Attached files
THIS AGREEMENT IS SUBJECT TO
ARBITRATION PURSUANT
TO §15-48-10, CODE OF LAWS
OF SOUTH CAROLINA (1976)
AGREEMENT
FOR THE PURCHASE AND SALE OF ASSETS
by and
among
SANTOLUBES
MANUFACTURING LLC AND SANTOLUBES SPARTANBURG HOLDINGS LLC
as the
Buying Parties,
AND
BLACKMAN
UHLER SPECIALTIES, LLC,
AND
SYNALLOY
CORPORATION,
as the
Selling Parties
Dated
October
2, 2009
TABLE OF
CONTENTS
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LIST OF SCHEDULES AND
EXHIBITS
SCHEDULES
Schedule
A Products
Schedule
1.1(e) Assigned
Contracts
Schedule
1.1(h) Permits
Schedule
1.8 Allocation
of Purchase Price for the Purchased Assets
Schedule
2.1 Description
of Spartanburg Site
Schedule
2.8 Allocation
of Purchase Price for the Real Property
Schedule
3.4(a) Real
Property
Schedule
3.6 Environmental
Matters
Schedule
3.7(b) Product
Liability Claims
Schedule
3.9 Financial
Statements
Schedule
3.10 Absence
of Changes
Schedule
3.11 Permitted
Liens
Schedule
3.12 Permits,
Licenses
Schedule
3.15 Purchased
Business Employees
Schedule
5.4 Identified
Retained Environmental Projects
Schedule
5.5 Identified
Transferred Environmental Projects
Schedule
7.3 Litigation
EXHIBITS
Annex
A Definitions
Exhibit
A Real
Property Lease
Exhibit
B Outsourcing
Agreement
Exhibit
C RCRA
Permit Financial Assurance Agreement
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AGREEMENT
FOR THE PURCHASE AND SALE OF ASSETS
THIS
PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of
October 2, 2009, by and among SantoLubes Manufacturing LLC, a Missouri limited
liability company ("Santolubes"), SantoLubes
Spartanburg Holdings LLC, a South Carolina limited liability company ("Santolubes Spartanburg")
(collectively, Santolubes and Santolubes Spartanburg are the "Buying Parties"), Blackman
Uhler Specialties, LLC, a South Carolina limited liability company ("BU") and Synalloy Corporation,
a Delaware corporation ("Synalloy") (collectively, BU
and Synalloy are the "Selling
Parties"). Unless otherwise indicated, capitalized
terms used herein shall have the meanings given such terms in Annex A of this
Agreement.
W I T N E S S E T H:
WHEREAS,
BU engages in the specialty chemical business from a plant site in Spartanburg,
South Carolina (the "Spartanburg Site"), and in the
past also conducted such specialty chemical business from a plant site in
Augusta, Georgia (the "Augusta
Site"), where it manufactures, uses sells and distributes the products
listed on Schedule
A (the "Products"), and performs
conversions under toll and contractual agreements (the "Purchased Business");
and
WHEREAS,
Synalloy owns all the real estate and improvements containing the Spartanburg
Site and the Augusta Site (collectively, "Sites") and formerly conducted
the Purchased Business from the Sites; and
WHEREAS,
BU desires to sell, transfer and assign to Santolubes, and
Santolubes
desires
to purchase and acquire from BU, substantially all of the assets of BU
associated with the Purchased Business excluding the Sites, and Santolubes has
agreed to assume certain of the Liabilities of BU relating to the Purchased
Business, all on the terms set forth herein; and
WHEREAS,
Synalloy desires to sell, transfer and assign the Spartanburg Site to Santolubes
Spartanburg, and Santolubes Spartanburg desires to buy the Spartanburg Site from
Synalloy;
NOW
THEREFORE, in consideration of the premises and the agreements, covenants,
representations and warranties hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
agreed, the Selling Parties and the Buying Parties agree as
follows:
1. PURCHASE AND SALE PURCHASED
BUSINESS.
1.1 Purchased
Assets. Upon
the terms and subject to the conditions of this Agreement and in reliance upon
the representations and warranties contained herein, on the Closing Date, BU
shall sell, transfer, assign, convey and deliver to Santolubes, and Santolubes
shall purchase from BU, free and clear of all Liens (except Permitted Liens and
subject to the Excluded Assets set forth in Section 1.3), all of
the assets that are used, owned, or leased by BU and that are used or held for
use by BU in or in connection with the Purchased Business, including, without
limitation:
(a) All
improvements and fixtures owned by BU and located on or at the Spartanburg
Site;
(b) all of
BU's owned or leased equipment, machinery, fixtures and improvements, tooling,
spare parts, supplies, tools, dies, and other material located upon or in the
Spartanburg Site or used in or in connection with the operation of the Purchased
Business, including without limitation, all of the items of equipment and
machinery, identified and/or included in the Master Balance Sheet, and all of
the replacements for any of the foregoing, and any rights of BU to the
warranties and licenses received from the manufacturers and distributors of said
items and to any related claims, credits, rights of recovery and set-off with
respect to said items, but only to the extent such rights are assignable (the
"Manufacturing
Equipment");
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(c) all of
the motor vehicles, whether or not licensed or registered to operate on public
highways, including, without limitation, automobiles, trucks, forklifts,
loaders, self-propelled carts, sweepers and other motorized equipment, used or
held for use by BU in the conduct of the Purchased Business, including without
limitation, those vehicles and equipment identified and/or included in the
Master Balance Sheet, and all spare parts, fuel and other supplies, tools and
other items used or held for use by BU in the operation or maintenance thereof
(collectively, the "Motor
Vehicles");
(d) All
Product-related Inventory, wherever located as of the Closing Date as well as
BU's right to receive Product-related Inventory that was ordered by BU from
suppliers prior to but not received by BU as of the Closing Date;
(e) All of
BU's Contracts relating exclusively or principally to the Purchased Business or
the manufacture, purchase, use, sale and distribution (or any of them) of
the Products, all of which are set forth on Schedule 1.1(e) (the
"Assigned Contracts"),
provided, however, none of the following Contracts are included in the Assigned
Contracts: (1) all computer, software, telephone (except rights to BU's
telephone number(s)), financial, employee support or other services, goods and
accommodations which Synalloy or any Affiliate of Synalloy furnished to BU prior
to Closing, and (2) Contracts involving the lending of money to or for the
benefit of BU;
(f) All
deposits and rights associated with prepaid expenses, if any, made by BU that
are accrued but unused as of the Closing Date and that relate exclusively to the
Assigned Contracts, including, without limitation, the items listed or otherwise
included in the Master Balance Sheet (the "Prepaid
Expenses");
(g) the
Intellectual Property Assets as described in Section 3.5,
including BU's domain name, web addresses, and telephone number(s);
(h) to the
extent their transfer is permitted by Law, all Permits related to the Purchased
Business, including all applications therefore, including, without limitation,
those identified on Schedule
1.1(h);
(i) all
trade, customer accounts and notes receivable, unbilled retention, costs in
excess of billings, unbilled revenues, reimbursable costs and expenses and other
claims for money due to BU relating to the Purchased Business, including,
without limitation, those identified and/or included in the Master Balance Sheet
(collectively, the "Accounts
Receivables"); provided, however, no Accounts Receivable owed by any
Affiliate of Synalloy are included in the Accounts Receivable or the Purchased
Assets unless the same are included in the Master Balance Sheet;
(j) all
mailing lists, equipment maintenance records, warranty information,
specifications for plant facilities and products, records of plant operations
and the source and disposition of materials used and produced therein, standard
forms of documents, manuals of operation or business procedures, and other
proprietary or confidential information to the extent the same may be necessary
or desirable for the operation of the Purchased Business;
(k) all BU
customer lists, including that certain recently generated list of all of BU's
customers, that have purchased the Products since January 1, 2007, setting
forth the name and address of each such customer (the "Customer List");
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(l) all BU
supplier lists, including that certain recently generated list of all of BU's
suppliers that have supplied Inventory related to the Purchased Business and the
Products, since January 1, 2007, setting forth the name and address of each such
supplier (the "Supplier
List");
(m) all
books, files and records of BU relating to the business and operations of the
Purchased Business (other than minutes of corporate meetings, capital stock
ledger and purely corporate records which Santolubes may agree are not necessary
or advisable to the conduct of the Purchased Business);
(n) all
goodwill of BU relating to the Purchased Business;
(o) all
claims, warranties, guaranties, refunds, causes of action, rights of recovery,
rights of set off and rights of recoupment of every kind and nature that relate
to the Purchased Business, the Purchased Assets and the Products;
and
(p) all other
personal property owned by BU or used or held for use by BU in the conduct of
the Purchased Business, of whatever type or description including, without
limitation, all furniture, office equipment, communicating equipment, computers,
and office supplies (but excluding, however, any computer equipment, telephone
equipment or software in which BU owns or owned a partial interest together with
Synalloy and/or any Affiliate of Synalloy).
The
Purchased Business, including, without limitation, the foregoing properties and
assets of BU (excepting those assets expressly excluded by Section 1.2), are
herein referred to as the "Purchased Assets" (which term,
however, when used herein with respect to any date prior to the Closing Date,
shall be deemed to refer to the properties and assets of BU that would
constitute the "Purchased Assets" hereunder if the Closing were to take place on
such date).
1.2 Synalloy Quit Claim
Conveyance. Upon the
terms and subject to the conditions of this Agreement and in reliance upon the
representations and warranties contained herein, on the Closing Date, Synalloy,
by a Bill of Sale, shall convey to the Buying Parties all right, title and
interest of Synalloy, if any, in (a) the fixtures and improvements that are
located on the Spartanburg Site and are not otherwise conveyed to Santolubes
Spartanburg by Synalloy pursuant to Section 2.3, and (b)
all chemical manufacturing/processing equipment and supplies located at the
Spartanburg Site and used in connection with the Purchased
Business. Such conveyance by Synalloy shall be free and clear of all
Liens, except Permitted Liens.
1.3
Excluded
Assets. Notwithstanding
the provisions of Sections 1.1 and
1.2, it is
hereby agreed that the Purchased Assets shall not include, and BU and Synalloy
are not selling to Santolubes, and Santolubes is not purchasing or acquiring
from BU or Synalloy, those assets expressly excluded in Sections 1.1 (e),
(i), (m) and (p) (the assets
expressly excluded by this Section 1.3,
collectively the "Excluded
Assets").
1.4 Assumed
Liabilities. At
the Closing, Santolubes shall by written instrument assume, and after the
Closing shall perform and discharge (i) the Liabilities and obligations of BU
under the Assigned Contracts but only to the extent any required third party
consents to the assignment and transfer thereof to Santolubes has been obtained
and only to the extent such Liabilities and obligations relate to periods
subsequent to the Closing and do not arise from acts or omissions of the BU that
give rise to a breach of any of the Assigned Contracts, (ii) all Accounts
Payable of BU incurred in the ordinary course of the Purchased Business, but
only to the extent so reflected in the Master Balance Sheet subject to any
adjustments reflected in the Revised Closing Date Balance Sheet, and (iii) all
Accruals of BU incurred in the ordinary course of the Purchased Business, but
only to the extent so reflected in the Master Balance Sheet subject to any
adjustments reflected in the Revised Closing Date Balance Sheet (collectively,
the "Assumed
Liabilities"). The undertakings of Santolubes referred to
in this Section
1.4 shall not in any way limit Santolubes's right of recourse as set
forth in this Agreement for any breach of the covenants, representations or
warranties of BU contained herein. The assumption by Santolubes of
the Assumed Liabilities shall not enlarge any rights or remedies of any third
parties under any Contracts or arrangements with BU. Nothing herein
shall prevent Santolubes from contesting with a third party in good faith any of
the Assumed Liabilities.
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1.5 Retained
Liabilities. Except
for the Assumed Liabilities, Santolubes shall not assume or incur any
Liabilities or obligations of BU (the "Retained
Liabilities"). BU shall remain liable to pay, perform and
discharge, any and all of the Retained Liabilities; provided however, that BU
makes no such commitment with regard to Environmental Claims.
1.6 Closing
Date. The
purchase and sale of the Purchased Assets provided for in Section 1.1 (the
"Closing") shall take
place October 2, 2009, at the office of BU at the Spartanburg Site
contemporaneously with the execution and delivery of this Agreement by the
Buying Parties and the Selling Parties on the date set forth above, provided all
of the conditions specified in Articles 7 and 8 shall have been satisfied
or waived, or at such other place or time or on such other date as BU and
Santolubes may agree upon in writing The effective date and time of the sale and
purchase transactions described in this Agreement shall be 11:59 p.m., October
2, 2009 (such date and time being herein called the "Closing Date").
1.7
Purchase
Price.(a) Purchase
Price. The purchase price for the Purchased Assets (the "Purchase Price") shall be the
Net Book Value on the Closing Date, as shown in the Master Balance Sheet,
subject to any adjustments determined in accordance with Section 1.7(c)
below. The Purchase Price shall be adjusted and paid in the amount
and in the manner set forth in Sections 1.7(b) and
(c)
below.
(b) Payment
Amount. At the Closing, Santolubes shall pay to BU, in United
States dollars by wire transfer of immediately available funds, the Purchase
Price as calculated by reference to a preliminary Master Balance Sheet prepared
by the Selling Parties based on the most recent financial information of the
Selling Parties as of the Closing Date, which information may not reflect all
financial transactions of BU occurring on or shortly before the Closing
Date. Within five (5) Business Days following the Closing Date, the
Selling Parties shall update the preliminary Master Balance Sheet with financial
information of the Selling Parties based on the actual financial information of
BU as of the Closing Date and shall furnish this revised Master Balance Sheet to
Buying Parties by said fifth Business Day. If the Purchase Price
determined in the revised Master Balance Sheet is less that the Purchase Price
determined in the preliminary Master Balance Sheet, the Selling Parties shall
immediately pay such difference to Santolubes. If the Purchase Price determined
in the revised Master Balance Sheet is greater that the Purchase Price
determined in the preliminary Master Balance Sheet, Santolubes shall immediately
pay such difference to the Selling Parties. Nothing in this Section
1.7 (b) shall affect or in any way prejudice the parties’ rights and obligations
under Section 1.7
(c).
(c) Purchase Price
Adjustment.
(i) Revised Closing Date Balance
Sheet. As soon as practicable after the Closing, but no later
than the ninetieth (90th) day following the Closing, Santolubes, at its expense,
may prepare and deliver, or cause to be prepared and delivered, to BU (i) a
balance sheet that reflects proposed adjustments to the Master Balance Sheet
(the "Revised Closing Date Balance Sheet")
and (ii) a schedule (the "Revised Closing Schedule") setting
forth a calculation of any difference between the Purchase Price paid at
Closing, and the Net Book Value of the Purchased Assets based on the Revised
Closing Date Balance Sheet. The Revised Closing Date Balance Sheet and the
Revised Closing Schedule shall be prepared in a manner consistent with Section
1.7(c)(v).
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(ii) Protest
Notice. Within thirty (30) days after Santolubes's delivery of
the Revised Closing Date Balance Sheet and the Revised Closing Schedule to BU,
BU may deliver written Notice, which may be electronic, to Santolubes of any
objections, including the basis therefor, BU may have to the Revised Closing
Date Balance Sheet and/or the Revised Closing Schedule (the "Protest
Notice"). Unless otherwise agreed by BU and Santolubes in
writing, the failure of BU to deliver such Protest Notice within the prescribed
time period will constitute BU's irrevocable acceptance of the Revised Closing
Date Balance Sheet and the Revised Closing Schedule.
