or activity related to or in
connection with the Peroxides Business and the ownership, possession and use of
the Peroxides Business Items, all in the ordinary course.
"Owned Real Property" has the meaning set forth in Section 5.8(a).
"Permits" means all rights and incidents of interest in and to all
licenses, certificates, consents, permits, approvals and other authorizations of
any Authority relating to the operation of the Peroxides Business, including
those required under any Environmental Laws, (as defined in the Environmental
Annex) statutes, Orders, rules and regulations.
"Permitted Encumbrances" means, as of any particular time: (a) liens
for current state and local property taxes not yet due and payable; (b)
covenants, restrictions, rights-of-way, easements, limitations and agreements
contained in instruments of record which, individually or in the aggregate, are
not material in character, amount or extent and which do not adversely affect,
detract from or inhibit the use or value of the Peroxides Business Items, the
Gibbstown Plant, Franklin Plant or the conduct of the Peroxides Business
together with the Gibbstown Reciprocal Access Easement, the Water Line Easement
and the Gibbstown Declaration and the Gibbstown Ground Lease and the Franklin
Declaration and Franklin Ground Lease as provided under this Agreement; and (c)
the items, if any, listed in Schedule 1.1, which, individually or in the
------------
aggregate, are not material in character, amount or extent and which do not,
individually or in the aggregate, adversely affect, detract from or inhibit the
use or value of the Peroxides Business Items or the conduct of the Peroxides
Business.
"Peroxides Area" means, the area of the manufacturing facility
designated as such in the Plant Operating Agreement.
"Peroxides Business" means the entire peroxides business of Hercules,
including the research, development, distribution, manufacturing, marketing and
sales of the peroxides products; but excluding: the Excluded Contracts, the
Excluded Equipment, the Excluded Items, the Excluded Resins Businesses, and the
Beringen Plant and its employees.
"Peroxides Business Financial Statements" means the internally
prepared, carved-out, unaudited balance sheet of the Peroxides Business as of
December 31, 2000 and the statement of operations for the Peroxides Business for
the one year period ending December 31, 2000.
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"Peroxides Business Items" means, individually and collectively, the
Purchased Assets and the Assumed Liabilities.
"Peroxides Confidential Information" means all information and data
relating to the Peroxides Business, without regard to form or medium, including
technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, business concepts, systems and methodologies of
business operations, drawings, processes, financial data, financial plans,
product plans or lists of actual or potential customers or suppliers, including
credit information, which is not commonly known by or available to the public.
"Peroxides Material Adverse Effect" means a material adverse effect
upon or change in (a) the business, assets, liabilities, properties, condition
(financial or otherwise), operations or results of operations of Hercules or the
Peroxides Business taken as a whole, or (b) the ability to continue to conduct
the Peroxides Business, or (c) Hercules' ability to consummate the Transactions.
"Peroxides Material Contracts" has the meaning set forth in Section
5.11(a).
"Peroxides Materiality Standard" means, to the extent that the item(s)
or matter(s) in question, individually or in the aggregate, would or could be
reasonably expected to have a Peroxides Material Adverse Effect.
"Person" means an individual, partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization (whether or not
regarded as a legal entity under applicable law), trust, estate, agency or other
entity and any Authority.
"Plant Operating Agreement" means the Plant Operating Agreement to be
executed at the Closing between Hercules and Buyer related to the peroxides
business located at Hercules' Franklin, Virginia, U.S.A. facility, substantially
in the form of Exhibit A attached hereto.
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"Post-Closing Adjustment" has the meaning set forth in Section 3.2.
"Pre-Closing Period" means the period between the execution of this
Agreement and the Closing.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Resolution Panel" has the meaning set forth in Section 13.2.
"Retained Liabilities" has the meaning set forth in Section 2.5.
"Subdivision Approvals" has the meaning set forth in Section
7.9.1(c)(i).
"Super Contract Consents" are those consents listed on Schedule
--------
5.11(b).
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"Taxes" means (a) any tax, charge, fee, levy or other assessment,
including any net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, payroll, employment, social security, withholding,
unemployment, excise, estimated, stamp, occupancy, occupation, property or other
similar taxes, including any interest or penalties thereon, and additions to tax
or additional amounts imposed by any Authority or (b) any liability for payment
of any taxes, interest, penalty, addition to tax or like additional amount
resulting from the application of Treasury Regulation Section 1.1502-6 or
comparable applicable law.
"Third Party Lease" has the meaning set forth in Section 5.8(a)(ii).
"Third Person" or "Third Persons" shall mean Person(s) other than
Buyer, Hercules, their respective Affiliates [and Persons who are, at the
relevant time,] their respective directors, officers, employees, agents,
consultants, representatives and successors.
"Third Person Claim" has the meaning set forth in Section 12.4(b).
"Threshold Loss Amount" has the meaning set forth in Section 12.5(a).
"Title Company" has the meaning set forth in Section 7.9.1(b)(v).
"Tolling Agreements" means the Tolling Agreements between the Parties
substantially in the form attached to this Agreement as Exhibits B-1 and B-2 to
------------ ---
be executed and delivered at Closing.
"Transactions" means individually and collectively the following: (a)
the execution and delivery of each and all of the Definitive Agreements; (b) the
sale, assignment, transfer and delivery by Hercules to Buyer of all right, title
and interest of Hercules in, to and under the Purchased Assets, free and clear
of all Encumbrances other than Permitted Encumbrances, and the purchase, receipt
and acceptance by Buyer of such right, title and interest; (c) the assumption by
Buyer of the Assumed Liabilities; (d) the effectuation and implementation of
each and all other transactions contemplated by the Definitive Agreements; and
(e) the taking of any and all action necessary to accomplish the foregoing.
"Utilities Services Agreement" has the meaning set forth in Section
7.9.2(h).
"Water Line" has the meaning set forth in Section 7.9.1(b)(vi).
"Water Line Easement" has the meaning set forth in Section
7.9.1(b)(vi).
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