STOCK PURCHASE AGREEMENT Dated as of November 5, 2007 by and among Cloud Holding LLC Icahn Enterprises Holdings L.P., Arnos Corp., Philip Services Corporation and PSC Metals Inc.
Dated
as
of November 5, 2007
by
and
among
Cloud
Holding LLC
Icahn
Enterprises Holdings L.P.,
Arnos
Corp.,
Xxxxxx
Services Corporation
and
PSC
Metals Inc.
Table
of Contents
Page | |||
ARTICLE
I TERMS OF THE TRANSACTION
|
1
|
||
ARTICLE
I
|
TERMS
OF THE TRANSACTION
|
|
1
|
1.1
|
Agreement
to Sell and to Purchase the Metals Stock.
|
1
|
|
1.2
|
Purchase
Price and Payment.
|
1
|
|
1.3
|
Closing.
|
1
|
|
1.4
|
Actions
at the Closing.
|
2
|
|
ARTICLE
II REPRESENTATIONS AND WARRANTIES OF PSC
|
2
|
||
2.1
|
Organization
of PSC.
|
2
|
|
2.2
|
Authority.
|
2
|
|
2.3
|
Title.
|
2
|
|
2.4
|
No
Conflicts.
|
2
|
|
2.5
|
Governmental
Consents and Approvals.
|
3
|
|
2.6
|
Working
Capital Amount.
|
3
|
|
2.7
|
Brokers.
|
3
|
|
2.8
|
Accuracy
of Statements.
|
3
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF PSC RELATING TO THE CORPORATION
AND
ITS SUBSIDIARIES
|
3
|
||
3.1
|
Due
Organization; Authority.
|
4
|
|
3.2
|
Capitalization.
|
4
|
|
3.3
|
Subsidiaries.
|
4
|
|
3.4
|
Financial
Statements.
|
4
|
|
3.5
|
Governmental
Approvals; No Violations
|
5
|
|
3.6
|
No
Adverse Effects or Changes.
|
5
|
|
3.7
|
Title
to Properties.
|
6
|
|
3.8
|
Tax.
|
6
|
|
3.9
|
Employee
Benefit Plans.
|
6
|
|
ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
|
8
|
||
4.1
|
Litigation.
|
8
|
|
4.2
|
Claims
Against Officers and Directors.
|
8
|
|
4.3
|
Insurance.
|
8
|
|
4.4
|
Compliance
with Law.
|
9
|
|
4.5
|
Undisclosed
Liabilities.
|
9
|
|
4.6
|
Related
Parties.
|
9
|
|
4.7
|
Intellectual
Property.
|
9
|
|
4.8
|
Environmental
Matters.
|
10
|
|
4.9
|
Employees,
Labor Matters, etc.
|
11
|
i
4.10
|
Real
Property.
|
12
|
|
4.11
|
Tangible
Personal Property.
|
12
|
|
4.12
|
Contracts.
|
12
|
|
4.13
|
Licenses.
|
13
|
|
4.14
|
Accuracy
of Statements.
|
13
|
|
ARTICLE
V REPRESENTATIONS AND WARRANTIES OF BUYER AND IEH
|
14
|
||
5.1
|
Organization
of Buyer and IEH.
|
14
|
|
5.2
|
Authority.
|
14
|
|
5.3
|
No
Conflicts.
|
14
|
|
5.4
|
Consents
and Approvals.
|
15
|
|
5.5
|
Brokers.
|
15
|
|
5.6
|
Financial
Condition.
|
15
|
|
ARTICLE
VI COVENANTS
|
15
|
||
6.1
|
Maintenance
of Business Prior to Closing.
|
15
|
|
6.2
|
Efforts
to Consummate Transaction.
|
17
|
|
6.3
|
Tax
Matters.
|
18
|
|
ARTICLE
VII CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND IEH
|
18
|
||
7.1
|
Warranties
True as of Both Present Date and Closing Date.
|
18
|
|
7.2
|
Compliance
by PSC and the Corporation.
|
19
|
|
7.3
|
Certificates
of PSC and the Corporation.
|
19
|
|
7.4
|
No
Material Adverse Change.
|
19
|
|
7.5
|
Actions
or Proceedings.
|
19
|
|
7.6
|
Conversion
to Limited Liability Companies.
|
19
|
|
ARTICLE
VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF PSC AND THE
CORPORATION
|
19
|
||
8.1
|
Warranties
True as of Both Present Date and Closing Date.
|
19
|
|
8.2
|
Compliance
by Buyer.
|
19
|
|
8.3
|
Certificates
of Buyer and IEH.
|
20
|
|
8.4
|
Actions
or Proceedings.
|
20
|
|
ARTICLE
IX TERMINATION
|
20
|
||
9.1
|
Termination.
|
20
|
|
9.2
|
Effect
of Termination.
|
20
|
|
ARTICLE
X INDEMNIFICATION
|
21
|
||
10.1
|
Indemnification
by Arnos.
|
21
|
|
10.2
|
Claims.
|
21
|
ii
10.3
|
Notice
of Third Party Claims; Assumption of Defense.
|
21
|
|
10.4
|
Settlement
or Compromise.
|
22
|
|
10.5
|
Failure
of Arnos to Act.
|
22
|
|
10.6
|
Tax
Character.
|
23
|
|
10.7
|
Sole
and Exclusive Remedy.
|
23
|
|
ARTICLE
XI DEFINITIONS
|
23
|
||
11.1
|
Defined
Terms.
|
23
|
|
ARTICLE
XII MISCELLANEOUS
|
29
|
||
12.1
|
Investigation.
|
29
|
|
12.2
|
Survival
of Representations and Warranties.
|
30
|
|
12.3
|
Entire
Agreement.
|
30
|
|
12.4
|
Waiver.
|
30
|
|
12.5
|
Amendment.
|
30
|
|
12.6
|
No
Third Party Beneficiary.
|
30
|
|
12.7
|
Assignment;
Binding Effect.
|
30
|
|
12.8
|
Headings.
|
30
|
|
12.9
|
Invalid
Provisions.
|
30
|
|
12.10
|
Governing
Law.
|
30
|
|
12.11
|
Counterparts.
|
31
|
|
12.12
|
Waiver
of Jury Trial.
|
31
|
|
12.13
|
Consent
to Jurisdiction.
|
31
|
|
12.14
|
Expenses.
|
31
|
|
12.15
|
Notices.
|
32
|
|
12.16
|
Further
Assurances.
|
33
|
iii
THIS
STOCK PURCHASE AGREEMENT (this “Agreement”),
dated
as of November 5, 2007, by and among Icahn Enterprises Holdings, L.P., a
Delaware limited partnership (“IEH”),
Cloud
Holding LLC, a Delaware limited liability company (the “Buyer”), the sole member
of which is AREH Oil & Gas Corp., which is, in turn, a wholly-owned
subsidiary of IEH, Arnos Corp., a Nevada corporation (“Arnos”),
Xxxxxx Services Corporation, a Delaware corporation and a majority owned
subsidiary of Arnos (“PSC”),
and
PSC Metals, Inc., an Ohio corporation and a wholly owned subsidiary of PSC
(the
“Corporation”).
Capitalized terms not otherwise defined herein have the meanings set forth
in
Article XI.
Recitals:
WHEREAS,
PSC
owns
all of the issued and outstanding capital stock (the “Metals
Stock”)
of the
Corporation; and
WHEREAS,
PSC desires to sell to Buyer, and Buyer desires to purchase from PSC, the
Metals
Stock, upon the terms and subject to the conditions in this
Agreement.
NOW,
THEREFORE, the parties
hereto agree as follows:
ARTICLE
I
TERMS
OF THE TRANSACTION
1.1 Agreement
to Sell and to Purchase the Metals Stock.
At the
Closing, and on the terms set forth in this Agreement and subject only to
the
conditions set forth in Articles
VII and VIII
of this
Agreement, PSC shall cause the Metals Stock to be sold, assigned, transferred,
delivered and conveyed to Buyer, and Buyer shall purchase and accept the
Metals
Stock.
1.2 Purchase
Price and Payment.
In
consideration of the sale of the Metals Stock to Buyer, Buyer shall pay to
PSC
at the Closing an amount equal to $335,000,000 (the “Purchase
Price”)
by
wire transfer in immediately available funds to a bank account or accounts
to be
designated by PSC.
1.3 Closing.
Subject
to fulfillment or waiver of the conditions set forth in Articles
VII and VIII
of this
Agreement, the closing of the transactions contemplated by this Agreement
(the
“Closing”)
shall
take place (a) at the offices of the Buyer, located at White Plains Plaza,
000
Xxxxxxxx Xxxxxx - Xxxxx 0000, Xxxxx Xxxxxx, XX 00000 or such other place
as the
parties may agree, at 10:00 a.m., local time, on the second business day
immediately following the day on which the last to be satisfied or waived
of the
conditions set forth in Articles VII
and VIII
(other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction or waiver of those conditions) shall be
satisfied or waived in accordance herewith or (b) at such other time, date
or
place as PSC and Buyer may agree. The date on which the Closing occurs is
herein
referred to as the “Closing
Date”.
The
Closing shall be deemed effective for all accounting, financial and reporting
purposes as of the close of business on the Closing Date.
1.4 Actions
at the Closing. At
the
Closing: (i) PSC shall deliver to Buyer one or more certificates representing
the Metals Stock duly endorsed in blank or accompanied by stock powers or
other
instruments of transfer duly executed in blank, and otherwise in form acceptable
for transfer of the Metals Stock to Buyer; (ii) Buyer shall deliver to PSC
the
Purchase Price by wire transfer in immediately available funds to a bank
account
or accounts specified by PSC; (iii) PSC shall deliver to Buyer evidence in
form
and substance reasonably satisfactory to Buyer that the Corporation and its
Subsidiaries have each been released from any further liability, obligation
or
Lien under the UBS Facility; and (iv) PSC shall deliver to Buyer evidence
in
form and substance reasonably satisfactory to Buyer of the release of the
Corporation and its Subsidiaries from any further liability or obligation
under
that certain Intercompany Note dated December 30, 2004 issued by PSC and
each of
its Subsidiaries to PSC and each of its Subsidiaries (the “Intercompany
Note”).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF PSC
As
an
inducement to Buyer and IEH to enter into this Agreement, PSC hereby makes
the
following representations and warranties to Buyer and IEH except as set forth
in
the Disclosure Schedule attached to this Agreement (it being agreed that
any
exceptions to such representations and warranties shall clearly identify
the
sections of this Agreement to which they apply):
2.1 Organization
of PSC.
PSC is a
corporation duly organized, validly existing and in good standing under the
Laws
of the State of Delaware. PSC has full organizational power and authority
to
execute and deliver this Agreement and to perform its obligations hereunder
and
to consummate the transactions contemplated hereby, including without
limitation, the obligation to transfer the Metals Stock.
