Exhibit 10.36

 

ASSET PURCHASE AGREEMENT

by and among

AIR PRODUCTS AND CHEMICALS, INC.

and

KMG CHEMICALS, INC.

 

Dated as of October 19, 2007

 

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TABLE OF CONTENTS

 

 

 

 

 

 

Page

ARTICLE I Purchase and Sale of Assets; Closing

1

 

 

 

 

SECTION 1.01.

 

Purchase and Sale of the Transferred Assets

 1

SECTION 1.02.

 

Transferred Assets and Excluded Assets

 1

SECTION 1.03.

 

Consents to Certain Assignments; Shared Contracts

 6

SECTION 1.04.

 

Assumption of Liabilities

 7

SECTION 1.05.

 

Risk of Loss

 9

SECTION 1.06.

 

Closing

 9

SECTION 1.07.

 

Transactions to be Effective at the Closing

 9

 

 

 

 

 

 

 

 

ARTICLE II Purchase Price Adjustment

10

 

 

 

 

SECTION 2.01.

 

Post-Closing Purchase Price Adjustment

 10

SECTION 2.02.

 

Post-Closing Books and Records

 12

 

 

 

 

 

 

 

 

ARTICLE III Representations and Warranties of Seller

13

 

 

 

 

SECTION 3.01.

 

Organization and Standing

 13

SECTION 3.02.

 

Authority; Execution and Delivery; Enforceability

 13

SECTION 3.03.

 

No Violation; Consents

 14

SECTION 3.04.

 

Financial Statements; Absence of Certain Changes

 14

SECTION 3.05.

 

Assets Other than Real Property Interests

 15

SECTION 3.06.

 

Real Property

 16

SECTION 3.07.

 

Intellectual Property

 16

SECTION 3.08.

 

Contracts

 18

SECTION 3.09.

 

Permits

 19

SECTION 3.10.

 

Taxes

 20

SECTION 3.11.

 

Proceedings

 20

SECTION 3.12.

 

Employee Compensation; Benefit Plans

 20

SECTION 3.13.

 

Absence of Changes or Events

 21

SECTION 3.14.

 

Compliance with Applicable Laws

 21

SECTION 3.15.

 

Labor Relations

 23

SECTION 3.16.

 

Accounts Receivable

 23

SECTION 3.17.

 

Inventory

 24

SECTION 3.18.

 

Customers

 24

 

 

 

 

 

 

 

 

ARTICLE IV Representations and Warranties of Purchaser

24

 

 

 

 

SECTION 4.01.

 

Organization, Standing and Power

 24

SECTION 4.02.

 

Authority; Execution and Delivery; and Enforceability

 24

SECTION 4.03.

 

No Conflicts; Consents

 25

SECTION 4.04.

 

Proceedings

 25

SECTION 4.05.

 

Availability of Funds

 25

SECTION 4.06.

 

Independent Judgment

 26

SECTION 4.07.

 

No Finder

 26

 

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ARTICLE V Covenants

26

 

 

 

 

SECTION 5.01.

 

Covenants Relating to Conduct of Business

 26

SECTION 5.02.

 

Access to Information

 28

SECTION 5.03.

 

Confidentiality

 29

SECTION 5.04.

 

Reasonable Best Efforts

 29

SECTION 5.05.

 

Expenses; Transfer Taxes

 31

SECTION 5.06.

 

Tax Matters

 31

SECTION 5.07.

 

Post-Closing Cooperation

 32

SECTION 5.08.

 

Publicity

 33

SECTION 5.09.

 

Non-Solicitation / No-Hire of Certain Employees

 34

SECTION 5.10.

 

Agreements Not To Compete

 34

SECTION 5.11.

 

No Use of Certain Retained Names

 36

SECTION 5.12.

 

Insurance Matters

 37

SECTION 5.13.

 

Refunds and Remittances

 37

SECTION 5.14.

 

Further Assurances

 38

SECTION 5.15.

 

Financial Statements

 38

SECTION 5.16.

 

Financing

 39

SECTION 5.17.

 

Warranty Costs

 39

SECTION 5.18.

 

Title Defects Surveys

 39

SECTION 5.19.

 

Transitional Services Agreement

 39

SECTION 5.20.

 

Supply Agreements

 39

SECTION 5.21.

 

Site Licenses

 39

SECTION 5.22.

 

Subsidiary Business Transfer Agreement

 39

SECTION 5.23.

 

Technology License Agreement

 40

SECTION 5.24.

 

Warehousing Agreement

 40

SECTION 5.25.

 

Resale Agreement

 40

SECTION 5.26.

 

Special Warranty Deed

 40

SECTION 5.27.

 

Delivery of Certificates of Title

 40

SECTION 5.28.

 

Sewer Project Covenants

 40

 

 

 

 

 

 

 

 

ARTICLE VI Employment Matters

41

 

 

 

 41

SECTION 6.01.

 

General

 45

SECTION 6.02.

 

Special U.S. Provisions

 47

SECTION 6.03.

 

Special Non-U.S. Provisions

 

 

 

 

 

 

 

 

 

ARTICLE VII Conditions Precedent

47

 

 

 

 

SECTION 7.01.

 

Conditions to Each Party’s Obligation

 47

SECTION 7.02.

 

Conditions to Obligation of Purchaser

 48

SECTION 7.03.

 

Conditions to Obligation of Seller

 48

SECTION 7.04.

 

Frustration of Closing Conditions

 49

 

 

 

 

 

 

 

 

ARTICLE VIII Termination; Effect of Termination

49

 

 

 

 

SECTION 8.01.

 

Termination

 49

SECTION 8.02.

 

Effect of Termination

 50

 

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ARTICLE IX Indemnification

50

 

 

 

 

SECTION 9.01.

 

Indemnification by Seller

 50

SECTION 9.02.

 

Indemnification by Purchaser

 53

SECTION 9.03.

 

Calculation of Losses

 53

SECTION 9.04.

 

Termination of Indemnification

 54

SECTION 9.05.

 

Indemnification Procedures

 54

SECTION 9.06.

 

Mitigation

 55

SECTION 9.07.

 

Survival of Representations

 56

SECTION 9.08.

 

Access

 56

 

 

 

 

 

 

 

 

ARTICLE X General Provisions

58

 

 

 

 

SECTION 10.01.

 

Assignment

 58

SECTION 10.02.

 

Amendments and Waivers

 59

SECTION 10.03.

 

No Third-Party Beneficiaries

 59

SECTION 10.04.

 

Attorney Fees

 59

SECTION 10.05.

 

Notices

 59

SECTION 10.06.

 

Headings; Certain Definitions

 60

SECTION 10.07.

 

Counterparts

 65

SECTION 10.08.

 

Integrated Contract; Exhibits and Seller Disclosure Letter

 65

SECTION 10.09.

 

Interpretation

 65

SECTION 10.10.

 

Severability; Enforcement

 65

SECTION 10.11.

 

Consent to Jurisdiction

 66

SECTION 10.12.

 

Service of Process

 66

SECTION 10.13.

 

Governing Law

 66

SECTION 10.14.

 

Waiver of Jury Trial

 66

SECTION 10.15.

 

Specific Enforcement

 66

 

 

 

 

 

 

 

 

ATTACHMENT A

Seller Subsidiaries

 

ATTACHMENT B

High Purity Process Chemicals

 

ATTACHMENT C

Knowledge of Seller Definition

 

ATTACHMENT D

Exceptions to Offers of Employment

 

 

 

 

 

 

EXHIBIT A

Accounting Principles

 

EXHIBIT B

Form of Assignment and Assumption Agreement

 

EXHIBIT C

Form of Bill of Sale

 

EXHIBIT D

Form of Transitional Services Agreement

 

EXHIBIT E

Form of Site Licenses [Pueblo Gas Pad & Milan Warehouse]

 

EXHIBIT F

Terms of Subsidiary Business Transfer Agreement

 

EXHIBIT G

Form of Technology License Agreement

 

EXHIBIT H

Form of Supply Agreements [Dallas & Milan Tolling Agreements]

 

EXHIBIT I

Warehousing Agreement Terms

 

EXHIBIT J

Resale Agreement Terms

 

 

iii

 

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ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT dated as of October 19, 2007 (this “Agreement”),
is entered into by and among AIR PRODUCTS AND CHEMICALS, INC., a Delaware
corporation (“Seller”), and KMG CHEMICALS, INC., a Texas corporation
(“Purchaser”).

 

WHEREAS Purchaser wishes to purchase from Seller and the subsidiaries of Seller
set forth in Attachment A (the “Seller Subsidiaries”), and Seller wishes to sell
and to cause the Seller Subsidiaries to sell to Purchaser certain of the assets
and liabilities of the Business (as defined in Section 10.06(b)) of the Seller,
upon the terms and subject to the conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, and in reliance thereon, Seller
and Purchaser, intending to be legally bound, hereby agree as follows:

ARTICLE I

 

PURCHASE AND SALE OF ASSETS; CLOSING

SECTION 1.01.   Purchase and Sale of the Transferred Assets.  Upon the terms and
subject to the conditions of this Agreement, at the Closing (as defined in
Section 1.06), (i) Seller shall sell, transfer, assign and deliver to Purchaser,
and Purchaser will purchase, acquire and accept from Seller, all of Seller’s
right, title and interest in, to and under the Transferred Assets (as defined in
Section 1.02(a)) and (ii) Seller will cause the Seller Subsidiaries to sell,
transfer, assign and deliver to Purchaser, and Purchaser will purchase, acquire,
and accept from Seller Subsidiaries, all of Seller Subsidiaries’ right, title
and interest in, to and under the Transferred Assets for (A) an aggregate
purchase price of $74.6 million in cash (the “Purchase Price”) payable as set
forth in Section 1.07 and subject to adjustment as set forth in Section 2.01 and
(B) the assumption of the Assumed Liabilities (as defined in Section 1.04(a)). 
The purchase and sale of the Transferred Assets and the assumption of the
Assumed Liabilities are collectively referred to in this Agreement as the
“Acquisition”.

SECTION 1.02.   Transferred Assets and Excluded Assets.

(A) THE TERM “TRANSFERRED ASSETS” MEANS ALL THE BUSINESS, PROPERTIES, ASSETS,
GOODWILL AND RIGHTS OF SELLER AND THE SELLER SUBSIDIARIES OF WHATEVER KIND AND
NATURE, REAL OR PERSONAL, TANGIBLE OR INTANGIBLE, THAT ARE OWNED, LEASED OR
LICENSED BY SELLER OR ANY SELLER SUBSIDIARIES THAT ARE USED OR HELD FOR USE
PRIMARILY IN THE OPERATION OR CONDUCT OF THE BUSINESS, OTHER THAN (A) THE
EXCLUDED ASSETS (AS DEFINED IN SECTION 1.02(B)) AND (B) AS OTHERWISE PROVIDED
FOR IN THIS SECTION 1.02(A), CONSISTING OF:

(I) ALL OWNED REAL PROPERTY, LEASEHOLDS AND OTHER INTERESTS IN REAL PROPERTY OF
SELLER OR ANY SELLER SUBSIDIARY LISTED IN SECTION 3.06(A) OF THE SELLER
DISCLOSURE LETTER OR SECTION 3.06(B) OF THE SELLER DISCLOSURE LETTER, IN EACH
CASE TOGETHER WITH SELLER’S OR SELLER SUBSIDIARY’S RIGHT, TITLE AND INTEREST IN,
TO AND UNDER ALL BUILDINGS,

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IMPROVEMENTS AND FIXTURES THEREON AND ALL OTHER APPURTENANCES THERETO (THE
“TRANSFERRED REAL PROPERTY”);

(II) ALL RAW MATERIALS, WORK-IN-PROCESS, FINISHED GOODS AND PRODUCTS, SUPPLIES,
PARTS AND OTHER INVENTORIES (“INVENTORY”) OF SELLER OR ANY SELLER SUBSIDIARY
THAT AS OF THE CLOSE OF BUSINESS ON THE CLOSING DATE IS LOCATED ON THE
TRANSFERRED REAL PROPERTY AND ALL OTHER INVENTORY OWNED, LEASED OR LICENSED BY
SELLER OR ANY SELLER SUBSIDIARY, IN EACH CASE THAT ARE USED OR HELD FOR USE IN
THE OPERATION OR CONDUCT OF THE BUSINESS (THE “TRANSFERRED INVENTORY”);

(III) ALL OTHER TANGIBLE PERSONAL PROPERTY AND INTERESTS THEREIN, INCLUDING ALL
MACHINERY, EQUIPMENT, FURNITURE, FURNISHINGS AND VEHICLES (“EQUIPMENT”), OF
SELLER OR ANY SELLER SUBSIDIARY THAT AS OF THE TIME OF THE CLOSING IS LOCATED ON
THE TRANSFERRED REAL PROPERTY AND ALL OTHER EQUIPMENT USED OR HELD FOR USE
PRIMARILY IN THE OPERATION OR CONDUCT OF THE BUSINESS (THE “TRANSFERRED
EQUIPMENT”);

(IV) ALL ACCOUNTS RECEIVABLE OF SELLER OR ANY SELLER SUBSIDIARY AS OF THE CLOSE
OF BUSINESS ON THE CLOSING DATE THAT ARISE PRIMARILY OUT OF THE OPERATION OR
CONDUCT OF THE BUSINESS (THE “TRANSFERRED RECEIVABLES”);

(V) ALL PATENTS (INCLUDING ALL REISSUES, DIVISIONS, CONTINUATIONS AND EXTENSIONS
THEREOF), PATENT APPLICATIONS, PATENT RIGHTS, TRADEMARKS, TRADEMARK
REGISTRATIONS, TRADEMARK APPLICATIONS, SERVICE MARKS, SERVICE MARK REGISTRATIONS
AND SERVICE MARK APPLICATIONS, TRADE NAMES, BUSINESS NAMES, BRAND NAMES,
COPYRIGHTS, DATABASE RIGHTS AND MORAL RIGHTS IN BOTH PUBLISHED WORKS AND
UNPUBLISHED WORKS (INCLUDING ALL SUCH RIGHTS IN USER AND TRAINING MANUALS,
MARKETING AND PROMOTIONAL MATERIALS, INTERNAL REPORTS AND BUSINESS PLANS), AND
ALL REGISTRATIONS OR APPLICATIONS FOR REGISTRATION OF COPYRIGHTS THEREOF AND ANY
RENEWALS OR EXTENSIONS THEREOF IN ANY JURISDICTION, DESIGNS, DESIGN
REGISTRATIONS, ALL RIGHTS TO ANY OF THE FOREGOING, ALL RIGHTS IN ANY
JURISDICTION TO LIMIT THE USE OR DISCLOSURE OF ANY TECHNOLOGY (AS DEFINED IN
SECTION 1.02(A)(VI)) BY A THIRD PARTY, ANY SIMILAR INTELLECTUAL PROPERTY OR
PROPRIETARY RIGHTS SIMILAR TO ANY OF THE FOREGOING, LICENSES, IMMUNITIES,
COVENANTS NOT TO SUE AND THE LIKE RELATING TO THE FOREGOING, ALL GOODWILL
RELATED TO ANY OF THE FOREGOING AND ANY CLAIMS PAST, PRESENT OR FUTURE ARISING
OUT OF OR RELATED TO ANY INFRINGEMENT, MISUSE OR MISAPPROPRIATION OF ANY OF THE
FOREGOING (COLLECTIVELY, THE “INTELLECTUAL PROPERTY”), IN EACH CASE, THAT ARE
OWNED, LEASED OR LICENSED BY SELLER OR ANY SELLER SUBSIDIARY AS OF THE TIME OF
THE CLOSING, TO PURCHASER AND ARE USED OR HELD FOR USE IN THE OPERATION OR
CONDUCT OF THE BUSINESS (OTHER THAN LICENSED ASSETS (AS DEFINED IN SECTION
10.06(B)), INCLUDING THOSE THAT ARE LISTED ON SECTION 3.07(A) OF THE SELLER
DISCLOSURE LETTER (THE “TRANSFERRED INTELLECTUAL PROPERTY”);

(VI) ALL TRADE SECRETS, INVENTIONS, DISCOVERIES, IDEAS (WHETHER PATENTABLE OR
NOT IN ANY JURISDICTION AND WHETHER OR NOT REDUCED TO PRACTICE), KNOW-HOW,
CUSTOMER LISTS, TECHNICAL INFORMATION, PROPRIETARY INFORMATION, FORMULAE,
PROCESSES, PROCEDURES, RESEARCH RECORDS, RECORDS OF INVENTIONS, TEST
INFORMATION, MARKET SURVEYS AND MARKETING KNOW-HOW (“TECHNOLOGY”) OWNED, LEASED
OR LICENSED BY SELLER OR ANY SELLER SUBSIDIARY AND USED OR HELD FOR USE IN THE
OPERATION OR CONDUCT OF THE BUSINESS (OTHER THAN LICENSED ASSETS) (THE
“TRANSFERRED TECHNOLOGY”);

 

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(VII) ALL PERMITS, LICENSES, FRANCHISES, APPROVALS OR AUTHORIZATIONS FROM ANY
GOVERNMENTAL ENTITY (AS DEFINED IN SECTION 3.03) (“PERMITS”) AND ENVIRONMENTAL
PERMITS ISSUED TO SELLER OR ANY SELLER SUBSIDIARY AND THAT ARE (X) USED OR HELD
FOR USE PRIMARILY IN THE OPERATION OR CONDUCT OF THE BUSINESS (TO THE EXTENT
SUCH PERMITS AND ENVIRONMENTAL PERMITS ARE TRANSFERABLE AS OF THE CLOSING) OR
(Y) LISTED ON SECTION 1.02(A)(VII) OF THE SELLER DISCLOSURE LETTER (THE
“TRANSFERRED PERMITS”);

(VIII) ALL WRITTEN CONTRACTS, LEASES, SUBLEASES, LICENSES, INDENTURES,
AGREEMENTS, COMMITMENTS AND ALL OTHER LEGALLY BINDING INSTRUMENTS (IN EACH CASE
OTHER THAN LEASES, SUBLEASES, LICENSES AND INTERESTS IN RESPECT OF REAL
PROPERTY) (“CONTRACTS”) TO WHICH SELLER OR ANY SELLER SUBSIDIARY IS A PARTY OR
BY WHICH SELLER OR ANY SELLER SUBSIDIARY IS BOUND THAT ARE LISTED IN
SECTION 3.08(A) OF THE SELLER DISCLOSURE LETTER, AND ALL OTHER CONTRACTS TO
WHICH SELLER OR ANY SELLER SUBSIDIARY IS A PARTY OR BY WHICH SELLER OR ANY
SELLER SUBSIDIARY IS BOUND (X) TO THE EXTENT USED OR HELD FOR USE IN, OR ARISE
OUT OF, THE OPERATION OR CONDUCT OF THE BUSINESS, IN THE CASE OF CONTRACTS WITH
CUSTOMERS OF THE BUSINESS, AND (Y) THAT ARE USED OR HELD FOR USE IN, OR ARISE
OUT OF, THE OPERATION OR CONDUCT OF THE BUSINESS, IN THE CASE OF CONTRACTS THAT
ARE NOT WITH CUSTOMERS OF THE BUSINESS (COLLECTIVELY, THE “TRANSFERRED
CONTRACTS”);

(IX) ALL CREDITS, PREPAID EXPENSES, DEFERRED CHARGES, ADVANCE PAYMENTS, SECURITY
DEPOSITS AND PREPAID ITEMS OF SELLER OR ANY SELLER SUBSIDIARY THAT ARE USED,
HELD FOR USE OR INTENDED TO BE USED PRIMARILY IN, OR THAT ARISE PRIMARILY OUT
OF, THE OPERATION OR CONDUCT OF THE BUSINESS; AND

(X) ALL BOOKS OF ACCOUNT, LEDGERS, GENERAL, FINANCIAL AND ACCOUNTING RECORDS,
FILES, INVOICES, CUSTOMERS’ AND SUPPLIERS’ LISTS, OTHER DISTRIBUTION LISTS,
BILLING RECORDS, SALES AND PROMOTIONAL LITERATURE (IN ALL CASES, IN ANY FORM OR
MEDIUM, PROVIDED, THAT, IN THE CASE OF DATA INCLUDED IN THE GENERAL LEDGER
SYSTEM, SELLER SHALL ONLY TRANSFER PRINTED COPIES OF SUCH DATA) OF SELLER OR OF
ANY SELLER SUBSIDIARY THAT ARE LOCATED ON THE TRANSFERRED REAL PROPERTY OR ARE
LOCATED ELSEWHERE, SEGREGABLE, AND USED, HELD FOR USE OR INTENDED TO BE USED
EXCLUSIVELY IN, OR THAT ARISE EXCLUSIVELY OUT OF, THE CONDUCT OR OPERATION OF
THE BUSINESS (THE “RECORDS”); PROVIDED THAT, EXCEPT AS PROVIDED IN
SECTION 6.01(A)(I), THE RECORDS SHALL NOT INCLUDE ANY PERSONNEL RECORDS

(XI) WITH REFERENCE TO BUSINESS EMPLOYEES WHO ARE EMPLOYED PRIMARILY OUTSIDE THE
UNITED STATES: (A) THE EMPLOYMENT CONTRACTS RELATING TO THE BUSINESS EMPLOYEES
(THE “EMPLOYEE CONTRACTS”); (B) ANY AGREEMENTS FOR WORKFORCE SUPPLY ENTERED INTO
BETWEEN SELLER OR SELLER SUBSIDIARY AND ANY TEMPORARY WORKFORCE SUPPLY AGENCIES
(AGENZIE DI SOMMINISTRAZIONE DE PERSONALE) RELATING TO TEMPORARY WORKERS; (C)
ANY CREDITS INDEMNITIES OR SUMS ACCRUED WITH RESPECT TO THE BUSINESS EMPLOYEES
AS OF THE CLOSING DATE DUE TO SELLER OR SELLER SUBSIDIARY IN CONNECTION WITH THE
EMPLOYMENT CONTRACTS AS OF THE CLOSING DATE, SUCH AS:(A) ADVANCE PAYMENTS OF
SEVERANCE PAY INDEMNITY (TFR); (B) ADVANCE PAYMENTS OF ACCIDENTS’ INSURANCE
PREMIUMS; (C) ADVANCE PAYMENTS OF COMPENSATION; (D) SO CALLED TFR “SOLIDARIETA”;
(E) CREDITS FOR ADVANCE PAYMENT OF TAX ON SALARIES AND TFR; AND (F) LOANS TO
BUSINESS EMPLOYEES FOR PURCHASE OF THEIR HOUSES.