(iii) Resolution of
Protest. If Santolubes and BU are unable to resolve any
accounting disagreement with respect to the Revised Closing Date Balance Sheet
and/or the Revised Closing Schedule within twenty (20) days following the
delivery of any Protest Notice, then either BU or Santolubes may refer the items
in dispute (the "Contested
Items") to a nationally recognized firm of independent public accountants
as to which BU and Santolubes mutually agree (the "Accountants"), which will not
be the regular accounting firm of BU or Santolubes or any firm providing
material services thereto. Any undisputed amount due from BU to
Santolubes or Santolubes to BU, as the case may be, shall be paid within five
(5) Business Days after delivery of the Protest Notice as set forth in Section 1.7(c)(ii), with payment
calculated and paid as set forth in Section 1.7(c)(iv). Promptly,
but not later than thirty (30) days after acceptance of their appointment, the
Accountants will determine resolution of (based solely on presentations to the
Accountants by BU and Santolubes and not by independent review) and will render
a report as to the Contested Items and the resulting Revised Closing Date
Balance Sheet and Revised Closing Schedule, which report will be conclusive and
binding upon BU and Santolubes. In resolving any Contested Item, the
Accountants may not assign a value to any particular item greater than the
greatest value for such item claimed by BU or Santolubes or less than the lowest
value for such item claimed by BU or Santolubes, in each case as presented to
the Accountants. The fees and expenses of the Accountants shall be
borne on a proportionate basis by each of BU and Santolubes, based on the
inverse proportion of the respective percentages of the dollar value of disputed
issues determined in favor of BU and Santolubes. In making its
determination, the Accountants shall only consider the Contested Items that
remain in dispute.
(iv) Payment of
Adjustment. Within five (5) Business Days after the final
determination of the Revised Closing Date Balance Sheet and the Revised Closing
Schedule (or with respect to undisputed amounts thereon or the failure of BU to
submit a timely Protest Notice) pursuant to the provisions of this Section 1.7(c), the
amount shall be calculated and paid as follows:
(a) If the
Net Book Value as determined in the Revised Closing Date Balance Sheet is less
than the Purchase Price, BU shall pay for the account of Santolubes the amount
of such difference by wire transfer of immediately available funds to the bank
account specified by Santolubes.
(b) If the
Net Book Value as determined in the Revised Closing Date Balance Sheet is
greater than the Purchase Price, Santolubes shall pay to BU the amount of such
difference by wire transfer of immediately available funds to the bank account
specified by BU.
(c) To the
extent amounts are owed by both BU and Santolubes, the amounts due shall be
netted and the party with the remaining amount payable shall wire funds as set
forth above.
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The
amount of any payment to be made pursuant to this Section 1.7(c)(iv)
shall bear interest from and including the Closing Date, but excluding the date
of payment, at a rate per annum equal to the prime rate as published in The Wall Street Journal, Eastern
Edition in effect from time to time during the period from the Closing
Date to the date of payment. Such interest shall be payable at the
same time as the payment to which it relates and shall be calculated daily on
the basis of a year of 365 days and the actual number of days
elapsed. BU or Santolubes, as the case may be, shall provide wire
instructions to Santolubes or BU, as the case may be, with respect to any such
payment at least two (2) Business Days prior to the payment
thereof.
(v) Determinations. The
Net Book Value for all purposes of this Agreement shall be calculated in
accordance with GAAP, and to the extent consistent therewith, in accordance with
BU's historical practices.
(vi) Cooperation. For
purposes of complying with the terms set forth herein, each party will
reasonably cooperate with and promptly make available to the other party and its
auditors and representatives all information, records, data and supporting
papers relevant to the preparation of the Revised Closing Date Balance Sheet and
the Revised Closing Schedule and any adjustment being disputed, and will cause
BU to permit access to its facilities and personnel, as may be reasonably
required in connection with the preparation and analysis of the Revised Closing
Date Balance Sheet and the Revised Closing Schedule and the resolution of any
disputes thereunder.
1.8 Allocation of Purchase
Price. BU
and Santolubes acknowledge and agree that the consideration paid by Santolubes
for the Purchased Assets shall be allocated as set forth on Schedule 1.8,
which allocation is consistent with the requirements of Section 1060 of the Code
and the regulations thereunder. Each party hereto agrees (i) to
complete jointly and to file separately Form 8594 with its Federal income tax
return, consistent with such allocation, for its current tax year, and (ii) that
it will no take a position on any income, transfer or gains tax return,
before any Governmental or Regulatory Authority charged with the collection of
any such Tax or in any judicial proceeding, that is in any manner inconsistent
with the terms of such allocation without the consent of the other
party.
1.9
Other
Calculations. All
assets and Liabilities in respect of the business of BU affecting the
calculation of the Purchase Price shall be determined, and all utilities,
property taxes, lease payments and similar items of expense (exclusive of
insurance) in respect of the Purchased Business and Purchased Assets of BU, and
BU's reserves for the same as of the Closing Date, shall be shown or included in
the Master Balance Sheet.
2.1 Purchase and
Sale. Upon
the terms and subject to the conditions of this Agreement and in reliance upon
the representations and warranties contained herein, on the Closing Date,
Synalloy shall sell, transfer and convey to Santolubes Spartanburg, the
Spartanburg Site, which site is more fully described in Schedule 2.1,
together with all buildings, fixtures and other improvements located on the
Spartanburg Site and rights and interests associated therewith or otherwise
appurtenant thereto (collectively, the "Real
Property"). Contemporaneously with the purchase and sale of
the Real Property, Santolubes Spartanburg, as lessor, and Synalloy, as lessee,
shall execute and deliver a lease, substantially in the form attached as Exhibit
A, with respect to a portion of the Spartanburg Site (the "Real Property Lease").
2.2 Real Property Purchase
Price. The
purchase price for the Real Property shall be One Million One Hundred
Twenty-Nine Thousand Nine Hundred Twenty-Two ($1,129,922.00) (the "Real Property Purchase
Price"). The Real Property Purchase Price shall be paid by
wire transfer of immediately available funds contemporaneously with the payment
of the Purchase Price for the Purchased Assets and pursuant to written wire
transfer instructions delivered by Synalloy to Santolubes Spartanburg prior to
Closing.
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2.3 Conveyance. Synalloy
shall convey to Santolubes Spartanburg at the Closing good, valid, marketable,
indefeasible and insurable fee simple title to the Real Property that it is
purchasing herein by limited warranty deed in customary recordable form
reasonably acceptable to Santolubes Spartanburg, free and clear of any and all
liens, claims, encumbrances, options, restrictions and adverse rights and
interests whatsoever, save and except the Permitted Liens.
2.4 Title
Insurance. Santolubes
Spartanburg shall be responsible for purchasing such title insurance, if any, as
it deems advisable, and the Selling Parties shall have no liability to obtain or
pay for such title insurance.
2.5 Review Right, Inspection and
Survey. Santolubes
Spartanburg acknowledges and agrees that prior to the Closing Date it and its
authorized representatives, including surveyor and environmental inspection
personnel, have had reasonable access to the Real Property for the purpose of
inspecting same and obtaining a survey or updated survey, and customary
environmental investigation reports, as SantoLubes Spartanburg reasonably
determined. The Selling Parties have no responsibility to pay the
cost of any such survey or environmental inspections or reports obtained by
Santolubes Spartanburg.
2.6 Closing. The
closing of the purchase of the Real Property as contemplated by this Agreement
shall occur simultaneously with, and at the same location as, the Closing of the
Purchased Assets.
2.7 Taxes; Closing Costs and
Prorations.
(a) Taxes. All
Taxes and special assessments accrued and not yet payable for the current tax
year and relating to the Real Property and Equipment should be reflected as an
Accrual in the Master Balance Sheet.
(b) Other
Prorations. All accrued and not yet payable utility costs for
the Business as of the Closing Date should be reflected as an Accrual or
Accounts Payable in the Master Balance Sheet, and to the extent a final meter
reading is obtained as of the Closing Date, the final meter reading shall be
utilized for purposes of allocating such utilities between the Selling Parties
and the Buying Parties.
(c) Other Closing
Costs. The Buying Parties shall be responsible for paying the
costs of any title search and abstracting fees, environmental examinations
performed or requested by any of the Buying Parties, and the cost of any title
insurance and survey procured by the Buying Parties. Each party shall
pay its own attorneys fees incurred in connection with the negotiation and
preparation of this Agreement and the consummation of the Closing as
contemplated hereby. Synalloy shall pay the recording fees and Taxes
for the recording of the deed to Santolubes Spartanburg, and the Buying Parties
shall pay the recording fee and Taxes for any mortgage securing any financing
obtained by them. Other closing costs shall be allocated between the
parties in accordance with normal custom in connection with commercial real
estate closing transactions in the community where the Real Property is
located.
2.8 Allocation of Real Property
Purchase Price. Synalloy
and Santolubes Spartanburg acknowledge and agree that the consideration paid by
Santolubes for the Real Property shall be allocated as set forth on Schedule 2.8, which
allocation is consistent with the requirements of Section 1060 of the Code and
the regulations thereunder. Synalloy and Santolubes Spartanburg agree
(i) to complete jointly and to file separately Form 8594 with its Federal income
tax return, consistent with such allocation, for its current tax year, and (ii)
that it will no take a position on any income, transfer or gains tax return,
before any Governmental or Regulatory Authority charged with the collection of
any such Tax or in any judicial proceeding, that is in any manner inconsistent
with the terms of such allocation without the consent of the other
party.
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3. REPRESENTATIONS AND
WARRANTIES OF THE SELLING PARTIES.
With
respect to the Purchased Business, the Purchased Assets and the Real Property,
the Selling Parties jointly and severally hereby represent and warrant to the
Buying Parties, as of the Closing Date, as follows:
3.1
Organization and
Authority. BU
is a limited liability company and is duly organized, validly existing and in
good standing under the laws of the State of South Carolina, and Synalloy is a
corporation and is duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Selling Parties have all power
and authority necessary to carry on that portion of the Purchased Business as
now conducted by them and to own or lease and operate the Purchased Business,
Purchased Assets and Real Property as and in the places where such business is
now conducted and such assets are now owned, leased or operated. The
Selling Parties are duly qualified or licensed to do business and are in good
standing as a foreign limited liability company or foreign corporation, as the
case may be, in each of the jurisdictions where the nature of its business
requires it to be so qualified, except where the failure to be so qualified has
not or would not result in, or is not reasonably expected to result in, a
Material Adverse Effect on the Purchased Business, the Purchased Assets or the
Real Property.
3.2 Authorization; Binding
Obligation. The
Selling Parties have the power and authority to execute and deliver this
Agreement and the Transaction Documents and to perform and consummate the
transactions contemplated hereby or thereby. The execution, delivery
and performance by the Selling Parties of this Agreement and the Transaction
Documents have been duly authorized and approved by all requisite corporate or
company or other action, as applicable. This Agreement and the
Transaction Documents to be executed and delivered by either or both of the
Selling Parties are the valid and legally binding obligation of the Selling
Parties, enforceable against the Selling Parties in accordance with their
respective terms, except to the extent
that enforcement of the rights and remedies created thereby may be limited by
bankruptcy and other similar Laws of general application affecting the rights
and remedies of creditors and by general equity principles.
3.3 No
Violations. The
execution, delivery and performance of this Agreement and the Transaction
Documents by the Selling Parties and the consummation of the transactions
contemplated hereby and thereby will not result in a breach or violation of, or
in a default under BU's certificate of formation or operating agreement (or
other governing document), Synalloy's articles of incorporation or by-laws, or
any statute applicable to the Selling Parties, any Contract to which either of
the Selling Parties is a party or by which the Selling Parties or their
properties are bound or affected, or any Order. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental or Regulatory Authority is required by the Selling Parties in
connection with the execution and delivery of this Agreement, the Transaction
Documents or the consummation of the transactions contemplated hereby or
thereby.
3.4 Real
Property.(a) The Real
Property is the only real property owned or leased by the Selling Parties and
used by the Selling Parties in the operation of the Purchased
Business. With respect to the Real Property: (i) Synalloy has good,
valid and marketable fee simple title to such parcel, free and clear of any Lien
except for the Permitted Liens; (ii) there are no leases, subleases, licenses,
concessions, or other Contracts, written or oral, granting to any Person the
right of use or occupancy of any portion of the Real Property; (iii) there are
no outstanding options or rights of first refusal to purchase the Real Property,
or any portion thereof or interest therein; (iv) the Real Property has
permanent, direct, immediate and uninterrupted rights of access to dedicated
public rights of way and roads sufficient for the operation of the Purchased
Business, and Synalloy has obtained all necessary curb cut permits or other
necessary authorization from all applicable Governmental or Regulatory
Authorities allowing Synalloy to connect and/or tie the Real Property directly
into such public rights of way; (v) no fact or condition exists which would
prohibit or adversely affect the ordinary rights of access to and from the Real
Property from and to the existing highways and roads and there is no pending or
threatened restriction or denial, governmental or otherwise, upon such ingress
and egress; (vi) except for the Permitted Liens, the Real Property may be used
and occupied for the Purchased Business, and no Laws prohibit the occupancy of
the Real Property for such purpose; (vii) there are no commitments or agreements
with any Governmental or Regulatory Authority affecting the Real Property that
would be binding on the Buying Parties after the Closing Date that have not been
specifically disclosed in writing in Schedule 3.4(a);
(viii) the Selling Parties have not received notice of any condemnation,
proposed condemnation or any similar proceeding affecting the Real Property and
to the Knowledge of the Selling Parties, no such condemnations, proposed
condemnations or any similar proceedings affecting the Real Property are
planned; (ix) the Real Property is serviced by public utilities or
utilities that are available to the Real Property by valid, unencumbered and
appurtenant easements, all such utilities are installed and operating and all
installation and connection charges with respect thereto have been paid in full;
(x) all Permits for use of such utilities have been obtained from all
Governmental or Regulatory Authorities or other entities regulating the use
thereof, and there is sufficient water, sewer, gas and electricity available to
the Real Property to service properly the Purchased Business; (xi) there is not
any claim of adverse possession or prescriptive rights involving the Real
Property, and there are no parties in possession of any portion of the Real
Property other than the Selling Parties; and (xii) no public improvements have
been commenced and, to the Knowledge of the Selling Parties, no such public
improvements are planned, which may result in special assessments against or
otherwise materially adversely affect the Real Property.
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(b) Except
for the Permitted Liens, the current use of the Real Property does not violate
any instrument of record or agreement affecting the Real
Property. There is no violation of any covenant, condition,
restriction, easement, agreement or order of any Governmental or Regulatory
Authority having jurisdiction over any of the Real Property that affects such
Real Property or the use or occupancy thereof or which would adversely affect
the Buying Parties' conduct of the Purchased Business following the Closing in
substantially the same manner as BU conducting the Purchased Business prior to
Closing. To the Knowledge of the Selling Parties, no part of the Real
Property consists of a wetlands area protected as such under applicable
Law.
3.5 Intellectual
Property.
(a) The
following intellectual property of BU is included in the Purchased Assets
(collectively, the "Intellectual Property
Assets"): the name "Blackman Uhler," processes, common law trademarks,
common law trade names, common law service marks, trade dress, logos, copyrights
and mask works, domain names (and all registrations, applications, reissuances,
continuations, continuations-in-part, revisions, extensions, reexaminations and
associated goodwill with respect to each of the foregoing), trade secrets,
confidential business information (including ideas, formulas, compositions,
inventions, know-how, production processes and techniques, research and
development information, drawings, designs, plans, proposals and technical data,
financial, marketing and business data and pricing and cost information),
Permits, franchises, licenses, distribution rights and the like and other
proprietary rights used in or relating to the Products, (in whatever form or
medium), including all rights to institute and prosecute all suits and
proceedings and take all actions necessary or proper to collect, assert or
enforce any claim, right of title of any kind in and to the items listed
above.