2.2 Authority.
The
execution and delivery by PSC of this Agreement, and the performance by PSC
of
its obligations hereunder, have been duly and validly authorized by PSC’s board
of directors and no other action on the part of PSC, its board of directors
or
stockholders is necessary for such execution, delivery or performance. This
Agreement has been duly and validly executed and delivered by PSC and
constitutes a legal, valid and binding obligation of PSC, enforceable against
PSC in accordance with its terms.
2.3 Title.
The
delivery of the Metals Stock and other instruments of transfer delivered
by PSC
to Buyer at the Closing will transfer to Buyer good and valid title to the
Metals Stock owned by PSC immediately prior to the Closing (which Metals
Stock
represents all of the issued and outstanding shares of capital stock of the
Corporation immediately prior to the Closing), free and clear of all
Liens.
2.4 No
Conflicts.
The
execution and delivery by PSC of this Agreement do not, and the performance
by
PSC of its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict
with or result in a violation or breach of any of the terms, conditions or
provisions of the organizational documents of PSC or the
Corporation;
2
(b) conflict
with or result in a violation or breach of any term or provision of any Law
or
Order applicable to PSC or the Corporation ; or
(c) (i)
except as set forth on Schedule
2.4,
conflict with or result in a violation or breach of, (ii) constitute (with
or
without notice or lapse of time or both) a default under, (iii) require PSC
or
the Corporation to obtain any consent, approval or action of, make any filing
with or give any notice to any Person, other than under the UBS Facility,
as a
result or under the terms of, (iv) result in or give to any Person any right
of
termination, cancellation, acceleration or modification in or with respect
to,
or (v) result in the creation or imposition of any Lien upon the Corporation
or
any of the Assets and Properties of the Corporation under, any Contract or
License to which PSC or the Corporation is a party or by which any of the
Corporation’s Assets and Properties are bound.
2.5 Governmental
Consents and Approvals.
Except
as set forth on Schedule
2.5,
no
consent, authorization or approval of, filing or registration with, or
cooperation from, any Governmental Authority is necessary in connection with
the
execution, delivery and performance by PSC of this Agreement or the consummation
of the transactions contemplated hereby.
2.6 Working
Capital Amount.
As of
the Closing Date, the Working Capital Amount, after excluding the $34,600,000
debt obligation incurred under the UBS Facility in connection with the
September, 2007 acquisition of Wimco Operating Company, Inc. and certain
of its
Affiliates, shall be at least $135,000,000.
2.7 Brokers.
Neither
PSC nor the Corporation has used any broker or finder in connection with
the
transactions contemplated hereby, and neither Buyer nor any Affiliate of
Buyer
has or shall have any liability or otherwise suffer or incur any Loss as
a
result of or in connection with any brokerage or finder’s fee or other
commission of any Person retained or purporting to be retained by PSC or
by the
Corporation in connection with any of the transactions contemplated by this
Agreement.
2.8 Accuracy
of Statements.
Neither
this Agreement nor any schedule, exhibit, statement, list, document, certificate
or other information furnished or to be furnished by or on behalf of PSC
to
Buyer or any representative or Affiliate of Buyer in connection with this
Agreement or any of the transactions contemplated hereby contains or will
contain any untrue statement of a material fact or omits or will omit to
state a
material fact necessary to make the statements contained herein or therein,
in
light of the circumstances in which they are made, not misleading.
3
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PSC RELATING TO THE CORPORATION AND ITS
SUBSIDIARIES
As
an
inducement to Buyer and IEH to enter into this Agreement, PSC hereby makes
the
following representations and warranties to Buyer and IEH, except as set
forth
in the Disclosure Schedule attached to this Agreement (it being agreed that
any
exceptions to such representations and warranties shall clearly identify
the
sections of this Agreement to which they apply).
3.1 Due
Organization; Authority.
(a) Each
of
the Corporation and the Subsidiaries is duly organized and validly existing
under the laws of its jurisdiction of incorporation or organization, as the
case
may be, with all requisite power and authority to own, lease and operate
its
properties and to carry on its business as they are now being owned, leased,
operated and conducted. Each of the Corporation and the Subsidiaries is licensed
or qualified to do business and is in good standing (where the concept of
“good
standing” is applicable) as a foreign corporation in each jurisdiction where the
nature of the properties owned, leased or operated by it and the business
transacted by it require such licensing or qualification.
(b) PSC
has
delivered to Buyer true, correct and complete copies of the organizational
documents of the Corporation, which organizational documents are in full
force
and effect.
(c) The
Corporation’s board of directors has duly authorized and approved this Agreement
and, this Agreement has been duly authorized by the Corporation by all necessary
corporate action.
3.2 Capitalization.
(a) The
authorized capital stock of the Corporation consists of 100 shares of common
stock, of which one (1) share of common stock (constituting all of the shares
of
capital stock of the Corporation) is issued and outstanding as of the date
hereof and represent all of the shares of the Corporation’s capital stock issued
and outstanding. All of the shares of Metals Stock have been duly authorized
and
are validly issued, fully paid and nonassessable.
(b) PSC
owns
the Metals Stock of record and beneficially, free and clear of all Liens,
other
than Liens securing the UBS Facility. No Person holds any option, warrant,
convertible security or other right to acquire any capital stock or other
securities of the Corporation. There are no obligations, contingent or
otherwise, of the Corporation to repurchase, redeem or otherwise acquire
any
ownership interests of the Corporation or to provide funds to or make any
material investment (in the form of a loan, capital contribution or otherwise)
in any Person.
3.3 Subsidiaries.
Except
as disclosed on Schedule
3.3,
all of
the Subsidiaries are directly or indirectly wholly owned by the
Corporation.
4
3.4 Financial
Statements.
(a) PSC
has
delivered to Buyer true, correct and complete copies of the Audited Financial
Statements. The Audited Financial Statements have been prepared in accordance
with GAAP consistently applied and present fairly the financial position,
assets, liabilities and retained earnings of the respective companies as
of the
dates thereof and the revenues, expenses, results of operations, and cash
flows
of the respective companies for the periods covered thereby. The Audited
Financial Statements are in accordance with the books and records of the
respective companies, and do not reflect any transactions which are not bona
fide transactions and do not contain any untrue statement of a material fact
(whether or not required to be disclosed under GAAP) or omit to state any
material fact necessary to make the statements contained therein, in light
of
the circumstances in which they were made, not misleading.
(b) PSC
has
delivered to Buyer true and complete copies of the Interim Financial Statements.
The Interim Financial Statements present fairly the financial position, assets,
liabilities and retained earnings of the respective companies as of the dates
thereof and the revenues, expenses, results of operations, and cash flows
of the
respective companies for the periods covered thereby. The Interim Financial
Statements are in accordance with the books and records of the respective
companies, and do not reflect any transactions which are not bona fide
transactions and do not contain any untrue statement of a material fact (whether
or not required to be disclosed under GAAP) or omit to state any material
fact
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.
3.5 Governmental
Approvals; No Violations.
Other
than (i) the filings and/or notices under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, if required, (ii) compliance with any
applicable foreign or state securities or blue sky laws, (iii) the filings
or
notices that are required and customary pursuant to any state environmental
transfer statutes (collectively, clauses (i) through (iii), the “Governmental
Approvals”),
(iv)
a consent under the UBS Facility and (v) those consents and approvals of
third
Persons set forth on Schedule
3.5,
no
notices, reports or other filings are required to be made by the Corporation
with, nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Corporation from, any Governmental or Regulatory
Authority or any other Person in connection with the execution, delivery
and
performance of this Agreement by the Corporation and the consummation of
the
transactions contemplated hereby.
3.6 No
Adverse Effects or Changes.
Except
as set forth on Schedule
3.6,
since
August 31, 2007, (i) the Subsidiaries and the Corporation, taken as a whole,
have not suffered any Material Adverse Effect; (ii) there has been no change,
event, development, damage or circumstance affecting the Subsidiaries and
the
Corporation, taken as a whole, that, individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect on the Subsidiaries
and
the Corporation, taken as a whole; (iii) there has not been any material
change
by the Corporation in its accounting methods, principles or practices, or
any
material revaluation by the Corporation of any of its assets, including material
writing down the value of inventory or material writing off notes or accounts
receivable; (iv) neither the Corporation, the Subsidiaries nor any of their
officers or directors in their representative capacities on behalf of the
Corporation or Subsidiaries, as the case may be, has taken any action that,
had
such action been taken following the date hereof without IEH’s approval, would
breach Section 6.1(b), and (v) each of the Corporation and the Subsidiaries
has
conducted its business only in the ordinary course of business consistent
with
past practice, except for the conversion through merger, conversion or otherwise
of some or all of the Subsidiaries from being corporate entities to becoming
limited liability companies.
5
3.7 Title
to Properties.
Each of
the Corporation and the Subsidiaries has good and marketable title to, and
each
of them is the lawful owner of, all of their respective tangible and intangible
assets, properties and rights used in connection with their respective business
and all of their respective tangible and intangible assets, properties and
rights reflected in the Financial Statements, except for changes accruing
in the
ordinary course of business that would not, individually or in the aggregate,
adversely affect the ability of the Subsidiaries and the Corporation, taken
as a
whole, to conduct their business in the ordinary course, consistent with
past
practice.
3.8 Tax.
Except
as set forth on Schedule
3.8:
(a) The
Corporation and each Subsidiary has duly and timely filed with the appropriate
taxing authorities all material federal, state and local income Tax Returns
and
all other material Tax Returns required to be filed through the date hereof
and
will duly and timely file any such returns required to be filed on or prior
to
the Closing. Such Tax Returns and other information filed are (and, to the
extent they will be filed prior to the Closing, will be) complete and accurate
in all material respects. Neither the Corporation nor any Subsidiary has
pending
any request for an extension of time within which to file federal, state
or
local income Tax Returns.
(b) None
of
the Corporation, any Subsidiary, Buyer or any direct or indirect Subsidiary
of
IEH is or will be liable for any Pre-Closing Taxes, except for Pre-Closing
Taxes
(other than income Taxes) shown as due and payable after the Closing on the
Financial Statements.
(c) No
federal, state, local or foreign audits or other administrative proceedings
or
court proceedings are presently pending with regard to any material Taxes
or
material Tax Returns of the Corporation or any Subsidiary. Neither the
Corporation nor any Subsidiary has received a written notice of any such
pending
audits or proceedings. There are no outstanding waivers extending the statutory
period of limitation relating to the payment of Taxes due from the Corporation
or any Subsidiary.
(d) Neither
the IRS nor any other taxing authority (whether domestic or foreign) has
asserted in writing against the Corporation or any Subsidiary any material
deficiency or material claim for Taxes in excess of the reserves established
therefor.
(e) There
are
no Liens for Taxes upon any property or assets of the Corporation or any
Subsidiary, except for Liens for Taxes not yet due and payable and Liens
for
Taxes that are being contested in good faith by appropriate proceedings as
set
forth on Schedule
3.8(e)
and as
to which adequate reserves have been established in accordance with
GAAP.