 

3

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(B) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, PURCHASER IS
PURCHASING ONLY THE TRANSFERRED ASSETS, AND IS NOT PURCHASING ANY ASSET OF
SELLER OR ANY SELLER SUBSIDIARY NOT INCLUDED IN THE TRANSFERRED ASSETS PURSUANT
TO SECTION 1.02(A) (ALL SUCH ASSETS NOT INCLUDED IN THE TRANSFERRED ASSETS BEING
HEREIN REFERRED TO AS THE “EXCLUDED ASSETS”), NONE OF WHICH EXCLUDED ASSETS
SHALL BE TRANSFERRED, CONVEYED, SET OVER, DELIVERED OR ASSIGNED TO PURCHASER. 
THE EXCLUDED ASSETS SHALL INCLUDE THE FOLLOWING BUSINESSES, PROPERTIES, ASSETS,
GOODWILL AND RIGHTS OF SELLER AND THE SELLER SUBSIDIARIES THAT ARE OWNED, LEASED
OR LICENSED BY SELLER OR ANY SELLER SUBSIDIARIES AS OF THE CLOSING DATE:

(I) ALL ASSETS LISTED IN SECTION 1.02(B) OF THE SELLER DISCLOSURE LETTER;

(II) ALL CASH AND CASH EQUIVALENTS OF SELLER OR ANY SELLER SUBSIDIARY;

(III) ALL INSURANCE POLICIES OF SELLER OR ANY SELLER SUBSIDIARY AND ALL RIGHTS
AND CLAIMS THEREUNDER AND, SUBJECT TO SECTION 5.12, ANY PROCEEDS THEREOF;

(IV) ALL RIGHTS, CLAIMS AND CREDITS OF SELLER OR ANY SELLER SUBSIDIARY TO THE
EXTENT RELATING TO ANY EXCLUDED ASSET OR ANY RETAINED LIABILITY, INCLUDING ANY
SUCH ITEMS ARISING UNDER ANY GUARANTEES, WARRANTIES, INDEMNITIES AND SIMILAR
RIGHTS IN FAVOR OF SELLER OR ANY SELLER SUBSIDIARY IN RESPECT OF ANY EXCLUDED
ASSET OR ANY RETAINED LIABILITY (AS DEFINED IN SECTION 1.02(B)(IV));

(V) ALL SHARES OF CAPITAL STOCK OF, OR OTHER EQUITY INTERESTS IN, ANY AFFILIATE
OF SELLER OR ANY OTHER PERSON, WHICH ARE OWNED BY SELLER OR ANY SELLER
SUBSIDIARY;

(VI) EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE VI, ALL ASSETS OF OR RELATING TO
A SELLER BENEFIT PLAN;

(VII) ALL FINANCIAL AND TAX RECORDS RELATING TO THE BUSINESS THAT FORM PART OF
SELLER’S OR ANY SELLER SUBSIDIARY’S GENERAL LEDGER (EXCEPT THAT COPIES OF
RELEVANT PORTIONS OF SUCH RECORDS SHALL BE PROVIDED TO PURCHASER TO THE EXTENT
THAT SUCH RECORDS RELATE TO THE BUSINESS);

(VIII) ANY REFUND OR CREDIT OF TAXES ATTRIBUTABLE TO ANY RETAINED TAX LIABILITY
(AS DEFINED IN SECTION 1.04(B)(V));

(IX) EXCEPT AS PROVIDED IN SECTION 6.01(A)(I), ALL PERSONNEL FILES OR RECORDS
AND ALL ORIGINALS AND COPIES OF TAX RETURNS;

(X) ALL RECORDS OF SELLER OR ANY SELLER SUBSIDIARY PREPARED IN CONNECTION WITH
THE SALE OF THE BUSINESS, INCLUDING BIDS RECEIVED FROM THIRD PARTIES AND
ANALYSES RELATING TO THE BUSINESS;

(XI) ALL RIGHTS OF SELLER OR ANY SELLER SUBSIDIARY UNDER THIS AGREEMENT AND ANY
OTHER AGREEMENTS, CERTIFICATES AND INSTRUMENTS RELATING TO THE SALE OF THE
BUSINESS (OR ANY PORTION THEREOF) OR OTHERWISE DELIVERED IN CONNECTION WITH THIS
AGREEMENT;

 

4

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(XII) THE NAMES AND MARKS SET FORTH ON SECTION 1.02(B)(XII) OF THE SELLER
DISCLOSURE LETTER AND ANY NAME OR MARK DERIVED FROM, SIMILAR TO OR INCLUDING ANY
OF THE FOREGOING (IN EACH CASE, IN ANY STYLE OR DESIGN) (COLLECTIVELY, THE
“RETAINED NAMES”);

(XIII) ALL EQUIPMENT LOCATED IN ALLENTOWN, PENNSYLVANIA, EASTON, PENNSYLVANIA,
OR DALLAS, TEXAS NOT LISTED ON SECTION 1.02(B) OF THE SELLER DISCLOSURE LETTER
THAT ARE NOT PRIMARILY USED IN THE OPERATION OF THE BUSINESS OR ANY OTHER ASSETS
NOT USED IN THE BUSINESS;

(XIV) ALL INTELLECTUAL PROPERTY THAT CANNOT BE FREELY AND CLEARLY TRANSFERRED TO
PURCHASER AS SET FORTH ON SECTION 1.02(B)(XIV) OF THE SELLER DISCLOSURE LETTER;

(XV) ALL PERMITS AND ENVIRONMENTAL PERMITS OF SELLER OR ANY SELLER SUBSIDIARY
THAT ARE NOT USED OR HELD FOR USE BY SELLER OR ANY SELLER SUBSIDIARY PRIMARILY
IN THE OPERATION OR CONDUCT OF THE BUSINESS (OTHER THAN THOSE SET FORTH ON
SECTION 1.02(A)(XV) OF THE SELLER DISCLOSURE LETTER) OR THAT ARE USED OR HELD
FOR USE BY SELLER OR ANY SELLER SUBSIDIARY PRIMARILY IN THE OPERATION OR CONDUCT
OF THE BUSINESS BUT ARE NOT TRANSFERABLE (AS SET FORTH ON SECTION 1.02(B)(XV) OF
THE SELLER DISCLOSURE LETTER);

(XVI) ALL CONTRACTS TO WHICH SELLER OR ANY SELLER SUBSIDIARY IS A PARTY OR BY
WHICH SELLER OR ANY SELLER SUBSIDIARY IS BOUND TO THE EXTENT NOT USED OR HELD
FOR USE IN, OR DO NOT ARISE OUT OF, THE OPERATION OR CONDUCT OF THE BUSINESS, IN
THE CASE OF CONTRACTS WITH CUSTOMERS OF THE BUSINESS;

(XVII) ALL RIGHTS AND CLAIMS OF SELLER OR OF ANY SELLER SUBSIDIARY, TO THE
EXTENT RELATING TO ANY TRANSFERRED ASSET OR ANY ASSUMED LIABILITY, CONSISTING
SOLELY OF (X) SUCH RIGHTS, CLAIMS AND CAUSES OF ACTION ARISING UNDER INSURANCE
POLICIES AND (Y) ALL RIGHTS TO ASSERT CLAIMS THAT SELLER OR ANY SELLER
SUBSIDIARY, IN ANY CAPACITY, EVER HAD, NOW HAS OR MAY OR SHALL HAVE IN THE
FUTURE, WHETHER KNOWN OR UNKNOWN, RELATING IN ANY WAY TO (1) THE BUSINESS’S
PURCHASE OR PROCUREMENT OF ANY GOOD, SERVICE OR PRODUCT OR (2) THE PURCHASE OR
PROCUREMENT BY SELLER OR ANY SELLER SUBSIDIARY OF ANY GOOD, SERVICE OR PRODUCT
FOR, OR ON BEHALF OF, THE BUSINESS, IN EACH CASE, AT ANY TIME UP UNTIL THE
CLOSING, ALONG WITH ANY AND ALL RECOVERIES BY SETTLEMENT, JUDGMENT OR OTHERWISE
IN CONNECTION WITH ANY SUCH CLAIMS;

(XVIII) ALL ACCOUNTS RECEIVABLE OF SELLER OR ANY SELLER SUBSIDIARY THAT ARE NOT
TRANSFERRED RECEIVABLES OR PURSUANT TO WHICH A PAYMENT IS OWED TO SELLER OR A
SELLER SUBSIDIARY BY AN AFFILIATE OF SELLER;

(XIX) ANY OTHER PROPERTY OR ASSETS OF SELLER OR ITS AFFILIATES NOT CONSTITUTING
TRANSFERRED ASSETS;

(XX) ALL CORPORATE-LEVEL SERVICES OF THE TYPE CURRENTLY PROVIDED TO THE BUSINESS
BY SELLER OR ANY OF ITS AFFILIATES (INCLUDING ASSETS USED OR HELD FOR USE BY
SELLER OR ANY OF ITS AFFILIATES IN CONNECTION WITH SUCH CORPORATE-LEVEL
SERVICES);

 

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(XXI) THE BUSINESS  EMPLOYEES’ SALARIES, PENSION, SEVERANCE PAY TREATMENT,
RETIREMENT BENEFITS, ADDITIONAL MONTHLY SALARIES, HOLIDAYS NOT TAKEN AND ANY AND
ALL OBLIGATIONS TOWARD OR RELATIVE TO THE BUSINESS EMPLOYEES OR ARISING OUT OF
OR IN RELATION TO THE EMPLOYEE CONTRACTS, WHETHER OR NOT PAYABLE AND
COLLECTABLE, WHICH HAVE ARISEN PRIOR TO THE CLOSING DATE; AND

(XXII) ALL OTHER ASSETS OF ANY KIND THAT ARE NOT USED OR HELD FOR USE IN THE
OPERATION OR CONDUCT OF THE BUSINESS.

SECTION 1.03.   Consents to Certain Assignments; Shared Contracts

(A) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THIS AGREEMENT
SHALL NOT CONSTITUTE AN AGREEMENT TO ASSIGN, DIRECTLY OR INDIRECTLY, ANY ASSET
OR ANY CLAIM OR RIGHT OR ANY BENEFIT ARISING UNDER OR RESULTING FROM SUCH ASSET
IF AN ATTEMPTED DIRECT OR INDIRECT ASSIGNMENT THEREOF, WITHOUT THE CONSENT OF A
THIRD PARTY, WOULD CONSTITUTE A BREACH, DEFAULT, VIOLATION OR OTHER
CONTRAVENTION OF THE RIGHTS OF SUCH THIRD PARTY, WOULD BE INEFFECTIVE WITH
RESPECT TO ANY PARTY TO AN AGREEMENT CONCERNING SUCH ASSET, CLAIM OR RIGHT.  IF
ANY DIRECT OR INDIRECT TRANSFER OR ASSIGNMENT BY SELLER OR ANY SELLER SUBSIDIARY
TO PURCHASER, OR ANY DIRECT OR INDIRECT ACQUISITION OR ASSUMPTION BY PURCHASER
OF, ANY INTEREST IN, OR LIABILITY, OBLIGATION OR COMMITMENT UNDER, ANY ASSET,
CLAIM OR RIGHT REQUIRES THE CONSENT OF A THIRD PARTY, THEN SUCH TRANSFER OR
ASSIGNMENT OR ASSUMPTION SHALL BE MADE SUBJECT TO SUCH CONSENT BEING OBTAINED.

(B) SELLER AND PURCHASER SHALL USE THEIR REASONABLE BEST EFFORTS TO OBTAIN SUCH
CONSENTS OR APPROVALS PRIOR TO THE CLOSING; PROVIDED THAT PURCHASER AGREES THAT
SELLER SHALL NOT HAVE ANY LIABILITY WHATSOEVER TO PURCHASER ARISING OUT OF OR
RELATING TO THE FAILURE TO OBTAIN ANY CONSENTS OR WAIVERS THAT MAY BE REQUIRED
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR BECAUSE OF
THE TERMINATION OF ANY CONTRACT OR PERMIT AS A RESULT THEREOF.  PURCHASER
FURTHER AGREES THAT NO REPRESENTATION, WARRANTY OR COVENANT OF SELLER CONTAINED
HEREIN SHALL BE BREACHED OR DEEMED BREACHED, NO BUSINESS MATERIAL ADVERSE EFFECT
SHALL HAVE BEEN DEEMED TO HAVE OCCURRED AND NO CONDITION (EXCEPT FOR THE
CONSENTS REQUIRED BY SECTION 7.02(D)) SHALL BE DEEMED NOT SATISFIED, AS A RESULT
OF (I) THE FAILURE TO OBTAIN ANY SUCH CONSENT OR WAIVER, (II) ANY SUCH
TERMINATION OR (III) ANY ACTION, CLAIM OR PROCEEDING COMMENCED OR THREATENED BY
OR ON BEHALF OF ANY PERSON ARISING OUT OF OR RELATING TO THE FAILURE TO OBTAIN
ANY SUCH CONSENT OR ANY SUCH TERMINATION.  IN THE EVENT ANY SUCH CONSENT OR
APPROVAL IS NOT OBTAINED PRIOR TO THE CLOSING, SELLER SHALL CONTINUE AT
PURCHASER’S REQUEST TO USE ALL REASONABLE BEST EFFORTS TO COOPERATE WITH
PURCHASER IN ATTEMPTING TO OBTAIN ANY SUCH CONSENT OR APPROVAL AFTER THE
CLOSING.

(C) IN THE EVENT THAT IT BECOMES REASONABLY APPARENT TO SELLER AND PURCHASER
THAT ANY SUCH CONSENT OR APPROVAL WITH RESPECT TO ANY SHARED CONTRACT WILL NOT
BE OBTAINED DESPITE THE USE OF REASONABLE BEST EFFORTS WITH RESPECT THERETO,
SELLER AND PURCHASER SHALL USE THEIR REASONABLE BEST EFFORTS FOR 180 DAYS
THEREAFTER TO ESTABLISH REASONABLE ARRANGEMENTS WITH RESPECT TO SUCH SHARED
CONTRACT WHICH RESULT IN PURCHASER RECEIVING ALL THE EXISTING BENEFITS AND
BEARING ALL THE EXISTING COSTS, LIABILITIES AND BURDENS WITH RESPECT TO ANY
PORTION OF SUCH SHARED CONTRACT WHICH RELATES TO THE BUSINESS,

 

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INCLUDING BUT NOT LIMITED TO THE SUBCONTRACTING THEREOF TO PURCHASER AND
ENFORCEMENT AT THE COST AND FOR THE ACCOUNT OF PURCHASER OF ANY AND ALL RIGHTS
OF SELLER AGAINST THE OTHER PARTY THERETO ARISING OUT OF THE BREACH OR
CANCELLATION THEREOF BY SUCH OTHER PARTY OR OTHERWISE.  IF AND TO THE EXTENT
SUCH ARRANGEMENTS CANNOT BE MADE, PURCHASER SHALL HAVE NO OBLIGATION WITH
RESPECT TO SUCH SHARED CONTRACT AND SELLER SHALL NOT HAVE ANY LIABILITY
WHATSOEVER TO PURCHASER ARISING OUT OF OR RELATING TO THE FAILURE TO MAKE SUCH
ARRANGEMENTS.  PURCHASER FURTHER AGREES THAT NO REPRESENTATION, WARRANTY OR
COVENANT OF SELLER CONTAINED HEREIN SHALL BE BREACHED OR DEEMED BREACHED, NO
BUSINESS MATERIAL ADVERSE EFFECT SHALL HAVE BEEN DEEMED TO HAVE OCCURRED AND NO
CONDITION (EXCEPT FOR THE CONSENTS REQUIRED BY SECTION 7.02(D)) SHALL BE DEEMED
NOT SATISFIED, AS A RESULT OF (I) THE FAILURE TO MAKE ANY SUCH ARRANGEMENTS OR
(II) ANY ACTION, CLAIM OR PROCEEDING COMMENCED OR THREATENED BY OR ON BEHALF OF
ANY PERSON ARISING OUT OF OR RELATING TO THE FAILURE TO MAKE SUCH ARRANGEMENTS. 
IN CONNECTION THEREWITH, EACH PARTY AGREES THAT IT WILL TAKE ALL ACTIONS
REASONABLY NECESSARY SO THAT THE OTHER PARTY HERETO AND ITS AFFILIATES, AS
APPLICABLE, WILL REMAIN AT ALL TIMES FULLY IN COMPLIANCE WITH THEIR OBLIGATIONS
UNDER THE SHARED CONTRACTS AS AND TO THE EXTENT SUCH OBLIGATIONS UNDER THE
SHARED CONTRACTS RELATE TO THE OPERATION OF THE BUSINESS AFTER THE DATE OF THE
CLOSING, AND THAT IT WILL COOPERATE WITH SUCH OTHER PARTY AND ITS AFFILIATES, AS
APPLICABLE, IN CONNECTION THEREWITH.

(D) FOR PURPOSES OF THIS SECTION 1.03, “REASONABLE BEST EFFORTS” SHALL NOT
INCLUDE ANY REQUIREMENT OF SELLER OR PURCHASER TO EXPEND MONEY (OTHER THAN
NOMINAL AMOUNTS), COMMENCE OR PARTICIPATE IN ANY LITIGATION OR OFFER OR GRANT
ANY MATERIAL ACCOMMODATION (FINANCIAL OR OTHERWISE) TO ANY THIRD PARTY.

SECTION 1.04.   Assumption of Liabilities.

(A) UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THIS AGREEMENT, PURCHASER
SHALL IRREVOCABLY ASSUME, EFFECTIVE AS OF THE CLOSING, AND FROM AND AFTER THE
CLOSING, PURCHASER SHALL PAY, PERFORM AND DISCHARGE WHEN DUE THE FOLLOWING
OBLIGATIONS, LIABILITIES AND COMMITMENTS OF SELLER OR OF ANY SELLER SUBSIDIARY
OF ANY NATURE (COLLECTIVELY, THE “ASSUMED LIABILITIES”), WHETHER KNOWN OR
UNKNOWN, EXPRESS OR IMPLIED, PRIMARY OR SECONDARY, DIRECT OR INDIRECT,
LIQUIDATED, ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE WHETHER DUE OR TO BECOME
DUE:

(I) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ARISING OUT OF, RELATING TO OR
OTHERWISE IN ANY WAY IN RESPECT OF ANY OF THE TRANSFERRED ASSETS, TRANSFERRED
PERMITS OR THE OPERATION OR CONDUCT OF THE BUSINESS BY PURCHASER OR ITS
AFFILIATES ON OR AFTER THE CLOSING DATE;

(II) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ARISING OUT OF, RELATING TO OR
OTHERWISE IN ANY WAY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING (A
“PROCEEDING”) AND ANY CLAIMS, IN EACH CASE ARISING OUT OF THE OPERATION OR
CONDUCT OF THE BUSINESS BY PURCHASER OR ITS AFFILIATES ON OR AFTER THE CLOSING
DATE;

(III) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ASSUMED BY PURCHASER PURSUANT
TO ARTICLE VI;

 

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(IV) (A) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ARISING OUT OF, RELATING
TO OR OTHERWISE IN ANY WAY IN RESPECT OF ANY AND ALL PRODUCTS MANUFACTURED OR
SOLD BY PURCHASER OR ITS AFFILIATES ON OR AFTER THE CLOSING DATE, INCLUDING
OBLIGATIONS, LIABILITIES AND COMMITMENTS FOR REFUNDS, ADJUSTMENTS, ALLOWANCES,
REPAIRS, EXCHANGES, RETURNS AND WARRANTY, PRODUCT LIABILITY, MERCHANTABILITY AND
OTHER CLAIMS RELATING TO SUCH PRODUCTS, AND (B) ALL SERVICE OBLIGATIONS AND
WARRANTY OBLIGATIONS OF SELLER OR ANY SELLER SUBSIDIARY TO REPAIR OR REPLACE
DEFECTIVE GOODS OR SERVICES SOLD BY THE BUSINESS UNDER THE TERMS OF ANY WRITTEN
CONTRACT, COMMITMENT OR SALE TRANSACTION ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESS AND RELATING TO PRODUCTS SHIPPED OR SERVICES PERFORMED NOT MORE THAN
SIX (6) MONTHS PRIOR TO THE CLOSING DATE; PROVIDED THAT PURCHASER ASSUMES NO
OBLIGATION OF SELLER OR ANY SELLER SUBSIDIARY FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES OR FOR ANY PERSONAL INJURY, OR FOR INFRINGEMENT OF INTELLECTUAL
PROPERTY, THE SOLE OBLIGATION OF PURCHASER HEREUNDER BEING THE OBLIGATION TO
REPAIR OR REPLACE DEFECTIVE GOODS OR SERVICES;

(V) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ARISING OUT OF, RELATING TO OR
OTHERWISE IN ANY WAY IN RESPECT OF BEING THE OWNER, LESSEE OR OCCUPANT OF, OR
THE OPERATOR OF THE ACTIVITIES CONDUCTED AT, THE TRANSFERRED REAL PROPERTY ON OR
AFTER THE CLOSING DATE EXCEPT FOR SUCH OBLIGATIONS, LIABILITIES AND COMMITMENTS
CONSTITUTING RETAINED LIABILITIES;

(VI) ALL LIABILITIES, OBLIGATIONS AND COMMITMENTS FOR (A) TAXES ARISING OUT OF
OR RELATING TO OR IN RESPECT OF THE BUSINESS OR THE TRANSFERRED ASSETS FOR ANY
POST-CLOSING TAX PERIOD (AS DEFINED IN SECTION 10.06(B)), INCLUDING THE
POST-CLOSING TAX PERIOD OF A STRADDLE PERIOD (AS DEFINED IN SECTION 10.06(B)),
AND (B) TRANSFER TAXES (COLLECTIVELY, THE “ASSUMED TAX LIABILITIES”);

(VII) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS UNDER ENVIRONMENTAL LAWS AND
ENVIRONMENTAL PERMITS ARISING OUT OF THE CONDUCT OF THE BUSINESS AFTER THE
CLOSING DATE OR CONDITIONS RELATED TO THE TRANSFERRED ASSETS WHERE SUCH
CONDITIONS FIRST COME INTO EXISTENCE AFTER CLOSING OR TO THE EXTENT ANY
PRE-CLOSING CONDITIONS ARE EXACERBATED AFTER CLOSING; AND

(VIII) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS WITH RESPECT TO THE BUSINESS
EMPLOYEES (AS DEFINED IN SECTION 3.12(A)) THAT (A) PURCHASER HAS SPECIFICALLY
AGREED TO ASSUME PURSUANT TO ARTICLE VI OR (B) THAT TRANSFER AUTOMATICALLY TO
PURCHASER OR ITS AFFILIATES UNDER APPLICABLE LAW (COLLECTIVELY, THE “COVERED
EMPLOYEE LIABILITIES”).

(B) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY,
PURCHASER SHALL NOT ASSUME ANY RETAINED LIABILITIES, EACH OF WHICH SHALL BE
RETAINED AND SHALL BE PAID, PERFORMED AND DISCHARGED WHEN DUE BY SELLER OR A
SELLER SUBSIDIARY, AS APPLICABLE.  THE TERM “RETAINED LIABILITIES” MEANS:

(I) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS OF SELLER OR ANY SELLER
SUBSIDIARY TO THE EXTENT NOT CONSTITUTING AN ASSUMED LIABILITY OR TO THE EXTENT
ARISING OUT OF, RELATING TO OR OTHERWISE IN ANY WAY IN RESPECT OF ANY EXCLUDED
ASSETS, INCLUDING BUT NOT LIMITED TO ACCOUNTS PAYABLE;

 

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(II) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS ARISING OUT OF, RELATING TO OR
OTHERWISE IN ANY WAY IN RESPECT OF ANY AND ALL PRODUCTS MANUFACTURED OR SOLD BY
SELLER OR ANY SELLER SUBSIDIARY PRIOR TO THE CLOSING DATE OTHER THAN TO THE
EXTENT ASSUMED UNDER SECTION 1.04(IV);

(III) ALL LIABILITIES UNDER TRANSFERRED CONTRACTS THAT ARISE AFTER THE CLOSING
DATE BUT THAT ARISE OUT OF OR RELATE TO ANY BREACH THAT OCCURRED PRIOR TO THE
CLOSING DATE;

(IV) ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS WITH RESPECT TO EMPLOYEES AND
FORMER EMPLOYEES (AND THEIR RESPECTIVE BENEFICIARIES AND DEPENDENTS) OF SELLER
OR ANY SELLER SUBSIDIARY OR ANY OTHER AFFILIATE OF SELLER OTHER THAN THE COVERED
EMPLOYEE LIABILITIES; AND

(V) ALL LIABILITIES, OBLIGATIONS AND COMMITMENTS OF SELLER OR ANY SELLER
SUBSIDIARY FOR TAXES ARISING OUT OF OR RELATING TO OR IN RESPECT OF ANY
BUSINESS, ASSET, PROPERTY OR OPERATION OF SELLER (INCLUDING THE BUSINESS AND THE
TRANSFERRED ASSETS) FOR ANY PRE-CLOSING TAX PERIOD (AS DEFINED IN
SECTION 10.06(B)), INCLUDING THE PRE-CLOSING TAX PERIOD OF A STRADDLE PERIOD (AS
DEFINED IN SECTION 10.06(B)) (COLLECTIVELY, THE “RETAINED TAX LIABILITIES”).