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(b) With
respect to the Intellectual Property Assets: (i) BU owns and
possesses all right, title and interest in and to, or has a valid and
enforceable license to use, the Intellectual Property Assets, (ii) no claim by
any third party contesting the validity, enforceability, use or ownership of any
of the Intellectual Property Assets, has been made or is threatened; (iii) BU
has received no notice of any infringement or misappropriation by any third
party with respect to the Intellectual Property Assets; and (iv) with respect to
the Intellectual Property Assets, BU has not infringed, misappropriated or
otherwise conflicted with any Intellectual Property of any third
parties.
(c) The
Intellectual Property Assets comprises all of the Intellectual Property that is
owned by BU and used by BU in the operation of the Purchased Business as
currently conducted. All of the Intellectual Property Assets will be
owned or available for use by Santolubes immediately after the
Closing.
3.6 Environmental
Matters. Schedule 1.1(h) sets
forth, and the Selling Parties have obtained, all Permits required under
applicable Environmental, Health or Safety Laws in connection with the conduct
and operations of the Purchased Business. Each of such Permits is in
full force and effect, and the Selling Parties are and have at all times been in
compliance in all material respects with the terms and conditions of all such
Permits and with any Environmental, Health or Safety Laws applicable to the
Purchased Business, Real Property, or the Purchased Assets. In
addition, except as set forth in Schedule 3.6 (with
paragraph references corresponding to those set forth below), to the Knowledge
of the Selling Parties:
(a) There are
no solid or hazardous waste management units located on or in the Real Property
except for any which may have been properly closed in place and all remediation
and clean up accomplished in accordance with all applicable Environmental,
Health or Safety Laws.
(b) No
underground fuel storage tanks are or have been located on or in the Real
Property.
(c) Since
August 13, 2008, no Order has been issued, no Environmental Claim has been filed
or asserted, no penalty has been assessed and no investigation or review is
pending or threatened by any Governmental or Regulatory Authority with respect
to any alleged failure by either of the Selling Parties to have any Permits
required under applicable Environmental, Health or Safety Laws in connection
with the conduct and operations of the Purchased Business on or from the Real
Property or with respect to any generation, treatment, storage, recycling,
transportation, discharge, disposal or Release of any Hazardous Substance
generated by the Selling Parties on or from the Real Property, and there are no
facts or circumstances in existence which could reasonably be expected to form
the basis for any such Order, Environmental Claim, penalty or
investigation.
(d) Neither
of the Selling Parties, or any other prior owner, lessee, or occupant of the
Real Property has used the Real Property as a treatment, storage or disposal
facility requiring a Permit under the Resource Conservation and Recovery Act, as
amended, or under any other comparable state or local Law; and, without limiting
the foregoing, (i) there are no surface impoundments for Hazardous Substances,
active or abandoned, and (ii) no Hazardous Substance has been Released at, and
no Hazardous Substance is present, on or under the Real Property in amounts or
concentrations that require, or might require, investigation, removal or
remedial actions under any Environmental, Health or Safety Law.
(e) With
respect to the Purchased Business or any other business conducted from the Real
Property, none of the Selling Parties or any other owner or occupant of the Real
Property has been designated as potentially responsible under any Environmental,
Health or Safety Law for investigative, removal or remedial costs related to the
Purchased Business or the Real Property or activities that occurred thereon
(including the generation, treatment, storage, or disposal of Hazardous
Substances in connection with activities occurring at the Real Property), and
none of the Selling Parties or any other owner or occupant of the Real Property
has received any requests for information, administrative subpoena or other
similar document from a Governmental or Regulatory Authority relating to the
Purchased Business or Real Property (including the generation, treatment,
storage, or disposal of Hazardous Substances in connection with activities
occurring at the Real Property).
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(f) With
respect to the Purchased Business, no Hazardous Substance generated by the
Selling Parties or any Person acting on behalf of either of the Selling Parties,
including, without limitation, transporters of Hazardous Substances, has been
recycled, treated, stored, disposed of or Released at any location, except in
full compliance with all applicable Environmental, Health or Safety
Laws.
(g) With
respect to the Purchased Business or the Real Property, no notification of a
Release of a Hazardous Substance under 42 USC 9603 has been filed by or on
behalf of either of the Selling Parties and neither the Real Property nor any
other site or facility now or previously owned, operated or leased by either of
the Selling Parties is listed or proposed for listing on the NPL, CERCLIS or any
similar state or local list of sites requiring investigation or
cleanup.
(h) No Liens
have arisen under or pursuant to any Environmental, Health or Safety Law on the
Real Property or with respect to the Purchased Business any other site or
facility owned, operated or leased by either of the Selling Parties, and no
federal, state or local Governmental or Regulatory Authority action has been
taken or are in process that could subject any such site or facility to such
Liens.
(i) Prior to
the Closing, the Selling Parties have given the Buying Parties reasonable access
to all environmental investigations, studies, audits, tests, reviews or other
analyses with respect to the Purchased Business or the Real Property which exist
to the Knowledge of the Selling Parties.
3.7 Product Liability Claims;
Warranties.
(a) The
Master Balance Sheet sets forth and/or includes all products liability and
warranty claims that have been asserted in writing or threatened against BU or,
asserted or threatened against any customer of BU or any other Person with
respect to the Products. No proceedings seeking the recall,
withdrawal, suspension or seizure of any of the Products are pending or
threatened against any of the Products.
(b) There
have been no actual or threatened claims by any employees or contractors of BU
or any other Persons, including any employees or contractors of any of BU's
customers, asserting any claim for personal injury or illness arising from or
relating to the Products, including any claims for workers compensation or
claims under OSHA or any other comparable environmental regulatory acts or
otherwise with respect to their use of or exposure to the Products.
(c) The
express warranty provisions in certain Assigned Contracts set forth on Schedule 1.1(e), and
BU's invoices to its customers and/or customers' purchase orders sent to BU
contain any warranties which are currently provided by BU in connection with the
sale or distribution of the Products and any other warranty under which BU or
Santolubes may have any liability with respect to the sale of the Products at or
prior to Closing or after Closing pursuant to contractual commitments entered
into prior to Closing.
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(d) There is
no data or other findings that would contradict any materials published by BU
with respect to the safety, toxicity or efficacy of the Products.
3.8 Taxes. With
respect to the Purchased Business, all federal, state, local and foreign tax
reports and returns required by Law to be filed by the Selling Parties have been
filed or will be filed by their normal or extended due dates, and all Taxes and
other charges shown on said reports and returns or otherwise required to be paid
have been paid other than those presently payable without penalty or
interest. Any sales or use taxes due in connection with the
transaction contemplated hereby have been or will be paid by the Selling
Parties. With respect to the Purchased Business, the Selling Parties
have required and collected sales tax exemption certificates from all of
customers to whom sales were made without requiring sales tax collection and
otherwise complied with applicable sales tax Laws (and has provided Santolubes
with copies of all such certificates as part of the books and records included
in the Purchased Assets).
3.9
Financial
Statements.(a) Set forth
on Schedule 3.9
are true, correct and complete copies of: (i) the financials for fiscal year
2007 (i.e., the
balance sheet as of the end of the fiscal year, and the related statements of
income and cash flow for the year then ended related to the Purchased Business);
(ii) the financials for fiscal year 2008 (i.e., the balance
sheet as of the end of the fiscal year, and the related statements of income and
cash flow for the year then ended related to the Purchased Business); (iii) the
financials for the first eight months of fiscal year 2009, which ended August
29, 2009 (i.e.,
the balance sheet dated as of August 29, 2009, and the related statements of
income and cash flow for the eight months then ended related to the Purchased
Business); and (iv) the Master Balance Sheet (collectively, the "Financial
Statements").
(b) Each of
the Financial Statements has been prepared in accordance with GAAP consistently
applied, and present fairly, in all Material respects, the financial condition,
the results of operations, cash flows and ownership of the Purchased Business as
of the dates and for the periods indicated therein, and are consistent in all
Material respects with the books and records of BU (which books and records are
correct and complete in all Material respects). The Master Balance
Sheet includes a list of fixed assets, inventory and prepaid items as of the
close of business as of the Closing Date and were derived using and consistent
with, the accounting principles employed in preparing the year end financials
for fiscal years 2007 and 2008.
3.10 Absence of
Changes. With
respect to the Purchased Business and the Purchased Assets, since August 29,
2009, and except as otherwise disclosed on Schedule
3.10:
(a) BU has
(i) conducted the Purchased Business only in the usual and ordinary course,
(ii) operated the Purchased Business in all Material respects in accordance
with past practices; and (iii) used its best efforts to preserve good
business relationships with its employees, customers, suppliers and other
persons having business relationships with it;
(b) there has
not been any change in the condition (financial or otherwise), assets,
Liabilities, capitalization, business or prospects of the Purchased Business,
other than changes arising in the ordinary course of business, none of which has
been adverse in any Material respect;
(c) BU has
not suffered any strike or other labor trouble with the Purchased Business
Employees and BU has not entered into any agreement or negotiation with any
labor union or other representative of any of the Purchased Business
Employees;
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(d) with
respect to the Purchased Business and the Purchased Assets, and other than in
the ordinary course of its business as historically conducted, BU has not
experienced, made, or agreed to a Material change with respect to (i) the
availability, acquisition, composition, quantity, quality or cost of BU's raw
material inventory, (ii) the quantity, quality, composition, value or price of
BU's finished goods inventory, or (iii) the volume, price, composition, or
profitability of BU's toll processing services;
(e) BU has
not granted or promised to grant any increase in the salaries or compensation of
any of the Purchased Business Employees, or granted or promised to grant any
increase in the employment benefits of any character of, or granted or promised
to grant any new benefits to, any Purchased Business Employees, except for
routine promotions and salary raises all in the ordinary course of business as
historically conducted (none of which exceed a raise of $10,000 per annum for
any individual);
(f) with
respect to the Purchased Business and the Purchased Assets, BU has not made any
change in any method of accounting or accounting practice, including without
limitation any change in depreciation or amortization policies or
rates;
(g) with
respect to the Purchased Business and the Purchased Assets, BU has not done any
act or omitted to do any act, or permitted any act or omission to act, which has
or could cause a breach of any Contract or commitment to which BU is a party or
by which the Purchased Assets are bound or affected; and
(h) with
respect to the Purchased Business and the Purchased Assets, BU has not entered
into a Contract to do or engage in any of the foregoing.
3.11 Title to Assets; Purchased Assets
Complete. BU
has good, valid and marketable title to the Purchased Assets free and clear of
any Lien except for Permitted Liens (including those set forth on Schedule 3.11), and
upon the transfer of the Purchased Assets to Santolubes at the Closing,
Santolubes will own all of the Purchased Assets free and clear of any Lien
except for Permitted Liens. Synalloy has good, valid and marketable
title to the Real Property free and clear of any Lien except for Permitted
Liens, and upon the transfer of the Real Property to Santolubes Spartanburg at
the Closing, Santolubes Spartanburg will own all of the Real Property free and
clear of any Lien except for Permitted Liens. Upon the transfer at
the Closing of the Purchased Assets to Santolubes and the Real Property to
Santolubes Spartanburg, the Buying Parties will collectively own all of the
assets and rights (exclusive of the Excluded Assets) necessary for them to
conduct the Purchased Business in a manner consistent with the manner in which
BU conducted the Purchased Business on and prior to the Closing.
3.12
Permits,
Licenses. Except
as set forth on Schedule 3.12, the
Selling Parties hold all Permits necessary for or used to carry on the Purchased
Business as now being conducted under currently effective Laws. Set
forth on Schedule
1.1(h) is a list of all Permits, and their respective dates of
termination or renewal, owned or held by either or both of the Selling Parties
relating to the ownership or operation of the Purchased Business, Real Property,
or the Purchased Assets, together with any formal or specific notices or
directives received from the Governmental or Regulatory Authority or Person
issuing or responsible therefor, for which noncompliance with any such notice or
directives could cause revocation, suspension or material diminution in the term
of such item, all of which are in good standing. The Selling Parties
shall cooperate with the Buying Parties to the extent reasonably necessary to
assist the Buying Parties in obtaining the Permits they deem necessary for the
Buying Parties to conduct the Purchased Business.
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3.14 Compliance with Laws and
Litigation. The
Purchased Business and the Real Property are in compliance with all applicable
Laws. There are no actions, suits, proceedings, Orders or governmental
investigations pending or threatened against either of the Selling Parties
related to the Purchased Business, the Purchased Assets or the Real Property
except as disclosed in Schedule
7.3. Notwithstanding anything herein to the contrary nothing
in this Section
3.14 shall be applicable to any Environmental Health or Safety Laws or
Environmental Claims, it being the parties' intention that warranties and
representations from the Selling Parties regarding environmental matters shall
be addressed and governed exclusively in Section
3.6.
3.15 Labor Relations;
Employees. Schedule 3.15
contains a complete and correct list of all employees employed by BU in the
Purchased Business (the "Purchased Business
Employees"). Other than amounts which have not yet become
payable in accordance with BU's customary practices (which amounts will be paid
in a timely manner), (a) BU has paid in full to the Purchased Business Employees
all wages, salaries, commissions, bonuses and other direct compensation for all
services performed by them to the Closing Date, and (b) BU has paid, or will pay
in a timely manner, all wages and benefits, FICA, and withholding taxes accrued
as of the Closing Date by all of the Purchased Business Employees, and BU is not
subject to any claim for nonpayment or non performance of any of the
foregoing. BU has not treated as an independent contractor any
individuals who should properly be treated as a Purchased Business
Employee. There is no unfair labor practice complaint against BU
pending before the National Labor Relations Board or any comparable state or
local agency, with respect to the Purchased Business Employees. There
is no labor strike, dispute, slowdown or stoppage pending, or threatened against
BU. No grievance or proceeding alleging discriminatory practices is
pending and no claim therefor has been asserted against BU. No
collective bargaining representative is certified to represent any group of
Purchased Business Employees under the Labor-Management Relations Act of
1947. No petition for election of a collective bargaining
representative for all or any portion of the Purchased Business is pending or in
respect of any other group of employees. Neither of the Selling
Parties is aware of any organizational effort or campaign by any labor union
that affects or might affect employment of any of the Purchased Business
Employees. Neither of the Selling Parties is a party to any
collective bargaining agreement with respect to any of the Purchased Business
Employees. The Selling Parties have no Knowledge that any salaried
Purchased Business Employees do not intend to accept employment with Santolubes
following the Closing.
3.16
Employees Benefit
Plans. With
respect to the Purchased Business, neither the Selling Parties nor any ERISA
Affiliate of the Selling Parties has, or is obligated with respect to (and at
the Closing Date will not have) (i) any "employee benefit plans" as defined
in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), other than the
Selling Parties' sick leave, vacation and holiday policies, 401(k) plan and
employee group life and health insurance plans, if any, (ii) any defined
benefit "employee pension benefit plans" (as defined in
ERISA). Santolubes shall not assume any employee benefit plans
including, without limitation, plans defined in ERISA Section
3(3). With respect to the Purchased Business, neither the Selling
Parties nor any ERISA Affiliate is a party to a multiemployer plan within the
meaning of ERISA Section 4001(a)(3) or has or may have any liability to make any
withdrawal liability payment to any multiemployer plan. With respect
to the Purchased Business, the Selling Parties do not have, and will not at the
Closing Date have, any "qualified beneficiaries" as defined in the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended. The Selling
Parties have delivered to Santolubes copies of the employee booklets (including
any plan summaries), if any, given to the Purchased Business Employees with
respect to any benefits currently being provided by the Selling Parties to the
Purchased Business Employees or to which the Selling Parties are a party or by
which either of them is bound. "ERISA Affiliate" shall mean
all employers (whether or not incorporated) which by reason of common control
(or being a member of a "controlled group" as defined in ERISA Section
4001(a)(14) or 4001(b)(i)) are treated together with either of the Selling
Parties as a single employer within the meaning of Section 414(b) or Section
414(c) of the Code.