6
3.9 Employee
Benefit Plans.
Except
as set forth on Schedule
3.9
or in
the Financial Statements or except for any of the following which does not
increase any of the liabilities or obligations to which IEH is subject to
as an
Affiliate of the Corporation under ERISA:
(a) Except
as
accrued thereafter in accordance with the terms of the Plans as of the date
hereof, neither the Corporation nor any of the Subsidiaries has incurred
any
material liability, and no event, transaction or condition has occurred or
exists that could result in any material liability, on account of any Plans,
including but not limited to liability for (i) additional contributions
required to be made under the terms of any Plan or its related trust, insurance
contract or other funding arrangement with respect to periods ending on or
prior
to the date hereof which are not reflected, reserved against or accrued in
the
Financial Statements; or (ii) breaches by the Corporation or any of the
Subsidiaries or any of its respective employees, officers, directors,
stockholders, or, to the Knowledge of PSC, the trustees under the trusts
created
under the Plans, or any other Persons under ERISA or any other applicable
Law.
Each of the Plans has been operated and administered in material compliance
with
its terms, all applicable Laws and, if applicable, collective bargaining
agreements. Since the date of the Interim Financial Statements, neither the
Corporation nor any of the Subsidiaries has communicated to any current or
former director, officer, employee or consultant thereof any intention or
commitment to amend or modify any Plan, or to establish or implement any
other
employee or retiree benefit or compensation plan or arrangement, which would
materially increase the cost to the Corporation and the Subsidiaries, taken
as a
whole.
(b) Each
Plan
which is intended to be “qualified” within the meaning of Section 401(a) of the
Code, and the trust (if any) forming a part thereof has received or requested
a
favorable determination letter or is covered by an opinion letter from the
Internal Revenue Service and, to the Knowledge of PSC, no event has occurred
and
no condition exists which could reasonably be expected to result in the
revocation of any such determination. All amendments and actions required
to
bring each Plan into conformity with the applicable provisions of ERISA,
the
Code, and any other applicable Laws have been made or taken.
(c) There
are
no pending or threatened claims by or on behalf of any participant in any
of the
Plans, or otherwise involving any such Plan or the assets of any Plan, other
than routine claims for benefits in the ordinary course. The Plans are not
presently under audit or examination (nor has notice been received of a
potential audit or examination) by the IRS or the Department of
Labor.
(d) None
of
the Plans provides benefits of any kind with respect to current or former
employees, officers, or directors (or their beneficiaries) of the Corporation
or
any of the Subsidiaries beyond their retirement or other termination of
employment, other than (i)
coverage for benefits mandated by Section 4980B of the Code, (ii)
death
benefits or retirement benefits under an employee pension benefit plan (as
defined by section 3(2) of ERISA), or (iii)
benefits, the full cost of which is borne by such current or former employees,
officers, directors, or beneficiaries.
(e) No
Plan
sponsored by the Corporation is a “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA or a “multiple employer plan” as addressed in
section 4063 or 4064 of ERISA. No Plan sponsored by the Corporation is subject
to Title IV of ERISA.
(f) The
consummation of the transactions contemplated by this Agreement will not
(alone
or in combination with any other event, including, without limitation, the
passage of time) result in (i) any payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus payments or
otherwise) becoming due under any agreement or oral arrangement to any current
or former director, officer, employee or consultant of the Corporation or
any of
the Subsidiaries, (ii) any increase in the amount of salary, wages or other
benefits payable to any director, officer, employee or consultant of the
Corporation or any of the Subsidiaries, or (iii) any acceleration of the
vesting
or timing of payment of any benefits or compensation (including, without
limitation, any increased or accelerated funding obligation) payable to any
director, officer, employee or consultant of the Corporation or any of the
Subsidiaries.
7
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE CORPORATION
As
an
inducement to Buyer and IEH to enter into this Agreement, the Corporation
hereby
makes the following representations to Buyer and IEH, except as set forth
in the
Disclosure Schedule attached to this Agreement (it being agreed that any
exceptions to such representations and warranties shall clearly identify
the
sections of this Agreement to which they apply).
4.1 Litigation.
Except
as disclosed in the Financial Statements or on Schedule
4.1,
there
are no actions, suits, arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations, with such exceptions as are,
individually or in the aggregate, not material in nature or amount, pending
or,
to the Knowledge of PSC or the Corporation, threatened against or affecting
the
Corporation or any Subsidiary or any of their officers, directors, employees
or
agents in their capacity as such, or any of the Corporation’s or the
Subsidiaries’ respective Assets and Properties or the respective businesses of
the Corporation or the Subsidiaries, and to the Knowledge of PSC or the
Corporation, there are no facts or circumstances which may give rise to any
of
the foregoing. Except as disclosed in the Financial Statements or on
Schedule
4.1,
neither
the Corporation nor any Subsidiary is subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
Governmental Authority.
4.2 Claims
Against Officers and Directors.
Except
as set forth on Schedule
4.2,
there
are no pending or, to the Knowledge of PSC or the Corporation, threatened
claims
against any current or former director, officer, employee or agent of the
Corporation, any of its Subsidiaries or any other Person, which could give
rise
to any claim for indemnification against the Corporation or any of the
Subsidiaries or cause the Corporation or any of the Subsidiaries to incur
any
material liability or otherwise suffer or incur any material Loss.
4.3 Insurance.
(a) The
Corporation and the Subsidiaries, as the case may be, maintain insurance
policies that provide adequate and suitable insurance coverage for their
respective businesses and are on such terms, cover such risks and are in
such
amounts as the insurance customarily carried by comparable companies of
established reputation similarly situated and carrying on the same or similar
business.
8
(b) Prior
to
the date hereof, the Corporation has delivered to Buyer all insurance policies
(including policies providing property, casualty, liability, workers’
compensation, and bond and surety arrangements, but excluding any policies
where
the principal insured is a Person that is not the Corporation or the
Subsidiaries) under which the Corporation and the Subsidiaries are insured,
or
named insured or otherwise the principal beneficiaries of coverage. All such
insurance policies are in full force and effect. Neither the Corporation
nor any
of the Subsidiaries has received notice of any refusal of coverage with respect
to an existing policy. All premiums due under all such policies have been
paid.
4.4 Compliance
with Law.
Except
as set forth in the Financial Statements or on Schedule
4.4,
each of
the Corporation and the Subsidiaries is in material compliance and, at all
times, has been in material compliance in all respects with all applicable
Laws
relating to each of them or their respective Assets and Properties or business.
Except as disclosed in the Financial Statements or on Schedule
4.4,
no
investigation or review by any Governmental or Regulatory Authority or
self-regulatory authority is pending or, to the Knowledge of PSC or the
Corporation, threatened, nor has any such authority indicated orally or in
writing to PSC or the Corporation or any of the Subsidiaries an intention
to
conduct an investigation or review of the Corporation or any of the Subsidiaries
or, with respect to the Corporation, any of the Subsidiaries or
PSC.
4.5 Undisclosed
Liabilities.
Except
as disclosed in the Financial Statements or as set forth on Schedule
4.5,
neither
the Corporation nor any of the Subsidiaries has any material liabilities
or
obligations of any nature, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due, other than liabilities
and obligations incurred after August 31, 2007 in the ordinary course of
business consistent with past practice (including as to amount and
nature).
4.6 Related
Parties.
Except
(x) as set forth on Schedule
4.6
or (y)
as otherwise disclosed in the Financial Statements or (z) with respect to
clauses (i) and (iv), any Contract, transaction or arrangement in connection
with the acquisition of the Corporation and the Subsidiaries by Affiliates
of
Xxxx X. Icahn which was consummated on December 31, 2003, (i) no Affiliate
(other than an Affiliate consisting of the Corporation or a Subsidiary) of
the
Corporation nor any of the Subsidiaries is a party to any Contract with the
Corporation; (ii) no Affiliate (other than an Affiliate consisting of the
Corporation or a Subsidiary) of the Corporation nor any of the Subsidiaries
owes
any material amount of money to, nor is such Affiliate owed any material
amount
of money by, the Corporation or any of the Subsidiaries, (iii) neither the
Corporation nor any of the Subsidiaries has, directly or indirectly, guaranteed
or assumed any indebtedness for borrowed money or otherwise for the benefit
of
an Affiliate (other than an Affiliate consisting of the Corporation or a
Subsidiary) of the Corporation or any of the Subsidiaries; and (iv) since
December 31, 2006, neither the Corporation nor any of the Subsidiaries has
made
any material payment to, or engaged in any material transaction with, an
Affiliate (other than an Affiliate consisting of the Corporation or a
Subsidiary) of the Corporation.
9
4.7 Intellectual
Property.
(a) Each
of
the Corporation and the Subsidiaries owns, or possesses adequate rights to
use,
all of its respective material patents, trade names, trademarks, copyrights,
inventions, processes, designs, formulae, trade secrets, know-how and other
intellectual property rights necessary for, used or held for use in the conduct
of its business. All material intellectual property necessary for used or
held
for use in the conduct of the business of each of the Corporation or the
Subsidiaries has been duly registered with, filed in or issued by the relevant
filing offices, domestic or foreign, to the extent necessary or desirable
to
ensure full protection under any applicable Law, and such registrations,
filings
or issuances remain in full force and effect.
(b) To
the
Knowledge of the Corporation, the conduct of the business of each of the
Corporation or the Subsidiaries does not infringe or otherwise conflict with
any
rights of any Person in respect of intellectual property rights. To the
Knowledge of the Corporation, none of the intellectual property rights owned
by
each of the Corporation or the Subsidiaries is being infringed or otherwise,
in
any way, used or available for use by any Person without a license or permission
from the Corporation or the applicable Subsidiary, as the case may be, and
neither the Corporation nor any of the Subsidiaries has taken or omitted
to take
any action which would have the effect of waiving any of its rights thereunder.
Neither the Corporation nor any of the Subsidiaries has received written
notice
of any claim of infringement or conflict by any third party in respect of
any
intellectual property used by the Corporation or any of the
Subsidiaries.
4.8 Environmental
Matters.