SECTION 1.05.   Risk of Loss.  Until the Closing, any loss of or damage to the
Transferred Assets from fire, casualty or any other occurrence shall be the sole
responsibility of Seller and the Seller Subsidiaries.  As of the time of
Closing, title to all Transferred Assets shall be transferred to Purchaser and
Purchaser shall thereafter bear all risk of loss associated with the Transferred
Assets and be solely responsible for procuring adequate insurance to protect the
Transferred Assets against any such loss.

SECTION 1.06.   Closing.  The closing of the Acquisition  (the “Closing”) shall
take place at the offices of Air Products, 7201 Hamilton Boulevard, Allentown,
PA 18195, at 10:00 a.m. on the second business day following the satisfaction
(or, to the extent permitted, the waiver) of the conditions set forth in
Section 7.01, or, if on such day any condition set forth in Section 7.02 or 7.03
has not been satisfied (or, to the extent permitted, waived by the party
entitled to the benefit thereof), as soon as practicable after all the
conditions set forth in Article VII have been satisfied (or, to the extent
permitted, waived by the parties entitled to the benefits thereof), or at such
other place, time and date as shall be agreed between Seller and Purchaser.  The
date on which the Closing occurs is referred to in this Agreement as the
“Closing Date”.

SECTION 1.07.   Transactions to be Effective at the Closing.

(A) AT THE CLOSING, SELLER AND EACH SELLER SUBSIDIARY SHALL DELIVER TO PURCHASER
(I) DULY EXECUTED COUNTERPARTS OF THE DEEDS, BILLS OF SALE, ASSIGNMENTS AND
OTHER INSTRUMENTS OF TRANSFER NECESSARY TO ASSIGN THE TRANSFERRED ASSETS TO THE
PURCHASER; IT BEING AGREED THAT ANY OF SUCH DEEDS, BILLS OF SALE, ASSIGNMENTS,
INSTRUMENTS OF TRANSFER, AGREEMENTS AND OTHER DOCUMENTS SHALL NOT REQUIRE SELLER
OR ANY SELLER SUBSIDIARY TO MAKE ANY ADDITIONAL REPRESENTATIONS, WARRANTIES OR
COVENANTS, EXPRESSED OR IMPLIED, NOT

 

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CONTAINED IN THIS AGREEMENT OR THE ANCILLARY AGREEMENTS (AS DEFINED IN SECTION
10.06(B)), (II) DULY EXECUTED COUNTERPARTS OF THE ASSIGNMENT AND ASSUMPTION
AGREEMENT AND BILL OF SALE (EACH DEFINED IN SECTION 10.06(B)), (III) A DULY
EXECUTED COUNTERPART OF THE TRANSITIONAL SERVICES AGREEMENT (DEFINED IN SECTION
10.06(B)), (IV) A DULY EXECUTED COUNTERPART OF THE TECHNOLOGY LICENSE AGREEMENT
(AS DEFINED IN SECTION 10.06(B)), (V) A DULY EXECUTED COUNTERPART OF EACH SUPPLY
AGREEMENT (AS DEFINED IN SECTION 10.06(B)), (VI) A DULY EXECUTED COUNTERPART OF
EACH SITE LICENSE, (VII) IN THE CASE OF EACH APPLICABLE SELLER SUBSIDIARY, A
DULY EXECUTED SUBSIDIARY BUSINESS TRANSFER AGREEMENT (AS DEFINED IN SECTION
10.06(B), (VIII) A DULY EXECUTED SPECIAL WARRANTY DEED, IN A FORM MUTUALLY
ACCEPTABLE TO SELLER AND PURCHASER, WITH RESPECT TO THE ACQUISITION OF THE REAL
PROPERTY IN PUEBLO, COLORADO RELATED TO THE BUSINESS; (IX) ORIGINAL CERTIFICATES
OF TITLE TO THE OWNED MOTOR VEHICLES AND OTHER ASSETS SET FORTH ON SECTION
3.05(C) OF THE SELLER DISCLOSURE LETTER IN PROPER FORM FOR BEING CONVEYED TO
PURCHASER, AND (X) SUCH OTHER AGREEMENTS, DOCUMENTS, INSTRUMENTS AND WRITINGS AS
ARE REQUIRED TO BE DELIVERED BY SELLER AND APPLICABLE SELLER SUBSIDIARIES AT OR
PRIOR TO THE CLOSING PURSUANT TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR
OTHERWISE REQUIRED IN CONNECTION HEREWITH OR THEREWITH).

(B) AT THE CLOSING, PURCHASER SHALL DELIVER TO SELLER AND THE SELLER
SUBSIDIARIES (I) PAYMENT, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO ONE
OR MORE ACCOUNTS DESIGNATED IN WRITING BY SELLER (SUCH DESIGNATION TO BE MADE AT
LEAST TWO BUSINESS DAYS PRIOR TO THE CLOSING DATE), IN AN AMOUNT EQUAL TO
(A) THE PURCHASE PRICE PLUS OR MINUS (B) AN ESTIMATE, PREPARED BY SELLER AND
DELIVERED TO PURCHASER AT LEAST TWO BUSINESS DAYS PRIOR TO THE CLOSING DATE, OF
ANY ADJUSTMENT TO THE PURCHASE PRICE UNDER SECTION 2.01, MINUS (C) THE EARLY
CLOSING ADJUSTMENT AMOUNT (AS DEFINED IN SECTION 10.06(B)), AS SET FORTH IN THE
EARLY CLOSING ADJUSTMENT STATEMENT (AS DEFINED IN SECTION 10.06(B)) DELIVERED BY
SELLER TO PURCHASER AT LEAST TWO BUSINESS DAYS PRIOR TO THE CLOSING DATE (THE
PURCHASE PRICE PLUS OR MINUS SUCH ESTIMATE OF ANY ADJUSTMENT UNDER SECTION 2.01
MINUS THE EARLY CLOSING ADJUSTMENT AMOUNT BEING HEREINAFTER CALLED THE “CLOSING
DATE PAYMENT”), (II) DULY EXECUTED COUNTERPARTS OF THE DEEDS, BILLS OF SALE,
ASSIGNMENTS AND OTHER INSTRUMENTS OF TRANSFER NECESSARY TO ASSIGN THE
TRANSFERRED ASSETS TO THE PURCHASER, AND DULY EXECUTED ASSUMPTION AGREEMENTS AND
OTHER INSTRUMENTS OF ASSUMPTION PROVIDING FOR THE ASSUMPTION OF THE ASSUMED
LIABILITIES, (III) A DULY EXECUTED COUNTERPART OF THE TRANSITIONAL SERVICES
AGREEMENT, (IV) A DULY EXECUTED COUNTERPART OF THE TECHNOLOGY LICENSE AGREEMENT,
(V) A DULY EXECUTED COUNTERPART TO EACH SUPPLY AGREEMENT, (VI) A DULY EXECUTED
COUNTERPART OF EACH SITE LICENSE AND (VII) ALL SUCH OTHER CERTIFICATES AND
DOCUMENTS REQUIRED TO BE DELIVERED TO SELLER OR ANY SELLER SUBSIDIARY AT OR
PRIOR TO THE CLOSING PURSUANT TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT.

ARTICLE II

 

PURCHASE PRICE ADJUSTMENT

SECTION 2.01.   Post-Closing Purchase Price Adjustment.

(A)  THE STATEMENT.  WITHIN 60 DAYS AFTER THE CLOSING DATE, PURCHASER SHALL
PREPARE AND DELIVER TO SELLER AN UNAUDITED STATEMENT (THE “STATEMENT”), SETTING
FORTH THE WORKING CAPITAL (AS DEFINED IN SECTION 2.01(D)) AS OF THE CLOSE OF
BUSINESS ON THE CLOSING

 

 

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DATE (“CLOSING WORKING CAPITAL”) AND A CERTIFICATE OF PURCHASER THAT THE
STATEMENT HAS BEEN PREPARED IN COMPLIANCE WITH THE REQUIREMENTS OF
SECTION 2.01(D).  THE STATEMENT SHALL BE BASED UPON THE RESULTS OF A PHYSICAL
INVENTORY OF THE INVENTORY OF THE BUSINESS CONDUCTED WITHIN TWO BUSINESS DAYS OF
THE CLOSING DATE.  SELLER SHALL HAVE THE RIGHT TO HAVE A REPRESENTATIVE(S)
PRESENT AT ALL TIMES DURING SUCH PHYSICAL INVENTORY AND PURCHASER SHALL GIVE
SELLER REASONABLE ADVANCED NOTICE OF THE TIME(S) AND PLACE(S) AT WHICH SUCH
PHYSICAL INVENTORY SHALL TAKE PLACE.  SELLER AND THE SELLER SUBSIDIARIES SHALL
ASSIST PURCHASER IN THE PREPARATION OF THE STATEMENT AND THE PARTIES SHALL
PROVIDE ONE ANOTHER WITH ACCESS AT ALL REASONABLE TIMES TO THEIR RESPECTIVE
PERSONNEL, PROPERTIES, BOOKS AND RECORDS OF THE BUSINESS REASONABLY REQUIRED IN
CONNECTION THEREWITH.  SELLER’S INDEPENDENT AUDITORS MAY PARTICIPATE IN THE
PREPARATION OF THE STATEMENT; PROVIDED, HOWEVER, THAT SELLER AND THE SELLER
SUBSIDIARIES ACKNOWLEDGE THAT PURCHASER SHALL HAVE THE PRIMARY RESPONSIBILITY
AND AUTHORITY FOR PREPARING THE STATEMENT.

(B) OBJECTIONS; RESOLUTION OF DISPUTES.  DURING THE 30-DAY PERIOD FOLLOWING
SELLER’S RECEIPT OF THE STATEMENT, SELLER AND ITS INDEPENDENT AUDITOR SHALL BE
PERMITTED TO REVIEW THE WORKING PAPERS RELATING TO THE STATEMENT.  THE STATEMENT
SHALL BECOME FINAL AND BINDING UPON THE PARTIES ON THE 30TH DAY FOLLOWING
DELIVERY THEREOF, UNLESS SELLER GIVES WRITTEN NOTICE OF ITS DISAGREEMENT WITH
THE STATEMENT (A “NOTICE OF DISAGREEMENT”) TO PURCHASER ON OR PRIOR TO SUCH
DATE.  ANY NOTICE OF DISAGREEMENT SHALL (I) SPECIFY IN REASONABLE DETAIL THE
NATURE OF ANY DISAGREEMENT SO ASSERTED AND (II) ONLY INCLUDE DISAGREEMENTS BASED
ON MATHEMATICAL ERRORS OR BASED ON CLOSING WORKING CAPITAL NOT BEING CALCULATED
IN ACCORDANCE WITH THIS SECTION 2.01.  IF A NOTICE OF DISAGREEMENT IS RECEIVED
BY PURCHASER IN A TIMELY MANNER, THEN THE STATEMENT (AS REVISED IN ACCORDANCE
WITH THIS SENTENCE) SHALL BECOME FINAL AND BINDING UPON SELLER AND PURCHASER ON
THE EARLIER OF (A) THE DATE SELLER AND PURCHASER RESOLVE IN WRITING ANY
DIFFERENCES THEY HAVE WITH RESPECT TO THE MATTERS SPECIFIED IN THE NOTICE OF
DISAGREEMENT AND (B) THE DATE ANY DISPUTED MATTERS ARE FINALLY RESOLVED IN
WRITING BY THE ACCOUNTING FIRM (AS DEFINED BELOW).  DURING THE 30-DAY PERIOD
FOLLOWING THE DELIVERY OF A NOTICE OF DISAGREEMENT, SELLER AND PURCHASER SHALL
SEEK IN GOOD FAITH TO RESOLVE IN WRITING ANY DIFFERENCES THAT THEY MAY HAVE WITH
RESPECT TO THE MATTERS SPECIFIED IN THE NOTICE OF DISAGREEMENT.  AT THE END OF
SUCH 30-DAY PERIOD, SELLER AND PURCHASER SHALL SUBMIT TO AN INDEPENDENT
ACCOUNTING FIRM (THE “ACCOUNTING FIRM”) FOR ARBITRATION ANY AND ALL MATTERS THAT
REMAIN IN DISPUTE AND WERE PROPERLY INCLUDED IN THE NOTICE OF DISAGREEMENT.  THE
ACCOUNTING FIRM SHALL BE PRICEWATERHOUSECOOPERS LLP OR, IF SUCH FIRM IS UNABLE
OR UNWILLING TO ACT, SUCH OTHER NATIONALLY RECOGNIZED INDEPENDENT PUBLIC
ACCOUNTING FIRM AS SHALL BE AGREED UPON BY THE PARTIES HERETO IN WRITING. 
SELLER AND PURCHASER SHALL USE REASONABLE EFFORTS TO CAUSE THE ACCOUNTING FIRM
TO RENDER A DECISION RESOLVING THE MATTERS SUBMITTED TO THE ACCOUNTING FIRM
WITHIN 30 DAYS OF RECEIPT OF THE SUBMISSION.  THE DETERMINATION OF THE
ACCOUNTING FIRM SHALL BE FINAL AND BINDING ON THE PARTIES, AND JUDGMENT MAY BE
ENTERED UPON THE DETERMINATION OF THE ACCOUNTING FIRM IN ANY COURT HAVING
JURISDICTION OVER THE PARTY AGAINST WHICH SUCH DETERMINATION IS TO BE
ENFORCED.   THE COST OF ANY ARBITRATION (INCLUDING THE FEES AND EXPENSES OF THE
ACCOUNTING FIRM AND REASONABLE ATTORNEY FEES AND EXPENSES OF THE PARTIES)
PURSUANT TO THIS SECTION 2.01(B) SHALL BE BORNE BY PURCHASER AND SELLER IN
INVERSE PROPORTION AS THEY MAY PREVAIL ON MATTERS RESOLVED BY THE ACCOUNTING
FIRM, WHICH PROPORTIONATE ALLOCATIONS SHALL ALSO BE DETERMINED BY THE ACCOUNTING
FIRM AT THE TIME THE DETERMINATION OF THE ACCOUNTING FIRM IS RENDERED ON THE
MERITS OF THE

 

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MATTERS SUBMITTED.  THE FEES AND DISBURSEMENTS OF SELLER’S AND EACH SELLER
SUBSIDIARY’S INDEPENDENT AUDITORS INCURRED IN CONNECTION WITH ANY REVIEW OF THE
STATEMENT AND REVIEW OF ANY NOTICE OF DISAGREEMENT SHALL BE BORNE BY SELLER, AND
THE FEES AND DISBURSEMENTS OF PURCHASER’S INDEPENDENT AUDITORS INCURRED IN
CONNECTION WITH ANY REVIEW OF THE STATEMENT SHALL BE BORNE BY PURCHASER.

(C) ADJUSTMENT PAYMENT.  THE PURCHASE PRICE SHALL BE INCREASED BY THE AMOUNT BY
WHICH CLOSING WORKING CAPITAL EXCEEDS $27.5 MILLION (THE “TARGET WORKING CAPITAL
AMOUNT”), AND THE PURCHASE PRICE SHALL BE DECREASED BY THE AMOUNT BY WHICH
CLOSING WORKING CAPITAL IS LESS THAN THE TARGET WORKING CAPITAL AMOUNT (THE
PURCHASE PRICE AS SO INCREASED OR DECREASED SHALL HEREINAFTER BE REFERRED TO AS
THE “ADJUSTED PURCHASE PRICE”).  IF THE CLOSING DATE PAYMENT IS LESS THAN THE
ADJUSTED PURCHASE PRICE, PURCHASER SHALL, AND IF THE CLOSING DATE PAYMENT IS
MORE THAN THE ADJUSTED PURCHASE PRICE, SELLER SHALL, WITHIN 10 BUSINESS DAYS
AFTER THE STATEMENT BECOMES FINAL AND BINDING ON THE PARTIES, MAKE PAYMENT BY
WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO ONE OR MORE ACCOUNTS DESIGNATED
IN WRITING BY THE PARTY TO RECEIVE SUCH PAYMENT OF THE AMOUNT OF SUCH
DIFFERENCE, TOGETHER WITH INTEREST THEREON AT A RATE EQUAL TO THE THREE-MONTH
U.S. DOLLAR LONDON INTERBANK OFFERED RATE (“LIBOR”) PLUS 2.0%, FROM THE CLOSING
DATE TO THE DATE OF PAYMENT (THE “PRIME RATE”).

(D) WORKING CAPITAL.  THE TERM “WORKING CAPITAL” SHALL BE DETERMINED IN
ACCORDANCE WITH EXHIBIT A (THE “ACCOUNTING PRINCIPLES”).  WORKING CAPITAL SHALL
INCLUDE THE TRANSFERRED INVENTORY, TRANSFERRED RECEIVABLES AND THE ACCRUED
LIABILITIES SET FORTH IN SECTION 3.04(A) OF THE SELLER DISCLOSURE LETTER. 
CLOSING WORKING CAPITAL IS TO BE CALCULATED IN ACCORDANCE WITH THE SAME
ACCOUNTING PRINCIPLES.  THE SCOPE OF THE DISPUTES TO BE RESOLVED BY THE
ACCOUNTING FIRM SHALL BE LIMITED TO WHETHER SUCH CALCULATION WAS DONE IN
ACCORDANCE WITH THE ACCOUNTING PRINCIPLES, AND WHETHER THERE WERE MATHEMATICAL
ERRORS IN THE STATEMENT, AND THE ACCOUNTING FIRM IS NOT AUTHORIZED OR PERMITTED
TO MAKE ANY OTHER DETERMINATION, INCLUDING ANY DETERMINATION AS TO WHETHER THE
TARGET WORKING CAPITAL AMOUNT IS CORRECT.  WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, THE ACCOUNTING FIRM IS NOT AUTHORIZED OR PERMITTED TO MAKE ANY
DETERMINATION AS TO THE ACCURACY OF SECTION 3.04 OR ANY OTHER REPRESENTATION OR
WARRANTY IN THIS AGREEMENT OR AS TO COMPLIANCE BY SELLER WITH ANY OF ITS
COVENANTS IN THIS AGREEMENT (OTHER THAN IN THIS SECTION 2.01).  ANY
DETERMINATIONS BY THE ACCOUNTING FIRM, AND ANY WORK OR ANALYSES PERFORMED BY THE
ACCOUNTING FIRM, IN CONNECTION WITH ITS ARBITRATION OF ANY DISPUTE UNDER THIS
SECTION 2.01 SHALL NOT BE ADMISSIBLE IN EVIDENCE IN ANY SUIT, ACTION OR
PROCEEDING BETWEEN THE PARTIES OTHER THAN TO THE EXTENT NECESSARY TO ENFORCE
PAYMENT OBLIGATIONS UNDER SECTION 2.01(C).

SECTION 2.02.   Post-Closing Books and Records.  Except for the consummation of
the Closing, Purchaser agrees that, during physical inventory pursuant to
Section 2.01(a), it shall use its reasonable best efforts to conduct the
Business in the ordinary course in a manner substantially consistent with past
practice.  Seller and the Seller Subsidiaries shall cooperate in the preparation
of the Statement, including providing any customary certifications as may be
required by Purchaser’s auditors.  During the period of time from and after the
Closing Date through the resolution of any adjustment to the Purchase Price
contemplated by Section 2.01, Purchaser shall afford to Seller and the Seller
Subsidiaries and any accountants, counsel or

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financial advisers retained by Seller in connection with any adjustment to the
Purchase Price contemplated by Section 2.01 reasonable access during normal
business hours to all the properties, books, contracts, personnel and records of
the Business relevant to the adjustment contemplated by Section 2.01.

ARTICLE III

 

Representations and Warranties of Seller

 

Except (i) to the extent arising out of, relating to or otherwise in any way in
respect of any Excluded Assets or Retained Liabilities or (ii) as set forth in
the disclosure schedule delivered by Seller to Purchaser prior to the date of
this Agreement, including the documents attached to or incorporated by reference
in such disclosure schedule (collectively, the “Seller Disclosure Letter”),
Seller hereby represents and warrants to Purchaser as follows:

SECTION 3.01.   Organization and Standing.  Each of Seller and the Seller
Subsidiaries is duly organized, validly existing and, to the extent applicable,
in good standing under the laws of the jurisdiction of its organization, which
jurisdiction is set forth in Section 3.01 of the Seller Disclosure Letter.  Each
of Seller and the Seller Subsidiaries has full power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to carry on its business as presently conducted, other than any such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Business Material Adverse Effect.  Each of Seller and the
Seller Subsidiaries is duly qualified and in good standing to do business as a
foreign entity in each jurisdiction in which the conduct or nature of its
business or the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the failure to be so
qualified or in good standing, individually or in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse Effect.  This
Section 3.01 does not relate to Environmental Permits, such items being subject
to Section 3.14(c).

SECTION 3.02.   Authority; Execution and Delivery; Enforceability.  Seller has
full corporate power and authority to execute this Agreement and the Ancillary
Agreements to which it is, or is specified to be, a party and to consummate the
transactions contemplated to be consummated by it by this Agreement and such
Ancillary Agreements.  Prior to the Closing, each Seller Subsidiary shall have
full corporate power and authority to execute the Ancillary Agreements to which
it is, or is specified to be, a party and to consummate the transactions
contemplated to be consummated by it by this Agreement and such Ancillary
Agreements.  Seller has taken all corporate action required by its Articles of
Incorporation and By-laws or similar organizational documents to authorize the
execution and delivery of this Agreement and the Ancillary Agreements to which
it is, or is specified to be, a party and to authorize the consummation of the
transactions contemplated to be consummated by it by this Agreement and such
Ancillary Agreements.  Prior to the Closing, each Seller Subsidiary shall have
taken all corporate action required by its comparable organizational documents
to authorize the execution and delivery of the Ancillary Agreements to which it
is, or is specified to be, a party and to authorize the consummation of the
transactions contemplated to be consummated by it by this Agreement and such
Ancillary Agreement.  Seller has duly executed and delivered this

 

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Agreement and prior to the Closing will have duly executed and delivered each
Ancillary Agreement to which it is, or is specified to be, a party, and this
Agreement constitutes, and each Ancillary Agreement to which it is, or is
specified to be, a party will after the Closing constitute, its legal, valid and
binding obligation, enforceable against it in accordance with its terms subject,
as to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors’ rights generally and to
general equitable principles.  Each of the Seller Subsidiaries prior to the
Closing will have duly executed and delivered each Ancillary Agreement to which
it is, or is specified to be, a party, and this Agreement constitutes, and each
Ancillary Agreement to which it is, or is specified to be, a party will after
the Closing constitute, its legal, valid and binding obligation, enforceable
against it in accordance with its terms subject, as to enforcement, to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors’ rights generally and to general equitable principles.

SECTION 3.03.   No Violation; Consents.  The execution and delivery by Seller of
this Agreement does not, the execution and delivery by Seller and each of the
Seller Subsidiaries of each Ancillary Agreement to which it is, or is specified
to be, a party will not, and the consummation by Seller of the Acquisition and
the other transactions contemplated to be consummated by it by this Agreement
and such Ancillary Agreement and by each of the Seller Subsidiaries of the
Acquisition and the other transactions to be consummated by it by such Ancillary
Agreements, will not conflict with, or result in any breach of or constitute a
default or give rise to any right of termination or acceleration under, any
provision of (i)  in the case of Seller, its Articles of Incorporation or
By-laws, and, in the case of each of the Seller Subsidiaries, its comparable
organizational documents, (ii) any Business Contract (as defined in
Section 3.08(b)) or (iii) any judgment or Applicable Law applicable to Seller,
any Seller Subsidiary or any of the Transferred Assets, and will not result in
the creation of any Lien (as defined in Section 3.05(a)) (other than Permitted
Liens (as defined in Section 3.05(a)) or Liens arising from acts of Purchaser or
its affiliates) upon any of the Transferred Assets.  No material consent,
approval or authorization (“Consent”) of, or registration, declaration or filing
with, any Federal, state, local or foreign court of competent jurisdiction,
governmental agency, authority, instrumentality or regulatory body (a
“Governmental Entity”) is required to be obtained or made by or with respect to
Seller or any Seller Subsidiary in connection with the execution, delivery and
performance of this Agreement or the consummation of the Acquisition, other than
(A) compliance with and filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”) and other applicable
Antitrust Laws, (B) compliance with and such filings and notifications as may be
required under applicable state property transfer laws or other Environmental
Laws (as defined in Section 10.06(b)), (C) those that may be required solely by
reason of Purchaser’s (as opposed to any other third party’s) participation in
the Acquisition and the other transactions contemplated by this Agreement and by
the Ancillary Agreements, and (D) compliance with the Seller’s reporting
obligations under the Securities Exchange Act of 1934.