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To the
extent allowable under the 401(k) plans of Synalloy and Santolubes LLC, a
Missouri limited liability company, and ERISA, both of said parties agree to
cause a “trust-to-trust” transfer of the 401(k) plan assets of Synalloy relating
to the Purchased Business Employees to be transfered to the 401(k) Plan of
Santolubes LLC.
3.17 Agreements. Schedule 1.1(e)
correctly and completely shows or includes all outstanding Contracts relating to
the Purchased Business to which BU is a party or by which it or its assets or
properties are bound or affected. Each Assigned Contract is in full
force and effect and is valid and enforceable in accordance with its terms and
was entered into in the ordinary course of business at customary rates and
prices. Neither BU, nor any other party to any of the Assigned
Contracts, has breached any provision of or is in default under the terms of any
such agreements. Other than the Assigned Contracts, there are no
arrangements or contractual obligations or assessments of any kind, including
service or operating Contracts or commitments to any third party or Governmental
or Regulatory Authorities that would affect or impose any obligation on either
of the Buying Parties or the Purchased Business, the Purchased Assets or Real
Property subsequent to the Closing. BU is not a party to any Assigned
Contracts, nor has BU submitted any bid or proposal for any Contract that
relates to the Purchased Business, the terms of which consists of prices or
rates that are less than customary or would result in Losses for
BU.
3.18 Books and
Records. All
books, files and records of the Selling Parties relating to the business and
operations of the Purchased Business, the Purchased Assets or Real Property
(other than minutes of corporate meetings, capital stock ledger and purely
corporate records which Santolubes may agree are not necessary or advisable to
the conduct of the Purchased Business) are true, correct and complete in all
material respects. All actions reflected in such books and records
were duly and validly taken in compliance with all applicable Laws.
3.19 Approvals and
Filings. No
consent, approval, waiver, release or action of, filing with or notice to any
Person or Governmental or Regulatory Authority on the part of the Selling
Parties is required in connection with the execution, delivery and performance
of this Agreement or any of the Transaction Documents to which any of them is a
party or the consummation of the transactions contemplated hereby or
thereby.
3.20
Operating
Condition. The
Manufacturing Equipment, Motor Vehicles and all other items of personal property
included in the Purchased Assets are sold in an "AS IS"
condition. The Selling Parties have no Knowledge that any of the
Manufacturing Equipment violates or does not comply with applicable Laws,
including without limitation those of the EPA, OSHA and other applicable state
or federal regulatory authorities.
3.21
Purchased
Business. The
Selling Parties have no Knowledge of any fact (other than matters of a general
economic or political nature) that has a Material Adverse Effect, or so far as
may be reasonably foreseen, will adversely effect in any Material respect, the
Purchased Business, the Purchased Assets, the Real Property or the value of any
thereof. Provided, however, the warranty and representation of the
Selling Parties in this Section 3.21 shall
not extend to a Material Adverse Effect caused by or arising in connection with
any Hazardous Substance or any Environmental, Health or Safety Law or any
Environmental Claims, it being the parties' intention that warranties and
representations from the Selling Parties regarding environmental matters shall
be addressed and governed exclusively in Section
3.6.
3.22 Transactions with Affiliated
Parties. Neither
of the Selling Parties nor any Affiliates of the Selling Parties: (i) has any
ownership interest, directly or indirectly, in any competitor, supplier or
customer of the Purchased Business, (ii) has any outstanding loan to or
receivable from the Purchased Business except as may be shown or included in the
Master Balance Sheet, or (iii) is a party to or has any interest in any Assigned
Contract.
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3.23 Inventory. The
Inventories in the Purchased Assets are properly valued in accordance with GAAP
as reflected in the Financial Statements. The books and records of BU
relating to the Inventories are complete and up to date. All
Inventories are located at the Spartanburg Site.
3.24 Accounts
Receivable. All
Accounts Receivable included in the Purchased Assets have arisen in the ordinary
course of business of BU, represent valid obligations due to BU, and will be
collectible in the ordinary course of business, subject to the reserves
reflected in the Master Balance Sheet. None of such Accounts
Receivable (i) is subject to any counterclaim or set off except as may be shown
or included in the Master Balance Sheet, or (ii) is subject to any
Lien.
3.25 Accounts
Payable. All
Accounts Payable and Accruals included in the Assumed Liabilities have arisen in
the ordinary course of business of BU, and represent valid obligations due from
BU.
3.26 Indebtedness. The
Master Balance Sheet sets forth a complete and accurate list and description of
all Indebtedness of BU related to the Purchased Business and the Purchased
Assets.
3.27 Undisclosed
Liabilities. Except
for Liabilities or obligations shown or included in the Master Balance Sheet,
and the reserves, if any, for same, the Selling Parties will not have any
Liabilities or obligations with respect to the Purchased Business, Real
Property, or the Purchased Assets which would cause any Loss, Liability, cost or
expense to the Buying Parties due to or in connection with their purchase of the
Purchased Assets and Real Property, other than the Assumed
Liabilities. Provided, however, the warranty and representation of BU
in this Section
3.27 shall not extend to any liability or obligation caused by or arising
in connection with any Hazardous Substance or any Environmental, Health or
Safety Law or Environmental Claims, it being the parties' intention that
warranties and representations from the Selling Parties regarding environmental
matters shall be addressed and governed exclusively in Section
3.6.
3.28 Liabilities;
Solvency.(a) The
Selling Parties are not entering into this Agreement or any other Transaction
Document or other document or instrument related hereto or thereto with the
intent to defraud, delay or hinder any of its present or future creditors, and
the transfers contemplated hereby and thereby will not have such
effect.
(b) The
Selling Parties are not now insolvent, nor will they be rendered insolvent by
the Buying Parties purchase of the Purchased Assets and Real Property or the
consummation of any other transaction contemplated hereby. As used in
this Section, "insolvent" means that the debts and other probable Liabilities of
an entity exceed the sum of the present fair saleable value of the assets of
such entity.
(c) Immediately
after giving effect to the consummation of the Buying Parties' purchase of the
Purchased Assets and Real Property, the Selling Parties will: (i) be able to pay
their liabilities as they become due in the usual course of business, (ii) not
have an unreasonably small capital with which to conduct their businesses, and
(iii) have assets (calculated at fair market value) that exceed
liabilities. The cash available to the Selling Parties, after taking
into account all other anticipated uses of the cash, will be sufficient to pay
all such debts and judgments, if any, related to the Purchased Business, the
Real Property or Purchased Assets promptly in accordance with their
terms. The Purchase Price and Real Property Purchase Price constitute
a reasonably equivalent value for the Purchased Assets and Real Property, as the
case may be, and the consummation of the Buying Parties' purchase of the
Purchased Assets and Real Property will not constitute a fraudulent transfer
under any Law relating to bankruptcy and insolvency.
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(d) The
Selling Parties have not, at any time, with respect to the Purchased Business,
the Purchased Assets or the Real Property: (i) made a general assignment
for the benefit of creditors, (ii) filed, or had filed against it, any
bankruptcy petition or similar filing, (iii) admitted in writing its
inability to pay its debts as they become due, (iv) been convicted of, or
pleaded guilty or no contest to, any felony, or (v) taken or been the
subject of any action that could reasonably be expected to have an adverse
effect on its ability to comply with or perform any of its covenants or
obligations under this Agreement or any of the Transaction
Documents.
(e) No writ
of attachment, execution or similar process has been ordered, executed or filed
against the Selling Parties or any of their assets or properties. The
Selling Parties have no intention to file a voluntary petition for relief under
the United States Bankruptcy Code, as amended, or to seek relief on their debts
under or the protection of any other bankruptcy or insolvency Law or proceeding,
and, to the Knowledge of the Selling Parties, no creditor of the Selling Parties
has threatened to file an involuntary petition for relief under the United
States Bankruptcy Code, as amended, or to institute any other insolvency
proceedings against the Selling Parties.
3.29 Customer
List. To
the Knowledge of the Selling Parties, the Customer List contains a true and
correct listing of all of BU's customers that have purchased the Products since
January 1, 2007, and no customer listed on the Customer List has threatened in
writing, nor threatened orally, to cease or Materially reduce its purchases from
Santolubes as a result of the sale of the Purchased Assets or for any other
reason. To the Knowledge of the Selling Parties, the relationships of
BU with its customers listed on the Customer List are good commercial working
relationships. To the Knowledge of the Selling Parties, no customer
listed on the Customer List is threatened with bankruptcy or
insolvency.
3.30 Supplier
List. To
the Knowledge of the Selling Parties, the Supplier List contains a true and
correct listing of all of BU's suppliers that have supplied Inventory since
January 1, 2007. To the Knowledge of the Selling Parties, no supplier
listed on the Supplier List has threatened in writing, nor threatened orally, to
cease or Materially reduce its supply of Inventory to Santolubes as a result of
the sale of the Purchased Assets or for any other reason. To the
Knowledge of the Selling Parties, the relationships of BU with its suppliers
listed on the Supplier List are good commercial working
relationships. To the Knowledge of the Selling Parties, no supplier
listed on the Suppliers List is threatened with bankruptcy or
insolvency.
3.31 Brokers. No
Person has acted directly or indirectly as a broker, finder or financial advisor
for either of the Selling Parties in connection with the negotiations relating
to the transactions contemplated by this Agreement, and no Person is entitled to
any fee or commission or like payment in respect thereof based in any way on any
agreement, arrangement or understanding made by or on behalf of either of the
Selling Parties.
3.32 Full
Disclosure. No
representation or warranty by either of the Selling Parties in this Agreement
and no statement contained in any of the documents furnished, or to be
furnished, by either of the Selling Parties to either of the Buying Parties
pursuant to the provisions hereof contains or will contain any untrue statement
of material fact, or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading. To the Knowledge of the
Selling Parties, except as otherwise disclosed or addressed in this Agreement or
the Schedules hereto, there are no facts with specific application to the
Selling Parties (excluding general economic conditions), that might reasonably
be expected to have a Material Adverse Effect upon the Purchased Assets, Real
Property or upon Santolubes's ability to operate the Purchased Business
following the Closing in substantially the manner in which BU operated
the Purchased Business at and prior to Closing.
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4. REPRESENTATIONS AND
WARRANTIES OF THE BUYING PARTIES. Santolubes
represents and warrants to BU as of the date here, and as of the Closing Date,
that:
4.1 Organization and
Authority. Santolubes
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Missouri. Santolubes
Spartanburg is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of South Carolina. The
Buying Parties have all power and authority necessary to carry on their
respective businesses as now conducted by them and to own or lease and operate
those businesses as and in the places where such businesses are now
conducted. Each of the Buying Parties is duly qualified or licensed
to do business and is in good standing as a foreign company in each of the
jurisdictions where the nature of its business requires it to be so qualified,
except where the failure to be so qualified has not or would not result in, or
is not reasonably expected to result in, a Material Adverse Effect.
4.2 Authorization; Binding
Obligation. The
Buying Parties have the power and authority to execute and deliver this
Agreement and the Transaction Documents to which they are a party and to perform
and consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by the Buying Parties of this Agreement and
the Transaction Documents to which they are a party have been duly authorized
and approved by all requisite limited liability company action. This
Agreement and the Transaction Documents to be executed and delivered by the
Buying Parties are valid and legally binding obligations of the respective
Buying Parties enforceable against them in accordance with their respective
terms, except to the extent that enforcement of the rights and remedies created
thereby may be limited by bankruptcy and other similar Laws of general
application affecting the rights and remedies of creditors and by general equity
principles.
4.3 No
Violations. (a)
The execution, delivery and performance of this Agreement and the Transaction
Documents by the Buying Parties and the consummation of the transactions
contemplated hereby will not result in a Material breach or violation of, or in
a default under, the Buying Parties respective articles of organization,
operating agreement, (or other governing document), any statute applicable to
the Buying Parties, any Contract to which either of the Buying Parties are a
party or by which either of their properties are bound or affected, or any
Order, and (b) no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental or Regulatory Authority is required
by the Buying Parties in connection with the execution and delivery of this
Agreement, the Transaction Documents or the consummation of the transactions
contemplated hereby or thereby.
4.4 Brokers. No
Person has acted directly or indirectly as a broker, finder or financial advisor
for the Buying Parties in connection with the negotiations relating to the
transactions contemplated by this Agreement, and no Person is entitled to any
fee or commission or like payment in respect thereof based in any way on any
agreement, arrangement or understanding made by or on behalf of the Buying
Parties.
5. CERTAIN
COVENANTS.
5.1 General. Each
of the parties will use its respective Reasonable Efforts to take all action and
to do all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement (including satisfying the
closing conditions set forth in Articles 7 and 8).
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5.2 Information. If
either of the Selling Parties after Closing has a reasonable need to have access
to any records or information regarding the Purchased Business and concerning a
period of time prior to the Closing Date, the Buying Parties will provide to the
Selling Parties and to their officers, employees, accountants, counsel and other
representatives, reasonable access during the Buying Parties' normal business
hours to all such records and information then within their possession or
control, and shall allow the Selling Parties, at their cost, to make copies of
the same.
5.3 Employees.
(a) BU shall
be responsible for, shall pay and discharge and shall indemnify and hold
Santolubes harmless from and against, all wages, salaries, commissions, bonuses,
severance, vacation and similar payments which through the Closing Date have
accrued or are payable to any Purchased Business Employees or which have accrued
or are payable, or may become payable as a result of the termination of
employment or otherwise, of any Purchased Business Employees during any period
through the Closing Date. Provided, however, if Santolubes on or
within thirty (30) days after the Closing Date hires any Person who was employed
by BU immediately prior to the Closing, Santolubes shall credit and provide such
Person with all unused sick days, personal leave days and vacation days which
such Person was entitled to receive from BU as of the Closing
Date. Any such Person shall be a third party beneficiary of this
Section
5.3(a).
(b) BU shall
pay over to the Internal Revenue Service and any other applicable Governmental
or Regulatory Authority all amounts withheld or required to be withheld with
respect to Purchased Business Employees for periods prior to the Closing Date
and shall issue in accordance with applicable federal Law Forms W-2 and
equivalent forms in accordance with similar state and local Law, with respect to
the Purchased Business Employees.
(c) Santolubes
may employ and/or retain the services of any or all the Purchased Business
Employees, subject to Santolubes's discretion in hiring and firing.
5.4
Completion of Identified
Retained Environmental Projects. The
Selling Parties shall complete the Identified Retained Environmental Projects in
accordance with the scope and timelines described in Schedule
5.4. All such work shall be performed in a good and
workmanlike manner, and in accordance with all Environmental, Health or Safety
Laws. The Buying
Parties shall grant the Selling Parties, and their agents and contractors
reasonable access to the Spartanburg Site (including without limitation access
after Santolubes’ normal business hours and on days that are not Business Days)
for all activities undertaken by the Selling Parties in connection with the
Identified Retained Environmental Projects, and the Buying Parties shall
reasonably cooperate with the Selling Parties in connection with such actions of
the Selling Parties, and their agents and contractors.