Except
as set forth on Schedule
4.8
or in
the Financial Statements:
(a) Each
of
the Corporation and the Subsidiaries has obtained all material Environmental
Permits that are required with respect to its respective Assets and Properties
and businesses, either owned or leased;
(b) Each
of
the Corporation and the Subsidiaries and their respective Assets and Properties
and businesses are, and, to the Knowledge of PSC and the Corporation, have
been,
since January 1, 2004, in compliance in all material respects with all terms
and
conditions of all applicable Environmental Laws and Environmental
Permits;
(c) There
are
no Environmental Claims pending or, to the Knowledge of PSC or the Corporation,
threatened against the Corporation or any of the Subsidiaries. Neither the
Corporation nor any of the Subsidiaries has received any notice from any
Person
of any violation or liability arising under any Environmental Law or
Environmental Permit in connection with their respective Assets and Properties,
business or operations;
10
(d) Neither
the Corporation nor, to the Knowledge of PSC or the Corporation, any other
Person has caused or taken any action that will result in any material
liability, obligation or cost on the part of the Corporation or any of the
Subsidiaries relating to (x) environmental conditions on, above, under or
from
any properties or assets currently or formerly owned, leased, operated or
used
by the Corporation or any of the Subsidiaries, other than those as to which
reserves adequate for the payment in full to discharge such liabilities,
obligations or costs have been established on the unaudited monthly balance
sheet of the Corporation, dated as of August 31, 2007, or (y) the past or
present use, management, transport, treatment, generation, storage, disposal,
release or threatened release of Hazardous Materials;
(e) Neither
the Corporation nor any of the Subsidiaries owns, leases or operates, or
since
January 1, 2004 has owned, leased or operated, any property listed on the
National Priorities List pursuant to CERCLA or on the CERCLIS or on any other
federal or state list as sites requiring investigation or cleanup;
(f) Neither
the Corporation nor any of the Subsidiaries is transporting, has transported
since January 1, 2004, or is arranging for the transportation of, any Hazardous
Material to any location which is listed on the National Priorities List
pursuant to CERCLA, on CERCLIS, or on any similar federal or state list or
which
is the subject of federal, state or local enforcement actions or other
investigations that may lead to material claims against the Corporation or
any
of the Subsidiaries for investigative or remedial work, damage to natural
resources, property damage or personal injury including claims under
CERCLA;
(g) There
are
no sites, locations or operations at which either the Corporation or any
of the
Subsidiaries is currently undertaking, or has completed, any investigative,
remedial, response or corrective action as required by Environmental
Laws;
(h) There
are
no physical or environmental conditions existing on any property owned or
leased
by either the Corporation or any of the Subsidiaries resulting from its
operations or activities, past or present, at any location, that would give
rise
to any material on-site or off-site investigative or remedial obligations
or any
corrective action under any applicable Environmental Laws, other than those
as
to which reserves adequate for the payment in full to perform such obligations
or corrective actions have been established on the unaudited monthly balance
sheet of the Corporation dated as of August 31, 2007; and
(i) PSC
has
caused the Corporation to provide to Buyer all material environmental site
assessments, audits, investigations and studies in the Corporation’s or any of
the Subsidiaries possession, custody or control.
4.9 Employees,
Labor Matters, etc.
Except
as set forth in the Financial Statements or Schedule
4.9,
neither
the Corporation nor any of the Subsidiaries is a party to or bound by, and
none
of its respective employees is subject to, any collective bargaining agreement,
and there are no labor unions or other organizations representing, to the
Knowledge of the Corporation or any of the Subsidiaries, purporting to represent
or attempting to represent any employees employed by the Corporation or any
of
the Subsidiaries. There has not occurred or been threatened any material
strike,
slow down, picketing, work stoppage, concerted refusal to work overtime,
or
other similar labor activity with respect to any employees of the Corporation
or
any of the Subsidiaries. There are no material labor disputes currently subject
to any grievance procedure, arbitration or litigation, and there is no
representation petition pending, or to the Knowledge of PSC or the Corporation,
threatened with respect to any material number of the employees of the
Corporation or any of the Subsidiaries. Each of the Corporation and the
Subsidiaries has complied with all applicable Laws pertaining to the employment
or termination of employment of their respective employees, including, without
limitation, all such Laws relating to labor relations, equal employment
opportunities, fair employment practices, prohibited discrimination or
distinction and other similar employment activities, except for any failure
to
comply that, individually and in the aggregate, is not reasonably likely
to
result in any Material Adverse Effect on the Corporation and its Subsidiaries,
taken as a whole.
11
4.10 Real
Property.
Except
as set forth on Schedule
4.10,
(a)
each of the Corporation and the Subsidiaries has Good and Defensible Title
to,
or a valid and subsisting leasehold estate, or easement, in each of their
respective parcels of real property, leases in real property, or other interests
in real property (collectively, the “Real
Property”),
free
and clear of all Liens other than Permitted Encumbrances, and (b) all of
the
real property leases that constitute Real Property are valid, binding, and
enforceable in accordance with their terms, and are in full force and
effect.
4.11 Tangible
Personal Property.
Each of
the Corporation and the Subsidiaries is in possession of and has good title
to,
or has valid leasehold interests in or valid rights under contract to use,
all
of the real and personal property used or held for use in its business,
including its interest in all improvements, goods and other personal property
located on or used in connection with its Real Property (the “Fixtures
and Equipment”).
All
the Fixtures and Equipment are in good working order and condition, ordinary
wear and tear excepted, and their uses comply in all material respects with
all
applicable Laws. All of the Fixtures and Equipment are adequate for the uses
to
which they are being put and are sufficient for the conduct of the respective
businesses of the Corporation and the Subsidiaries in the manner as conducted
prior to the Closing. Each of the Corporation and the Subsidiaries owns all
of
its respective Fixtures and Equipment free and clear of all Liens except
the
Permitted Encumbrances.
4.12 Contracts.
(a) Schedule
4.12
contains
a true and complete list of each of the following Contracts as of the date
hereof:
(i) all
Contracts providing for a commitment of employment by the Corporation or
any of
its Subsidiaries or consultation services for the Corporation or any of the
Subsidiaries for a specified term and payments at any one time or in any
one
year in excess of $200,000;
(ii) all
Contracts with any Person containing any provision or covenant prohibiting
or
materially limiting the ability of the Corporation or any of the Subsidiaries
to
engage in any business activity or compete with any Person;
(iii) all
Contracts relating to any debt for borrowed money (other than trade payables)
of
the Corporation or any of the Subsidiaries in excess of $500,000 in principal
amount per any such Contract;
(iv) all
Contracts (other than this Agreement) providing for (i) the disposition or
acquisition of any assets or properties that individually or in the aggregate
are material to the business of the Corporation and the Subsidiaries, taken
as a
whole, or that contain continuing payment obligations (beyond customary
indemnity provisions) of the Corporation or any of the Subsidiaries in excess
of
$1,000,000 in amount per year per any such Contract, or (ii) any merger or
other
similar business combination among the Corporation or any of the Subsidiaries
and a Person that is not a Subsidiary;
12
(v) all
material Contracts (other than this Agreement) that prohibit or contain material
restrictions on the ability of the Corporation or any of the Subsidiaries
to
incur indebtedness or incur or suffer to exist any Lien, to purchase or sell
any
assets, to change the lines of business in which it participates or engages
or
to engage in any merger or other business combination;
(vi) all
Contracts establishing any joint venture, strategic alliance or other similar
collaboration, other than dedicated scrap metal purchase Contracts entered
into
in the ordinary course of business;
(vii) all
Contracts with any Person obligating the Corporation or any of the Subsidiaries
to guarantee or otherwise become directly or indirectly obligated with respect
to any debt for borrowed money (other than any such debt incurred in the
ordinary course of business) of the Corporation or any of the Subsidiaries
in
excess of $1,000,000 in principal amount per any such Contract;
(viii) all
Contracts for the leasing of real property by the Corporation or any of the
Subsidiaries providing for a lease payment in excess of $1,000,000 in amount
per
year per any such Contract and setting forth the address, landlord and tenant
for each lease; and
(ix) all
other
Contracts that (i) involve the payment, pursuant to the terms of any such
Contract, by the Corporation or any of the Subsidiaries of more than $1,000,000
annually per any such Contract, or (ii) cannot be terminated within 90 days
after giving notice of termination without resulting in a cost or penalty
to the
Corporation exceeding $200,000.
(b) Prior
to
the date hereof, true, correct and complete copies of each Contract required
to
be disclosed in Schedule
4.12
have
been delivered to, or made available for inspection by, Buyer. Each such
Contract is in full force and effect and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, of the Corporation or
any
of the Subsidiaries, as the case may be, and, of each other party thereto;
and
neither the Corporation nor any of the Subsidiaries nor, to the Knowledge
of the
Corporation or any of the Subsidiaries, any other party to such Contract,
is in
violation or breach of or default under any such Contract (or with notice
or
lapse of time or both, would be in violation or breach of or default under
any
such Contract). All conditions necessary to maintain these Contracts in force
have been duly performed.
4.14 Accuracy
of Statements.
Neither
this Agreement nor any schedule, exhibit, statement, list, document, certificate
or other information furnished or to be furnished by or on behalf of the
Corporation to Buyer or any representative or Affiliate of Buyer in connection
with this Agreement or any of the transactions contemplated hereby contains
or
will contain any untrue statement of a material fact or omits or will omit
to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not
misleading
13
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF BUYER AND IEH
Buyer
and
IEH hereby represent and warrant to PSC as follows:
5.1 Organization
of Buyer and IEH.
Buyer is
a limited liability company duly formed, validly existing and in good standing
under the Laws of the State of Delaware. IEH is a limited partnership duly
formed, validly existing and in good standing under the Laws of the State
of
Delaware. Each of IEH and Buyer has full organizational power and authority
to
execute and deliver this Agreement and to perform its respective obligations
hereunder and to consummate the transactions contemplated hereby, including
without limitation, the obligation of Buyer to merge with the Corporation
pursuant to this Agreement.
5.2 Authority.
The
execution and delivery by each of Buyer and IEH of this Agreement, and the
performance by each of Buyer and IEH of its respective obligations hereunder,
have been duly and validly authorized and, no other action on the part of
Buyer
or IEH or IEH’s general partner is necessary. This Agreement has been duly and
validly executed and delivered by each of Buyer and IEH and constitutes a
legal,
valid and binding obligation of each of Buyer and IEH enforceable against
each
of Buyer and IEH in accordance with its terms.
5.3 No
Conflicts.
The
execution and delivery by each of Buyer and IEH of this Agreement do not,
and
the performance by each of Buyer and IEH of its respective obligations under
this Agreement and the consummation of the transactions contemplated hereby,
will not:
(a) conflict
with, or result in a violation or breach of, any of the terms, conditions
or
provisions of the organizational documents of either Buyer or IEH;
(b) conflict
with, or result in a violation or breach of, any term or provision of any
Law or
Order applicable to Buyer or IEH (other than such conflicts, violations or
breaches which will not have a Material Adverse Effect on Buyer or IEH);
or
(c) (i)
conflict with, or result in a violation or breach of, (ii) constitute (with
or
without notice or lapse of time or both) a default under, (iii) require Buyer
or
IEH to obtain any consent, approval or action of, make any filing with or
give
any notice to any Person as a result or under the terms of, (iv) result in
or
give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, or (v) result in the creation or imposition
of any Lien upon Buyer or IEH or any of their respective Assets and Properties
under, any Contract or License to which Buyer or IEH is a party or by which
any
of their respective Assets and Properties are bound.
14
5.4 Consents
and Approvals.