SECTION 3.04.   Financial Statements; Absence of Certain Changes.

(A) SECTION 3.04(A) OF THE SELLER DISCLOSURE LETTER SETS FORTH AN UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES WITH RESPECT TO THE BUSINESS AT
SEPTEMBER 30, 2007 (TOGETHER WITH THE NOTES THERETO, THE “STATEMENT OF ASSETS
AND LIABILITIES”) AND THE RELATED UNAUDITED STATEMENT OF REVENUES AND DIRECT
COSTS WITH RESPECT TO THE BUSINESS FOR THE 36

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MONTHS THEN ENDED (TOGETHER WITH THE NOTES THERETO, AND COLLECTIVELY WITH THE
STATEMENT OF ASSETS AND LIABILITIES, THE “BUSINESS FINANCIAL STATEMENTS”), WHICH
FAIRLY PRESENT, IN ALL MATERIAL RESPECTS, SELLER’S HISTORICAL COST, IN
CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES AS
IN EFFECT FROM TIME TO TIME (“GAAP”) (EXCEPT THAT THE STATEMENT OF ASSETS AND
LIABILITIES LACKS FOOTNOTE DISCLOSURE AND OTHER PRESENTATION ITEMS REQUIRED BY
GAAP) BASIS OF THE ASSETS AND LIABILITIES OF THE BUSINESS AS OF SEPTEMBER 30,
2007, AND THE REVENUES AND DIRECT COSTS OF THE BUSINESS, BASED UPON OR DERIVED
FROM THE TRANSFERRED ASSETS AND ASSUMED LIABILITIES, FOR THE 36 MONTHS THEN
ENDED.

(B) NEITHER SELLER, NOR ANY OF THE SELLER SUBSIDIARIES, HAVE ANY MATERIAL
LIABILITIES OR OBLIGATIONS OF ANY NATURE, WHETHER KNOWN OR UNKNOWN, ACCRUED,
CONTINGENT, ABSOLUTE, DETERMINED, DETERMINABLE OR OTHERWISE, RELATED TO THE
BUSINESS AND REQUIRED TO BE REFLECTED IN THE BUSINESS FINANCIAL STATEMENTS,
WHICH WERE PREPARED IN CONFORMITY WITH GAAP (EXCEPT THAT THE STATEMENT OF ASSETS
AND LIABILITIES LACKS FOOTNOTE DISCLOSURE AND OTHER PRESENTATION ITEMS REQUIRED
BY GAAP)(“LIABILITIES”), EXCEPT (I) AS DISCLOSED, REFLECTED OR RESERVED AGAINST
IN THE STATEMENT OF ASSETS AND LIABILITIES, (II) THE RETAINED LIABILITIES AND
(III) LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH
PAST PRACTICE SINCE THE DATE OF THE STATEMENT OF ASSETS AND LIABILITIES AND NOT
IN VIOLATION OF THIS AGREEMENT (NONE OF WHICH HAS HAD OR WOULD REASONABLY BE
EXPECTED TO HAVE A BUSINESS MATERIAL ADVERSE EFFECT).

SECTION 3.05.   Assets Other than Real Property Interests.

(A) SELLER OR A SELLER SUBSIDIARY HAS, OR AS OF THE CLOSE OF BUSINESS ON THE
CLOSING DATE WILL HAVE, GOOD AND VALID TITLE TO ALL TRANSFERRED ASSETS, OTHER
THAN THOSE SOLD OR OTHERWISE DISPOSED OF SINCE THE DATE OF THE STATEMENT OF
ASSETS AND LIABILITIES IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE AND NOT IN VIOLATION OF THIS AGREEMENT, IN EACH CASE FREE AND CLEAR OF
ALL MORTGAGES, LIENS, CHARGES, CLAIMS, PLEDGES OR OTHER ENCUMBRANCES OF ANY KIND
(COLLECTIVELY, “LIENS”), EXCEPT FOR (I) MECHANICS’, CARRIERS’, WORKMEN’S,
REPAIRMEN’S OR OTHER LIKE LIENS ARISING OR INCURRED IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICE, (II) LIENS ARISING UNDER ORIGINAL
PURCHASE PRICE CONDITIONAL SALES CONTRACTS AND EQUIPMENT LEASES WITH THIRD
PARTIES ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE WITH RESPECT TO THE EQUIPMENT BEING PURCHASED OR LEASED, (III) LIENS
FOR TAXES AND OTHER GOVERNMENTAL CHARGES THAT ARE NOT DUE AND PAYABLE, THAT MAY
THEREAFTER BE PAID WITHOUT PENALTY OR WHICH ARE BEING CONTESTED IN GOOD FAITH,
AND (IV) OTHER NON-MONETARY IMPERFECTIONS OF TITLE, LICENSES OR ENCUMBRANCES, IF
ANY, WHICH DO NOT MATERIALLY IMPAIR THE CONTINUED USE AND OPERATION OF THE
ASSETS TO WHICH THEY RELATE IN THE CONDUCT OF THE BUSINESS AS CURRENTLY
CONDUCTED (THE LIENS DESCRIBED IN CLAUSES (I) THROUGH (IV) ABOVE, TOGETHER WITH
THE LIENS REFERRED TO IN CLAUSES (B) THROUGH (E) OF THE SECOND SENTENCE OF
SECTION 3.06, ARE REFERRED TO COLLECTIVELY AS “PERMITTED LIENS”).  ALL TANGIBLE
PERSONAL PROPERTY INCLUDED IN THE TRANSFERRED ASSETS IS IN GOOD OPERATING
CONDITION AND REPAIR, OTHER THAN NORMAL WEAR AND TEAR, AND IS SUITABLE FOR
IMMEDIATE USE IN THE ORDINARY COURSE OF BUSINESS.  NO ITEM OF TANGIBLE PERSONAL
PROPERTY INCLUDED IN THE TRANSFERRED PROPERTY IS IN NEED OF REPAIR OR
REPLACEMENT OTHER THAN AS PART OF ROUTINE MAINTENANCE IN THE ORDINARY COURSE OF
BUSINESS.

 

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(B) THIS SECTION 3.05 DOES NOT RELATE TO REAL PROPERTY OR INTERESTS IN REAL
PROPERTY, SUCH ITEMS BEING THE SUBJECT OF SECTION 3.06, OR TO INTELLECTUAL
PROPERTY, SUCH ITEMS BEING THE SUBJECT OF SECTION 3.07.

SECTION 3.06.   Real Property.  Section 3.06(a) of the Seller Disclosure Letter
sets forth a complete list of all real property and interests in real property
owned in fee by Seller or a Seller Subsidiary and used or held by Seller or a
Seller Subsidiary for use primarily in the operation or conduct of the Business
(collectively, the “Real Property”) and true and complete copies of all deeds
(or comparable instruments, with respect to Seller Subsidiaries), and title
insurance policies related to the Real Property. Section 3.06(b) of the Seller
Disclosure Letter sets forth a complete list of all real property and interests
in real property leased by Seller or a Seller Subsidiary and used or held by
Seller or a Seller Subsidiary for use primarily in the operation or conduct of
the Business (individually, a “Leased Property”).  Seller and each of the Seller
Subsidiaries have good and insurable fee title to all Real Property and good and
valid title to the leasehold estates in all Leased Property (Real Property or
Leased Property being sometimes referred to herein, individually, as
“Transferred Real Property”), in each case free and clear of all Liens, except
(A) Liens described in clauses (i) through (iv) of Section 3.05(a), (B) leases,
subleases and similar agreements set forth in Section 3.06 of the Seller
Disclosure Letter, (C) easements, covenants, rights-of-way, restrictions and
other similar matters of record, (D) any conditions that may be shown by a
current, accurate survey or physical inspection of any Transferred Real Property
made prior to Closing, and (E)(i) zoning, building and other similar codes and
restrictions, (ii) Liens that have been placed by any developer, landlord or
other third party on property over which Seller or any Seller Subsidiary has
easement rights or on any Leased Property and subordination or similar
agreements relating thereto, and (iii) unrecorded easements, covenants,
rights-of-way, restrictions and other similar matters, none of which items set
forth in this clause (E), individually or in the aggregate, materially impairs
the continued use and operation of the Transferred Real Property to which they
relate in the conduct of the Business as currently conducted.  This Section 3.06
does not relate to environmental matters, such items being the subject of
Section 3.14.

SECTION 3.07.   Intellectual Property.

(A) SECTION 3.07(A) OF THE SELLER DISCLOSURE LETTER SETS FORTH A COMPLETE AND
ACCURATE LIST OF (I) THE PATENTS AND PATENT APPLICATIONS, (II) THE TRADEMARK AND
SERVICEMARK REGISTRATIONS AND APPLICATIONS AND MATERIAL UNREGISTERED TRADEMARKS,
(III) COPYRIGHT APPLICATIONS AND REGISTRATIONS, (IV) REGISTERED INTERNET DOMAIN
NAMES, (V) OUTGOING LICENSES OF ANY OF THE FOREGOING AND (VI) INCOMING LICENSES
OF INTELLECTUAL PROPERTY, IN EACH CASE THAT ARE USED IN OR HELD FOR USE IN THE
BUSINESS.  WITH RESPECT TO PATENT, COPYRIGHT AND TRADEMARK REGISTRATIONS AND
APPLICATIONS, SECTION 3.07(A) OF THE SELLER DISCLOSURE LETTER LISTS, AS OF THE
DATE OF THIS AGREEMENT, THE JURISDICTIONS WHERE SUCH PATENTS, COPYRIGHTS OR
TRADEMARKS ARE REGISTERED OR WHERE SUCH APPLICATIONS HAVE BEEN FILED AND ALL
REGISTRATION AND APPLICATION NUMBERS AND ANY FEES THAT WILL BE DUE WITHIN 180
DAYS FOLLOWING THE CLOSING THAT WILL NOT BE PAID BY SELLER.  SELLER OR A SELLER
SUBSIDIARY IS THE SOLE AND EXCLUSIVE OWNER OF, OR HAS A VALID RIGHT TO USE OR A
LICENSE FOR, THE TRANSFERRED INTELLECTUAL PROPERTY AND TRANSFERRED TECHNOLOGY
AND NO LICENSE FEES OF ANY KIND IN RESPECT OF SUCH TRANSFERRED INTELLECTUAL
PROPERTY AND TRANSFERRED TECHNOLOGY ARE REQUIRED FOR THE USE BY SELLER OR THE
APPLICABLE SELLER SUBSIDIARY, OR FOR THE PURCHASER

 

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FOLLOWING THE CLOSING (OTHER THAN FEES THAT MAY EXIST FOR INTELLECTUAL PROPERTY
THAT IS LICENSED-IN BY SELLER, OF SUCH INTELLECTUAL PROPERTY IN THOSE
JURISDICTIONS WHERE SUCH INTELLECTUAL PROPERTY IS CURRENTLY USED.  ALL
TRANSFERRED INTELLECTUAL PROPERTY OR TRANSFERRED TECHNOLOGY OWNED BY SELLER OR A
SELLER SUBSIDIARY (“OWNED INTELLECTUAL PROPERTY”) IS OWNED BY SUCH ENTITY FREE
AND CLEAR OF ALL LIENS OTHER THAN PERMITTED LIENS, AND IS VALID AND ENFORCEABLE.

(B) ALL OWNED INTELLECTUAL PROPERTY CONSISTING OF PATENTS, PATENT APPLICATIONS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND APPLICATIONS AND COPYRIGHT
APPLICATIONS AND REGISTRATIONS HAS BEEN DULY REGISTERED AND/OR FILED, AS
APPLICABLE, WITH OR ISSUED BY EACH APPLICABLE GOVERNMENTAL ENTITY IN EACH
JURISDICTION IN WHICH A SELLER HAS SOUGHT TO REGISTER SUCH RIGHTS (ALL OF WHICH
ARE SET FORTH ON THE SELLER DISCLOSURE LETTER), ALL NECESSARY AFFIDAVITS OF
CONTINUING USE HAVE BEEN FILED AND ALL NECESSARY MAINTENANCE FEES HAVE BEEN PAID
TO CONTINUE ALL SUCH RIGHTS IN EFFECT.  SELLER AND EACH SELLER SUBSIDIARY HAVE
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE NOTICE AND MARKING
REQUIREMENTS FOR SUCH PATENTS AND TRADEMARKS.

(C) NO CLAIMS ARE PENDING OR, TO THE KNOWLEDGE OF SELLER, THREATENED, AGAINST
SELLER OR ANY SELLER SUBSIDIARY BY ANY PERSON CLAIMING INFRINGEMENT OF SUCH
PERSON’S INTELLECTUAL PROPERTY BY USE OF THE TRANSFERRED INTELLECTUAL PROPERTY
OR TRANSFERRED TECHNOLOGY IN THE OPERATION OR CONDUCT OF THE BUSINESS AS
CURRENTLY CONDUCTED.  THE OPERATION OF THE BUSINESS, AND THE USE, MARKETING,
LICENSING AND SALE OF TRANSFERRED INVENTORY FROM THE BUSINESS DOES NOT VIOLATE
AND HAS NOT VIOLATED OR INFRINGED THE RIGHTS OF ANY PERSON IN ANY THIRD PARTY
INTELLECTUAL PROPERTY.

(D) THE TRANSFERRED ASSETS AND THE LICENSED ASSETS INCLUDE ALL INTELLECTUAL
PROPERTY NECESSARY FOR THE OPERATION OF THE BUSINESS BY PURCHASER.

(E) TO THE KNOWLEDGE OF THE SELLER, THERE IS NO AND HAS BEEN NO UNAUTHORIZED
USE, DISCLOSURE, INFRINGEMENT, MISAPPROPRIATION OR OTHER VIOLATION OF ANY
TRANSFERRED INTELLECTUAL PROPERTY OR TRANSFERRED TECHNOLOGY BY ANY THIRD PARTY,
INCLUDING ANY EMPLOYEE OR FORMER EMPLOYEE OF THE SELLER OR ANY OF THE SELLER
SUBSIDIARIES.

(F) NEITHER THE SELLER NOR ANY OF THE SELLER SUBSIDIARIES HAS LICENSED ANY
TRANSFERRED INTELLECTUAL PROPERTY OR TRANSFERRED TECHNOLOGY TO ANY PERSON ON AN
EXCLUSIVE BASIS, NOR HAS THE SELLER OR ANY OF THE SELLER SUBSIDIARIES ENTERED
INTO ANY CONTRACT MATERIALLY LIMITING ITS ABILITY TO EXPLOIT FULLY ANY
TRANSFERRED INTELLECTUAL PROPERTY OR TRANSFERRED TECHNOLOGY.

(G) THE SELLER AND EACH OF THE SELLER SUBSIDIARIES IS NOT, NOR WILL ANY OF THEM
BE AS A RESULT OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, IN BREACH OF ANY LICENSE,
SUBLICENSE OR OTHER CONTRACT RELATING TO THE TRANSFERRED INTELLECTUAL PROPERTY
OR TRANSFERRED TECHNOLOGY.

(H) TO THE KNOWLEDGE OF SELLER, NO NON-PUBLIC, PROPRIETARY INTELLECTUAL PROPERTY
OWNED BY THE SELLER OR THE SELLER SUBSIDIARIES, HAS BEEN AUTHORIZED TO BE
DISCLOSED OR ACTUALLY DISCLOSED BY THE SELLER OR ANY OF THE SELLER SUBSIDIARIES
TO ANY

 

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EMPLOYEE OR THIRD PARTY OTHER THAN PURSUANT TO A NON-DISCLOSURE AGREEMENT OR
OTHER CONFIDENTIALITY OBLIGATION THAT PROTECTS THE PROPRIETARY INTERESTS OF THE
SELLER AND THE SELLER SUBSIDIARIES IN AND TO SUCH INTELLECTUAL PROPERTY. TO THE
KNOWLEDGE OF SELLER, THE SELLER AND THE SELLER SUBSIDIARIES HAVE ENTERED INTO
WRITTEN CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENTS WITH ALL OF ITS PAST
AND PRESENT EMPLOYEES ACKNOWLEDGING THE SELLER’S OR SELLER SUBSIDIARY’S
OWNERSHIP OF ALL INTELLECTUAL PROPERTY CREATED OR DEVELOPED BY ITS EMPLOYEES
WITHIN THE SCOPE OF THEIR EMPLOYMENT.  THE SELLER AND THE SELLER SUBSIDIARIES
HAVE TAKEN REASONABLE SECURITY MEASURES TO PROTECT THE CONFIDENTIALITY OF
CONFIDENTIAL INFORMATION OWNED BY THE SELLER AND THE SELLER SUBSIDIARIES. THE
SELLER OR THE SELLER SUBSIDIARIES HAVE ALSO TAKEN REASONABLE SECURITY MEASURES
TO PROTECT THE CONFIDENTIALITY OF, AND HAVE NOT DISCLOSED OR AUTHORIZED THE
DISCLOSURE OF, ANY CONFIDENTIAL INFORMATION THAT IS NOT OWNED BY THE SELLER OR
THE SELLER SUBSIDIARIES, EXCEPT FOR INSTANCES IN WHICH THE FAILURE TO TAKE SUCH
SECURITY MEASURES, OR THE DISCLOSURE OF OR AUTHORIZATION TO DISCLOSE SUCH
INFORMATION, DID NOT BREACH ANY CONTRACTUAL OBLIGATION OWED BY THE SELLER OR ANY
OF THE SELLER SUBSIDIARIES TO A THIRD PARTY WITH RESPECT TO SUCH INFORMATION.

SECTION 3.08.   Contracts.

(A) EXCEPT FOR CONTRACTS (X) SET FORTH IN SECTION 3.08(A) OF THE SELLER
DISCLOSURE LETTER, (Y) THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND
(Z) CONTRACTS ENTERED INTO AFTER THE DATE OF THIS AGREEMENT IN ACCORDANCE WITH
SECTION 5.01, NEITHER SELLER NOR ANY SELLER SUBSIDIARY IS A PARTY TO OR BOUND BY
ANY CONTRACT THAT IS USED AND HELD FOR USE PRIMARILY IN, OR THAT ARISES
PRIMARILY OUT OF, THE OPERATION OR CONDUCT OF THE BUSINESS IN EACH CASE THAT IS:

(I) WRITTEN EMPLOYMENT CONTRACT;

(II) EMPLOYEE COLLECTIVE BARGAINING AGREEMENT OR OTHER CONTRACT WITH ANY LABOR
ORGANIZATION, UNION OR ASSOCIATION;

(III) COVENANT NOT TO COMPETE (OTHER THAN PURSUANT TO ANY RADIUS RESTRICTION
CONTAINED IN ANY LEASE, RECIPROCAL EASEMENT OR DEVELOPMENT, CONSTRUCTION,
OPERATING OR SIMILAR AGREEMENT) OR OTHER COVENANT RESTRICTING THE DEVELOPMENT,
MANUFACTURE, MARKETING OR DISTRIBUTION OF THE PRODUCTS AND SERVICES OF SELLER OR
A SELLER SUBSIDIARY THAT MATERIALLY LIMITS THE CONDUCT OF THE BUSINESS AS
PRESENTLY CONDUCTED;

(IV) LEASE, SUBLEASE OR SIMILAR CONTRACT WITH ANY PERSON UNDER WHICH SELLER OR
ANY SELLER SUBSIDIARY IS A LESSOR OR SUBLESSOR OF, OR MAKES AVAILABLE FOR USE TO
ANY PERSON, (A) ANY TRANSFERRED REAL PROPERTY OR (B) ANY PORTION OF ANY PREMISES
OTHERWISE OCCUPIED BY SELLER OR ANY SELLER SUBSIDIARY THAT, IN EITHER CASE,
SPECIFIES ANNUAL PAYMENTS IN EXCESS OF $100,000;

(V) LEASE, SUBLEASE OR SIMILAR CONTRACT WITH ANY PERSON UNDER WHICH SELLER OR A
SELLER SUBSIDIARY IS LESSEE OF, OR HOLDS OR USES, ANY MACHINERY, EQUIPMENT,
VEHICLE OR OTHER TANGIBLE PERSONAL PROPERTY OWNED BY ANY PERSON THAT HAS A
FUTURE LIABILITY IN EXCESS OF $100,000;

 

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(VI) CONTRACT FOR THE PURCHASE OR SALE OF INVENTORY, MATERIALS, SUPPLIES OR
EQUIPMENT (OTHER THAN PURCHASE CONTRACTS AND ORDERS FOR INVENTORY THAT ARE
REFLECTED ON THE STATEMENT OF ASSETS AND LIABILITIES) THAT HAS AN AGGREGATE
FUTURE LIABILITY TO ANY PERSON IN EXCESS OF $100,000 AND IS NOT TERMINABLE BY
SELLER OR A SELLER SUBSIDIARY BY NOTICE OF NOT MORE THAN 90 DAYS FOR NO COST;

(VII) MANAGEMENT, SERVICE, CONSULTING OR OTHER SIMILAR CONTRACT THAT HAS AN
AGGREGATE FUTURE LIABILITY TO ANY PERSON IN EXCESS OF $100,000;

(VIII) CONTRACT UNDER WHICH SELLER OR A SELLER SUBSIDIARY HAS BORROWED ANY MONEY
FROM, OR ISSUED ANY NOTE, BOND, DEBENTURE OR OTHER EVIDENCE OF INDEBTEDNESS
(OTHER THAN ACCOUNTS PAYABLE) TO, ANY PERSON OR ANY OTHER NOTE, BOND, DEBENTURE
OR OTHER EVIDENCE OF INDEBTEDNESS (OTHER THAN ACCOUNTS PAYABLE) OF SELLER OR A
SELLER SUBSIDIARY, IN ANY SUCH CASE WHICH, INDIVIDUALLY, IS IN EXCESS OF
$100,000;

(IX) CONTRACT (INCLUDING ANY SO-CALLED TAKE-OR-PAY OR KEEPWELL AGREEMENTS) UNDER
WHICH (A) ANY PERSON HAS DIRECTLY OR INDIRECTLY GUARANTEED INDEBTEDNESS,
LIABILITIES OR OBLIGATIONS OF SELLER OR A SELLER SUBSIDIARY OR (B) SELLER OR ANY
SELLER SUBSIDIARY HAS DIRECTLY OR INDIRECTLY GUARANTEED INDEBTEDNESS,
LIABILITIES OR OBLIGATIONS OF ANY PERSON (IN EACH CASE OTHER THAN ENDORSEMENTS
FOR THE PURPOSE OF COLLECTION IN THE ORDINARY COURSE OF BUSINESS), IN ANY SUCH
CASE WHICH, INDIVIDUALLY, IS IN EXCESS OF $100,000;

(X) CONTRACT GRANTING A LIEN UPON ANY TRANSFERRED REAL PROPERTY FOR WHICH THE
LIEN IS NOT A PERMITTED LIEN;

(XI)  CONTRACT PROVIDING FOR INDEMNIFICATION OF ANY PERSON, INCLUDING SELLER OR
A SELLER SUBSIDIARY, WITH RESPECT TO MATERIAL LIABILITIES RELATING TO THE
BUSINESS, OTHER THAN THE CONSTITUTIVE DOCUMENTS OF SELLER OR ANY SELLER
SUBSIDIARY AND MARKETING AGREEMENTS, PROPERTY LEASES AND OTHER COMMERCIAL
AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS; OR

(XII) OTHER CONTRACT THAT HAS AN AGGREGATE FUTURE LIABILITY TO ANY PERSON IN
EXCESS OF $250,000.