5.5 Performance
of Identified Transferred Environmental Projects. Santolubes
shall complete or perform the Indentified Transferred Environmental Projects
described in Schedule
5.5 All such work shall be performed in a good and workmanlike
manner, and in accordance with all Environmental, Health or Safety Laws. Buying Parties shall
reasonably consult with Synalloy regarding actions to be undertaken with DHEC in
regard to the Identified Transferred Environmental Projects and shall give
Synalloy copies of all filings and communications sent by Buying Parties to
DHEC, or from DHEC to Buying Parties, in regard to Buying Parties activities
taken pursuant to this Section 5.5.
Provided, however, so long as the LC is
issued and outstanding, then: If in the reasonable opinion of Synalloy, and
based on objective facts, it appears to Synalloy that (i) DHEC may take
enforcement action in connection with any of the Identified Transferred
Environmental Projects due to any actions or non-actions of Buying Parties
relating thereto, or (ii) DHEC may call payment of the letter of credit
described in the RCRA
Permit Financial Assurance Agreement due to any actions or non-actions of
Buying Parties relating to the Identified Transferred Environmental Projects,
then in that event Synalloy shall have the right to take over and perform itself
the Identified Transferred Environmental Projects, and in that event Buying
Parties shall give Synalloy full access to their books and records regarding the
Identified Transferred Environmental Projects, they shall direct their employees
to fully cooperate with Synalloy in Synalloy’s activities undertaken to itself
perform the Identified Transferred Environmental Projects, and it shall grant
Synalloy and its agents and contractors reasonable access to all parts of the
Spartanburg Site as necessary or advisable for Synalloy to itself perform the
Identified Transferred Environmental Projects. So long as Synalloy is
itself performing the Identified Transferred Environmental Projects as provided
herein, Buying Parties shall reimburse Synalloy for all its costs and expenses
in connection with the Identified Transferred Environmental Projects to the same
extent and in the same manner as Buying Parties reimburse Synalloy for its costs
and expenses in connection with the Augusta Pump and Treat
Obligations. Further, in addition to reimbursing Synalloy for such
cost and expenses as aforesaid, Buying Parties also shall pay Synalloy an
administrative fee equal to 15% of all cost reimbursements due Synalloy, and
such administrative fee shall be due and payable at the same time as the
relevant cost and expense reimbursement is due and payable. The
parties hereto acknowledge and agree that Synalloy will incur overhead expenses
which will not be included in the costs and expenses to be reimbursed by Buying
Parties pursuant to this paragraph and that the administrative fee is a fair and
reasonable manner of compensating Synalloy should it have to take over and
perform the Identified Transferred Environmental Projects as provided in this
paragraph.
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5.6 Reimbursement for Augusta
Pump and Treat Obligations. Synalloy
will continue to engage a qualified environmental remediation contractor that is
reasonably acceptable to Santolubes to perform the Augusta Pump and Treat
Remediation Work, and Santolubes will reimburse Synalloy for the out-of-pocket
costs charged from time to time by such contractor for any such work performed
from and after the Closing. Provided, however, (i) Santolubes shall not refuse
to pay Synalloy such reimbursement because Santolubes disagrees with the charges
or the services of the contractor, and (ii) Santolubes may directly communicate
with the contractor regarding any disagreements which Santolubes has regarding
the contractor’s services and charges, and any refunds granted by the contractor
to Synalloy shall be paid over to Santolubes to the extent they previously were
reimbursed by Santolubes to Synalloy. Each such
reimbursement shall be made within thirty (30) days after written request
accompanied with the presentment of a copy of the relevant contractor’s invoice
and any documentation provided by the contractor as a part of that
invoice. Synalloy will cause the contractor to perform all of the
Augusta Pump and Treat Remediation Work in a good, workmanlike, and cost
efficient manner, and in accordance with all Environmental, Health or Safety
Laws and Government or Regulatory Agency Statutes, Regulations, or
Orders. Any alteration or expansion of the Augusta Pump and Treat
Remediation Work to be performed from and after the Closing shall be subject to
Santolubes's reasonable prior approval; provided, however, to the extent that
said alterations or expansions to the Pump and Treat System or monitoring well
network are required by a Governmental or Regulatory Agency, Santolubes shall
reimburse Synalloy for the out of pocket costs charged for such work performed.
Buying Parties at their option and cost may request applicable Governmental or
Regulatory Authoirites to reduce or eliminate the need for the Augusta Pump and
Treat Obligations, and Synalloy will consent to such action so long as such
actions will not result in accelerated remediation costs, increased remediation
costs, increased duties or any other cost or detriment to Synalloy. To the
extent that a Governmental or Regulatory Agency requires active microbial or
chemical oxidation or other active remediation in addition to operation of the
Augusta Pump and Treat Work, Synalloy shall not be reimbursed for the out of
pocket costs charged for such work performed. Santolubes's
obligations under this Section 5.6 shall
continue until such time as the Augusta Pump and Treat Remediation Work is
completed or Synalloy sells the Augusta Site or Synalloy is no longer
responsible for the Augusta Pump and Treat Remediation Work, whereupon all
further obligations of Santolubes under this Section 5.6 shall
forever terminate. At any time, Santolubes may request that the
remediation contractor provide a reasonable estimate of the then present value
of the sum of all of the remaining costs to be incurred to complete the Augusta
Pump and Treat Remediation Work, and SantoLubes may pay the same to Synalloy
whereupon all further obligations of Santolubes under this Section 5.6 shall
forever terminate. Santolubes shall reimburse Synalloy for the out of
pocket costs expended by the contractor associated with creating any cost
estimate. To the extent that it has reimbursed Synalloy, SantoLubes
shall be subrogated to any rights or claims that Synalloy or BU may have against
any third party with respect to the implementation or need for the Augusta Pump
and Treat Remediation, and the Selling Parties will take such action, including
prosecution of legal action if so requested by Santolubes, to recover amounts
owed with respect to the same, provided that any costs so incurred by the
Selling Parties, shall be reimbursed by Santolubes, and any amounts recovered
from such third parties shall be remitted to Santolubes.
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5.7 Santolubes's Post-Closing
Payment and Contract Duties. After
the Closing Santolubes shall timely pay all Assumed Liabilities and timely
perform and fulfill all obligations of BU under the Assumed Contracts. Provided
however, Santolubes in good faith may refuse to pay any such liabilities or
perform such obligations if prior to disputing its payment or its contract
performance with the third party, Santolubes consults with BU regarding the
impending dispute and explains to BU all reasons justifying Santolubes's
decision to dispute the liability or obligation, but Santolubes's good faith
refusal to pay or perform shall not diminish or otherwise affect its indemnity
obligation under Article
IX.
5.8 Santolubes's Utility
Duties. As
of the Closing or promptly thereafter, one or both of the Buying Parties shall
have opened accounts with electric, gas, water and other utilities serving the
Spartanburg Site and shall perform all actions necessary to cause the Selling
Parties or any of their Affiliates to be removed as the payor or other
responsible party for such accounts.
5.9 Adjustments for
Taxes. Included
in the Master Balance Sheet is a reserve for estimated ad valorem property taxes
payable on the Purchased Assets and Real Property as of the Closing Date (the
"Ad Valorem
Taxes"). If the amounts of actual, applicable Ad Valorem
Taxes prorated as of the Closing Date are different from the reserves used in
the Master Balance Sheet and the same is not corrected in the Revised Closing
Balance Sheet, BU shall pay Santolubes any amount by which such taxes were
under-reserved, and Santolubes shall pay BU any amount by which such taxes were
over-reserved.
5.10 Name
Change. After
the Closing, at a time and date requested by Santolubes, Synalloy agrees that it
will cause BU to amend its articles of organization to remove any reference to
"Blackman Uhler" and to change its name to any name that is not confusingly
similar to either "Blackman Uhler," "BU," or any other trademark or trade name
included within the Purchased Assets.
5.11 Further
Assurances. From
time to time following the Closing, the Selling Parties and the Buying Parties
shall execute and deliver, or cause to be executed or delivered, to the other
parties such additional instruments of conveyance and transfer as any other
party may reasonably request or as may be otherwise necessary to more
effectively convey or transfer to, and vest in, Santolubes and/or Santolubes
Spartanburg, as the case may be, and put Santolubes and/or Santolubes
Spartanburg, as the case may be, in possession of, all or any part of the
Purchased Assets and Real Property, and BU shall, in the case of Permits,
Contracts, easements and other commitments that would have been included in the
Purchased Assets but for the reason that they cannot be assigned or transferred
effectively without the consent of third Persons which consent has not been
obtained prior to the Closing, cooperate with the Buying Parties at their
reasonable request in endeavoring to obtain such consent
promptly. The Selling Parties also agree that in the event either of
them receives an order for Products from a purchaser after the Closing, whether
by purchase order or otherwise, or if either or both of them receives any
communication from a Person regarding the Products or the Purchased Business,
the receiving party will direct such purchaser, purchaser's order, or Person to
Santolubes.
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6.1
Closing
Deliveries of
the Selling Parties. At
the Closing, the Selling Parties will execute and deliver or cause to be
executed and delivered, as applicable, to Santolubes or Santolubes Spartanburg,
as appropriate:
(a) Assignment and Bill of
Sale. An assignment and bill of sale for the Purchased Assets
acquired from BU (the "Assignment and Bill of
Sale");
(b) FIRPTA
Certificate. A FIRPTA certificate from Synalloy;
(c) Lien
Terminations. A document, in recordable form and in proper
format, terminating the judgment, security interest or other Liens of any Person
in the Purchased Assets or Real Property;
(d) Deed for the Spartanburg
Site. Such deeds, affidavits, and other documents from
Synalloy for the Spartanburg Site as may be required to transfer title to
Santolubes Spartanburg as provided herein, and to cause the title policies with
respect thereto to be issued;
(e) The
section is intentionally left blank;
(f) Tax Clearance
Certificates. Tax clearance certificates (or similar
certificates), if available from the relevant Governmental Authority, for BU
dated not more than ten (10) Business Days prior to the Closing Date, stating
that BU does not owe any Tax related to the Purchased Assets to the particular
jurisdiction for which BU may be held liable;
(g) Third Party
Consents. Copies of all consents, notices and approvals of any
Person necessary to the consummation of the Closing and other consents and
approvals from parties to Assigned Contracts and consents and approvals, if
applicable, from Governmental or Regulatory Authorities, whether federal, state
or local shall have been obtained, and a copy of each such consent or approval
shall have been provided to Santolubes at or prior to the Closing;
(h) Real Property
Lease. The Real Property Lease;
(i) Resolutions. Certified
copies of the resolutions of the manager(s) and member(s) of BU and directors of
Synalloy approving the transactions contemplated by this Agreement (the "Sellers'
Resolutions");
(j) Good Standing
Certificates. Current certificates, of any state of the United
States or any other jurisdiction where the Selling Parties are qualified to do
business providing that the Selling Parties are in good standing;
(k) Secretary's
Certificate. A certificate from the secretary of Synalloy and
the manager of BU, dated as of the Closing Date, certifying to: (i)
the certificate of incorporation and by-laws or certificate of formation and
operating agreement of BU, as applicable; with copies of same attached (ii) the
Sellers' Resolutions and (iii) the incumbency and signatures of the signatories
of the Selling Parties signing this Agreement, the Transaction Documents or any
other certificate or document delivered in connection herewith or
therewith;
(l) Closing
Certificate. A closing certificate executed on behalf of
Synalloy and BU confirming the matters referred to in Sections 7.1 and
7.2;
22
(m) Master Balance
Sheet. The Master Balance Sheet, as mutually agreed to by the
Selling Parties and the Buying Parties in writing;
(n) Synalloy Bill of
Sale. Synalloy's Bill of Sale as described in Section
1.2;
(o) Outsourcing
Agreement. The Outsourcing Agreement;
(p) RCRA Permit Financial
Assurance Agreement. The RCRA Financial Assurance Agreement;
and
(q) Other
Documents. All other previously undelivered documents,
instruments or writings required to be delivered by the Selling Parties to any
Buying Parties at or prior to the Closing pursuant to this Agreement and such
other documents and instruments as the Buying Parties or their counsel
reasonably shall deem necessary to consummate the transactions contemplated
hereby.
6.2 Closing Deliveries of
Santolubes. At
the Closing, Santolubes will execute and deliver or cause to be executed and
delivered to BU simultaneously with delivery of the items referred to in Section 5.1
above:
(a) Assumption
Agreement. An assumption agreement for the Assumed Liabilities
of BU (the "Assumption
Agreement");
(b) Real Property
Lease. The Real Property Lease;
(c) Resolutions. Certified
copies of the resolutions of the manager(s) and member(s) of the Buying Parties
approving the transactions contemplated by this Agreement (the "Santolubes
Resolutions");
(d) Manager's
Certificate. A certificate from the manager of Santolubes,
dated as of the Closing Date, certifying to: (i) the articles of
formation and operating agreement of Santolubes, with copies of same attached;
(ii) the Santolubes Resolutions and (iii) the incumbency and signatures of the
manager(s) of Santolubes signing this Agreement, the Transaction Documents or
any other certificate or document delivered in connection herewith;
(e) Closing
Certificate. A closing certificate executed on behalf of
Santolubes confirming the matters referred to in Sections 8.1 and
8.2;
(f) Outsourcing
Agreement. The Outsourcing Agreement;
(g) RCRA Permit Financial
Assurance Agreement. The RCRA Financial Assurance Agreement;
and
(h) Other
Documents. All other previously undelivered documents,
instruments or writings required to be delivered by Santolubes to the Selling
Parties at or prior to the Closing pursuant to this Agreement and such other
documents and instruments as the Selling Parties or their counsel reasonably
shall deem necessary to consummate the transactions contemplated
hereby.
7. CONDITIONS PRECEDENT TO
SANTOLUBES’S OBLIGATIONS. All
obligations of the Buying Parties under this Agreement are subject to the
fulfillment, prior to or at the Closing of each of the following conditions, any
of which may be waived in writing by the applicable Buying Parties:
23
7.1
Representations and
Warranties of both the Selling Parties True at the Closing. The
representations and warranties of both the Selling Parties contained in this
Agreement or in any schedule, certificate or document delivered pursuant to the
provisions hereof or in connection with the transactions contemplated hereby
shall be true and correct at and as of the Closing Date as though such
representations and warranties were made at and as of such time.
7.2
Performance by the Selling
Parties. The
Selling Parties shall have performed and complied with all agreements and
conditions required by this Agreement and the Transaction Documents to be
performed or complied with by them prior to the Closing and the Selling Parties
shall be ready and able to perform and comply with their obligations at the
Closing.
7.3
Litigation. There
shall be no litigation, proceeding or investigation pending or threatened
against the Selling Parties with respect to the Purchased Business, the Real
Property or the Purchased Assets which could have an adverse effect thereon or
which questions the validity or legality of this Agreement, the Transaction
Documents or of any action taken or to be taken by the Selling Parties pursuant
to or in connection with the provisions of this Agreement or the Transaction
Documents.
7.4
Delivery of
Materials. The
Selling Parties shall have delivered to Santolubes each of the materials
required to be delivered by the Selling Parties under Section 6.1
hereof.
8. CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE SELLING PARTIES. All
obligations of the Selling Parties under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any of which may be waived in writing by the applicable Selling
Parties:
8.1
Representations and
Warranties of the Buying Parties True at the Closing. The
representations and warranties of each of the Buying Parties contained in this
Agreement or in any certificate or document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be true
at and as of the Closing Date as though such representations and warranties were
made at and as of such time.