No
consent, authorization or approval of, filing or registration with, or
cooperation from, any Governmental Authority or any other Person not a party
to
this Agreement is necessary in connection with the execution, delivery and
performance by each of Buyer and IEH of this Agreement or the consummation
of
the transactions contemplated hereby.
5.5 Brokers.
Neither
Buyer nor IEH has used any broker or finder in connection with the transactions
contemplated hereby, and neither PSC nor the Corporation has or shall have
any
liability or otherwise suffer or incur any Loss as a result of or in connection
with any brokerage or finder’s fee or other commission of any Person retained or
purporting to be retained by Buyer or by IEH in connection with any of the
transactions contemplated by this Agreement.
5.6 Financial
Condition.
Buyer
owns all legal and beneficial equity interests in its Subsidiaries. Neither
Buyer nor any of its subsidiaries has any material liabilities or obligations
of
any nature, whether known or unknown, absolute, accrued, contingent or otherwise
and whether due or to become due, nor do any of them have any Indebtedness
(as
defined in the UBS Facility) other than of the type described by Section
6.01(m)
of the UBS Facility and clause (iii) of the definition of “Permitted
Acquisition” in the UBS Facility. The assets and property of Buyer and its
Subsidiaries are not subject to any Lien (as defined in the UBS Facility)
other
than of the type described under Section 6.02(k) of the UBS
Facility.
ARTICLE
VI
COVENANTS
6.1 Maintenance
of Business Prior to Closing.
(a) The
Corporation shall, and PSC shall cause the Corporation from the date hereof
through the Closing Date to:
(i) conduct
its operations and business according to their usual, regular and ordinary
course consistent with past practice;
(ii) use
all
commercially reasonable efforts to keep its business and properties
substantially intact, including its present operation, physical facilities,
working conditions, insurance policies, and relationships with lessors,
licensors, suppliers, customers, employees;
(iii) maintain
its corporate existence;
(iv) maintain
its books and records and accounts in its usual, regular, and ordinary manner
in
compliance with all applicable laws and governmental orders;
(v) pay
and
discharge when due all taxes, assessments and governmental charges imposed
upon
it or any of its properties, or upon the income or project therefrom in the
ordinary course of business consistent with past practice;
15
(vi) promptly
notify Buyer and IEH of any Material Adverse Change to the Corporation;
and
(vii) permit
representatives of Buyer and IEH to have full access at all reasonable times,
and in a manner so as not to interfere with the normal business operations
of
the Corporation, to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to the
Corporation.
(b) Without
limiting the generality of the foregoing but subject to the exceptions set
forth
in clause (a) above, from the date hereof through the Closing, PSC shall
not
authorize or permit the Corporation directly or indirectly to do, or propose
to
do, and the Corporation shall not directly or indirectly do, or propose to
do,
any of the following without the prior written consent of IEH:
(i) engage
in
any transaction or take or omit to take any action that would result in a
breach
of any representation or warranty in Articles II, III or IV of this
Agreement;
(ii) declare,
set aside, or pay any dividend, other than intercompany dividends by a
Subsidiary to the Corporation or to another Subsidiary;
(iii) declare
or pay any increase in compensation to any officer, director, employee or
agent
of the Corporation or any Subsidiary, except in the ordinary course of business
consistent with past practice;
(iv) enter
into any Contract that, had it been in effect on the date hereof, would have
been required to be listed on Schedule
4.12,
except
for those Contracts entered into in the ordinary course of business consistent
with past practice;
(v) permit,
allow or suffer any of its properties, assets or rights to be subject to
any
Lien other than Permitted Encumbrances;
(vi) incur
any
long-term indebtedness, other than under the UBS Facility;
(vii) make
any
material capital expenditure or commitment, other than for emergency repairs
or
replacement, except for those capital expenditures or commitments made in
the
ordinary course of business consistent with past practice; or
(viii) other
than with respect to UBS Facility, terminate, materially modify, assign,
or
materially amend any Contract required to be listed on Schedule
4.12,
except
in the ordinary course of business consistent with past practice.
16
6.2 Efforts
to Consummate Transaction.
(a) From
the
date hereof through the Closing Date, upon the terms and subject to the
conditions set forth in this Agreement, each of the parties hereto shall
use its
commercially reasonable efforts to take, or cause to be taken, all actions,
and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable under applicable Laws
and
regulations to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. The parties
will
use their commercially reasonable efforts and cooperate with one another
(i) in
promptly determining whether any filings are required to be made or consents,
approvals, waivers, licenses, permits or authorizations are required to be
obtained (or, which if not obtained, would result in a Material Adverse Effect
on the Corporation or its Subsidiaries or an event of default, termination
or
acceleration of any agreement or any put right under any agreement) under
any
applicable Law or regulation or from any Governmental or Regulatory Authority
or
third parties, and (ii) in promptly making any such filings, in furnishing
information required in connection therewith and in timely seeking to obtain
any
such consents, approvals, permits or authorizations. For purposes of this
Section 6.2, PSC shall not be obligated to make, or cause to be made, any
payment to any third party as a condition to obtaining such party’s consent or
approval, other than for required filing fees.
(b) From
the
date hereof through the Closing Date, PSC shall give prompt written notice
to
Buyer and IEH of: (i) any occurrence, or failure to occur, of any
event whose occurrence or failure to occur would reasonably be expected to
cause
any representation or warranty of PSC or the Corporation contained in this
Agreement, if made on or as of the date of such event or as of the Closing
Date,
to be untrue or inaccurate, except for changes permitted by this Agreement
and
except to the extent that any representation and warranty is made as of a
specified date, in which case, such representation and warranty shall be
true,
complete and accurate as of such date; or (ii) any failure of PSC, the
Corporation or any officer, general partner, director, employee, consultant
or
agent of PSC or the Corporation, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it or them under
this
Agreement; provided, however, that no such notification shall affect the
representations or warranties of PSC or the conditions to the obligations
of
Buyer hereunder. From the date hereof through the Closing Date, each of Buyer
and IEH shall give prompt written notice to PSC of: (i) any
occurrence, or failure to occur, of any event whose occurrence or failure
to
occur would reasonably be expected to cause any representation or warranty
of
Buyer or IEH contained in this Agreement, if made on or as of the date of
such
event or as of the Closing Date, to be untrue or inaccurate, except for changes
permitted by this Agreement and except to the extent that any representation
and
warranty is made as of a specified date, in which case, such representation
and
warranty shall be true, complete and accurate as of such date; or (ii) any
failure of Buyer or IEH or any officer, general partner, director, employee,
consultant or agent of Buyer or IEH, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it or them under
this
Agreement; provided, however, that no such notification shall affect the
representations or warranties of Buyer or IEH or the conditions to the
obligations of PSC or the Corporation hereunder.
17
6.3 Tax
Matters.
(a) Responsibility
for Filing Income Tax Returns for Periods through the Closing
Date.
The
common parent of the federal consolidated income Tax group of which PSC is
a
member (the “Common
Parent Group”)
shall
include the income of the Corporation and its Subsidiaries on the Common
Parent
Group’s consolidated federal income Tax Return for all periods through the
Closing Date and pay any federal income Taxes attributable to such income.
For
all taxable periods ending on or before the Closing Date, the Common Parent
Group shall cause the Corporation and its Subsidiaries to join in the Common
Parent Group’s consolidated federal income Tax Return and, in jurisdictions
requiring separate reporting from the Common Parent Group, to file separate
company state and local income tax returns. All such Tax Returns shall be
prepared and filed in a manner consistent with prior practice, except as
required by a change in applicable law. Buyer shall cause the Corporation
and
its Subsidiaries to furnish information to the Common Parent Group as reasonably
requested by the Common Parent Group to allow the Common Parent Group to
satisfy
its obligations under this section in accordance with past custom and practice.
Buyer shall cause the Corporation and its Subsidiaries to file income Tax
Returns for all periods other than the periods ending on or before the Closing
Date.
(b) Tax
Sharing Agreements.
PSC
shall cause all tax sharing, allocation, indemnity or similar arrangements
between the Corporation or any Subsidiary and any Affiliate to be terminated
or
modified so that after the Closing, neither the Corporation nor any Subsidiary
shall be bound thereby or have any rights or liability thereunder.
(c) Transfer
Taxes.
All
real property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp Taxes, and transfer, recording, registration and other
fees
and any similar Taxes that become payable in connection with the transactions
contemplated by this Agreement (together with any related interest, penalties
or
additions to Tax) shall be borne equally between PSC and Buyer.
(d) Elections.
PSC
shall make any election requested by Buyer to enable the Buyer to receive,
to
the extent possible, for federal income tax purposes, a carryover basis equal
to
PSC’s basis in the Metals Stock as of the Closing Date as a result of the
transactions contemplated by this Agreement.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF BUYER AND IEH
The
obligations of Buyer and IEH under Article I of this Agreement are subject
to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent:
7.1 Warranties
True as of Both Present Date and Closing Date.
Each of
the representations and warranties of PSC and of the Corporation contained
herein shall have been accurate, true and correct on and as of the date of
this
Agreement, and shall also be accurate, true and correct in all material respects
(except for the representations and warranties contained in Section 3.2,
which
shall be accurate, true and correct in all respects) on and as of the Closing
Date with the same force and effect as though made by PSC and the Corporation
as
of the Closing Date.
18
7.2 Compliance
by PSC and the Corporation.
Each of
PSC and the Corporation shall have duly performed and complied with all of
its
covenants, obligations and agreements contained in this Agreement to be
performed and complied with by PSC or the Corporation, as the case may be,
on or
prior to the Closing Date.
7.3 Certificates
of PSC and the Corporation.
Buyer
shall have received (i) a certificate dated as of the Closing Date executed
by
an authorized officer of PSC certifying as to the fulfillment and satisfaction
of the conditions set forth in Sections 7.1 and 7.2 and (ii) a certificate
dated
as of the Closing Date executed by an authorized officer of the Corporation
certifying as to the fulfillment and satisfaction of the conditions set forth
in
Sections 7.1 and 7.2.
7.4 No
Material Adverse Change.
No
Material Adverse Change to the Corporation shall have occurred and no event
shall have occurred which is reasonably likely to have a Material Adverse
Effect
on the Corporation and its Subsidiaries, taken as a whole.
7.5 Actions
or Proceedings.
No
action or proceeding by any Governmental Authority shall have been instituted
or
threatened, and no action or proceeding by other Person shall have been
instituted, which (a) is reasonably likely to have a Material Adverse Effect
on
the Corporation and its Subsidiaries, taken as a whole, or (b) is reasonably
likely to enjoin, restrain or prohibit, or is reasonably likely to result
in
substantial damages in respect of, any provision of this Agreement or the
consummation of the transactions contemplated hereby.
7.6 Conversion
to Limited Liability Companies. Each
of
those Subsidiaries listed on Schedule
7.6
(the
“U.S. Subsidiaries”) shall have been converted (through statutory conversion,
merger or otherwise) to limited liability companies.