(B) ALL TRANSFERRED CONTRACTS LISTED IN SECTION 3.08(A) OF THE SELLER DISCLOSURE
LETTER (SUCH CONTRACTS, THE “BUSINESS CONTRACTS”) ARE VALID, BINDING AND IN FULL
FORCE AND EFFECT IN ALL MATERIAL RESPECTS AND ARE ENFORCEABLE IN ALL MATERIAL
RESPECTS BY SELLER, IN ACCORDANCE WITH THEIR TERMS, SUBJECT, AS TO ENFORCEMENT,
TO APPLICABLE BANKRUPTCY, INSOLVENCY, MORATORIUM, REORGANIZATION OR SIMILAR LAWS
AFFECTING CREDITORS’ RIGHTS GENERALLY AND TO GENERAL EQUITABLE PRINCIPLES. 
SELLER AND THE SELLER SUBSIDIARIES HAVE PERFORMED ALL OBLIGATIONS REQUIRED TO BE
PERFORMED BY THEM TO DATE UNDER THE BUSINESS CONTRACTS IN ALL MATERIAL RESPECTS,
AND THEY ARE NOT IN BREACH OR DEFAULT THEREUNDER IN ANY MATERIAL RESPECT AND, TO
THE KNOWLEDGE OF SELLER, AS OF THE DATE OF THIS AGREEMENT, NO OTHER PARTY TO ANY
BUSINESS CONTRACT IS IN BREACH OR DEFAULT OF ITS OBLIGATIONS THEREUNDER IN ANY
MATERIAL RESPECT.

 

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SECTION 3.09.   Permits.

(A) SECTION 3.09 OF THE SELLER DISCLOSURE LETTER LISTS ALL MATERIAL PERMITS USED
OR HELD FOR USE PRIMARILY IN THE OPERATION OR CONDUCT OF THE BUSINESS. ALL
TRANSFERRED PERMITS ARE VALIDLY HELD BY SELLER OR A SELLER SUBSIDIARY, AND
SELLER OR A SELLER SUBSIDIARY HAS COMPLIED IN ALL MATERIAL RESPECTS WITH THE
TERMS AND CONDITIONS THEREOF. SINCE JANUARY 1, 2004, NEITHER SELLER NOR A SELLER
SUBSIDIARY HAS RECEIVED WRITTEN NOTICE OF ANY PROCEEDING RELATING TO, AND, TO
THE KNOWLEDGE OF SELLER, THERE ARE NO FACTS, CIRCUMSTANCES OR CONDITIONS THAT
WOULD REASONABLY BE EXPECTED TO RESULT IN, THE REVOCATION OR MATERIAL
MODIFICATION OF ANY SUCH TRANSFERRED PERMITS. NONE OF SUCH TRANSFERRED PERMITS
WOULD REASONABLY BE EXPECTED TO BE SUBJECT TO SUSPENSION, MATERIAL MODIFICATION,
REVOCATION OR NONRENEWAL AS A RESULT OF THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE CONSUMMATION OF THE ACQUISITION.  THIS SECTION 3.09 DOES NOT
RELATE TO ENVIRONMENTAL PERMITS, SUCH ITEMS BEING THE SUBJECT OF
SECTION 3.14(C).

SECTION 3.10.   Taxes.

(A) SELLER AND EACH OF THE SELLER SUBSIDIARIES HAVE TIMELY PAID ALL TAXES
IMPOSED ON, OR IN CONNECTION WITH, THE TRANSFERRED ASSETS (AND FILED ON A TIMELY
BASIS ALL TAX RETURNS REQUIRED TO BE FILED RELATING TO THE TRANSFERRED ASSETS,
WHICH TAX RETURNS WERE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS) THAT
ARE DUE AND PAYABLE ON OR PRIOR TO THE CLOSING DATE (EXCEPT FOR TAXES BEING
CONTESTED IN GOOD FAITH AND TRANSFER TAXES).

(B) NO MATERIAL TAX LIENS HAVE BEEN FILED AND NO MATERIAL CLAIMS ARE BEING
ASSERTED IN WRITING WITH RESPECT TO ANY TAXES DUE WITH RESPECT TO THE
TRANSFERRED ASSETS.

SECTION 3.11.   Proceedings.  Except as set forth on Section 3.11 of Seller
Disclosure Letter, there are no pending or, to the knowledge of Seller,
threatened Proceedings against Seller or any Seller Subsidiary, which arise out
of the conduct of the Business.  Section 3.11 of the Seller Disclosure Letter
lists, as of the date of this Agreement, each pending Proceeding initiated by
Seller or any Seller Subsidiary which arises out of the conduct to the
Business.  No Seller nor any of the Seller Subsidiaries, is party or subject to
or in default under any material unsatisfied judgment that is applicable to the
conduct of the Business.

SECTION 3.12.   Employee Compensation; Benefit Plans.

(A) SECTION 3.12 OF THE SELLER DISCLOSURE LETTER SETS FORTH A TRUE AND CORRECT
LIST, AS OF THE DATE OF THIS AGREEMENT, OF ALL INDIVIDUALS EMPLOYED BY SELLER
AND ANY SELLER SUBSIDIARY PRIMARILY IN THE CONDUCT OF THE BUSINESS AND THEIR
PRESENT POSITION AND RATE OF COMPENSATION (THE “BUSINESS EMPLOYEES”).

(B) NEITHER SELLER, NOR ANY SELLER SUBSIDIARY, HAS TAKEN ANY ACTION THAT MIGHT
RESULT IN PURCHASER BEING A PARTY TO, OR BOUND BY, ANY SELLER EMPLOYEE BENEFIT
PLAN, AND PURCHASER SHALL HAVE NO LIABILITY OR OBLIGATION UNDER, OR BE SUBJECT
TO ANY LIABILITY OR OBLIGATION ON ACCOUNT OF, ANY SELLER EMPLOYEE BENEFIT PLAN
FOLLOWING THE ACQUISITION INCLUDING, WITHOUT LIMITATION, ANY LIABILITY OR OTHER
OBLIGATION WITH RESPECT TO ANY MULTIEMPLOYER PLAN OR COBRA.

 

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(C) SECTION 3.12 OF THE SELLER DISCLOSURE LETTER CONTAINS A TRUE AND COMPLETE
LIST OF ALL SELLER EMPLOYEE BENEFIT PLANS.

(D) SELLER AND THE SELLER SUBSIDIARIES HAVE PROVIDED TO PURCHASER TRUE AND
CORRECT SUMMARIES OF ALL SELLER EMPLOYEE BENEFIT PLANS (INCLUDING AMENDMENTS).

SECTION 3.13.   Absence of Changes or Events.  Since the date of the Statement
of Assets and Liabilities, (a) there has not been a Business Material Adverse
Effect and (b) Seller and the Seller Subsidiaries have caused the Business to be
conducted in the ordinary course and substantially in the same manner as
previously conducted.

SECTION 3.14.   Compliance with Applicable Laws.

(A) THE BUSINESS, THE TRANSFERRED ASSETS AND THE TRANSFERRED REAL PROPERTY ARE
AND HAVE BEEN, DURING THE THREE YEARS IMMEDIATELY PRECEDING THE DATE OF THIS
AGREEMENT, IN COMPLIANCE WITH ALL APPLICABLE LAWS IN ALL MATERIAL RESPECTS. 
NEITHER SELLER, NOR ANY OF THE SELLER SUBSIDIARIES, HAVE RECEIVED ANY WRITTEN
NOTICE OR OTHER WRITTEN COMMUNICATION WHICH HAS NOT BEEN FINALLY RESOLVED AS OF
THE DATE OF THIS AGREEMENT FROM ANY GOVERNMENTAL ENTITY THAT ALLEGES THAT THE
BUSINESS IS NOT IN COMPLIANCE WITH ANY APPLICABLE LAWS IN ANY MATERIAL RESPECT. 
THIS SECTION 3.14(A) DOES NOT RELATE TO MATTERS WITH RESPECT TO TAXES, WHICH ARE
SUBJECT TO SECTION 3.10, TO PERMITS, WHICH ARE SUBJECT TO SECTION 3.09, TO
EMPLOYEE MATTERS, WHICH ARE SUBJECT TO SECTION 3.12, OR TO ENVIRONMENTAL
MATTERS, WHICH ARE SUBJECT TO THE OTHER SUBSECTIONS OF THIS SECTION 3.14.

(B) THE TRANSFERRED ASSETS (INCLUDING THE TRANSFERRED REAL PROPERTY) AND THE
OPERATION OF THE BUSINESS ARE, AND HAVE BEEN, DURING THE THREE YEARS IMMEDIATELY
PRECEDING THE DATE OF THIS AGREEMENT, IN MATERIAL COMPLIANCE WITH ALL
ENVIRONMENTAL LAWS, AND SELLER AND EACH SELLER SUBSIDIARY POSSESS, AND THE
TRANSFERRED ASSETS (OTHER THAN THE TRANSFERRED REAL PROPERTY) AND THE OPERATION
OF THE BUSINESS ARE, AND HAVE BEEN, DURING THE THREE YEARS IMMEDIATELY PRECEDING
THE DATE OF THIS AGREEMENT, IN MATERIAL COMPLIANCE WITH, ALL ENVIRONMENTAL
PERMITS REQUIRED TO OPERATE THE TRANSFERRED ASSETS (INCLUDING THE TRANSFERRED
REAL PROPERTY) AND THE BUSINESS, OTHER THAN ANY NONCOMPLIANCE WITH SUCH
ENVIRONMENTAL LAWS OR ENVIRONMENTAL PERMITS WHICH HAS BEEN FINALLY RESOLVED AS
OF THE DATE OF THIS AGREEMENT;

(C) SECTION 3.14(C) OF THE SELLER DISCLOSURE LETTER LISTS, AS OF THE DATE OF
THIS AGREEMENT, ALL MATERIAL ENVIRONMENTAL PERMITS USED OR HELD FOR THE
OPERATION OR CONDUCT OF THE BUSINESS OR THE OWNERSHIP OF THE TRANSFERRED ASSETS
(INCLUDING THE TRANSFERRED REAL PROPERTY), (X) ALL ENVIRONMENTAL PERMITS ARE
VALIDLY HELD BY SELLER OR A SELLER SUBSIDIARY, AND ARE IN FULL FORCE AND EFFECT
AND NEITHER SELLER NOR ANY OF THE SELLER SUBSIDIARIES HAVE RECEIVED WRITTEN
NOTICE OF ANY PROCEEDING RELATING TO THE ENVIRONMENTAL PERMITS, (Y) TO THE
KNOWLEDGE OF SELLER, THERE ARE NO FACTS, CIRCUMSTANCES OR CONDITIONS THAT WOULD
REASONABLY BE EXPECTED TO RESULT IN THE SUSPENSION, MODIFICATION, REVOCATION OR
NON-RENEWAL OF ANY ENVIRONMENTAL PERMIT, AND (Z) SELLER AND SELLER SUBSIDIARIES
HAVE TIMELY APPLIED FOR THE RENEWAL OF SUCH ENVIRONMENTAL PERMITS SO THAT SUCH
ENVIRONMENTAL PERMITS REMAIN IN FULL FORCE AND EFFECT DURING THE PENDENCY OF THE
RENEWAL APPLICATION.

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TO SELLER’S KNOWLEDGE, NONE OF SUCH ENVIRONMENTAL PERMITS WOULD REASONABLY BE
EXPECTED TO BE SUBJECT TO SUSPENSION, MATERIAL MODIFICATION, REVOCATION OR
NONRENEWAL OR TO NOT BE TRANSFERRED TO PURCHASER AS A RESULT OF THE EXECUTION
AND DELIVERY OF THIS AGREEMENT OR THE CONSUMMATION OF THE ACQUISITION;

(D) THERE IS NO PENDING, OR TO SELLER’S KNOWLEDGE, THREATENED, PROCEEDING TO
WHICH SELLER OR ANY SELLER SUBSIDIARY IS A PARTY, OR CLAIM, DEMAND OR NOTICE OF
VIOLATION RECEIVED BY SELLER OR ANY SELLER SUBSIDIARY, OR, TO SELLER’S
KNOWLEDGE, INVESTIGATION OF SELLER OR ANY SUBSIDIARY (INCLUDING ANY INSPECTION
BY ANY GOVERNMENTAL ENTITY DURING THE TWO YEARS IMMEDIATELY PRECEDING THE DATE
OF THIS AGREEMENT), ALLEGING ANY LIABILITY, VIOLATION OF OR OBLIGATION UNDER OR
IN CONNECTION WITH ANY ENVIRONMENTAL LAW  IN RESPECT OF THE TRANSFERRED ASSETS
(INCLUDING THE TRANSFERRED REAL PROPERTY) OR THE OPERATION OF THE BUSINESS, AND
TO THE KNOWLEDGE OF SELLER, THERE ARE NO FACTS, CIRCUMSTANCES, OR CONDITIONS
THAT WOULD REASONABLY BE EXPECTED TO RESULT IN SUCH PROCEEDINGS, CLAIMS,
DEMANDS, INVESTIGATIONS OR NOTICES OF VIOLATION AND SELLER AND SELLER
SUBSIDIARIES HAVE MADE AVAILABLE TO PURCHASER COPIES OF ALL PENDING OR
THREATENED PROCEEDINGS, CLAIMS, DEMANDS OR NOTICES OF VIOLATION ARISING UNDER OR
IN CONNECTION WITH ENVIRONMENTAL LAW IN RESPECT OF THE TRANSFERRED ASSETS;

(E) THERE HAS BEEN NO RELEASE OR THREATENED RELEASE OF ANY HAZARDOUS MATERIALS
FROM THE OPERATIONS, ACTS OR OMISSIONS OF SELLER OR ANY SELLER SUBSIDIARY IN
AMOUNTS EITHER IN AMOUNTS IN EXCESS OF ANY REGULATORY STANDARD APPLICABLE TO
SUCH MATTER, IN AMOUNTS SUCH THAT REPORTING TO ANY GOVERNMENTAL ENTITY IS OR WAS
REQUIRED OR IN AMOUNTS REASONABLY LIKELY TO RESULT IN A BUSINESS MATERIAL
ADVERSE EFFECT, IN, ON, AT, UNDER, TO, ABOUT, THROUGH OR FROM THE SOIL,
SUBSURFACE STRATA, SURFACE WATER, GROUNDWATER OR AMBIENT OR INDOOR AIR OR
OTHERWISE AT ANY OF THE TRANSFERRED ASSETS OR THE TRANSFERRED REAL PROPERTY) AND
THERE IS NOT NOW, NOR, SINCE JANUARY 1, 2004, HAS THERE BEEN IN THE PAST, ON, IN
OR UNDER ANY OF THE TRANSFERRED ASSETS, ANY UNDERGROUND STORAGE TANKS,
ABOVE-GROUND STORAGE TANKS, DIKES OR IMPOUNDMENTS OR ANY LOCATIONS OF ON SITE
DISPOSAL OF HAZARDOUS MATERIALS OR OF ANY OTHER SUBSTANCE THAT WOULD GIVE RISE
TO ANY LIABILITIES OR INVESTIGATIVE, CORRECTIVE OR REMEDIAL OBLIGATIONS PURSUANT
TO ANY ENVIRONMENTAL LAWS; AND

(F) NEITHER SELLER NOR ANY SELLER SUBSIDIARY HAS RECEIVED ANY WRITTEN NOTICE OF
ANY PROCEEDING, CLAIM, DEMAND, INVESTIGATION OR NOTICE OF VIOLATION ALLEGING ANY
LIABILITY UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY ACT (“CERCLA”) OR ANY SIMILAR STATE STATUTES OR ANY REQUEST FOR
INFORMATION OR SIMILAR INQUIRY UNDER CERCLA OR SIMILAR STATE STATUTES, RELATING
TO THE RELEASE OR THREATENED RELEASE OF ANY HAZARDOUS MATERIALS OR THE OFF-SITE
DISPOSAL OR ARRANGEMENT FOR DISPOSAL OF ANY HAZARDOUS MATERIALS WHICH
PROCEEDING, CLAIM, DEMAND, INVESTIGATION OR NOTICE OF VIOLATION HAS NOT BEEN
FINALLY RESOLVED AS OF THE DATE OF THIS AGREEMENT.

(G) SELLER AND THE SELLER SUBSIDIARIES HAVE MADE AVAILABLE TO PURCHASER COPIES
OF ALL MATERIAL AUDITS, STUDIES, REPORTS, ANALYSES AND RESULTS OF INVESTIGATIONS
RELATED TO ENVIRONMENTAL MATTERS, INCLUDING ENVIRONMENTAL PERMITS, AND PHASE I
AND PHASE II ENVIRONMENTAL SITE ASSESSMENTS, THAT ARE IN THE SELLER’S OR ANY
SELLER SUBSIDIARY’S

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POSSESSION OR UNDER ITS OR THEIR CONTROL WITH RESPECT TO THE BUSINESS OR THE
TRANSFERRED ASSETS.

SECTION 3.15.   Labor Relations.

(A) NONE OF THE BUSINESS EMPLOYEES SET FORTH ON SECTION 3.12 OF THE SELLER
DISCLOSURE LETTER IS, OR WITHIN THE LAST THREE YEARS HAS BEEN, A MEMBER OF A
BARGAINING UNIT COVERED BY A COLLECTIVE BARGAINING AGREEMENT OR OTHER LABOR
UNION CONTRACT TO WHICH SELLER OR ANY SELLER SUBSIDIARY IS A PARTY;

(B) THERE ARE NO PENDING NEGOTIATIONS BETWEEN SELLER OR ANY SELLER SUBSIDIARY
AND ANY LABOR UNION OR REPRESENTATIVE THEREOF REGARDING (I) ANY PROPOSED
MATERIAL CHANGES TO ANY EXISTING COLLECTIVE BARGAINING AGREEMENT APPLICABLE TO
THE BUSINESS EMPLOYEES, (II) THE EXTENSION OR RENEWAL OF SUCH AN AGREEMENT OR
(III) THE ENTERING INTO OF ANY COLLECTIVE BARGAINING AGREEMENT OR OTHER LABOR
UNION CONTRACT APPLICABLE TO THE BUSINESS EMPLOYEES;

(C) TO THE KNOWLEDGE OF SELLER, NEITHER SELLER NOR ANY SELLER SUBSIDIARY IS IN
DEFAULT OR HAS BREACHED, IN ANY MATERIAL RESPECT, THE TERMS OF ANY COLLECTIVE
BARGAINING OR OTHER LABOR UNION CONTRACT APPLICABLE TO THE BUSINESS EMPLOYEES;

(D) NEITHER SELLER NOR ANY SELLER SUBSIDIARY IS NOW, NOR HAS BEEN WITHIN THE
LAST THREE YEARS, SUBJECT TO ANY UNION ORGANIZING EFFORT, STRIKE, WORK STOPPAGE
OR LOCK OUT INVOLVING ANY BUSINESS EMPLOYEES;

(E) TO THE KNOWLEDGE OF SELLER, NEITHER SELLER NOR ANY SELLER SUBSIDIARY IS
ENGAGED IN ANY MATERIAL RESPECT IN ANY UNFAIR LABOR PRACTICE WITH RESPECT TO ANY
BUSINESS EMPLOYEES AND THERE IS NOT ANY MATERIAL EMPLOYEE GRIEVANCE WHICH
INVOLVES ANY BUSINESS EMPLOYEES PENDING BEFORE ANY UNION, ORGANIZATION OR
GOVERNMENTAL ENTITY;

(F) TO THE KNOWLEDGE OF SELLER, NEITHER SELLER NOR ANY SELLER SUBSIDIARY IS THE
SUBJECT OF ANY MATERIAL COMPLAINT, CHARGE, INVESTIGATION, AUDIT, SUIT OR OTHER
LEGAL PROCESS PENDING WITH ANY GOVERNMENTAL ENTITY WITH RESPECT TO ANY BUSINESS
EMPLOYEES, OR ANY OF THE TERMS OR CONDITIONS OF THEIR EMPLOYMENT, BY ANY
GOVERNMENTAL ENTITY;

(G) THE EMPLOYMENT CONTRACTS ARE IN COMPLIANCE WITH THE NATIONAL COLLECTIVE
BARGAINING AGREEMENTS APPLICABLE TO SELLER AND ANY SELLER SUBSIDIARY AND
“DIRIGENTI AZIENDE INDUSTRIALI”, AS THE CASE MAY BE, AND THERE ARE NO ADDITIONAL
COMPANY OR PLANT COLLECTIVE BARGAINING AGREEMENTS OR RELATIONSHIPS WITH ANY
LABOR UNIONS; AND

(H) THE BUSINESS EMPLOYEES ARE THE SOLE EMPLOYEES OF SELLER OR ANY SELLER
SUBSIDIARY ENTITLED TO BE TRANSFERRED TO PURCHASER PURSUANT TO ARTICLE 2112 OF
THE ITALIAN CIVIL CODE, AND NO OTHER EMPLOYEES OF SELLER OR ANY SELLER
SUBSIDIARY ARE OR CAN BE CONSIDERED PART OF THE BUSINESS NOR ARE ANY SUCH
EMPLOYEES ENTITLED TO BE TRANSFERRED TO PURCHASER PURSUANT TO APPLICABLE LAW.

SECTION 3.16.   Accounts Receivable.  All accounts receivable (the “Accounts
Receivable”) reflected on the Statement of Assets and Liabilities or the
accounting records of the

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Business as of the Closing arose or will arise from sales actually made by
Seller or the Seller Subsidiaries in the ordinary course of business.  There is
no material contest, claim or right of set-off asserted in writing under any
Contract with any obligor of an Account Receivable relating to the amount or
validity of such Account Receivable which has not been reserved against on the
Statement of Assets and Liabilities or in the accounting records of the Business
as of the Closing.  Subject to such reserves, each of such Accounts Receivable
either has been or will be collectible  in full, in the ordinary course of
business.

SECTION 3.17.   Inventory.  All items included in Inventory consist of a quality
and quantity usable and, with respect to finished goods, saleable in the
ordinary course of business of Seller and the Seller Subsidiaries, except for
obsolete times and items below standard quality, all of which have been taken
into account in reserves set forth on the Statement of Assets and Liabilities
and the accounting records of Seller and the Seller Subsidiaries as of the
Closing.  The Inventory has been valued in accordance with GAAP consistently
applied.  Inventory purchased after the date of the Statement of Assets and
Liabilities were purchased in the ordinary course of business.  The quantities
of each item of Inventory are not excessive, but are reasonable in the present
circumstances of Seller and the Seller Subsidiaries.  Work in process Inventory
has been valued as set forth on the Statement of Assets and Liabilities.

SECTION 3.18.   Customers.  Section 3.18 of the Seller Disclosure Letter sets
forth a true and accurate list of the ten largest customers of the Business in
terms of worldwide revenues as measured within the last twelve months ended
September 30, 2007.  Seller has not received, within the last twelve months,
written notice from any of such customers of a threat to cancel or otherwise
terminate its relationship with Seller or any Seller Subsidiary or to decrease
or limit such customer’s purchase of the products or services of the Business,
which cancellation, termination, decrease or limitation would have a Business
Material Adverse Effect.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows:

SECTION 4.01.   Organization, Standing and Power.  Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its business as presently conducted, other than such franchises,
licenses, permits, authorizations and approvals the lack of which, individually
or in the aggregate, have not had and would not reasonably be expected to have a
material adverse effect (i) on the ability of Purchaser to perform its
obligations under this Agreement and the Ancillary Agreements or (ii) on the
ability of Purchaser to consummate the Acquisition and the other transactions
contemplated by this Agreement and the Ancillary Agreements (a “Purchaser
Material Adverse Effect”).

SECTION 4.02.   Authority; Execution and Delivery; and Enforceability. 
Purchaser has full power and authority to execute this Agreement and the
Ancillary Agreements to which it

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is, or is specified to be, a party and to consummate the Acquisition and the
other transactions contemplated hereby and thereby.  The execution and delivery
by Purchaser of this Agreement and the Ancillary Agreements to which it is, or
is specified to be, a party and the consummation by Purchaser of the Acquisition
and the other transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action.  Purchaser has duly executed and
delivered this Agreement and prior to the Closing will have duly executed and
delivered each Ancillary Agreement to which it is, or is specified to be, a
party, and this Agreement constitutes, and each Ancillary Agreement to which it
is, or is specified to be, a party will after the Closing constitute, its legal,
valid and binding obligation, enforceable against it in accordance with its
terms subject, as to enforcement, to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors’ rights generally
and to general equitable principles.