8.2
Performance by
Santolubes. The Buying
Parties shall have performed and complied with all agreements and conditions
required by this Agreement and the Transaction Documents to be performed or
complied with by it prior to the Closing and the Buying Parties shall be ready
and able to perform and comply with their obligations at the
Closing.
8.3 Delivery of
Materials. The
Buying Parties shall have delivered to the Selling Parties each of the materials
required to be delivered by the Buying Parties under Section 6.2
hereof.
8.4 Purchase
Prices. The
Buying Parties shall have paid the Purchase Price and the Real Estate Purchase
Price.
9. SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS; INDEMNIFICATION.
9.1 Survival. All
representations and warranties contained in this Agreement shall survive until
the day that is two (2) years after the Closing Date; provided, however, that
(i) the representations or warranties set forth in Section 3.1
(Organization and Authority), Section 3.2
(Authorizations; Binding Obligation), Section 3.3 (No
Violations), Section
3.19 (Approvals and Filings), Section 3.8
(Taxes), and Section
3.6 (Environmental Matters) shall survive through the 90th day
after the date of the expiration of any applicable statute of limitations during
which a claim may be brought against any Santolubes Indemnified Party or any
Purchased Asset in respect of the subject matter thereof, and (ii) the
representations and warranties set forth in Section 3.11 (Title
to Assets; Purchased Assets Complete) shall survive indefinitely. The
indemnification stated in Section 9.2(h) shall
terminate if the results of DHEC’s anticipated domestic drinking water sampling
event show no exceedances of relevant state or federal safe drinking water
Primary Maximum Contaminant Levels (MCLs) or other applicable standards such
that DHEC does not require corrective action, or if it is determined that
exceedances are not attributable to BU. Should DHEC determine to take
no action other than to continue to sample some or all of these wells, this
indemnification shall terminate. All covenants and agreements that by
their terms contemplate or involve actions to be taken or obligations in effect
after the Closing shall survive the Closing and remain in full force and effect
in accordance with their terms and the terms of this Agreement.
24
9.2 Indemnification by the
Selling Parties. Subject
to the other provisions of this Article 9, from and after the Closing, the
Selling Parties, jointly and severally, shall indemnify, hold harmless and
reimburse the Buying Parties and theirs officers, directors, members, managers,
agents and representatives (each a "Santolubes Indemnified Party")
from and against and in respect of any and all Losses that may be imposed on,
sustained, incurred or suffered by or assessed against each Santolubes
Indemnified Party, directly or indirectly, to the extent relating to or arising
out of or in connection with:
(a) any
breach of any of the representations or warranties contained in Article
3;
(b) any
failure by BU or Synalloy to perform or comply with their covenants and
agreements contained in this Agreement;
(c) any Third
Party Claim asserted against any Santolubes Indemnified Party related to the
ownership or operation of the Purchased Business, the Purchased Assets or Real
Property by the Selling Parties or their predecessors or Affiliates prior to the
Closing Date, other than (i) Third Party Claims related to the Assumed
Liabilities, or (ii) Claims for which Buying Parties have indemnification
obligations under Section 9.3(d);
(d) the
failure of BU to pay or otherwise satisfy any Retained Liabilities;
(e) the
Identified Retained Environmental Projects listed in Schedule
5.4.;
(f) Claims
arising from any matter identified on Schedule
3.6.e.ii;
(g) Claims
arising from any matter identified on Schedule
3.6.e.iii;
(h) Claims
filed by owners of affected property and orders from Governmental or Regulatory
Agencies requiring corrective action arising from any matter identified on Schedule 3.6.c.iv;
and
(i) Claims
arising from any matter identified on Schedule 3.7(b)
9.3 Indemnification by
Santolubes. Subject
to the other provisions of this Article 9, from and after the Closing, the
Buying Parties shall indemnify the Selling Parties and their respective
officers, directors, members, managers, agents and representatives (each a
"Selling Parties Indemnified
Party" and collectively, the "Selling Parties Indemnified
Parties") from and against and in respect of any and all Losses incurred
by any of the Selling Parties Indemnified Parties that may be imposed on,
sustained, incurred or suffered by or assessed against a Selling Parties
Indemnified Party, directly or indirectly, to the extent relating to or arising
out of:
25
(a) any
breach of the representations or warranties of the Buying Parties contained in
Article 4;
(b) any
failure by either of the Buying Parties to perform or comply with its covenants
and agreements contained in this Agreement, including without limitation, the
failure of Santolubes to pay or otherwise satisfy any Assumed
Liabilities;
(c) the
Identified Transferred Environmental Projects listed on Schedule
5.5;
(d) any
Environmental Claim arising out of or in connection with the Purchased Business
or Synalloy’s past operations at the Spartanburg Site or its ownership
of the Real Property, excepting however any such claim that arises
out of (i) the Selling Parties’ obligation to complete the Identified Retained
Environmental Projects listed on Schedule 5.4, (ii) any Environmental Claim
associated with a breach of any representation or warranty contained in Section
3.6, (iii) a claim made by an individual person alleging his/her personal injury
due to actions or inactions of the Selling Parties occurring prior to the
Closing Date; (iv) Selling Parties’ offsite transportation, arrangement for
offsite transportation, offsite treatment, or offsite disposal of any Hazardous
Substance if such claim arises out of a notice or request for information
issued by a Governmental or Regulatory Authority on or before the
second anniversary of the Closing Date; or (v) any Environmental Claim arising
in connection with the Augusta Site (provided, however, this exception (v) shall
in no way affect the Buying Parties duties and obligations under Section
5.6).
9.4 Timing of Delivery of Notice
of Claim. No
party to this Agreement, including without limitation Synalloy, shall be liable
for any Losses pursuant to Section 9.2(a)
or 9.3(a)
unless the party seeking such indemnification (the "Indemnified Party") has
delivered the notice of Claim in respect of such Loss required by Section 9.9
below to the party from which indemnification is sought (the "Indemnifying Party") on or
prior to expiration of the representation and warranty to which such Loss
relates.
9.5 Limitation of
Liability. Notwithstanding
anything to the contrary in Sections 9.2 or 9.3, an Indemnifying
Party shall not have any liability with respect to Losses any Indemnified Party
would otherwise be entitled to recover pursuant to Section 9.2(a) or
9.3(a), as the
case may be, until the aggregate amount of Losses for which an Indemnified Party
would otherwise be entitled to indemnification pursuant to Section 9.2(a) or
9.3(a) exceeds
twenty-five thousand dollars ($25,000) (the "Threshold"), whereupon, the
Indemnifying Party shall be liable for all Losses including the
Threshold. The Indemnifying Party's maximum aggregate indemnification
liability pursuant to Section 9.2(a) or
9.3(a) shall be
an amount equal to the sum of the Purchase Price, the Real Property Purchase
Price, and the reimbursement obligation under Section 5.5;
provided, however, that there shall be no limitation with respect to liability
for damages arising out of or based upon (i) intentional misrepresentation or
fraud, (ii) an inaccuracy in or breach of a representation or warranty contained
in Section 3.6
(Environmental Matters), (iii) a products liability claim with respect to
finished product Inventory sold by BU or its Affiliates prior to Closing, or
(iv) a personal injury claim with respect to finished product Inventory sold by
BU or its Affiliates prior to Closing.
9.6 Right of
Subrogation. To
the extent that an Indemnifying Party makes any payment pursuant to this Article
9 in respect of Losses for which the Indemnified Party has a right to recover
against a third party (including an insurance company or an environmental
consultant or contractor), the Indemnifying Party shall be subrogated to the
right of the Indemnified Party to seek and obtain recovery from such third
party, including, but not limited to, the right to recover from an Indemnified
Party the amount of any such recovery paid to such Indemnified
Party.
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9.7 No
Duplication. Any
liability for indemnification hereunder shall be determined without duplication
of recovery by reason of the state of facts giving rise to such liability
constituting a breach of more than one representation, warranty, covenant or
agreement or more than one right to indemnification.
9.8 Exclusive
Remedy. Except
as otherwise contemplated hereby, from and after the Closing, except for a
party's right to recover Losses and obtain all other legal and equitable
remedies as may be available in connection with any acts of fraud, intentional
misrepresentation or active concealment, indemnification under this Article 9
shall be the sole and exclusive remedy of the parties to this Agreement, as
applicable, for breach of any representation, warranty, covenant or agreement
contained in this Agreement, and the Selling Parties and the Buying Parties, as
applicable, shall have no other liability to the other party or parties
resulting from any such breach.
9.9 Notice of
Claim. If
the Indemnified Party shall become aware of any claim, proceeding or other
matter (a "Claim"), that
may give rise to a Loss that will be taken into account for purposes of
calculating the amount of any indemnity obligation under this Article 9, the
Indemnified Party shall promptly give Notice thereof to the Indemnifying
Party. Such Notice shall specify whether the Claim arises as a result
of a Claim by a third party against the Indemnified Party (a "Third Party Claim") or whether
the Claim does not so arise as a result of a Claim by a third party against the
Indemnified Party (a "Direct
Claim"), and shall also specify with reasonable particularity (to the
extent that the information is available) the factual basis for the Claim and
the amount of the Claim, if known. If the Indemnified Party does not
promptly give Notice of any Claim as specified above, such failure shall not
affect the Indemnified Party's right to indemnification hereunder for Losses in
connection with such Claim, except to the extent the Indemnifying Party's rights
are prejudiced by such failure; provided, however, that nothing in this Section 9.9 shall
mitigate the obligation of an Indemnified Party to provide such Notice during
the period specified in Section
9.1.
9.10 Direct
Claims
. With
respect to any Direct Claim, following receipt of Notice from the Indemnified
Party of the Claim, the Indemnifying Party shall have ninety (90) days to make
such investigation of the Claim as it considers necessary or
desirable. For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If all
parties agree at or prior to the expiration of such 90-day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the Claim. If the parties do not agree,
such dispute shall be determined in accordance with Section
10.10.
9.11 Third Party
Claims.
(a) With
respect to any Third Party Claims as to which the Indemnified Party intends to
seek indemnity from the Indemnifying Party, the Indemnifying Party shall have
the right, at its expense and at its election, to assume control of the
negotiation, settlement and defense of the Claim through counsel of its choice;
provided, however, that the
Indemnifying Party shall have no right to assume control of the negotiation,
settlement or defense of any Third Party Claim (i) insofar as such Third Party
Claim would have a Material Adverse Effect on the Indemnified Party if resolved
adversely to the interests of the Indemnified Party, product recall, or any
injunctive or other equitable relief or criminal penalty, and (ii) unless the
Indemnifying Party acknowledges in writing to the Indemnified Party the
Indemnifying Party's liability hereunder to indemnify, hold harmless and
reimburse the Indemnified Party in accordance herewith for all Losses arising in
connection with such Third Party Claim. Provided further, that with
respect to any indemnifiable claim involving environmental remediation, (a) the
Indemnifying Party shall reasonably consult with the Indemnified Party regarding
the nature and timing of any remediation activities which the Indemnifying Party
intends to take, (b) the Buying Parties shall grant Synalloy, its agents and
contractors reasonable access to the Spartanburg Site for the purpose of
performing the remediation actions, and the Buying Parties shall reasonably
cooperate with Synalloy, its agents and contractors in connection with such
remediation work, and (c) the Indemnifying Party shall act in good faith in
undertaking any such remediation activities required by the relevant
Governmental or Regulatory Authorities. The election of the Indemnifying
Party to assume such control shall be made within thirty (30) days of receipt of
notice of the Third Party Claim, failing which the Indemnifying Party shall be
deemed to have elected not to assume such control. If the
Indemnifying Party elects to assume such control, the Indemnified Party shall
have the right to be informed and consulted with respect to the negotiation,
settlement or defenses of such Third Party Claim and to retain counsel to act on
its behalf, but the fees and disbursements of such counsel shall be paid by the
Indemnified Party unless the Indemnifying Party consents to the retention of
such counsel or unless the named parties to any action or proceeding include
both the Indemnifying Party and the Indemnified Party and a representation of
both the Indemnifying Party and the Indemnified Party by the same counsel would
be inappropriate due to the actual or potential differing interests between them
(such as the availability of different defenses). If the Indemnifying
Party, having elected to assume such control, thereafter fails to defend the
Third Party Claim within a reasonable period of time, the Indemnified Party
shall be entitled to assume such control, and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to the Third
Party Claim.
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(b) If the
Indemnifying Party assumes control of the negotiation, settlement or defense of
any Third Party Claim, the Indemnifying Party shall not settle any such Third
Party Claim without the written consent of the Indemnified Party (which consent
shall not be unreasonably withheld).
(c) The
Indemnified Party and the Indemnifying Party shall cooperate fully with each
other with respect to Third Party Claims and, regardless of which party has
control thereof as provided for herein, shall keep each other reasonably advised
with respect thereto.
9.12 Effect of
Investigation. The
right to indemnification by a Santolubes Indemnified Party based upon the breach
of a representation or warranty of the Selling Parties shall not be affected by
any investigation (including any environmental investigation or assessment)
conducted by the Buying Parties prior to the Closing, unless the Selling Parties
can establish by clear and convincing proof that the Buying Parties had actual
conscious knowledge of the breach prior to the Closing and elected to close the
transaction notwithstanding such breach.
9.13 Workers' Compensation
Claims. Notwithstanding
anything to the contrary contained in this Section 9, if any
personal injury Claim is made against Santolubes or its Affiliates by a current
or former employee of Santolubes, and such Claim is made under any applicable
Workers Compensation Law, then the Losses that are subject to indemnification
under this Section
9 shall exclude (i) any award payable to the claimant under applicable
Workers Compensation Law with respect to such Workers Compensation Claim, and
(ii) any increased premium costs incurred by Santolubes or its Affiliates as a
consequence of such Workers Compensation Claim.
10. MISCELLANEOUS
PROVISIONS.
10.1 Bulk Sales Laws, Sales, Use
and Transfer Tax
. If
the Buying Parties request compliance by the Selling Parties with the provisions
of any applicable bulk sales Laws, the Selling Parties jointly and severally
agree to comply therewith and if no such request is made, the Selling Parties
agree jointly and severally to indemnify and hold the Buying Parties harmless
from, and reimburse the Buying Parties for, any Loss, cost, expense, liability
or damage which the Buying Parties may suffer or incur by virtue of
noncompliance by the Buying Parties or the Selling Parties with applicable bulk
sales Laws. The Selling Parties shall be responsible for any sales,
use and transfer taxes imposed by the State of South Carolina on the
transactions contemplated hereby.
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(a) Without
Santolubes's prior written consent, neither of the Selling Parties or any of
their respective Affiliates shall for a period of three (3) years after the
Closing Date, directly or indirectly (i) within the Territory, market, sell or
solicit the sale of the Restricted Products; (ii) in the Territory, engage in or
render services to or have an interest in any business that sells or
manufactures the Restricted Products; or (iii) solicit any current or potential
customers of BU for any business that sells or manufactures Restricted
Products.
(b) From the
Closing Date through the period ending on the second (2nd)
anniversary of the Closing Date: (1) the Selling Parties shall not, nor will
they cause or permit any of their respective Affiliates to directly or
indirectly, solicit the employment of or hire any Purchased Business Employees
who after the Closing Date become employees of either of the Buying Parties, or
otherwise interfere with the relationship between the Buying Parties and any
such person; (2) the Buying Parties, without the written consent of BU, shall
not, nor will it cause or permit any of its respective Affiliates to directly or
indirectly, solicit the employment of or hire any Person who on the Closing Date
was an employee of Synalloy or its Affiliates other than BU.