ARTICLE
VIII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF PSC AND THE CORPORATION
The
obligations of PSC and the Corporation under Article I of this Agreement
are
subject to the satisfaction, on or prior to the Closing Date, of each of
the
following conditions precedent:
8.1 Warranties
True as of Both Present Date and Closing Date.
Each of
the representations and warranties of Buyer and of IEH contained herein shall
have been accurate, true and correct on and as of the date of this Agreement,
and shall also be accurate, true and correct in all material respects on
and as
of the Closing Date with the same force and effect as though made by Buyer
and
IEH on and as of the Closing Date.
8.2 Compliance
by Buyer.
Buyer
and IEH shall have duly performed and complied with its respective covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by Buyer or IEH, as the case may be, on or prior to the Closing
Date.
19
8.3 Certificates
of Buyer and IEH.
PSC
shall have received (i) a certificate dated as of the Closing Date executed
by
an authorized officer of Buyer certifying as to the fulfillment and satisfaction
of the conditions set forth in Sections 8.1 and 8.2 and (ii) a certificate
dated
as of the Closing Date executed by a duly authorized officer of the general
partner of IEH certifying as to the fulfillment and satisfaction of the
conditions set forth in Sections 8.1 and 8.2.
8.4 Actions
or Proceedings.
No
action or proceeding by any Governmental Authority shall have been instituted
or
threatened, and no action or proceeding by other Person shall have been
instituted, which (a) is reasonably likely to have a Material Adverse Effect
on
PSC or the Corporation and its Subsidiaries, taken as a whole, or (b) is
reasonably likely to enjoin, restrain or prohibit, or is reasonably likely
to
result in substantial damages in respect of, any provision of this Agreement
or
the consummation of the transactions contemplated hereby.
ARTICLE
IX
TERMINATION
9.1 Termination.
This
Agreement may be terminated at any time on or prior to the Closing
Date:
(a) By
written notice of PSC or Buyer, if the Closing shall not have taken place
on or
before November 30, 2007; provided,
however, that the right to terminate this Agreement under this Section 9.1
shall
not be available to any party whose willful failure to fulfill any obligation
under this Agreement has been the cause of or resulted in the failure of
the
Closing to occur on or before such date;
(b) By
Buyer,
if there shall have been a material breach of any covenant, representation
or
warranty or other agreement of PSC or the Corporation hereunder, and such
breach
shall not have been remedied within ten (10) Business Days after receipt
by PSC
or the Corporation, as the case may be, of notice in writing from Buyer
specifying the breach and requesting such be remedied; or
(c) By
PSC,
if there shall have been a material breach of any covenant, representation
or
warranty or other agreement of Buyer or IEH hereunder, and such breach shall
not
have been remedied within ten (10) Business Days after receipt by Buyer or
IEH,
as the case may be, of notice in writing from PSC specifying the breach and
requesting such be remedied.
9.2 Effect
of Termination.
If this
Agreement is terminated pursuant to Section 9.1 all obligations of the parties
hereunder shall terminate, except for the obligations set forth in Article
X and
Article XII, which shall survive the termination of this Agreement, and except
that no such termination shall relieve any party from liability for any prior
willful breach of this Agreement.
20
ARTICLE
X
INDEMNIFICATION
10.1 Indemnification
by Arnos.
Arnos
agrees to indemnify Buyer, its Affiliates and their respective officers,
directors, employees, independent contractors, stockholders, principals,
partners, agents, or representatives (other than Xxxx Xxxxx and his Affiliates
other than American Property Investors, Inc. and its controlled Affiliates
(each
an “Indemnified
Person”
and
collectively, the “Indemnified
Persons”)
against, and to hold each Indemnified Person harmless from, any and all (i)
Losses incurred or suffered by any Indemnified Person relating to or arising
out
of or in connection with (a) any breach of or any inaccuracy in any
representation or warranty made by PSC or the Corporation in this Agreement
other than any breaches of or inaccuracies contained in any representation
or
warranty contained in Section 4.8 (for purposes of the representations and
warranties contained in Section 3.8(b), the existence of any breach and the
amount of any Taxes arising or resulting therefrom will be determined without
regard to any disclosures by the Company or any Subsidiary set forth on Schedule
3.8), or (b) any breach of or failure by PSC to perform any of its covenants
or
obligations set out or contemplated in this Agreement and (ii) Losses incurred
or suffered by any Indemnified Person relating to or arising out of or in
connection with any Environmental Claim to the extent that the same is based
upon, or arises out of, any Pre-Closing Environmental Liabilities.
Notwithstanding any provisions to the contrary contained herein, the aggregate
liability of Arnos for any and all obligations under this Agreement shall
in no
event exceed the Purchase Price received by PSC.
10.2 Claims.
As
promptly as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement, the Indemnified Person shall promptly
give
notice to Arnos of such claim and the amount the Indemnified Person will
be
entitled to receive hereunder from Arnos; provided that the failure of the
Indemnified Person to promptly give notice shall not relieve Arnos of its
obligations except to the extent (if any) that Arnos shall have been prejudiced
thereby. If Arnos does not object in writing to such indemnification claim
within 30 days of receiving notice thereof, the Indemnified Person shall
be
entitled to recover, on the thirty-fifth day after such notice was given,
from
Arnos the amount of such claim, and no later objection by Arnos shall be
permitted; if Arnos agrees that it has an indemnification obligation but
objects
that it is obligated to pay only a lesser amount, the Indemnified Person
shall
nevertheless be entitled to recover, on the thirty-fifth day after such notice
was given, from Arnos the lesser amount, without prejudice to the Indemnified
Person’s claim for the difference. In addition to the amounts recoverable by the
Indemnified Person from Arnos pursuant to the foregoing provisions, the
Indemnified Person shall also be entitled to recover from Arnos interest
on such
amounts at the rate of Two Times Prime from, and including, the thirty-fifth
day
after such notice of an indemnification claim is given to, but not including,
the date such recovery is actually made by the Indemnified Person.
21
10.3 Notice
of Third Party Claims; Assumption of Defense.
The
Indemnified Person shall give notice as promptly as is reasonably practicable
to
Arnos of the assertion of any claim, or the commencement of any suit, action
or
proceeding, by any Person not a party hereto (a “Third
Party Claim”)
in
respect of which indemnity may be sought under this Agreement; provided that
the
failure of the Indemnified Person to promptly give notice shall not relieve
Arnos of its obligations except to the extent (if any) that Arnos shall have
been prejudiced thereby. Arnos may, at its own expense, participate in the
defense of any Third Party Claim, suit, action or proceeding (a) upon
notice to the Indemnified Person and (b) upon delivery by Arnos to the
Indemnified Person a written agreement that the Indemnified Person is entitled
to indemnification for all Losses arising out of such Third Party Claim,
suit,
action or proceeding and that Arnos shall be liable for the entire amount
of any
Loss, at any time during the course of any such Third Party Claim, suit,
action
or proceeding, assume the defense thereof; provided, however, that (i) Arnos’s
counsel is reasonably satisfactory to the Indemnified Person, and (ii) Arnos
shall thereafter consult with the Indemnified Person upon the Indemnified
Person’s reasonable request for such consultation from time to time with respect
to such Third Party Claim, suit, action or proceeding. If Arnos assumes such
defense, the Indemnified Person shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by Arnos. If, however, the Indemnified
Person
reasonably determines in its judgment that representation by Arnos’s counsel of
both Arnos and the Indemnified Person would present such counsel with a conflict
of interest, then such Indemnified Person may employ separate counsel to
represent or defend it in any such Third Party Claim, action, suit or proceeding
and Arnos shall pay all of the fees and disbursements in connection with
the
retention of such separate counsel. If Arnos fails to promptly notify the
Indemnified Party that Arnos desires to defend the Third Party Claim pursuant,
or if Arnos gives such notice but fails to prosecute vigorously and diligently
or settle the Third Party Claim, then the Indemnified Party will have the
right
to defend, at the sole cost and expense of Arnos, the Third Party Claim by
all
appropriate proceedings, which proceedings will be prosecuted by the Indemnified
Person in good faith or will be settled at the discretion of the Indemnified
Person (with the consent of Arnos, which consent will not be unreasonably
withheld). The Indemnified Person will have full control of such defense
and
proceedings, including any compromise or settlement thereof. Whether or not
Arnos chooses to defend or prosecute any such Third Party Claim, suit, action
or
proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.
10.4 Settlement
or Compromise.
Any
settlement or compromise made or caused to be made by the Indemnified Person
or
Arnos, of any claim, suit, action or proceeding shall also be binding upon
Arnos
or the Indemnified Person, as the case may be, in the same manner as if a
final
judgment or decree had been entered by a court of competent jurisdiction
in the
amount of such settlement or compromise thereof; provided, however, that
no
obligation, restriction or Loss shall be imposed on the Indemnified Person
as a
result of such settlement without its prior written consent. The Indemnified
Person will give Arnos at least thirty (30) days notice of any proposed
settlement or compromise of any Third Party Claim, suit, action or proceeding
it
is defending, during which time Arnos may reject such proposed settlement
or
compromise; provided, however, that from and after such rejection, Arnos
shall
be obligated to assume the defense of and full and complete liability and
responsibility for such Third Party Claim, suit, action or proceeding and
any
and all Losses in connection therewith in excess of the amount of
unindemnifiable Losses which the Indemnified Person would have been obligated
to
pay under the proposed settlement or compromise.
22
10.5 Failure
of Arnos to Act.
In the
event that Arnos does not assume the defense of any Third Party Claim, suit,
action or proceeding brought against an Indemnified Person, then any failure
of
the Indemnified Person to defend or to participate in the defense of any
such
Third Party Claim, suit, action or proceeding or to cause the same to be
done,
shall not relieve Arnos of any of its obligations under this
Agreement.
10.6 Tax
Character.
Arnos,
PSC and Buyer agree that any payments pursuant to this Article X will be
treated
for federal and state income tax purposes as adjustments to the Purchase
Price,
and that they will report such payments on all Tax Returns consistently with
such characterization.
10.7 Sole
and Exclusive Remedy.
The
indemnification remedy provided to the Indemnified Persons under this Article
X
shall be the sole and exclusive remedy to which the Buyer and each other
Indemnified Person shall be entitled after the Closing for any breach of
any
representation or warranty or any covenant by PSC or the Corporation under
this
Agreement. The representations and warranties of PSC, the Corporation, Buyer
and
IEH contained in Articles II, III, IV and V of this Agreement may have been
made
for the purposes of allocating risks among the parties to this Agreement,
and
such representations and warranties shall not confer, and shall not be deemed
to
confer, any personal liability on any director, officer or employee of any
party
to this Agreement.
ARTICLE
XI
DEFINITIONS
11.1 Defined
Terms.