SECTION 4.03.   No Conflicts; Consents.  The execution and delivery by Purchaser
of this Agreement do not, the execution and delivery by Purchaser of each
Ancillary Agreement to which it is, or is specified to be, a party will not, and
the consummation of the Acquisition and the other transactions contemplated
hereby and thereby and compliance by Purchaser with the terms hereof and thereof
will not conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Purchaser or any of its subsidiaries under, any
provision of (i) the articles of incorporation or by-laws or comparable
organizational documents of Purchaser or any of its subsidiaries, (ii) any
Contract to which Purchaser or any of its subsidiaries is a party or by which
any of their respective properties or assets is bound or (iii) any judgment or
Applicable Law applicable to Purchaser or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Purchaser Material Adverse
Effect.  No Consent of or registration, declaration or filing with any
Governmental Entity is required to be obtained or made by or with respect to
Purchaser or any of its subsidiaries in connection with the execution, delivery
and performance of this Agreement or any Ancillary Agreement or the consummation
of the Acquisition or the other transactions contemplated hereby and thereby,
other than (A) compliance with and filings under Antitrust Laws, (B)  compliance
with and such filings and notifications as may be required under applicable
state property transfer laws or Environmental Laws, and (C) compliance with the
Purchaser’s reporting obligations under the Securities Exchange Act of 1934.

SECTION 4.04.   Proceedings.  There are not any (a) outstanding judgments
against Purchaser or any of its subsidiaries, (b) Proceedings pending or, to the
knowledge of Purchaser, threatened against Purchaser or any of its subsidiaries
or (c) investigations by any Governmental Entity that are pending or threatened
against Purchaser or any of its subsidiaries that, in any such case,
individually or in the aggregate, have had or would reasonably be expected to
have a Purchaser Material Adverse Effect.

SECTION 4.05.   Availability of Funds.  Purchaser has or at Closing will have
cash available or has or will have at Closing existing borrowing facilities
which together are sufficient to enable it to consummate the Acquisition and the
other transactions contemplated by this Agreement.  The financing required to
consummate the Acquisition and the other transactions

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contemplated by this Agreement is referred to in this Section 4.05 collectively
as the “Financing”.  Purchaser does not have any reason to believe that any of
the conditions to the Financing will not be satisfied or that the Financing will
not be available to Purchaser on a timely basis to consummate the Acquisition
and the other transactions contemplated by this Agreement.

SECTION 4.06.   Independent Judgment.  Purchaser has been given access to the
premises, books, records and offices of Seller and the Seller Subsidiaries, and
has had the opportunity to review such other data and other information with
respect to the Business and the Transferred Assets as Purchaser has determined
is sufficient to evaluate the transaction with Seller contemplated by this
Agreement.  In proceeding with the Closing, with respect to Seller, Purchaser
will rely solely upon its due diligence and those representations and warranties
made by Seller in Article III hereof.  Purchaser acknowledges that neither
Seller nor any of its officers, directors, affiliates or agents assume any
responsibility for the accuracy and adequacy of any information heretofore or
hereafter furnished to Purchaser by or on behalf of Seller with respect to the
Business or the Transferred Assets, except as otherwise expressly provided in
this Agreement (including the Seller Disclosure Letter).  Without limiting the
generality of the foregoing, Purchaser understands that any cost estimates,
projections or other predictions contained or referred to in any Exhibit hereto
or the Seller Disclosure Letter or which otherwise have been provided to
Purchaser by or on behalf of Seller are not and shall not be deemed to be
representations or warranties of Seller.  Purchaser acknowledges that (a) there
are uncertainties inherent in attempting to make such estimates, projections and
other predictions, (b) Purchaser is familiar with such uncertainties,
(c) Purchaser is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections and other predictions so
furnished to it, and (d) Purchaser shall have no claim against Seller or any of
its officers, directors, affiliates or agents with respect thereto.  Nothing
contained in this Section 4.06 is intended to limit the representations and
warranties of Seller in Article III hereof or Purchaser’s right to rely upon
such representations and warranties.

SECTION 4.07.   No Finder.  Except as set forth in the Purchaser’s disclosure
letter, Purchaser has not taken any action which would give to any person a
right to a finder’s fee or any type of brokerage commission in relation to, or
in connection with, the transactions contemplated by this Agreement.

ARTICLE V

COVENANTS

SECTION 5.01.   Covenants Relating to Conduct of Business.  Except for matters
(i) expressly agreed to in writing by Purchaser or (ii) otherwise expressly
permitted or required by the terms of this Agreement, from the date of this
Agreement to the Closing, the Seller and the Seller Subsidiaries shall cause the
Business to be conducted in the ordinary course in substantially the same manner
as previously conducted and, to the extent consistent therewith, use their
reasonable best efforts to preserve their relationships with customers,
suppliers, distributors and others with whom they deal in the ordinary course of
business.  In addition (and without limiting the generality of the foregoing),
except as otherwise expressly permitted or required by the terms of this
Agreement, Seller and the Seller Subsidiaries shall not do any of the

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following without the prior written consent of Purchaser (which consent shall
not be unreasonably withheld, conditioned or delayed) in connection with the
Business:

(A) INCUR OR ASSUME ANY LIABILITIES, OBLIGATIONS OR INDEBTEDNESS FOR BORROWED
MONEY OR GUARANTEE ANY SUCH LIABILITIES, OBLIGATIONS OR INDEBTEDNESS, OTHER THAN
IN THE ORDINARY COURSE OF BUSINESS;

(B) PERMIT ANY OF THE TRANSFERRED ASSETS TO BECOME SUBJECTED TO ANY LIEN OF ANY
NATURE WHATSOEVER, OTHER THAN PERMITTED LIENS;

(C) CANCEL ANY MATERIAL INDEBTEDNESS (INDIVIDUALLY OR IN THE AGGREGATE) OR WAIVE
ANY CLAIMS OR RIGHTS OF MATERIAL VALUE;

(D) MAKE ANY MATERIAL CHANGE IN ANY METHOD OF ACCOUNTING OR ACCOUNTING PRACTICE
OR POLICY OTHER THAN THOSE REQUIRED BY GAAP OR BY APPLICABLE LAW (SOLELY TO THE
EXTENT SUCH CHANGE WOULD BE BINDING ON PURCHASER, IT BEING UNDERSTOOD THAT NO
SUCH CHANGE SHALL AFFECT ANY CALCULATION UNDER SECTION 2.01);

(E) ACQUIRE BY MERGING OR CONSOLIDATING WITH, OR BY PURCHASING A SUBSTANTIAL
PORTION OF THE ASSETS OF, OR BY ANY OTHER MANNER, ANY BUSINESS OR ANY
CORPORATION, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ORGANIZATION OR DIVISION
THEREOF OR OTHERWISE ACQUIRE ANY ASSETS (OTHER THAN INVENTORY) THAT ARE MATERIAL
TO THE BUSINESS, TAKEN AS A WHOLE;

(F) MAKE OR INCUR ANY CAPITAL EXPENDITURES (OF A NON-EMERGENCY NATURE)(TO THE
EXTENT SUCH CAPITAL EXPENDITURE WOULD CONSTITUTE AN ASSUMED LIABILITY) THAT
EXCEED $250,000 IN THE AGGREGATE, EXCEPT FOR ANY SUCH CAPITAL EXPENDITURES FOR
WHICH SELLER, THE SELLER SUBSIDIARIES AND THEIR AFFILIATES SHALL BE SOLELY
OBLIGATED;

(G) SELL, LEASE, LICENSE OR OTHERWISE DISPOSE OF ANY MATERIAL TRANSFERRED
ASSETS, EXCEPT FOR THE SALE OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS AND
OBSOLETE OR EXCESS EQUIPMENT SOLD OR DISPOSED OF IN THE ORDINARY COURSE OF
BUSINESS;

(H) ENTER INTO OR AMEND ANY LEASE OF REAL PROPERTY THAT CONSTITUTES A
TRANSFERRED ASSET, EXCEPT ANY RENEWALS OF EXISTING LEASEHOLD INTERESTS THAT
CONSTITUTE LEASED PROPERTY IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH
PAST PRACTICE;

(I) ENTER INTO ANY EMPLOYMENT CONTRACT OR COLLECTIVE BARGAINING AGREEMENT,
WRITTEN OR ORAL, OR MODIFY THE TERM OF ANY EXISTING EMPLOYMENT CONTRACT, OTHER
THAN IN COMPLIANCE WITH COMPULSORY APPLICABLE COMPANY, PLANT OR OTHER COLLECTIVE
BARGAINING AGREEMENTS;

(J) EXCEPT AS SET FORTH BELOW, INCREASE OR COMMIT OR PROMISE TO INCREASE THE
CASH COMPENSATION PAYABLE OR TO BECOME PAYABLE TO ANY BUSINESS EMPLOYEE OR MAKE
ANY DISCRETIONARY BONUS OR MANAGEMENT FEE PAYMENT TO ANY SUCH PERSON, EXCEPT
BONUSES OR SALARY INCREASES TO EMPLOYEES AT THE TIMES AND IN THE AMOUNTS
CONSISTENT WITH ITS PAST PRACTICE;

(K) (I) ADOPT, ESTABLISH, AMEND OR TERMINATE ANY SELLER EMPLOYEE BENEFIT PLAN OR
EMPLOYEE POLICIES AND PROCEDURES OR (II) TAKE ANY DISCRETIONARY ACTION, OR OMIT
TO TAKE ANY CONTRACTUALLY REQUIRED ACTION, IF THAT ACTION OR OMISSION COULD
EITHER (A) DEPLETE THE ASSETS OF ANY

 

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SELLER EMPLOYEE BENEFIT PLAN OR (B) INCREASE THE LIABILITIES OR OBLIGATIONS
UNDER ANY SUCH SELLER EMPLOYEE BENEFIT PLAN;

 

(L) WAIVE ANY OF ITS RIGHTS OR CLAIMS THAT IN THE AGGREGATE ARE MATERIAL TO THE
BUSINESS, PROVIDED THAT IT MAY NEGOTIATE AND ADJUST BILLS IN THE COURSE OF GOOD
FAITH DISPUTES WITH CUSTOMERS AND VENDORS IN A MANNER CONSISTENT WITH PAST
PRACTICE;

(M) AMEND IN ANY MATERIAL RESPECT OR TERMINATE ANY BUSINESS CONTRACT OF SELLER
OR ANY OF ITS PERMITS; OR

(N) AGREE, WHETHER IN WRITING OR OTHERWISE, TO DO ANY OF THE FOREGOING.

SECTION 5.02.   Access to Information.

(A) SELLER SHALL AFFORD, AND SHALL CAUSE THE SELLER SUBSIDIARIES TO AFFORD,
PURCHASER AND ITS ACCOUNTANTS, COUNSEL AND OTHER REPRESENTATIVES REASONABLE
ACCESS FOR THE PURPOSE OF FACILITATING THE CLOSING AND THE CONSUMMATION OF THE
OTHER TRANSACTIONS CONTEMPLATED HEREBY, UPON REASONABLE PRIOR NOTICE DURING
NORMAL BUSINESS HOURS DURING THE PERIOD PRIOR TO THE CLOSING, TO THE PERSONNEL,
PROPERTIES, BOOKS, CONTRACTS, COMMITMENTS AND RECORDS AND THE TRANSFERRED REAL
PROPERTY (EXCLUDING ANY CONFIDENTIAL PERSONNEL RECORDS) RELATING TO THE
BUSINESS; PROVIDED, HOWEVER, THAT SUCH ACCESS DOES NOT UNREASONABLY DISRUPT THE
NORMAL OPERATIONS OF SELLER, THE SELLER SUBSIDIARIES OR THE BUSINESS.  SUCH
ACCESS EXCLUDES ANY RIGHT OR PERMISSION TO DISTURB SURFACE OR SUBSURFACE
CONDITIONS AT THE TRANSFERRED REAL PROPERTY OR TO PERFORM ANY SAMPLING OR
TESTING OF ANY TRANSFERRED ASSETS OR THE SOIL, SUBSURFACE STRATA, SURFACE WATER,
GROUNDWATER, SEDIMENTS OR AMBIENT AIR AT, ON, IN OR UNDER THE TRANSFERRED ASSETS
(INCLUDING THE TRANSFERRED REAL PROPERTY) (INCLUDING, FOR EXAMPLE, THE
PREPARATION OF ANY PHASE II ENVIRONMENTAL ASSESSMENTS). NOTWITHSTANDING THE
FOREGOING, SELLER AND EACH OF THE SELLER SUBSIDIARIES NEED NOT DISCLOSE TO
PURCHASER (I) ANY DOCUMENT OR INFORMATION THAT IS CONFIDENTIAL PURSUANT TO, OR
THE DISCLOSURE OF WHICH WOULD, AS DETERMINED BY SELLER’S COUNSEL, BE REASONABLY
LIKELY TO RESULT IN A VIOLATION OF, APPLICABLE LAW OR PURSUANT TO THE TERMS OF A
CONFIDENTIALITY AGREEMENT WITH A THIRD PARTY OR (II) SUCH PORTIONS OF DOCUMENTS
OR INFORMATION RELATING TO MATTERS THAT ARE HIGHLY SENSITIVE IF THE EXCHANGE OF
SUCH DOCUMENTS (OR PORTIONS THEREOF) OR INFORMATION WOULD, AS DETERMINED BY
SELLER’S COUNSEL, BE REASONABLY LIKELY TO VIOLATE ANY ATTORNEY-CLIENT PRIVILEGE
OF SELLER OR SUCH SELLER SUBSIDIARIES.  IF ANY MATERIAL IS WITHHELD BY SELLER OR
ANY SELLER SUBSIDIARY PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE, SELLER
SHALL INFORM PURCHASER AS TO THE GENERAL NATURE OF WHAT IS BEING WITHHELD. 
SELLER AND EACH SELLER SUBSIDIARY MAY REDACT SUCH PORTIONS OF ITS BOOKS AND
RECORDS THAT DO NOT RELATE TO THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES OR
THE BUSINESS.

(B) UPDATE OF SELLER DISCLOSURE LETTER.

(I) PRIOR TO THE CLOSING DATE, SELLER MAY, AT ITS SOLE OPTION, UPDATE THE SELLER
DISCLOSURE LETTER WITH ADDITIONAL DISCLOSURES THAT HAVE ARISEN SINCE THE DATE OF
THIS AGREEMENT.  IN THE EVENT THAT SELLER CHOOSES TO EXERCISE SUCH OPTION,
SELLER SHALL PROVIDE

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SUCH ADDITIONAL DISCLOSURES TO PURCHASER BY WRITTEN NOTICE IN ACCORDANCE WITH
SECTION 10.05 NO LATER THAN SEVEN CALENDAR DAYS PRIOR TO THE CLOSING DATE.

(II) UPON RECEIPT OF WRITTEN NOTICE, PURCHASER SHALL HAVE UNTIL FIVE BUSINESS
DAYS AFTER RECEIPT OF SUCH NOTICE TO TERMINATE THIS AGREEMENT PURSUANT TO
SECTION 8.01(A)(VI) BY DELIVERING WRITTEN NOTICE THEREOF TO SELLER IN ACCORDANCE
WITH SECTION 10.05.  IN THE EVENT THAT PURCHASER DOES NOT EXERCISE SUCH
TERMINATION RIGHT, THE ADDITIONAL DISCLOSURES DELIVERED BY SELLER SHALL BE
DEEMED TO BE PART OF THE SELLER DISCLOSURE LETTER AS DELIVERED TO PURCHASER ON
THE DATE OF THIS AGREEMENT FOR ALL PURPOSES OF THIS AGREEMENT, INCLUDING THIS
ARTICLE V.

(III) IN FURTHERANCE OF THE FOREGOING, EACH PARTY ACKNOWLEDGES THAT, EXCEPT AS
SET FORTH IN THIS SECTION 5.02, THE EXERCISE, OR FAILURE TO EXERCISE, BY EITHER
PARTY OF ANY RIGHT, POWER OR PRIVILEGE PURSUANT TO THIS SECTION 5.02 SHALL NOT
OPERATE AS A WAIVER OF ANY OTHER RIGHT, POWER OR PRIVILEGE OF SUCH PARTY UNDER
THIS AGREEMENT.

SECTION 5.03.   Confidentiality.

(A) PURCHASER ACKNOWLEDGES THAT THE INFORMATION BEING PROVIDED TO IT IN
CONNECTION WITH THE ACQUISITION AND THE CONSUMMATION OF THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY IS SUBJECT TO THE TERMS OF A CONFIDENTIALITY AGREEMENT
BETWEEN PURCHASER AND SELLER DATED AS OF APRIL 20, 2007 (THE “CONFIDENTIALITY
AGREEMENT”), THE TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE.  EFFECTIVE
UPON, AND ONLY UPON, THE CLOSING, THE CONFIDENTIALITY AGREEMENT SHALL TERMINATE
WITH RESPECT TO INFORMATION RELATING SOLELY TO THE BUSINESS AND THE TRANSFERRED
ASSETS; PROVIDED, HOWEVER, THAT PURCHASER ACKNOWLEDGES THAT ANY AND ALL OTHER
INFORMATION PROVIDED TO IT BY SELLER OR ANY SELLER SUBSIDIARY CONCERNING SELLER
OR ANY OF ITS AFFILIATES (OTHER THAN WITH RESPECT TO THE BUSINESS OR THE
TRANSFERRED ASSETS) SHALL REMAIN SUBJECT TO THE TERMS AND CONDITIONS OF THE
CONFIDENTIALITY AGREEMENT AFTER THE CLOSING.

(B) AFTER THE CLOSING DATE, SELLER, THE SELLER SUBSIDIARIES AND THEIR AFFILIATES
SHALL KEEP CONFIDENTIAL, AND CAUSE THEIR AFFILIATES AND INSTRUCT THEIR OFFICERS,
DIRECTORS, EMPLOYEES AND ADVISORS TO KEEP CONFIDENTIAL, ALL INFORMATION RELATING
TO THE BUSINESS AND THE TRANSFERRED ASSETS, EXCEPT AS REQUIRED BY LAW OR
ADMINISTRATIVE PROCESS AND EXCEPT FOR INFORMATION THAT IS AVAILABLE TO THE
PUBLIC ON THE CLOSING DATE, OR THEREAFTER BECOMES AVAILABLE TO THE PUBLIC OTHER
THAN AS A RESULT OF A BREACH OF THIS SECTION 5.03(B).

SECTION 5.04.   Reasonable Best Efforts.

(A) ON THE TERMS AND SUBJECT TO THE CONDITIONS OF THIS AGREEMENT, EACH OF SELLER
AND PURCHASER SHALL USE ITS REASONABLE BEST EFFORTS TO CAUSE THE CLOSING TO
OCCUR, INCLUDING TAKING ALL ACTIONS NECESSARY TO COMPLY PROMPTLY WITH ALL LEGAL
REQUIREMENTS THAT MAY BE IMPOSED ON IT OR ANY OF ITS AFFILIATES WITH RESPECT TO
THE CLOSING.  WITHOUT LIMITING THE REQUIREMENTS FOR CLOSING SET FORTH IN
SECTION 1.07 OR THE PROVISIONS SET FORTH IN ARTICLE VII, EACH PARTY SHALL USE
ITS REASONABLE BEST EFFORTS TO CAUSE THE CLOSING TO OCCUR ON OR PRIOR TO THE
TERMINATION DATE.  SELLER AND PURCHASER SHALL NOT, AND SHALL NOT PERMIT ANY OF

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THEIR RESPECTIVE AFFILIATES TO, TAKE ANY ACTIONS THAT WOULD, OR THAT COULD
REASONABLY BE EXPECTED TO, RESULT IN ANY OF THE CONDITIONS SET FORTH IN
ARTICLE VII NOT BEING SATISFIED.

(B) EACH PARTY SHALL USE ITS REASONABLE BEST EFFORTS TO HAVE ANY RESTRAINT OR
PROHIBITION OF THE TYPE DESCRIBED IN SECTION 7.01(B) TERMINATED AS PROMPTLY AS
PRACTICABLE.

(C) WITHOUT LIMITING SECTION 5.04(A), PURCHASER AND SELLER SHALL USE THEIR
REASONABLE BEST EFFORTS TO OBTAIN, OR TO CAUSE TO BE OBTAINED, ANY PERMIT OR
ENVIRONMENTAL PERMIT FOR PURCHASER NEEDED TO REPLACE ANY PERMIT USED BY A SELLER
IN CONNECTION WITH THE BUSINESS THAT IS NOT A TRANSFERRED PERMIT PURSUANT TO
SECTION 1.02(A)(VII); PROVIDED, THAT NO PARTY SHALL BE OBLIGATED TO PAY ANY
CONSIDERATION TO ANY THIRD PARTY OR GOVERNMENTAL ENTITY FROM WHOM SUCH PERMITS
OR ENVIRONMENTAL PERMITS ARE REQUESTED UNDER THIS SECTION 5.04(C).

(D) EACH OF SELLER AND PURCHASER SHALL (I) FILE OR CAUSE TO BE FILED AS PROMPTLY
AS PRACTICABLE, BUT IN NO EVENT LATER THAN 20 BUSINESS DAYS FOLLOWING THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, WITH THE UNITED STATES FEDERAL TRADE
COMMISSION (THE “FTC”) AND THE UNITED STATES DEPARTMENT OF JUSTICE (THE “DOJ”)
ALL NOTIFICATION AND REPORT FORMS THAT MAY BE REQUIRED FOR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND ANY SUPPLEMENTAL
INFORMATION REQUESTED IN CONNECTION THEREWITH PURSUANT TO THE HSR ACT, AND
(II) MAKE SUCH OTHER FILINGS AND ANY SIMILAR REQUIRED NOTIFICATION UNDER THE
LAWS OF ANY FOREIGN JURISDICTION AS PROMPTLY AS PRACTICABLE, BUT IN NO EVENT
LATER THAN 20 BUSINESS DAYS FOLLOWING THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, AS ARE NECESSARY UNDER THE ANTITRUST LAWS AND SHALL PROMPTLY PROVIDE
ANY SUPPLEMENTAL INFORMATION REQUESTED BY APPLICABLE GOVERNMENTAL ENTITIES
RELATING THERETO.  NEITHER PARTY SHALL INCLUDE IN ANY SUCH FILING, NOTIFICATION
OR REPORT FORM REFERRED TO IN CLAUSES (I) AND (II) OF THE IMMEDIATELY PRECEDING
SENTENCE A REQUEST FOR EARLY TERMINATION OR ACCELERATION OF ANY APPLICABLE
WAITING PERIODS WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY.  ANY SUCH
FILING, NOTIFICATION AND REPORT FORM AND SUPPLEMENTAL INFORMATION SHALL BE IN
SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENTS OF THE HSR ACT AND OTHER ANTITRUST
LAWS.  SELLER AND PURCHASER EACH SHALL FURNISH TO THE OTHER SUCH NECESSARY
INFORMATION AND REASONABLE ASSISTANCE AS THE OTHER MAY REASONABLY REQUEST IN
CONNECTION WITH ITS PREPARATION OF ANY FILING OR SUBMISSION THAT IS NECESSARY
UNDER THE HSR ACT AND OTHER ANTITRUST LAWS.  SELLER AND PURCHASER EACH SHALL
KEEP EACH OTHER APPRISED OF THE STATUS OF ANY COMMUNICATIONS WITH, AND ANY
INQUIRIES OR REQUESTS FOR ADDITIONAL INFORMATION FROM, THE FTC, THE DOJ AND ANY
OTHER APPLICABLE GOVERNMENTAL ENTITY AND SHALL COMPLY WITH ANY SUCH INQUIRY OR
REQUEST AS PROMPTLY AS PRACTICABLE.  EACH PARTY SHALL USE ITS REASONABLE BEST
EFFORTS TO OBTAIN CLEARANCE REQUIRED UNDER THE HSR ACT AND OTHER ANTITRUST LAWS
FOR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS AS PROMPTLY AS PRACTICABLE.