(c) From and
after the Closing, (i) the Selling Parties will not disparage the Buying Parties
or their respective shareholders, partners, members, directors, officers,
employees or agents, or the Restricted Products manufactured or sold by the
Buying Parties; and (ii) the Buying Parties will not disparage the Selling
Parties, their Affiliates or the respective shareholders, partners, members,
directors, officers, employees or agents of the same.
(d) Until the
Closing, in the case of the Buying Parties, and thereafter in the case of the
Selling Parties, of the transactions contemplated hereby, each party agrees that
it will treat in confidence (a) all documents, materials and other
information which it shall have obtained regarding the other parties or their
Affiliates during the course of the negotiations leading to the consummation of
the transactions contemplated hereby (whether obtained before or after the date
of this Agreement), any investigations made in connection therewith and the
preparation of this Agreement and related documents (the "Provided Information"), and
(b) all analyses, reports, compilations, evaluations and other materials
prepared by a party or by its counsel, accountants or financial advisors that
contain or otherwise reflect or are based upon, in whole or in part, any of the
Provided Information (the "Derived
Information"). The obligation of each party to treat the
Provided Information and the Derived Information in confidence shall not apply
to any information which (w) is or becomes available to such party from a
source other than the other parties, (x) is or becomes available to the
public other than as a result of disclosure by such party or its agents,
(y) is required to be disclosed under applicable Law or judicial process or
(z) such party deems it necessary to disclose to obtain any of the consents
or approvals contemplated hereby, provided, however, that if the information is
to be disclosed in reliance upon clause (y) or clause (z) above, the disclosing
party shall so notify the other party promptly so that such party may seek a
protective order or take such other action as may be available to avoid the
necessity of disclosure of the information and, in all events, the disclosing
party shall use its reasonable best efforts to protect the information through
court orders or other appropriate means. Following the Closing, the
Buying Parties shall have no obligation to treat in confidence Provided
Information and Derived Information so long as the Buying Parties' use of such
information is related to the ongoing operation of the Purchased Business, but
notwithstanding anything to the contrary in this Section 10.2(d), the
Selling Parties will be obligated to maintain such Provided Information and
Derived Information in confidence and treat the same as if it originated from
the Buying Parties.
29
(e) The
Selling Parties hereby acknowledge and agree that the provisions, restrictions
and remedies contained in this Section 10.2,
including the limitations as to time, geographical area and scope of activities
to be restrained, are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill and the legitimate business interests of
Santolubes arising out of the acquisition of the Purchased Assets pursuant to
the Agreement. The Selling Parties acknowledge that such restrictions
are material conditions and inducement to the agreement of the Buying Parties to
enter into this Agreement and the restrictions constitute a material and
integral part of this Agreement.
(f) The
Selling Parties acknowledge that irreparable Loss and injury may result to the
Buying Parties or the Purchased Business upon any breach of any of the covenants
contained in this Section 10.2 and that
damages arising out of such breach would be difficult to
ascertain. The Selling Parties agree that, in addition to all
the remedies provided at Law or at equity, any of the Buying Parties may
petition and seek from a court of Law or equity, without bond, both temporary
and permanent injunctive relief to prevent a breach by the Selling Parties any
such covenant.
(g) If any
court determines that any one or more of the restrictive covenants contained in
this Section
10.2, or any part thereof, is unenforceable because of the duration of
such provision or the territory covered thereby, such court shall have the power
to reduce the duration or territory of such provisions, and, in its reduced
form, such provisions shall then be enforceable and shall be
enforced.
(h) The
restrictions of Sections 10.2(a) and
(b) shall not
apply to any Person which is not an Affiliate of Selling Parties and which after
Closing purchases or acquires control of substantially all the assets of
Manufacturer’s Chemicals, LLC.
10.3 Notices
. All
notices, requests, demands, tenders or other communications required or
permitted hereunder ("Notices") must be in writing
and are deemed to have been duly given if (a) delivered personally, (b)
mailed, certified or registered mail, return receipt requested, postage prepaid,
(c) sent by Federal Express or other nationally recognized overnight courier
service or overnight express U.S. Mail, postage prepaid, or (d) sent by
facsimile or e-mail transmission, followed with an original sent in accordance
with (a), (b) or (c) above, as follows:
If to the
Buying Parties, to:
SantoLubes
LLC
P.O. Box
960
St.
Charles, MO 63302-0960
Attn:
George Garrison
Fax no.:
(636) 723-4210
E-mail
address: ggarrison@santolubes.com
with a
copy to:
Smith,
Gambrell & Russell, LLP
1230
Peachtree Street, N.E., Suite 3100
Atlanta,
Georgia 30309-3592
Attn:
Eric H. Mandus
Facsimile
No.: (404) 685-6937
E-mail
address: emandus@sgrlaw.com
30
If to the
Buying Parties, to:
Synalloy
Corporation
2155 West
Croft Circle
Post
Office Box 5627
Spartanburg,
South Carolina 29304
Facsimile:
(864) 596-1501
Gregory
M. Bowie, Vice President of Finance
Facsimile
No.: (864)
E-mail
address: gbowie@synalloy.com
with a
copy to:
Haynsworth
Sinkler Boyd, P.A.
75
Beattie Place, Eleventh Floor
Greenville,
SC 29601
Attn: Andrew
J. White Jr.
Facsimile
No.: (864) 240-3300
E-mail
address: awhite@hsblawfirm.com
Notices
personally delivered or transmitted by facsimile (with confirmation of delivery)
are deemed to have been given on the date so delivered or transmitted; provided, that if the
confirmation of delivery sets forth a delivery time later than 5:00PM on any
Business Day, then the facsimile will be deemed delivered on the succeeding
Business Day. Notices mailed are deemed to have been given on the
date three (3) Business Days after the date posted, and Notices sent in
accordance with (c) above are deemed to have been given on the next Business Day
after delivery to the courier service or U.S. Mail (in time for next day
delivery). The parties may change their address for receipt of
Notices by delivery of a Notice of change of address in accordance with the
terms of this Section 10.3.
10.4 Expenses. Except
as otherwise specifically provided herein, each of the parties shall pay all
costs and expenses incurred or to be incurred by it in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement.
10.5 Entire Agreement,
Modification. This
Agreement, the Transaction Documents, the Annex and the Schedules and Exhibits
attached to this Agreement (all of which shall be deemed incorporated in the
Agreement and made a part hereof) set forth the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings or letters of intent among any of the parties
hereto.
10.6 Assignment; Binding
Effect. This
Agreement, or any rights hereunder, may not be assigned by any party hereto
without the prior written consent of the other parties; provided, however, that
either or both of the Buying Parties may, without the consent of the Selling
Parties, assign their respective rights hereunder to any of their respective
Affiliates or subsidiaries, or to any lender or lenders of either or both of the
Buying Parties, or to any party that succeeds to the Purchased Business or Real
Property; provided that any such assignment shall not result in a release of the
Buying Parties from there continuing obligations under this
Agreement. No assignment in violation of this Section 10.6 shall be
effective. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the successors, legal representatives and
permitted assigns of each party hereto.
10.7 Additional
Assurances. The
parties shall cooperate in good faith to facilitate and accomplish the
transactions contemplated herein. The provisions of this Agreement
shall be self-operative and shall not require further agreement by the parties
except as may be herein specifically provided to the contrary; provided,
however, at the request of any party, the other parties shall execute such
additional instruments and take such additional acts as are reasonably necessary
to effectuate this Agreement.
31
10.8 Consents, Approvals and
Discretion. Whenever
this Agreement requires any consent or approval to be given by a party or a
party must or may exercise discretion, the parties agree that, unless expressly
provided to the contrary, such consent or approval shall not be unreasonably
withheld or delayed and such discretion shall be reasonably
exercised.
10.9 Governing
Law. This
Agreement shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Agreement shall be governed by, the laws of the State of South Carolina, without
giving effect to provisions thereof regarding conflict of laws.
10.10 Arbitration. Any
controversy or claim arising out of or relating to this Agreement shall be
settled exclusively by arbitration in accordance with the following
provisions:
(a) Disputes
Covered. The agreement of the parties to arbitrate covers all
disputes of every kind relating to or arising out of this
Agreement. Disputes include actions for breach of contract with
respect to this Agreement, as well as any claim based upon tort or any other
causes of action relating to the transactions that are the subject of this
Agreement, such as claims based upon an allegation of fraud or misrepresentation
and claims based upon a federal or state statute. In addition, the
arbitrators selected according to procedures set forth below shall determine the
arbitrability of any matter brought to them, and their decision shall be final
and binding on the parties.
(b) Forum. The
forum for the arbitration shall be Greenville, South Carolina.
(c) Selection. There
shall be three arbitrators, unless the parties are able to agree on a single
arbitrator. In the absence of such agreement within ten (10) days
after the initiation of an arbitration proceeding, the Selling Parties shall
select one arbitrator and the Buying Parties shall select one arbitrator, and
those two arbitrators shall then select, within ten (10) days, a third
arbitrator. If those two arbitrators are unable to select a third
arbitrator within such ten (10)-day period, a third arbitrator shall be
appointed by the commercial panel of the American Arbitration
Association. The decision in writing of at least two of the three
arbitrators shall be final and binding upon the parties.
(d) Administration. The
arbitration shall be administered by the American Arbitration
Association.
(e) Rules. The
rules of arbitration shall be the Commercial Arbitration Rules of the American
Arbitration Association, as modified by any other instructions that the parties
may agree upon at the time, except that each party shall have the right to
conduct discovery in any manner and to the extent authorized by the Federal
Rules of Civil Procedure as interpreted by the federal courts. If
there is any conflict between those rules and the provisions of this section,
the provisions of this section shall prevail.
(f) Substantive
Law. The arbitrators shall be bound by and shall strictly
enforce the terms of this Agreement and may not limit, expand or otherwise
modify its terms. The arbitrators shall make a good faith effort to apply
substantive applicable Law, but an arbitration decision shall not be subject to
review because of errors of Law. The arbitrators shall be bound to
honor claims of privilege or work-product doctrine recognized at Law, but the
arbitrators shall have the discretion to determine whether any such claim of
privilege or work product doctrine applies.
32
(g) Decision. The
arbitrators' decision shall provide a reasoned basis for the resolution of each
dispute and for any award.
(h) Expenses. Each
party shall bear its own fees and expenses with respect to the arbitration and
any proceeding related thereto and the parties shall share equally the fees and
expenses of the American Arbitration Association and the
arbitrators.
(i) Remedies;
Award. The arbitrators shall have power and authority to award
any remedy or judgment that could be awarded by a court of law in South
Carolina. The decision of the arbitrator(s) shall be final, binding, and
nonappealable (except in the case of fraud or malfeasance of the arbitrator)
with respect to all persons, including without limitation persons who have
failed or refused to participate in the arbitration process. Judgment
upon the award may be entered in any court of competent jurisdiction in the
United States.
10.11 Waiver. The
failure of any party to enforce at any time any provision of this Agreement
shall not be construed to be a waiver of such provision, nor in any way to
affect the validity of this Agreement or the right of such party thereafter to
enforce each and every such provision. The waiver by any party of a
breach or violation of any term or provision of this Agreement shall not operate
as, or be construed to be, a waiver of any subsequent breach of the same
provision by any party or of the breach of any other term or provision of this
Agreement. The delay or a failure of a party to transmit any written
notice hereunder shall not constitute a waiver by such party of any default
hereunder or of any other or further default under this Agreement except as may
expressly be provided for by the terms of this Agreement.
10.12
Rules of
Interpretation.(a) Whenever
this Agreement provides that an event is to occur on or performance of an
obligation or activity is to be completed by a specified day or date and the
specified day or date falls on a day other than a Business Day, the event will
be deemed to have occurred on or the performance will be deemed to have been
completed by the specified day or date if it occurs or is completed on the next
succeeding Business Day. For purposes of this Agreement, a "Business Day" shall be any day
other than a Saturday, Sunday, bank holiday, or any other day on which the
principal offices of either Santolubes or BU are closed as required by Law or as
a result of an act of God or other reason beyond their control including, but
not limited to, adverse weather conditions.
(b) The
subject headings of Articles and Sections of this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
(c) Each of
the parties has agreed upon the particular language of the provisions of this
Agreement, including all attached Exhibits, Annex and Schedules, and any
questions of doubtful interpretation shall not be resolved by any rule or
interpretation against the draftsman but rather in accordance with the fair
meaning thereof, having due regard to the benefits and rights intended to be
conferred upon the parties hereto and the limitations and restrictions upon
such rights and benefits intended to be provided.
(d) Whenever
the context of this Agreement requires, the gender of all words herein shall
include the masculine, feminine and neuter, and the number of all words herein
shall include the singular and plural.
33
10.13 Public
Announcement. Neither
the Selling Parties nor the Buying Parties shall, without the approval of the
other parties hereto, make any press release or other public announcement
concerning the terms of the transactions contemplated by this Agreement, except
as and to the extent that any such party shall be so obligated by Law, in which
case the other party shall be advised and the parties shall use their best
efforts to cause a mutually agreeable release or announcement to be issued;
provided that the foregoing shall not preclude communications or disclosures
necessary to (a) implement the provisions of this Agreement,
(b) comply with Law or accounting disclosure obligations, or
(c) respond to inquiries initiated by the press as long as the party making
such communications or disclosures informs the other parties in a timely manner
that they have been made, and provided further that the parties shall cooperate
in making a public announcement concerning this Agreement immediately following
its execution.
10.14 Severability. In
the event any provision of this Agreement is held to be invalid, illegal or
unenforceable for any reason and in any respect, such invalidity, illegality, or
unenforceability shall in no event affect, prejudice or disturb the validity of
the remainder of this Agreement, which shall be in full force and effect,
enforceable in accordance with its terms, including, without limitation, those
terms which contemplate or require the further agreements of the
parties. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and still be legal, valid or
enforceable.
10.15 Amendment of
Agreement. This
Agreement may be amended by a written instrument duly executed on behalf of each
party hereto by its duly authorized officer or employee.
10.16 Execution in
Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same agreement, it being understood that all of the parties need not sign the
same counterpart. In the execution of this Agreement, facsimile or
scanned and emailed manual signatures shall be fully effective for all
purposes.
10.17 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 other than any Person entitled to indemnity under Article
9, and except as otherwise provided in Section
5.3(a).
(signatures
begin on next page)
IN
WITNESS WHEREOF, each of the Selling Parties and the Buying Parties have caused
this Agreement to be duly executed as of the day and year first written
above.
34
|
|
BUYING
PARTIES:
|
|
|
SANTOLUBES
MANUFACTURING LLC
|
By:
__________________________
George
E. Garrison, sole manager
|
|
SANTOLUBES
SPARTANBURG HOLDINGS LLC
|
By:
__________________________
George
E. Garrison, sole manager
SELLING
PARTIES:
|
|
BLACKMAN
UHLER SPECIALTIES, LLC
|
By:
Synalloy Corporation, sole member
________________________________
By:
Gregory M. Bowie
Title:
Vice President of Finance
SYNALLOY
CORPORATION
________________________________
By:
Gregory M. Bowie
Title:
Vice President of Finance
ANNEX
A
"Accountants" has the meaning
given to such term in Section
1.7(c)(iii).
"Accounts Payable" means the
amount of all trade accounts payable related to the Purchased Business, the
Purchased Assets and the Real Property determined in accordance with GAAP
consistently applied.
"Accounts Receivables" has the
meaning given to such term in Section
1.1(i).
"Accruals" means expenses which
have been incurred but not yet paid for as of a date in time.
"Ad Valorem Taxes" has the
meaning given to such term in Section
5.9.
"Affiliate" of a Person shall
mean any Person controlling, controlled by, or under common control with, such
Person;
"Agreement" has the meaning
given to such term in the forepart of this Agreement.