As used
in this Agreement, the following defined terms have the meanings indicated
below:
“Affiliate”
means, with respect to any specified Person, any other Person that, directly
or
indirectly, owns or controls, is under common ownership or control with,
or is
owned or controlled by, such specified Person.
“Affiliated
Group” shall mean an affiliated group of corporations within the meaning of
Section 1504(a) of the Code, or any similar provision of state, local or
foreign
law, filing a consolidated, combined or unitary Tax Return of which PSC or
any
of its Affiliates is or was the common parent.
“Agreement”
has the meaning ascribed to it in the recitals.
“Arnos”
has the meaning ascribed to it in the recitals.
“Assets
and Properties” of any Person means all assets and properties of every kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible, and wherever situated), including the goodwill related
thereto, operated, owned or leased by such Person.
“Audited
Financial Statements” means the consolidated audited financial statements of the
Corporation as
of
December 31, 2006 and December 31, 2005, consisting of the balance sheet
at such
date and the related statements of operations, statement of stockholders
equity,
and cash flows for the year then ended, each accompanied by the audit report
of
Xxxxx Xxxxxxxx LLP, independent public auditors with respect to the
Corporation.
23
“Business
Day” means any day of the year other than (i) any Saturday or Sunday or (ii) any
other day on which commercial banks located in New York City are generally
closed for business.
“Business
or Condition” of any Person means the business, condition (financial or
otherwise), properties, assets or results of operations or prospects of such
Person, taken as a whole.
“Buyer”
has the meaning ascribed to it in the recitals.
“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability
Act
of 1980, as amended, or any successor statutes and any regulations promulgated
thereunder.
“CERCLIS”
means the Comprehensive Environmental Response, Compensation and Liability
Information System List.
“Closing”
has the meaning ascribed to it in Section 1.3.
“Closing
Date” has the meaning ascribed to it in Section 1.3.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Common
Parent Group” has the meaning ascribed to it in Section 6.3(a)
“Contract”
means any contract, lease, commitment, understanding, sales order, purchase
order, agreement, indenture, mortgage, note, bond, right, warrant, instrument,
plan, permit or license, whether written or oral, which is intended or purports
to be binding and enforceable and to which either the Corporation or any
of the
Subsidiaries is a party.
“control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Corporation”
has the meaning ascribed to it in the recitals.
“Disclosure
Schedule” shall mean the Disclosure Schedule attached to this Agreement and
incorporated herein by reference.
“Dollars”
or numbers proceeded by the symbol “$” means amounts in United States
Dollars.
“Environmental
Claim” means any action, lawsuit, claim or proceeding (including, without
limitations, actions, lawsuits, claims or proceedings by private individuals,
Governmental or Regulatory Authorities and employees) arising under any
Environmental Law. An Environmental Claim includes, but is not limited to,
a
common law action, as well as a proceeding to issue, modify or terminate
an
Environmental Permit.
24
“Environmental
Law” means all applicable foreign, federal, state, district, and local civil and
criminal laws (including common law), regulations, rules, ordinances, codes,
decrees, judgments, injunctions, judicial or administrative orders, and
contractual obligations relating to public health, welfare and the environment,
or for the safety and health of employees or individuals, including, without
limitation, those requirements relating to the storage, handling and use
of
chemicals and other Hazardous Materials, those relating to the generation,
processing, treatment, storage, transport, investigation and remediation,
or
other management of waste materials of any kind, and those relating to the
protection of environmentally sensitive species or areas. Environmental Laws
include but are not limited to OSHA, CERCLA, the Clean Air Act, as amended,
the
Federal Water Pollution Control Act, as amended, the Rivers and Harbors Act
of
1899, as amended, the Safe Drinking Water Act, as amended, the Superfund
Amendments and Reauthorization Act of 1986 (“XXXX”), as amended, the Resource
Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Hazardous and
Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control
Act, as amended, the Oil Pollution Act of 1990 (“OPA”), as amended, the
Hazardous Materials Transportation Act, as amended, the Endangered Species
Act
of 1973, and the state analogs to these.
“Environmental
Permit” means any permit, license, approval, registration or other authorization
required under any Environmental Law.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
“Financial
Statements” means the Audited Financial Statements and the Interim Financial
Statements.
“Fixtures
and Equipment” has the meaning ascribed to it in Section 4.11.
“GAAP”
means U.S. generally accepted accounting principles at the time in
effect.
“Good
and
Defensible Title” means such right title and interest that is (a) evidenced by
an instrument or instruments filed of record in accordance with the conveyance
and recording laws of the applicable jurisdiction to the extent necessary
to
prevail against competing claims of bona fide purchasers for value without
notice, and (b) subject to Permitted Encumbrances, free and clear of all
Liens,
claims, infringements, burdens and other defects.
“Governmental
Approvals” has the meaning ascribed to it in Section 3.5.
“Governmental
or Regulatory Authority” means any court, tribunal, arbitrator, authority,
administrative or other agency, commission, authority, licensing board official
or other instrumentality of the United States or any state, county, city
or
other political subdivision thereof, or of any foreign government having
competent jurisdiction over the Business or Condition of any Person.
25
“Hazardous
Material” means “hazardous substance” and “pollutant or contaminant,” as those
terms are defined or used in Section 101 of CERCLA and any other substances
or
chemicals regulated because of their effect or potential effect on public
health
and the environment, or the health and safety of employees or individuals,
including, without limitation, (i) petroleum, petroleum hydrocarbons, or
any
fraction or byproduct thereof, (ii) natural gas liquids, (iii) polychlorinated
byphenyls in any form or condition, (iv) lead paint, (v) asbestos containing
materials in any form or condition, (vi) urea formaldehyde, (vi) radioactive
materials, including any naturally occurring radioactive material, and any
source, special or byproduct material, and (vii) putrescible and infectious
materials.
“IEH”
has
the meaning ascribed to it in the recitals.
“Indemnified
Person” or “Indemnified Persons” have the respective meanings ascribed to them
in Section 9.1(a).
“Intercompany
Note” has the meaning ascribed to it in Section 1.4.
“Interim
Financial Statements” means the unaudited internal financial statements of the
Corporation for the eight (8) months ended August 31, 2007, consisting of
the
balance sheet at such date and the related statements of operations for the
period then ended.
“Knowledge”
or “knowledge” means, with respect to PSC and/or the Corporation, in each case
the knowledge of any director, officer or senior executive of PSC or the
Corporation.
“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States or any state,
county, city or other political subdivision or of any Governmental or Regulatory
Authority.
“License”
means licenses, permits, certificates of authority, authorizations, approvals,
registrations, findings of suitability, variances, exemptions, certificates
of
occupancy, orders, franchises and similar consents granted or issued by any
Governmental or Regulatory Authority.
“Lien”
means any mortgage, lien (except for any lien for Taxes not yet due and
payable), charge, restriction, pledge, security interest, option, lease or
sublease, claim, right of any third party, easement, encroachment, encumbrance
or other adverse claim of any kind or description.
“Loss”
or
“Losses” means any and all liabilities, losses, costs, claims, obligations,
damages (including consequential damages if and to the extent actually paid
to a
third party in connection with a Third Party Claim, amounts paid in settlement,
and reasonable expenses of investigation, enforcement and collection), penalties
and expenses (including attorneys’ and accountants’ fees and expenses and costs
of investigation and litigation), whether absolute, accrued, conditional
or
otherwise.
“Material
Adverse Effect” or “Material Adverse Change,” as to any Person, means a material
adverse change (or circumstance involving a prospective change) in the Business
or Condition of such Person.
“Metals
Stock” has the meaning ascribed to it in the recitals.
26
“Order”
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary
or
final).
“OSHA”
means the Occupational Safety and Health Act, as amended, or any successor
statute, and any regulations promulgated thereunder.
“Permitted
Encumbrances” means, as applicable,
(a) any
liens
for taxes and assessments not yet delinquent as of the Closing
Date;
(b) any
Liens
or security interests created by law or reserved in leases attributable to
any
assets or property for royalty, bonus or rental, or created to secure compliance
with the terms of any assets or property;
(c) any
obligations or duties affecting any assets or property to any municipality
or
public authority with respect to any franchise, grant, license or permit,
and
all applicable Laws, rules and orders of any Governmental or Regulatory
Authority;
(d) any
(i)
easements, rights-of-way, servitudes, permits, surface leases and other rights
in respect of surface operations, pipelines, grazing, hunting, fishing, lodging,
canals, ditches, reservoirs or the like, and (ii) easements for streets,
alleys,
highways, pipelines, telephone lines, power lines, railways and other similar
rights-of-way attributable to any assets or property;
(e) encumbrances
securing payments to mechanics and material men and encumbrances attributable
to
any assets or property securing payment of taxes or assessments that are,
in
either case, not yet delinquent or, if delinquent, are being contested in
good
faith in the normal course of business;
(f) Liens
under the UBS Facility and the Permitted Liens (as defined under the UBS
Facility); and
(g) Liens
reflected on the UCC search results set forth in the Disclosure
Schedule.
“Person”
means any natural person, corporation, limited liability company, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
“Plans”
shall mean all material pension and profit sharing, retirement and post
retirement welfare benefit, health insurance benefit (medical, dental and
vision), disability, life and accident insurance, sickness benefit, vacation,
bonus, incentive, deferred compensation, workers compensation, stock purchase,
stock option, phantom stock and other equity-based, severance, employment,
change of control or fringe benefit plans, programs, arrangements or agreements,
whether written or oral, including any employee benefit plans defined in
Section
3(3) of ERISA, maintained or contributed to by the Corporation or any of
the
Subsidiaries.
27
“Pre-Closing
Environmental Liabilities” shall mean any and all liabilities, claims, demands,
commitments or obligations of every kind and description arising under or
pursuant to any Environmental Law and relating to the operation of the
Corporation or the ownership or operation of the Real Property relating to
actions occurring or conditions existing on or prior to the Closing
Date.
“Pre-Closing
Tax Period” shall mean any tax period or portion thereof ending on or before the
Closing Date.
“Pre-Closing
Taxes” shall mean Taxes (without duplication) (a) of the Corporation or any
Subsidiary for all Pre-Closing Tax Periods, (b) of any member of an Affiliated
Group of which the Corporation or any Subsidiary (or any predecessor of the
Company or any Subsidiary) is or was a member on or prior to the Closing
Date,
including pursuant to Treasury Regulations Section 1.1502-6 (or any predecessor
or successor thereof or any analogous or similar state, local or foreign law or
regulation) that arose on or after January 1, 2004 or (c) of any Person imposed
on the Company or any Subsidiary as a transferee or successor, by contract
or
pursuant to any law, rule or regulation, which Taxes relate to an event or
transaction occurring on or before the Closing and during a period the
Corporation or any Subsidiary was held or owned (directly or indirectly)
by PSC
or any of its Affiliates, (d) arising as a result of an inclusion in excess
of
$2,500,000 under Section 951(a) of the Code (or any similar provision of
state
or local law) attributable to (A) “subpart F income,” within the meaning of
Section 952 of the Code (or any similar provision of state or local law),
received or accrued by the any Subsidiary on or prior to the Closing Date
or (B)
the holding of “United States property,” within the meaning of Section 956 of
the Code (or any similar provision of state or local law), by any Subsidiary
on
or prior to the Closing Date or (e) resulting from the sale of the Metals
Stock
or the other transactions contemplated by this Agreement occurring prior
to the
Closing or undertaken by the Corporation or any Subsidiary in connection
with
the sale of the Metals Stock or such transactions
occurring prior to the Closing (but excluding any transfer Taxes payable
by
Buyer pursuant to Section 6.3(c)).