(E) SELLER AND PURCHASER SHALL USE THEIR REASONABLE BEST EFFORTS TO CAUSE THE
EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING PERIODS UNDER THE HSR ACT
AND ANY OTHER ANTITRUST LAW AS SOON AS PRACTICABLE.  SELLER AND PURCHASER SHALL
NOT EXTEND, DIRECTLY OR INDIRECTLY, ANY SUCH WAITING PERIOD OR ENTER INTO ANY
AGREEMENT WITH A GOVERNMENTAL ENTITY TO DELAY OR NOT TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY AGREEMENTS TO BE
CONSUMMATED ON THE CLOSING DATE, EXCEPT WITH THE

 

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PRIOR WRITTEN CONSENT OF THE OTHER PARTY HERETO. IF ANY ANTITRUST PROCEEDING IS
INSTITUTED (OR THREATENED TO BE INSTITUTED) CHALLENGING ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY AGREEMENTS UNDER ANY ANTITRUST
LAW, SELLER AND PURCHASER SHALL USE THEIR REASONABLE BEST EFFORTS TO RESOLVE
(AND TO AVOID THE INSTITUTION OF) ANY SUCH ANTITRUST PROCEEDING.  IF,
NOTWITHSTANDING SUCH REASONABLE BEST EFFORTS, ANY SUCH ANTITRUST PROCEEDING IS
INSTITUTED, SELLER AND PURCHASER SHALL FURTHER USE THEIR REASONABLE BEST EFFORTS
TO CONTEST SUCH ANTITRUST PROCEEDING UNTIL EACH SUCH ANTITRUST PROCEEDING IS
RESOLVED PURSUANT TO A SETTLEMENT OR A FINAL NONAPPEALABLE COURT ORDER.

(F) FOR PURPOSES OF THIS SECTION 5.04, REASONABLE BEST EFFORTS OF THE PARTIES
SHALL NOT INCLUDE ANY REQUIREMENT OF THE PARTIES TO OFFER OR GRANT ANY
ACCOMMODATION (FINANCIAL OR OTHERWISE) TO ANY THIRD PARTY OR GOVERNMENTAL ENTITY
(OTHER THAN NOMINAL APPLICATION AND FILING FEES) OR DIVEST ANY OF THE ASSETS OR
BUSINESSES OF ANY PARTY.

(G) PRIOR TO THE CLOSING, EACH PARTY SHALL, AND SHALL CAUSE ITS AFFILIATES TO,
USE ITS REASONABLE BEST EFFORTS (AT ITS OWN EXPENSE) TO OBTAIN, AND TO COOPERATE
IN OBTAINING, ALL CONSENTS FROM THIRD PARTIES NECESSARY OR APPROPRIATE TO PERMIT
THE CONSUMMATION OF THE ACQUISITION; PROVIDED, HOWEVER, THAT THE PARTIES SHALL
NOT BE REQUIRED TO PAY OR COMMIT TO PAY ANY AMOUNT TO (OR INCUR ANY OBLIGATION
IN FAVOR OF) ANY PERSON FROM WHOM ANY SUCH CONSENT MAY BE REQUIRED (OTHER THAN
NOMINAL FILING OR APPLICATION FEES).

SECTION 5.05.   Expenses; Transfer Taxes.

(A) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE
CONSUMMATED, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, INCLUDING SECTIONS
5.07, 8.02(B) AND 10.04 AND ARTICLE IX, EACH OF THE PARTIES HERETO SHALL BE
RESPONSIBLE FOR THE PAYMENT OF ITS OWN COSTS AND EXPENSES INCURRED IN CONNECTION
WITH THE NEGOTIATIONS LEADING UP TO AND THE PERFORMANCE OF ITS OWN OBLIGATIONS
PURSUANT TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, INCLUDING THE FEES OF
ANY ATTORNEYS, ACCOUNTANTS, BROKERS OR ADVISORS EMPLOYED OR RETAINED BY OR ON
BEHALF OF SUCH PARTY.

(B) THE FILING FEES REQUIRED UNDER THE HSR ACT SHALL BE BORNE BY PURCHASER.

(C) ALL TRANSFER TAXES APPLICABLE TO THE CONVEYANCE AND TRANSFER FROM SELLER AND
THE SELLER SUBSIDIARIES TO PURCHASER OF THE TRANSFERRED ASSETS AND ANY OTHER
TRANSFER OR DOCUMENTARY TAXES OR ANY FILING OR RECORDING FEES APPLICABLE TO SUCH
CONVEYANCE AND TRANSFER SHALL BE PAID BY PURCHASER.  EACH PARTY SHALL USE
REASONABLE EFFORTS TO AVAIL ITSELF OF ANY AVAILABLE EXEMPTIONS FROM ANY SUCH
TAXES OR FEES, AND TO COOPERATE WITH THE OTHER PARTIES IN PROVIDING ANY
INFORMATION AND DOCUMENTATION THAT MAY BE NECESSARY TO OBTAIN SUCH EXEMPTIONS.

SECTION 5.06.   Tax Matters.

(A) COOPERATION.  SELLER AND PURCHASER SHALL REASONABLY COOPERATE, AND SHALL
CAUSE THEIR RESPECTIVE AFFILIATES, OFFICERS, EMPLOYEES, AGENTS, AUDITORS AND
REPRESENTATIVES REASONABLY TO COOPERATE, IN PREPARING AND FILING ALL TAX
RETURNS, INCLUDING MAINTAINING AND MAKING AVAILABLE TO EACH OTHER ALL RECORDS
NECESSARY IN CONNECTION WITH TAXES AND IN RESOLVING ALL DISPUTES AND AUDITS WITH
RESPECT TO ALL TAXABLE PERIODS RELATING TO TAXES.

 

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EACH PARTY AND ITS AFFILIATES WILL NEED ACCESS, FROM TIME TO TIME, AFTER THE
CLOSING DATE, TO CERTAIN ACCOUNTING AND TAX RECORDS AND INFORMATION HELD BY THE
OTHER PARTY AND ITS AFFILIATES TO THE EXTENT SUCH RECORDS AND INFORMATION
PERTAIN TO EVENTS OCCURRING PRIOR TO THE CLOSING DATE; THEREFORE, EACH PARTY
SHALL, AND SHALL CAUSE EACH OF ITS AFFILIATES TO, (I) USE ITS REASONABLE BEST
EFFORTS TO PROPERLY RETAIN AND MAINTAIN SUCH RECORDS UNTIL SUCH TIME AS THE
OTHER PARTIES AGREE THAT SUCH RETENTION AND MAINTENANCE IS NO LONGER NECESSARY
AND (II) TO ALLOW THE OTHER PARTIES AND THEIR AGENTS AND REPRESENTATIVES (AND
AGENTS OR REPRESENTATIVES OF ANY OF THEIR AFFILIATES), AT TIMES AND DATES
MUTUALLY ACCEPTABLE TO THE PARTIES, TO INSPECT, REVIEW AND MAKE COPIES OF SUCH
RECORDS AS THE PARTIES MAY DEEM NECESSARY OR APPROPRIATE FROM TIME TO TIME, SUCH
ACTIVITIES TO BE CONDUCTED DURING NORMAL BUSINESS HOURS AND AT THE REQUESTING
PARTY’S EXPENSE.

(B) STRADDLE PERIOD. ANY SALES, VALUE-ADDED, GOODS AND SERVICES, STAMP DUTIES,
PROPERTY, AD VALOREM AND SIMILAR TAXES (OTHER THAN TAXES DESCRIBED IN
SECTION 5.05(C)) IMPOSED WITH RESPECT TO A STRADDLE PERIOD SHALL BE ALLOCATED
BETWEEN THE PORTIONS OF THE STRADDLE PERIOD IN THE FOLLOWING MANNER:  (I) IN THE
CASE OF A PROPERTY TAX FOR A STRADDLE PERIOD, THE AMOUNT OF SUCH TAX ALLOCABLE
TO A PORTION OF THE STRADDLE PERIOD SHALL BE THE TOTAL AMOUNT OF SUCH TAX FOR
THE PERIOD IN QUESTION MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS THE
TOTAL NUMBER OF DAYS IN SUCH PORTION OF SUCH STRADDLE PERIOD AND THE DENOMINATOR
OF WHICH IS THE TOTAL NUMBER OF DAYS IN SUCH STRADDLE PERIOD, AND (II) IN THE
CASE OF SALES, VALUE-ADDED AND SIMILAR TRANSACTION-BASED TAXES (OTHER THAN TAXES
DESCRIBED IN SECTION 5.05(C) AND 5.06(B)(I)) FOR A STRADDLE PERIOD, SUCH TAXES
SHALL BE ALLOCATED TO THE PORTION OF THE STRADDLE PERIOD IN WHICH THE RELEVANT
TRANSACTION OCCURRED.

(c) Allocations.  Within 90 days after the Closing Date, or, if later, within 90
days after any post-Closing Adjusted Purchase Price becomes final and binding as
provided in Article II hereof, Purchaser shall propose to Seller in writing an
allocation of the applicable portions of the Purchase Price to Transferred
Assets in accordance with the methodology set forth in Code Section 1060 and the
regulations thereunder.  Such allocation shall be subject to approval by Seller,
which approval shall not be unreasonably withheld, conditioned or delayed.  If
the parties cannot agree upon such allocation, they shall submit the dispute for
final decision by an independent tax or accounting firm mutually selected by
Purchaser and Seller, the expense of which shall be borne equally by each, and
each party shall be bound by the decision of such independent tax or accounting
firm.  Purchaser and the Seller shall apply the allocations determined under
this paragraph for all tax reporting purposes.

 

SECTION 5.07.   Post-Closing Cooperation.

(A) FOLLOWING THE CLOSING, FOR SO LONG AS SUCH INFORMATION IS RETAINED BY A
PARTY (WHICH SHALL BE FOR A PERIOD OF AT LEAST FIVE YEARS), UPON REASONABLE
WRITTEN NOTICE, EACH PARTY SHALL AFFORD OR CAUSE TO BE AFFORDED TO THE OTHER
PARTY AND ITS AGENTS, REPRESENTATIVES AND AUDITORS REASONABLE ACCESS TO THE
PERSONNEL, PROPERTIES, BOOKS, SYSTEMS, CONTRACTS AND RECORDS (INCLUDING
FINANCIAL AND OTHER TAX RECORDS) RELATING TO THE TRANSFERRED ASSETS FOR ANY
REASONABLE BUSINESS PURPOSE, INCLUDING IN RESPECT OF LITIGATION, INSURANCE
MATTERS, PREPARATION OF TAX RETURNS AND FINANCIAL REPORTING OF SUCH PARTY AND
ITS AFFILIATES, INCLUDING BY, AS AND WHEN REASONABLY REQUESTED BY THE OTHER
PARTY,

 

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PROVIDING COPIES OF ANY OF THE FOREGOING BOOKS, SYSTEMS, CONTRACTS AND RECORDS
(INCLUDING FINANCIAL AND OTHER TAX RECORDS) RELATING TO THE TRANSFERRED ASSETS
TO THE OTHER PARTY; PROVIDED, HOWEVER, THAT THE PARTY REQUESTING SUCH ACCESS
AGREES TO REIMBURSE THE OTHER PARTY PROMPTLY FOR ALL REASONABLE OUT-OF-POCKET
COSTS AND EXPENSES INCURRED IN CONNECTION WITH ANY SUCH REQUEST. 
NOTWITHSTANDING THE FOREGOING, A PARTY WILL NOT BE REQUIRED TO DISCLOSE (I) ANY
DOCUMENT OR INFORMATION THAT IS (A) CONFIDENTIAL PURSUANT TO, OR THE DISCLOSURE
OF WHICH WOULD, AS DETERMINED BY SUCH PARTY’S COUNSEL, BE REASONABLY LIKELY TO
RESULT IN A VIOLATION OF, APPLICABLE LAW OR (B) CONFIDENTIAL PURSUANT TO THE
TERMS OF A CONFIDENTIALITY AGREEMENT WITH A THIRD PARTY OR (II) SUCH PORTIONS OF
DOCUMENTS OR INFORMATION RELATING TO PRICING OR OTHER MATTERS THAT ARE HIGHLY
SENSITIVE, IF THE EXCHANGE OF SUCH DOCUMENTS (OR PORTIONS THEREOF) OR
INFORMATION, AS DETERMINED BY SUCH PARTY’S COUNSEL, MIGHT REASONABLY BE EXPECTED
TO RESULT IN ANTITRUST DIFFICULTIES FOR SUCH PARTY (OR ANY OF ITS AFFILIATES) OR
VIOLATE ANY ATTORNEY-CLIENT PRIVILEGE OF SUCH PARTY.  IF ANY MATERIAL IS
WITHHELD BY A PARTY PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE, SUCH PARTY
SHALL INFORM THE OTHER PARTY AS TO THE GENERAL NATURE OF WHAT IS BEING
WITHHELD.  EACH PARTY MAY REDACT SUCH PORTIONS OF SUCH BOOKS AND RECORDS THAT DO
NOT RELATE TO THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS.

(B) AFTER THE CLOSING DATE, EXCEPT IN THE CASE OF AN ACTION BY ONE PARTY AGAINST
ANOTHER PARTY, EACH PARTY HERETO SHALL USE ITS REASONABLE BEST EFFORTS TO MAKE
AVAILABLE TO EACH OTHER PARTY, UPON WRITTEN REQUEST, THE FORMER, CURRENT AND
FUTURE DIRECTORS, OFFICERS, EMPLOYEES, OTHER PERSONNEL AND AGENTS OF MEMBERS OF
SUCH PARTY AS WITNESSES, TO THE EXTENT THAT ANY SUCH PERSON (GIVING
CONSIDERATION TO BUSINESS DEMANDS OF SUCH DIRECTORS, OFFICERS, EMPLOYEES, OTHER
PERSONNEL AND AGENTS) MAY REASONABLY BE REQUIRED IN CONNECTION WITH ANY ACTION
IN WHICH THE REQUESTING PARTY MAY FROM TIME TO TIME BE INVOLVED, REGARDLESS OF
WHETHER SUCH ACTION IS A MATTER WITH RESPECT TO WHICH INDEMNIFICATION MAY BE
SOUGHT HEREUNDER.  THE REQUESTING PARTY SHALL BEAR ALL COSTS AND EXPENSES IN
CONNECTION THEREWITH.

(C) PURCHASER RECOGNIZES THAT CERTAIN RECORDS MAY CONTAIN INFORMATION RELATING
TO SUBSIDIARIES, DIVISIONS OR BUSINESSES OF SELLER AND ITS AFFILIATES OTHER THAN
THE BUSINESS AND THAT SELLER MAY RETAIN COPIES THEREOF.

SECTION 5.08.   Publicity.  No communication, release or announcement to the
public or to employees or others not directly involved in the negotiation or
approval of this Agreement, any Ancillary Agreement or the transactions
contemplated hereby or thereby shall be issued or made by any party without the
prior consent of the other parties (which consent shall not be unreasonably
withheld, conditioned or delayed), except as such communication, release or
announcement may be required by law or the rules or regulations of any U.S. or
foreign securities exchange or similar organization, in which case the party
required to make the communication, release or announcement shall allow the
other parties reasonable time to comment thereon in advance of such issuance;
provided, however, that each of the parties may make internal announcements to
their respective employees that are consistent with the parties’ prior public
disclosures regarding the transactions contemplated hereby after reasonable
prior notice to and consultation with the other parties.

 

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SECTION 5.09.   Non-Solicitation / No-Hire of Certain Employees.  For a period
of twelve (12) months from and after the Closing Date, (the “Non-Solicitation
Period”), Seller shall not, and shall cause the affiliates of Seller not to (i)
recruit, solicit, offer employment, influence, entice, encourage, or in any
other manner persuade or attempt to persuade, any Transferred Employee (as
defined in Section 6.01(a)(ii)) to cease or curtail his or her relationship with
Purchaser or any of its affiliates or (ii) hire or attempt to hire, whether as
an employee, consultant or otherwise, any such Transferred Employee; provided,
however, that (A) if any such Transferred Employee responds to any general
public advertisement placed or general solicitation undertaken by Seller or
affiliate of Seller, such advertisement or general solicitation shall not itself
constitute a breach of this Section 5.09 and (B) this Section 5.09 shall not
apply to any Transferred Employee who is not offered employment or whose
employment is involuntarily terminated by Purchaser or its affiliates.  In
addition, during the Non-Solicitation Period, Seller shall not, and shall cause
the affiliates of Seller not to, re-employ any Business Employee who is not an
Active Employee (as defined in Section 6.01(a)) due to long-term disability,
personal long-term, education or medical leave on the Closing Date, unless (1)
Purchaser has not made an offer of employment, and Purchaser has informed Seller
that Purchaser does not intend to make an offer of employment, to such Business
Employee or (2) such Business Employee has been offered employment by Purchaser
and has not accepted such employment.

SECTION 5.10.   Agreements Not To Compete.

(A) SELLER’S RESTRICTIVE COVENANT.   IN ORDER THAT PURCHASER MAY HAVE AND ENJOY
THE FULL BENEFIT OF THE BUSINESS, SELLER HEREBY AGREES THAT IT WILL NOT, NOR
WILL ANY OF ITS AFFILIATES, DIRECTLY OR INDIRECTLY, ANYWHERE IN ANY MARKET IN
THE WORLD ENGAGE IN THE MANUFACTURE OR SALE OF THE HIGH PURITY PROCESS CHEMICALS
SET FORTH ON ATTACHMENT B FOR A PERIOD OF FIVE YEARS FROM THE CLOSING DATE;
PROVIDED, HOWEVER, THAT, NOTWITHSTANDING THE FOREGOING, SELLER OR ANY OF ITS
AFFILIATES MAY ENGAGE IN SUCH BUSINESS OR ACTIVITIES THROUGH ANY COMPANY (OR
BUSINESS THEREOF) THAT ACQUIRES OR IS ACQUIRED BY SELLER OR ANY OF ITS
AFFILIATES AFTER THE DATE OF THIS AGREEMENT IF SUCH COMPANY WAS ALREADY ENGAGED
IN SUCH BUSINESS AT THE TIME OF SUCH ACQUISITION, AND THE REVENUES OF SUCH
COMPANY ATTRIBUTABLE TO THAT PORTION OF THE COMPANY ENGAGED IN SUCH BUSINESS
DURING THE TWELVE (12) MONTHS PRECEDING THE TRANSACTION WITH SELLER OR ANY OF
ITS AFFILIATES DID NOT EXCEED TWENTY PERCENT (20%) OF THE AGGREGATE REVENUES OF
(X) SUCH COMPANY DURING SUCH PERIOD, IN THE CASE OF A COMPANY THAT ACQUIRES
SELLER OR ANY OF ITS AFFILIATES, OR (Y) ALL OF THE BUSINESSES OR OPERATIONS
ACQUIRED BY SELLER OR ANY OF ITS AFFILIATES FROM SUCH COMPANY DURING SUCH
PERIOD, IN THE CASE OF AN ACQUISITION BY SELLER OR ANY OF ITS AFFILIATES.  THIS
SECTION 5.10(A) SHALL BE DEEMED NOT TO BE BREACHED AS A RESULT OF THE
CONSUMMATION OF ANY ACQUISITION OR BUSINESS COMBINATION INVOLVING SELLER OR ANY
OF ITS AFFILIATES IF, FOLLOWING SUCH TRANSACTION, EITHER (I) SELLER’S PUBLIC
SHAREHOLDERS SHALL NOT HAVE A MAJORITY OF THE AGGREGATE VOTING SECURITIES OF THE
SURVIVING CORPORATION IN SUCH ACQUISITION OR (II) SELLER SHALL DIVEST ITSELF,
WITHIN EIGHTEEN (18) MONTHS AFTER SUCCESSFUL CONSUMMATION OF SUCH TRANSACTION,
OF THE BUSINESS OR ASSETS THAT VIOLATE THIS SECTION 5.10.  SELLER AGREES THAT
THIS RESTRICTIVE COVENANT IS ANCILLARY TO THE OTHERWISE ENFORCEABLE PROMISES
CONTAINED IN THIS AGREEMENT, INCLUDING PURCHASER’S PROMISE TO PROVIDE SELLER
WITH ACCESS TO CONFIDENTIAL BUSINESS INFORMATION PURSUANT TO THIS AGREEMENT AND
SELLER’S RETURN PROMISE NOT TO DISCLOSE SUCH INFORMATION.

 

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(B) NATURE OF THE RESTRICTIVE COVENANTS.  SELLER AGREES THAT THE TIME,
GEOGRAPHICAL AREA, AND SCOPE OF RESTRAINED ACTIVITIES FOR THE RESTRICTIONS
CONTAINED IN THIS SECTION 5.10 ARE REASONABLE AND NECESSARY TO PROTECT THE
PURCHASER AND GOODWILL OF THE PURCHASER.  IF A COURT CONCLUDES THAT ANY TIME
PERIOD, GEOGRAPHICAL AREA, OR SCOPE OF RESTRAINED ACTIVITIES SPECIFIED IN THIS
SECTION 5.10 IS UNENFORCEABLE, THE COURT IS VESTED WITH THE AUTHORITY TO MODIFY
THE TIME PERIOD, GEOGRAPHICAL AREA, AND/OR SCOPE OF RESTRAINED ACTIVITIES, SO
THAT THE RESTRICTIONS MAY BE ENFORCED TO THE FULLEST EXTENT PERMITTED BY LAW. 
IF FOR ANY REASON ANY COURT OF COMPETENT JURISDICTION FINDS ANY PROVISIONS OF
AGREEMENT SECTION 5.10 UNREASONABLE IN DURATION OR GEOGRAPHIC SCOPE OR
OTHERWISE, THE PURCHASER AND SELLER AGREE THAT THE RESTRICTIONS AND PROHIBITIONS
CONTAINED IN SECTION 5.10 OF THIS AGREEMENT SHALL BE EFFECTIVE TO THE FULLEST
EXTENT ALLOWED UNDER APPLICABLE LAW.  ADDITIONALLY, IF SELLER VIOLATES ANY OF
THE RESTRICTIONS CONTAINED IN THIS SECTION 5.10, THE RESTRICTIVE PERIOD SHALL BE
SUSPENDED AND WILL NOT RUN IN FAVOR OF PURCHASER FROM THE TIME OF THE
COMMENCEMENT OF ANY VIOLATION UNTIL THE TIME WHEN SELLER CURES THE VIOLATION TO
THE PURCHASER’S REASONABLE SATISFACTION.

(C) PURCHASER’S REMEDIES.  SELLER ACKNOWLEDGES THAT THE RESTRICTIONS CONTAINED
IN THIS SECTION 5.10, IN VIEW OF THE NATURE OF PURCHASER’S BUSINESS, ARE
REASONABLE AND NECESSARY TO PROTECT PURCHASER’S LEGITIMATE BUSINESS INTERESTS
AND THAT ANY VIOLATION OF THIS SECTION 5.10 WOULD RESULT IN IRREPARABLE INJURY
TO PURCHASER FOR WHICH THERE IS NO ADEQUATE REMEDY AT LAW.  IN THE EVENT OF A
BREACH OR A THREATENED BREACH BY SELLER OF THIS SECTION 5.10, PURCHASER SHALL BE
ENTITLED TO SEEK A TEMPORARY RESTRAINING ORDER AND INJUNCTIVE RELIEF RESTRAINING
SELLER FROM THE COMMISSION OF ANY BREACH.  NOTHING CONTAINED IN THIS AGREEMENT
SHALL BE CONSTRUED AS PROHIBITING PURCHASER FROM PURSUING ANY OTHER REMEDIES
AVAILABLE TO IT FOR ANY BREACH OR THREATENED BREACH, INCLUDING, WITHOUT
LIMITATION, THE RECOVERY OF MONEY DAMAGES, EQUITABLE RELIEF, ATTORNEYS’ FEES,
AND COSTS.  THE EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION BY SELLER AGAINST
PURCHASER, WHETHER PREDICATED ON THIS AGREEMENT OR OTHERWISE, SHALL NOT
CONSTITUTE A DEFENSE TO PURCHASER’S ENFORCEMENT OF THIS SECTION 5.10.