"Assigned Contracts" has the
meaning given to such term in Section
1.1(e).
"Assignment and Bill of Sale"
has the meaning given to such term in Section
6.1(a).
"Assumed Liabilities" has the
meaning given to such term in Section
1.4.
"Assumption Agreement" has the
meaning given to such term in Section
6.2(a).
"Augusta Pump and Treat Remediation
Work" mean the operation of the pump and treat and monitoring work with
respect to the Augusta Site that is described in Section 5.6 of this
Agreement.
"Augusta Site" has the meaning
given to such term in the recitals of this Agreement.
"BU" has the meaning given to
such term in the forepart of this Agreement.
"Business Day(s)" has the
meaning given to such term in Section
10.12(a).
"Buying Parties" has the
meaning given to such term in the forepart of this Agreement.
"Claim" has the meaning given
to such term in Section
9.9.
"Closing" has the meaning given
to such term in Section
1.6.
"Closing Date" has the meaning
given to such term in Section
1.6.
"Code" means the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.
"Contested Items" has the
meaning given to such term in Section
1.7(c)(iii).
"Contract" means any agreement,
arrangement, lease, license, evidence of Indebtedness, mortgage, indenture,
security agreement or other contract (whether written or oral).
1
"Customer List" has the meaning
given to such term in Section
1.1(k).
"Derived Information" has the
meaning given to such term in Section
10.2(d).
"Direct Claim" has the meaning
given to such term in Section
9.9.
"Environmental Claim(s)" means
any Claim which arises from or in connection with any Hazardous Substance or
Environmental, Health or Safety Law.
"Environmental, Health or Safety
Law" means any federal, state, local or foreign statute, Law, ordinance,
regulation, rule, code, Order, consent decree or judgment relating to or
addressing pollution, protection of the environment, health or safety matters
relating to (i) the use, handling, or disposal of any Hazardous Substance, or
(ii) workplace or worker safety and health, as such requirements are promulgated
by any Governmental or Regulatory Authority responsible for administering such
requirements.
"ERISA" has the meaning given
to such term in Section
3.16.
"ERISA Affiliate" has the
meaning given to such term in Section
3.16.
"Excluded Assets" has the
meaning given to such term in Section
1.3.
"Financial Statements" has the
meaning given to such term in Section
3.9(a).
"GAAP" means generally accepted
accounting principles in the United States;
"Governmental or Regulatory
Authority" means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision.
"Hazardous Substance(s)"
mean(s) any substances,
materials, and wastes listed by the Environmental Protection Agency as hazardous
substances under 40 CFR part 302 and amendments thereto, or such substances,
materials and wastes which are or become regulated under any applicable local,
state or federal Law, including any substance defined as a “hazardous substance”
or “hazardous waste” under applicable local, state or federal Law or designated
as a “hazardous substance” pursuant to Section 311 of the Clean Water Act, or
defined as “hazardous waste” pursuant to Section 1004 of the Resource
Conservation and Recovery Act, or defined as “hazardous substances” pursuant to
Section 101 (14) of the Comprehensive Environmental Response, Compensation, and
Liability Act..
"Identified Retained Environmental
Projects" means the presently scheduled environmental remediation
projects set forth in Schedule
5.4.
"Identified Transferred Environmental
Projects" means those tasks set forth in Schedule
5.5.
"Indebtedness" means (i) any
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any Liabilities or obligations for
the deferred purchase price of services with respect to which either of the
Selling Parties are liable, contingently or otherwise, as obligor or otherwise
(other than trade payables and other current Liabilities which are recorded on
the Revised Closing Schedule, (iv) any commitment by which either of the Selling
Parties assures a creditor against Loss (including contingent reimbursement
obligations with respect to letters of credit), (v) any Indebtedness guaranteed
in any manner by either of the Selling Parties (including guarantees in the form
of an agreement to repurchase or reimburse), (vi) any Liabilities or obligations
under capitalized leases with respect to which either of the Selling Parties are
liable, contingently or otherwise, as obligor, guarantor or otherwise or with
respect to which obligations either of the Selling Parties assures a creditor
against Loss (except to the extent recorded on the Revised Closing Schedule and
included in the calculation of the Net Book Value in the Master Balance Sheet),
(vii) any Liabilities secured by a Lien on either of the Selling
Parties' assets, (viii) any amounts owed by either of the Selling Parties
to any Person under any noncompetition, consulting or deferred compensation
arrangements and (ix) any deferred purchase price obligations related to past
asset or stock acquisitions by either of the Selling Parties with respect to the
Purchased Business.
2
"Indemnified Party" has the
meaning given to such term in Section
9.4.
"Indemnifying Party" has the
meaning given to such term in Section
9.4.
"Intellectual Property" means,
collectively, patents, patent disclosures, inventions, designs, models,
processes, trademarks, trade names, service marks, trade dress, logos,
copyrights and mask works (and all registrations, applications, reissuances,
continuations, continuations-in-part, revisions, extensions, reexaminations and
associated goodwill with respect to each of the foregoing), computer software
(including source and object codes), computer programs, computer data bases,
written, magnetic and storage media and related documentation and materials,
data, trade secrets, confidential business information (including ideas,
formulas, compositions, inventions, know-how, production processes and
techniques, research and development information, drawings, designs, plans,
proposals and technical data, financial, marketing and business data and pricing
and cost information), Permits, franchises, licenses, distribution rights and
the like and other proprietary rights used in or relating to the conduct of the
Purchased Business (in whatever form or medium), including all rights to
institute and prosecute all suits and proceedings and take all actions necessary
or proper to collect, assert or enforce any claim, right of title of any kind in
and to the items listed above.
"Intellectual Property Assets"
has the meaning given to such term in Section
3.5(a).
"Inventory" means the raw
materials, work-in-process, and finished goods, including any inventory of
packaging and labels.
"Knowledge" means the knowledge
of a fact or other matter by a current officer of BU or Synalloy. For
purposes of this definition, an individual will be deemed to have knowledge of a
particular fact or other matter if such individual is actually aware of such
fact or other matter.
"Law" or "Laws" means all laws,
statutes, rules, regulations, ordinances and other pronouncements having the
effect of law of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"Liability" or "Liabilities" means all
Indebtedness, obligations and other liabilities of a Person
(whether absolute, accrued, contingent, fixed or otherwise, or whether due
or to become due).
"Liens" means any mortgage,
pledge, assessment, security interest, lease, lien, adverse claim, levy, charge
or other encumbrance of any kind, or any conditional sales Contract, title
retention Contract or other Contract to give any of the foregoing.
3
"Loss" or "Losses" means any and all
damages (including incidental, punitive, exemplary and consequential damages),
fines, fees, penalties, deficiencies, diminution in value, losses and expenses
(including the fees of attorneys and accountants) whether or not arising from a
Third Party Claim.
"Manufacturing Equipment" has
the meaning given to such term in Section
1.1(b).
"Master Balance Sheet" means
the balance sheet and supporting schedules prepared by the Selling Parties in
accordance with GAAP, reflecting the Purchased Assets, Assumed Liabilities, and
Net Book Value of BU as of the Closing Date and any reserved liabilities
relating to the Real Property.
"Material" or "Materially" means any fact or
circumstance that involves or is likely to involve matters that give rise or
could reasonably be expected to give rise to Losses, Liabilities, damages
(including punitive damage and consequential damage), costs or expenses in an
amount equal to, or more than, Two Thousand Five Dollars ($2,500).
"Material Adverse Effect"
means, with respect to any event, act, circumstance, condition, change,
development, effect or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, circumstance or circumstances, condition or conditions, change or
changes, development or developments, effect or effects or occurrence or
occurrences, whether or not related, a material adverse effect upon, any of (a)
the condition (financial or otherwise), operations or results of operations,
business, properties, assets or Liabilities of the Purchased Business, taken as
a whole, (b) the rights and remedies of a party under this Agreement, or the
ability of any party to perform any of its obligations under this Agreement to
which it is a party, or (c) the legality, validity or enforceability of this
Agreement, but excluding (i) any such effect that results from changes affecting
general U.S. or worldwide economic or capital market conditions, (ii) any such
effect that results from changes affecting the chemical industry generally,
(iii) any changes in any Law or changes in the interpretation thereof by any
Governmental or Regulatory Entity affecting the Purchased Business, (iv) the
announcement or pendency of the transaction contemplated by this Agreement, or
(v) the commencement, continuation or escalation of a war, material armed
hostilities or other material international or national calamity or act of
terrorism directly or indirectly involving the United States of
America.
"Motor Vehicles" has the
meaning given to such term in Section
1.1(c).
"Net Book Value" means the
recorded costs, net of reserves, of the Purchased Assets, less the Assumed
Liabilities, all as of the Closing Date, and all determined in accordance with
GAAP consistently applied and to the extent consistent therewith, in accordance
with BU's historical practices.
"Notices" has the meaning given
to such term in Section
10.3.
"Order" means any writ,
judgment, decree, injunction or similar order of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).
"Outsourcing Agreement" means
that certain outsourcing services agreement, dated as of October 2, 2009,
between Synalloy and Santolubes, substantially in the form attached as Exhibit
B
"Permits" means all licenses,
permits, certificates of authority, certificates of inspection, authorizations,
approvals, registrations, franchises and similar consents granted or issued by
any Governmental or Regulatory Authority or any other Person.
4
"Permitted Lien(s)" means: (i)
statutory liens for current Taxes or other governmental charges with respect to
the Real Property or Purchased Assets not yet due and payable or the amount or
validity of which is being contested and for which adequate reserves have been
established in accordance with GAAP; (ii) mechanics, carriers, workers,
repairers and similar statutory liens arising or incurred in the ordinary course
of business for amounts which are not delinquent and which could not,
individually or in the aggregate, have a Material Adverse Effect on BU; (iii)
zoning, entitlement, building and other land use regulations imposed by a
Governmental or Regulatory Authority having jurisdiction over the Real Property
which are not violated by the current use and operation of the Real Property;
(iv) covenants, conditions, restrictions and easements of record and other
matters of record affecting title to the Sites which do not Materially interfere
with the use or occupancy of the Sites currently used in the Purchased Business;
and (v) any Lien or other matter identified on Schedule
3.11.
"Person" shall mean and include
any individual, corporation, partnership, firm, association, joint venture,
trust or other entity, or any government, regulatory, administrative or
political subdivision or agency, department or instrumentality
thereof.
"Prepaid Expenses" has the
meaning given to such term in Section
1.1(f).
"Products" has the meaning
given to such term in the recitals of this Agreement.
"Protest Notice" has the
meaning given to such term in Section
1.7(c)(ii).
"Provided Information" has the
meaning given to such term in Section
10.2(d).
"Purchase Price" has the
meaning given to such term in Section
1.7(a).
"Purchased Assets" has the
meaning given to such term in Section
1.1.
"Purchased Business" has the
meaning given to such term in the recitals of this Agreement.
"Purchased Business Employees" has the meaning
given to such term in Section
3.15.
"RCRA Permit Financial Assurance
Agreement" means the agreement in
the form of Exhibit
C.
"Real Property" has the meaning
given to such term in Section
2.1.
"Real Property Lease" has the
meaning given to such term in Section
2.1.
"Real Property Purchase Price"
has the meaning given to such term in Section
2.2.
"Reasonable Efforts" means the
good faith and commercially reasonable efforts that a reasonably prudent Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as reasonably expeditiously as possible.
"Release" means any releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing or dumping of a Hazardous Substance
into the environment (including, without limitation, the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Substance) and any condition that results in the exposure of a Person
to a Hazardous Substance.
"Restricted Products"
collectively means and refers to the Products, and any hydrogenated or spray
dried products, and any products that are competitive with any of the foregoing,
but excluding any products currently or previously sold by Manufacturer’s
Chemicals, LLC, an Affiliate of Synalloy, prior to the Closing Date that were
not manufactured by Manufacturer’s Chemicals, LLC, for or on behalf of
BU.
5
"Retained Liabilities" has the
meaning given to such term in Section
1.5.
"Revised Closing Date Balance
Sheet" has the meaning given to such term in Section
1.7(c)(i).
"Revised Closing Schedule" has
the meaning given to such term in Section
1.7(c)(i).
"Santolubes" has the meaning
given to such term in the forepart of this Agreement.
"Santolubes Indemnified Party"
has the meaning given to such terms in Section
9.2.
"Santolubes Resolutions" has
the meaning given to such term in Section
6.2(c).
"Santolubes Spartanburg" has
the meaning given to such term in the forepart of this Agreement.
"Sellers' Resolutions" has the
meaning given to such term in Section
6.1(i).
"Selling Parties" has the
meaning given to such term in the forepart of this Agreement.
"Selling Parties Indemnified
Parties" has the meaning given to such term in Section
9.3.
"Selling Parties Indemnified
Party" has the meaning given to such term in Section
9.3.
"Sites" has the meaning given
to such term in the recitals of this Agreement.
"Spartanburg Site" has the
meaning given to such term in the recitals of this Agreement.
"Supplier List" has the meaning
given to such term in Section
1.1(l).
"Synalloy" has the meaning
given to such term in the forepart of this Agreement.
"Tax" or "Taxes" shall mean all taxes,
charges, fees, duties, levies, penalties or other assessments imposed by any
federal, state, local or foreign governmental authority, including, but not
limited to, income, gross receipts, excise, property, sales, gain, use, license,
custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum, estimated, and other taxes, and shall
include interest, penalties or additions attributable thereto.
"Territory" shall mean
Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Bermuda, British Virgin
Islands, Cayman Islands, Cuba, Dominica, Dominican Republic, Grenada,
Guadeloupe, Haiti, Jamaica, Martinique, Montserrat, Netherlands Antilles, Puerto
Rico, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines,
Trinidad and Tobago, US Virgin Islands, Belize, Costa Rica, El Salvador,
Guatemala, Honduras, Nicaragua, Panama, Argentina, Bolivia, Brazil, Chile,
Colombia, Ecuador, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay,
Venezuela, Canada, Mexico, United States, Belarus, Bulgaria, Czech Republic,
Hungary, Moldova, Poland, Romania, Russian Federation, Slovakia, Ukraine,
Denmark, Estonia, Faroe Islands (Denmark), Finland, Greenland (Denmark),
Iceland, Ireland, Latvia, Lithuania, Northern Ireland (UK), Norway, Scotland
(UK), Sweden, United Kingdom, Wales (UK), Albania, Andorra, Bosnia and
Herzegovina, Croatia (Hrvatska), Cyprus, Gibraltar (UK), Greece, Holy See
(Vatican City State), Italy, Macedonia, Rep. of, Malta, Montenegro, Portugal,
San Marino, Serbia, Slovenia, Spain, Turkey, Austria, Belgium, France, Germany,
Liechtenstein, Luxembourg, Monaco, Netherlands, and Switzerland.
6
6
"Third Party Claim" has the
meaning given to such term in Section
9.9.
"Threshold" has the meaning
given to such term in Section
9.5.
"Transaction Documents" means
all agreements and instruments contemplated by and being delivered pursuant to
or in connection with this Agreement, including without limitation, this
Agreement, the Assignments and Bills of Sale, the Assumption Agreements, the
Real Property Lease, the Outsourcing Agreement, and the limited or special
warranty deed, as applicable, with respect to the Spartanburg Site.
"Workers Compensation Law"
means the South Carolina Workers' Compensation Laws or the similar Laws of
another state.
7
EXHIBIT
A
REAL
PROPERTY LEASE
EXHIBIT
B
OUTSOURCING
AGREEMENT
EXHIBIT
C
RCRA
PERMIT FINANCIAL ASSURANCE AGREEMENT