“PSC”
has
the meaning ascribed to it in the recitals.
“Purchase
Price” has the meaning ascribed to it in Section 1.2.
“Real
Property” has the meaning ascribed to it in Section 4.10.
“Subsidiary”
means,
with
respect to any Person at any date, any corporation, limited or general
partnership, limited liability company, trust, association or other entity
(i)
the
accounts of which would be consolidated with those of such Person in such
Person’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP or (ii)
of
which more than 50% of (A)
the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors of such corporation,
(B)
the
interest in the capital or profits of such partnership or limited liability
company or (C)
the
beneficial interest in such trust or estate is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries,
by such Person.
28
“Tax”
or
“Taxes” means any and all taxes, charges, fees, levies, duties, liabilities,
impositions or other assessments, including, without limitation, income,
gross
receipts, profits, excise, real or personal property, environmental, recapture,
sales, use, value-added, withholding, social security, retirement, employment,
unemployment, occupation, service, license, net worth, payroll, franchise,
gains, stamp, transfer and recording taxes, fees and charges, imposed by
a Tax
Authority, whether computed on a separate, consolidated, unitary, combined
or
any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies, duties,
liabilities, impositions or other assessments.
“Tax
Authority” means the U.S. Internal Revenue Service or any other taxing authority
(whether domestic or foreign including, without limitation, any state, county,
local or foreign government or any subdivision or taxing agency thereof
(including a United States possession)).
“Tax
Return” means any report, return, document, declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction (foreign
or domestic) with respect to Taxes, including attachments thereto and amendments
thereof, and including, without limitation, information returns, any documents
with respect to or accompanying payments of estimated Taxes, or with respect
to
or accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
“Third
Party Claim” has the meaning ascribed to it in Section 10.3.
“Two
Times Prime” means two times the prime rate published by Citibank,
N.A.
“UBS
Facility” means (i) that certain Credit Agreement dated as of December 30, 2004
among PSC, certain of PSC’s Subsidiaries, UBS AG, Stamford Branch, as
administrative agent, and the other agents and lenders party thereto and
(ii)
that certain Security Agreement dated as of December 30, 2004 among PSC,
certain
of PSC’s Subsidiaries, and UBS AG, Stamford Branch and Bank of America, N.A. as
collateral agents.
“U.S.
Subsidiaries” has the meaning ascribed to it in Section 7.6.
“Working
Capital Amount” means the current assets of the Corporation and its Subsidiaries
minus the current liabilities of the Corporation and its Subsidiaries (in
each
case as determined in accordance with GAAP, applied on a basis consistent
with
the Audited Financial Statements).
ARTICLE
XII
MISCELLANEOUS
12.1 Investigation.
It shall
be no defense to an action for breach of this Agreement that Buyer or its
agents
have (or have not) made investigations into the affairs of the Corporation
or
have knowledge of a misrepresentation or breach of warranty or that the
Corporation or PSC could not have known of the misrepresentation or breach
of
warranty.
29
12.2 Survival
of Representations and Warranties.
The
representations and warranties of the parties hereunder shall survive the
Closing.
12.3 Entire
Agreement.
This
Agreement, including the schedules and exhibits hereto, which are incorporated
herein and made an integrated part hereof, constitutes the entire agreement
between the parties hereto and supersedes any and all prior discussions and
agreements between the parties relating to the subject matter
hereof.
12.4 Waiver.
Any term
or condition of this Agreement may be waived at any time by the party that
is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement
or
by Law or otherwise afforded, will be cumulative and not
alternative.
12.5 Amendment.
This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto.
12.6 No
Third Party Beneficiary.
The
terms and provisions of this Agreement are intended solely for the benefit
of
each party hereto and their respective successors or permitted assigns, and
it
is not the intention of the parties to confer third party beneficiary rights
upon any other Person, except that each Indemnified Person shall be a third
party beneficiary of Article X.
12.7 Assignment;
Binding Effect.
No party
may assign this Agreement or any right, interest or obligation hereunder
without
the prior written consent of the other Parties. This Agreement is binding
upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
12.8 Headings.
The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
12.9 Invalid
Provisions.
If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future Law, and if the rights or obligations of any
party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, and (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by
the
illegal, invalid or unenforceable provision or by its severance
herefrom.
12.10 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York without giving effect to the conflicts of laws principles
thereof, except as to matters relating to the internal affairs of Buyer,
IEH,
PSC or the Corporation, which shall be governed by the respective law of
their
organization or incorporation, as the case may be.
30
12.11 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the
same
instrument.
12.12 Waiver
of Jury Trial.
EACH
PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER ARISING OUT OF OR IN
ANY
WAY CONNECTED WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN
CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN. No party to this Agreement shall seek a jury
trial in any lawsuit, proceeding, counterclaim, or any other litigation
procedure based upon, or arising out of, this Agreement or any related
instruments or the relationship between the parties. No party will seek to
consolidate any such action in which a jury trial has been waived with any
other
action in which a jury trial cannot be or has not been waived. THE PROVISIONS
OF
THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION
WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
12.13 Consent
to Jurisdiction.
Each
party irrevocably submits to the exclusive jurisdiction of any NY State Court
in
the County of New York or any courts of the United States of America located
in
the Southern District of New York, and each party hereby agrees that all
suits,
actions and proceedings brought by such party hereunder shall be brought
in any
such court. Each party irrevocably waives, to the fullest extent permitted
by
law, any objection which it may now or hereafter have to the laying of the
venue
of any such suit, action or proceeding brought in any such court, any claim
that
any such suit, action or proceeding brought in such a court has been brought
in
an inconvenient forum and the right to object, with respect to any such suit,
action or proceeding brought in any such court, that such court does not
have
jurisdiction over such party or the other party. In any such suit, action
or
proceeding, each party waives, to the fullest extent it may effectively do
so,
personal service of any summons, complaint or other process and agrees that
the
service thereof may be made by any means permitted by Section 12.15 (other
than
facsimile transmission). Each party agrees that a final non-appealable judgment
in any such suit, action or proceeding brought in such a court shall be
conclusive and binding.
12.14 Expenses.
All
expenses, costs and fees in connection with the transactions contemplated
hereby
(including fees and disbursements of counsel, consultants and accountants)
incurred by (a) PSC shall be paid and borne exclusively by PSC, (b) Buyer
shall be paid and borne exclusively by Buyer, (c) IEH shall be paid and borne
exclusively by IEH, (d) Arnos shall be paid and borne exclusively by Arnos
and
(e) the Corporation shall be paid and borne exclusively by the Corporation.
Notwithstanding the foregoing, if this Agreement is
terminated prior to the Closing and such termination results from any breach
by
PSC, IEH or Buyer, as the case may be, of any representation, warranty or
covenant by such party, then such breaching party shall reimburse the
non-breaching party for all such expenses, fees and cash, including for all
expenses, fees and cash incurred in connection with obtaining high yield
or
other financing.
31
12.15 Notices.
All
notices, request, demands and other communications hereunder shall be in
writing
and shall be delivered personally, by certified or registered mail, return
receipt requested, and postage prepaid, by courier, or by facsimile
transmission, addressed as follows:
If
to
PSC:
Xxxxxx
Services Corporation
0000
Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
With
a
copy to:
Icahn
Associates Corp.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxxx
If
to the
Corporation:
PSC
Metals, Inc.
0000
Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxx
With
a
copy to:
Icahn
Associates Corp.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxxx
If
to
Arnos:
Arnos
Corp.
c/o
American Casino & Entertainment Properties, LLC
Finance
Department
0000
Xxx
Xxxxx Xxxxxxxxx Xxxxx
Xxx
Xxxxx, XX 00000
Attn:
Xxxxx Xxxxxx
32
If
to
Buyer or IEH:
c/o
Icahn
Enterprises Holdings X.X.
Xxxxx
Plains Plaza
000
Xxxxxxxx Xxxxxx - Xxxxx 0000
Xxxxx
Xxxxxx, XX 00000
With
a
copy to:
Debevoise
& Xxxxxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxx
or
to
such other address as a party may from time to time designate in writing
in
accordance with this Section 12.15. Each notice or other communication given
to
any party hereto in accordance with the provisions of this Agreement shall
be
deemed to have been received (a) on the Business Day it is sent, if sent
by
personal delivery, (b) the earlier of receipt of three Business Days after
having been sent by certified or registered mail, return receipt requested
and
postage prepaid, (c) on the Business Day it is sent, if sent by facsimile
transmission and an activity report showing the correct facsimile number
of the
party on whom notice is served and the correct number of pages transmitted
is
obtained by the sender (provided, however, that such notice or other
communication is also sent by some other means permitted by this Section
12.15,
or (d) on the first Business Day after sending, if sent by courier or overnight
delivery.
12.16 Further
Assurances.
Each of
the parties hereto covenants and agrees that, from time to time subsequent
to
Closing, it will, at the request of the other party, execute and deliver
all
such documents, including, without limitation, all such additional conveyances,
transfers, consents and other assurances and do all such other acts and things
as such other party may from time to time request be executed or done in
order
to better evidence, perfect or effect any provision of this Agreement, or
of any
agreement or other document executed pursuant to this Agreement, or any of
the
respective obligations intended to be created hereby or thereby.
[Signature
Page Follows]
33
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly
authorized officer of each party hereto as of the date first above
written.
Arnos Corp. | ||
|
|
|
By: | ||
Name:
Title:
|
Xxxxxx Services Corporation | ||
|
|
|
By: | ||
Name:
Title:
|
PSC Metals Inc. | ||
|
|
|
By: | ||
Name:
Title:
|
Cloud Holding LLC | ||
|
|
|
By: | ||
Name:
Title:
|
Icahn Enterprises Holdings L.P. | ||
By: American Property Investors, Inc., its general partner | ||
|
|
|
By: | ||
Name:
Title:
|
[Signature
Page to the Xxxxxx Services Stock Purchase Agreement - PSC to IEH]
34
GUARANTY:
The undersigned hereby guarantees the payment and performance by Buyer of
all of
its duties and obligations under this Agreement when due.
Icahn Enterprises Holdings L.P. | ||
|
|
|
By: | ||
Name:
Title:
|
[Signature
Page to the Xxxxxx Services Stock Purchase Agreement - PSC to IEH]
35