(D) PURCHASER’S RESTRICTIVE COVENANT.  IN ORDER THAT SELLER MAY CONTINUE TO HAVE
AND ENJOY THE FULL BENEFIT OF THE SELLER’S PCMP CLEANS BUSINESS AND SELLER’S ACT
M-100 CHEMICAL AS IDENTIFIED IN EXHIBIT A OF THE MILAN TOLLING AGREEMENT) AND AS
AN INDUCEMENT FOR SELLER TO ENTER INTO THE MILAN TOLLING AGREEMENT, PURCHASER
HEREBY AGREES THAT IT WILL NOT, NOR WILL ANY OF ITS AFFILIATES, DIRECTLY OR
INDIRECTLY, ANYWHERE IN ANY MARKET IN THE WORLD ENGAGE IN THE MANUFACTURE OR
SALE OF CHEMICALS RELATED TO THE PCMP CLEANS BUSINESS AND SELLER’S ACT M-100
CHEMICAL FOR A PERIOD OF FIVE YEARS FROM THE CLOSING DATE; PROVIDED, HOWEVER,
THAT, NOTWITHSTANDING THE FOREGOING, PURCHASER OR ANY OF ITS AFFILIATES MAY
ENGAGE IN SUCH BUSINESS OR ACTIVITIES THROUGH ANY COMPANY (OR BUSINESS THEREOF)
THAT ACQUIRES OR IS ACQUIRED BY PURCHASER OR ANY OF ITS AFFILIATES AFTER THE
DATE OF THIS AGREEMENT IF SUCH COMPANY WAS ALREADY ENGAGED IN SUCH BUSINESS AT
THE TIME OF SUCH ACQUISITION, AND THE REVENUES OF SUCH COMPANY ATTRIBUTABLE TO
THAT PORTION OF THE COMPANY ENGAGED IN SUCH BUSINESS DURING THE TWELVE (12)
MONTHS PRECEDING THE TRANSACTION WITH SELLER OR ANY OF ITS AFFILIATES DID NOT
EXCEED TWENTY PERCENT (20%) OF THE AGGREGATE REVENUES OF (X) SUCH COMPANY DURING
SUCH PERIOD, IN THE CASE OF A COMPANY THAT ACQUIRES SELLER OR ANY OF ITS
AFFILIATES, OR (Y) ALL OF THE BUSINESSES OR OPERATIONS ACQUIRED BY SELLER OR ANY
OF ITS AFFILIATES FROM SUCH COMPANY DURING SUCH PERIOD, IN THE CASE OF AN

 

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ACQUISITION BY SELLER OR ANY OF ITS AFFILIATES.  THIS SECTION 5.10(D) SHALL BE
DEEMED NOT TO BE BREACHED AS A RESULT OF THE CONSUMMATION OF ANY ACQUISITION OR
BUSINESS COMBINATION INVOLVING PURCHASER OR ANY OF ITS AFFILIATES IF, FOLLOWING
SUCH TRANSACTION, EITHER (I) PURCHASER’S PUBLIC SHAREHOLDERS SHALL NOT HAVE A
MAJORITY OF THE AGGREGATE VOTING SECURITIES OF THE SURVIVING CORPORATION IN SUCH
ACQUISITION OR (II) PURCHASER SHALL DIVEST ITSELF, WITHIN EIGHTEEN (18) MONTHS
AFTER SUCCESSFUL CONSUMMATION OF SUCH TRANSACTION, OF THE BUSINESS OR ASSETS
THAT VIOLATE THIS SECTION 5.10.  PURCHASER AGREES THAT THIS RESTRICTIVE COVENANT
IS ANCILLARY TO THE OTHERWISE ENFORCEABLE PROMISES CONTAINED IN THIS AGREEMENT,
INCLUDING PURCHASER’S PROMISE TO PROVIDE SELLER WITH ACCESS TO CONFIDENTIAL
BUSINESS INFORMATION PURSUANT TO THIS AGREEMENT AND SELLER’S RETURN PROMISE NOT
TO DISCLOSE SUCH INFORMATION.

(E) NATURE OF THE RESTRICTIVE COVENANTS.  PURCHASER AGREES THAT THE TIME,
GEOGRAPHICAL AREA, AND SCOPE OF RESTRAINED ACTIVITIES FOR THE RESTRICTIONS
CONTAINED IN THIS SECTION 5.10 ARE REASONABLE AND NECESSARY TO PROTECT THE
SELLER AND GOODWILL OF ITS BUSINESS.  IF A COURT CONCLUDES THAT ANY TIME PERIOD,
GEOGRAPHICAL AREA, OR SCOPE OF RESTRAINED ACTIVITIES SPECIFIED IN THIS SECTION
5.10 IS UNENFORCEABLE, THE COURT IS VESTED WITH THE AUTHORITY TO MODIFY THE TIME
PERIOD, GEOGRAPHICAL AREA, AND/OR SCOPE OF RESTRAINED ACTIVITIES, SO THAT THE
RESTRICTIONS MAY BE ENFORCED TO THE FULLEST EXTENT PERMITTED BY LAW.  IF FOR ANY
REASON ANY COURT OF COMPETENT JURISDICTION FINDS ANY PROVISIONS OF AGREEMENT
SECTION 5.10 UNREASONABLE IN DURATION OR GEOGRAPHIC SCOPE OR OTHERWISE, THE
PURCHASER AND SELLER AGREE THAT THE RESTRICTIONS AND PROHIBITIONS CONTAINED IN
SECTION 5.10 OF THIS AGREEMENT SHALL BE EFFECTIVE TO THE FULLEST EXTENT ALLOWED
UNDER APPLICABLE LAW.  ADDITIONALLY, IF PURCHASER VIOLATES ANY OF THE
RESTRICTIONS CONTAINED IN THIS SECTION 5.10, THE RESTRICTIVE PERIOD SHALL BE
SUSPENDED AND WILL NOT RUN IN FAVOR OF SELLER FROM THE TIME OF THE COMMENCEMENT
OF ANY VIOLATION UNTIL THE TIME WHEN PURCHASER CURES THE VIOLATION TO THE
PURCHASER’S REASONABLE SATISFACTION.

(F) SELLER’S REMEDIES.  PURCHASER ACKNOWLEDGES THAT THE RESTRICTIONS CONTAINED
IN THIS SECTION 5.10, IN VIEW OF THE NATURE OF SELLER’S BUSINESS, ARE REASONABLE
AND NECESSARY TO PROTECT SELLER’S LEGITIMATE BUSINESS INTERESTS AND THAT ANY
VIOLATION OF THIS SECTION 5.10 WOULD RESULT IN IRREPARABLE INJURY TO SELLER FOR
WHICH THERE IS NO ADEQUATE REMEDY AT LAW.  IN THE EVENT OF A BREACH OR A
THREATENED BREACH BY PURCHASER OF THIS SECTION 5.10, SELLER SHALL BE ENTITLED TO
SEEK A TEMPORARY RESTRAINING ORDER AND INJUNCTIVE RELIEF RESTRAINING PURCHASER
FROM THE COMMISSION OF ANY BREACH.  NOTHING CONTAINED IN THIS AGREEMENT SHALL BE
CONSTRUED AS PROHIBITING SELLER FROM PURSUING ANY OTHER REMEDIES AVAILABLE TO IT
FOR ANY BREACH OR THREATENED BREACH, INCLUDING, WITHOUT LIMITATION, THE RECOVERY
OF MONEY DAMAGES, EQUITABLE RELIEF, ATTORNEYS’ FEES, AND COSTS.  THE EXISTENCE
OF ANY CLAIM OR CAUSE OF ACTION BY PURCHASER AGAINST SELLER, WHETHER PREDICATED
ON THIS AGREEMENT OR OTHERWISE, SHALL NOT CONSTITUTE A DEFENSE TO SELLER’S
ENFORCEMENT OF THIS SECTION 5.10.

SECTION 5.11.   No Use of Certain Retained Names.  Purchaser shall, and shall
cause its subsidiaries to, promptly, and in any event (a) within 30 days after
the Closing, make all necessary filings and take all other necessary actions to
discontinue any references to the Retained Names, (b) within 90 days after the
Closing, to revise print advertising, product labeling and all other information
or other materials, including any Internet or other electronic

 

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communications vehicles, to delete all references to the Retained Names and
(c) within 90 days after the Closing, to change signage and stationery and
otherwise discontinue use of the Retained Names; provided, however, that during
such 90 day period, Purchaser may continue to distribute product literature that
uses any Retained Names and distribute products with labeling or packaging that
uses any Retained Names to the extent that such product literature and labeling
or packaging exists on the Closing Date.  In no event shall Purchaser or any of
its subsidiaries use any Retained Names after the Closing in any manner or for
any purpose different from the use of such Retained Names by Seller or the
Seller Subsidiaries prior to the Closing.  With respect to the Transferred
Inventory, Purchaser may continue to sell such Transferred Inventory,
notwithstanding that it or its labeling or packaging bears one or more of the
Retained Names.  None of the foregoing provisions of this Section 5.11 shall be
construed to obligate Purchaser to require any wholesaler, retailer or other
merchant or customers of the Business to conduct themselves in accordance
therewith.

SECTION 5.12.   Insurance Matters.

(A) SELLER SHALL, AND SHALL CAUSE EACH SELLER SUBSIDIARY TO, KEEP ALL THIRD
PARTY INSURANCE POLICIES CURRENTLY MAINTAINED WITH RESPECT TO THE TRANSFERRED
ASSETS (THE “SELLER INSURANCE POLICIES”), OR SUITABLE REPLACEMENTS THEREFOR, IN
FULL FORCE AND EFFECT THROUGH THE CLOSE OF BUSINESS ON THE CLOSING DATE. 
PURCHASER ACKNOWLEDGES THAT ANY AND ALL SELLER INSURANCE POLICIES ARE OWNED AND
MAINTAINED BY THE SELLER AND ITS AFFILIATES (AND NOT THE BUSINESS) AND ARE
EXCLUDED ASSETS.  PURCHASER WILL NOT HAVE ANY RIGHTS UNDER THE SELLER INSURANCE
POLICIES FROM AND AFTER THE CLOSING.

(B) IN THE EVENT THAT PRIOR TO THE CLOSING ANY TRANSFERRED ASSET SUFFERS ANY
DAMAGE, DESTRUCTION OR OTHER CASUALTY LOSS, SELLER SHALL, AND SHALL CAUSE THE
SELLER SUBSIDIARIES TO, SURRENDER TO PURCHASER AFTER THE CLOSING DATE (I) ANY
INSURANCE PROCEEDS RECEIVED BY SELLER OR ANY SELLER SUBSIDIARY UNDER ANY SELLER
INSURANCE POLICY WITH RESPECT TO SUCH DAMAGE, DESTRUCTION OR LOSS, LESS ANY
PROCEEDS APPLIED TO THE PHYSICAL RESTORATION OF SUCH ASSET PRIOR TO THE CLOSING,
AND (II) ALL RIGHTS OF SELLER OR ANY SELLER SUBSIDIARY WITH RESPECT TO ANY
CAUSES OF ACTION, WHETHER OR NOT LITIGATION HAS COMMENCED AS OF THE CLOSING
DATE, IN CONNECTION WITH SUCH DAMAGE, DESTRUCTION OR LOSS.  SELLER SHALL, AND
SHALL CAUSE THE SELLER SUBSIDIARIES TO, MAKE AVAILABLE TO PURCHASER THE BENEFITS
OF ANY SELLER INSURANCE POLICY COVERING THE TRANSFERRED ASSETS WITH RESPECT TO
INSURED EVENTS OR OCCURRENCES PRIOR TO THE CLOSING (WHETHER OR NOT CLAIMS
RELATING TO SUCH EVENTS OR OCCURRENCES ARE MADE PRIOR TO OR AFTER THE CLOSING
DATE); PROVIDED, HOWEVER, THAT THE BENEFITS OF SUCH INSURANCE SHALL BE SUBJECT
TO (AND RECOVERY THEREON SHALL BE REDUCED BY THE AMOUNT OF) ANY APPLICABLE
DEDUCTIBLES AND CO-PAYMENT PROVISIONS OR ANY PAYMENT OR REIMBURSEMENT
OBLIGATIONS OF SELLER OR ANY SELLER SUBSIDIARY IN RESPECT THEREOF.

SECTION 5.13.   Refunds and Remittances.  After the Closing, if Seller or any of
its affiliates receives any refund or other amount which is a Transferred Asset
or is otherwise properly due and owing to Purchaser in accordance with the terms
of this Agreement, Seller promptly shall remit, or shall cause to be remitted,
such amount to Purchaser at the address set forth in Section 10.05.  After the
Closing, if Purchaser or any of its affiliates receives any refund or other
amount which is an Excluded Asset or is otherwise properly due and owing to
Seller or any of its affiliates in accordance with the terms of this Agreement,
Purchaser promptly shall

 

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remit or shall cause to be remitted, such amount to Seller at the address set
forth in Section 10.05.  After the Closing, if Purchaser or any of its
affiliates receives any refund or other amount which is related to Claims
(including workers’ compensation), litigation or other matters for which Seller
is responsible hereunder, and which amount is not a Transferred Asset, or is
otherwise properly due and owing to Seller in accordance with the terms of this
Agreement, Purchaser promptly shall remit, or cause to be remitted, such amount
to Seller at the address set forth in Section 10.05.  After the Closing, if
Seller or any of its affiliates receives any refund or other amount which is
related to Claims (including workers’ compensation), litigation or other matters
for which Purchaser is responsible hereunder, and which amount is not an
Excluded Asset, or is otherwise properly due and owing to Purchaser in
accordance with the terms of this Agreement, Seller promptly shall remit, or
cause to be remitted, such amount to Purchaser at the address set forth in
Section 10.05.  Seller promptly shall remit, or cause to be remitted, to
Purchaser at the address set forth in Section 10.05 that portion of all rebates,
discounts or similar amounts that Seller or any of its affiliates receives on or
after the Closing Date that relate to the operation of the Business or the
purchase of goods and services in respect of the Business, in each case, by
Purchaser on or after the Closing Date.  Purchaser promptly shall remit, or
cause to be remitted, to Seller at the address set forth in Section 10.05 that
portion of all rebates, discounts or similar amounts that Purchaser or any of
its affiliates receives on or after the Closing Date that relate to the
operation of the Business or the purchase of goods and services in respect of
the Business, in each case, by Seller prior to the Closing Date.

SECTION 5.14.   Further Assurances.  From time to time, as and when requested by
any party, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions (subject to Section 5.04), as such
other party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement, including, in the case of Seller,
executing and delivering to Purchaser such assignments, deeds, bills of sale,
consents and other instruments as Purchaser or its counsel may reasonably
request as necessary or desirable for such purpose, provided that the taking of
such action and the execution of such documents shall not otherwise increase any
liability or obligation of Seller or its affiliates under this Agreement or any
Ancillary Agreement.

SECTION 5.15.   Financial Statements.  Within 75 days of the Closing, Purchaser
will be required to file audited financial statements for the Business for the
three fiscal years preceding the Closing, plus interim quarterly unaudited
financial statements. Upon reasonable prior notice during normal business hours
until expiration of the periods within which Purchaser must file such financial
statements, Seller hereby agrees, and agrees to cause the Seller Subsidiaries,
to provide Purchaser, its agents and independent auditors access to such data
regarding the Business and such additional information as is reasonably
requested by the Purchaser, including access to Seller’s independent auditors
and their work papers, on a timely basis as is necessary for Purchaser to
prepare and file with the Securities and Exchange Commission such audited
financial statements and unaudited interim financial statements within the time
periods necessary for Purchaser not to be in violation of its filing
requirements under the Securities Exchange Act of 1934; provided, however, that
such access does not unreasonably disrupt the normal operations of Seller or any
Seller Subsidiary or require Seller or any Seller Subsidiary to offer or grant
any accommodation (financial or otherwise) to any third party or Governmental
Entity.

 

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SECTION 5.16.   Financing.  From the date of execution of this Agreement through
the Closing Date, Seller shall, and shall cause the Seller Subsidiaries to,
reasonably cooperate with the Purchaser in order to assist the Purchaser in
obtaining permanent financing necessary for the Purchaser to pay the Purchase
Price hereunder. Such cooperation shall include providing financial information
and access to the Business to the agents and representatives of potential
providers of such financing to the Purchaser consistent with Seller’s
obligations under Section 5.02 with the agreement by Purchaser that any such
information provided will be subject to the provisions of Section 5.03;
provided, however, that such cooperation does not unreasonably disrupt the
normal operations of Seller or any Seller Subsidiary or require Seller or any
Seller Subsidiary to offer or grant any accommodation (financial or otherwise)
to any third party or Governmental Entity.

SECTION 5.17.   Warranty Costs.  Seller agrees to pay to the Purchaser, within
30 days after receipt of reasonably detailed invoice therefor, the costs
incurred by the Purchaser for direct materials, labor, manufacturing overhead,
travel and freight arising out of the Purchaser’s assumption of obligations
under Section 1.04(a)(iv), which amount shall be charged to Seller in accordance
with Purchaser’s standard accounting practices.

SECTION 5.18.   Title Defects Surveys.  Notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall have the right, at its own expense,
to examine title to the Transferred Property at any time prior to Closing for
the purpose of ascertaining whether Seller is in compliance with Seller’s
representations and warranties set forth herein.  Purchaser may obtain, at its
own expense, surveys with respect to the Transferred Property, certified to
Purchaser, Purchaser’s lender and the title company, if any.

SECTION 5.19.   Transitional Services Agreement.  On the Closing Date, a
Transitional Services Agreement, which provides for the rendering of certain
post-Closing transitional services by Seller to Purchaser in connection to the
Business, shall have been duly executed by Seller and Purchaser in the form
attached hereto as Exhibit D.

SECTION 5.20.   Supply Agreements.  On the Closing Date, a Custom Manufacture of
Product Agreement, which provides for Seller to supply certain products and
services to Purchaser post-Closing from Seller’s Dallas facility, shall have
been executed by Seller and Purchaser substantially in the form attached hereto
as Exhibit H.  In addition, on the Closing Date, a Supply Agreement which
provides for Purchaser Subsidiary to supply certain products and services to
Seller post-Closing, shall have been duly executed by Seller, Purchaser
Subsidiary and Purchaser substantially in the form attached hereto as Exhibit H.

SECTION 5.21.   Site Licenses.  On the Closing Date, a Site License for Seller’s
use of certain real property located in Pueblo, Colorado owned by Purchaser on a
post-Closing basis shall have been duly executed by Seller and Purchaser in the
form attached hereto as Exhibit E.

SECTION 5.22.   Subsidiary Business Transfer Agreement.  Without limiting
Section 5.04(a), Seller and Purchaser shall provide any required notice under
Section 47 of Law No. 428/1990 (the “Union Act”), and shall use their reasonable
best efforts to cause the expiration or termination of the applicable
consultation period under the Union Act.  Within 5 days after the expiration or
termination of the applicable consultation period under the Union

 

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ACT, SELLER AND PURCHASER SHALL USE THEIR BEST EFFORTS TO CAUSE THEIR RESPECTIVE
AFFILIATES TO EXECUTE A SUBSIDIARY BUSINESS TRANSFER AGREEMENT IN A FORM
REASONABLY ACCEPTABLE TO SELLER AND PURCHASER AND REFLECTING THE TERMS SET FORTH
IN EXHIBIT F ATTACHED HERETO.

 

SECTION 5.23.   Technology License Agreement.  On the Closing Date, a Technology
License Agreement, which provides for the licensing of certain technology by
Purchaser from Seller on a post-Closing basis, shall have been duly executed by
Seller and Purchaser in the form attached hereto as Exhibit G.

SECTION 5.24.   Warehousing Agreement.  On the Closing Date, Warehousing
Agreements,  which will provide for the supply of warehousing services by Seller
or Purchaser, as applicable, to the other, shall have been executed by Seller
and Purchaser in a form reasonably acceptable to Seller and Purchaser and
reflecting the terms set forth in Exhibit I attached hereto.

SECTION 5.25.   Resale Agreement.  On the Closing Date, a Resale Agreement,
which provides for Seller to supply certain products to Purchaser post-Closing
from Seller’s Dallas and Easton facilities, shall have been executed by Seller
and Purchaser in a form reasonably acceptable to Seller and Purchaser and
reflecting the terms set forth in Exhibit J attached hereto.

SECTION 5.26.   Special Warranty Deed.  On the Closing Date, a special warranty
deed, which provides for the conveyance of the fee simple real property of
Seller located in Pueblo, Colorado to Purchaser, shall have been duly executed
by Seller in a form reasonably acceptable to Purchaser.

SECTION 5.27.   Delivery of Certificates of Title.  On the Closing Date, Seller
shall have delivered all original certificates of title for any owned
Transferred Equipment as set forth in Section 3.05(c) of the Seller Disclosure
Schedule in proper form for conveyance to Purchaser.

SECTION 5.28.   Sewer Project Covenants.  From and after Closing, Seller shall
reimburse Purchaser for the reasonable and actual out-of-pocket expenses
incurred by Purchaser in connection with those actions necessary to bring the
sewer system (both the sanitary sewer and the storm water management system) at
the Via Ticino facility into compliance with Applicable Law and with
representations made to Governmental Entities, all as referenced and described
in Section 5.28 of the Seller Disclosure Letter (collectively, such actions are
referred to hereinafter as the “Sewer Project”).  Any amounts due under this
Section 5.28 shall be paid by Seller within forty-five (45) days after receipt
of reasonably satisfactory documentary evidence therefore.  Seller will promptly
cooperate with any requests from Purchaser for information relating to the past
history or use of the sewer system in Seller’s possession in order to facilitate
Purchaser’s execution of the Sewer Project.  Purchaser shall afford, and shall
cause the Purchaser Subsidiary to afford, Seller and its accountants, counsel
and other representatives reasonable access for the purpose of confirming the
costs incurred by Purchaser in connection with the Sewer Project and the
execution of the Sewer Project as provided herein, upon reasonable prior notice
during normal business hours, to the personnel, properties, books, Contracts,
commitments and records and the Transferred Real Property relating to the Sewer
Project; provided, however, that such access does not unreasonably disrupt the
normal operations of Purchaser and Purchaser Subsidiary.   Seller and the Seller
Subsidiaries shall not enter into a

 

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contract related to the Sewer Project without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld) and any expenses
incurred in connection with any such contract shall be deemed to be reasonable
expenses for purposes of this Section 5.28.

 

ARTICLE VI

 

Employment Matters

 

SECTION 6.01.   General.

 

                (a) Offers of Employment. (i) Except as otherwise provided in
Attachment D, Purchaser shall make offers of employment with Purchaser (or its
subsidiary formed for the purpose of executing and performing the Subsidiary
Business Transfer Agreement (“Purchaser Subsidiary”)(which shall include
Purchaser’s compliance with Purchaser’s covenants set forth in this Article VI)
to the Business Employees who are actively at work on the Closing Date (each, an
“Active Employee”), in accordance with the provisions of this Article VI, to be
effective as of the Closing.  For purposes of this Agreement, any Business
Employee who is not actively at work on the Closing Date due to vacation,
holiday or sick days, in compliance with the applicable policies of Seller or
any affiliate of Seller, shall be deemed an Active Employee.  With respect to
each Business Employee who is not an Active Employee due to short-term
disability, emergency family, personal short-term, jury duty, adoption, reserve
military or full-time military leave or an approved leave of absence under the
Family and Medical Leave Act of 1993, as amended (“FMLA”), Purchaser shall make
an offer of employment with Purchaser or Purchaser Subsidiary (which shall
include Purchaser’s compliance with Purchaser’s covenants set forth in this
Article VI) to such Business Employee effective as of the date on which such
Business Employee presents himself or herself to Purchaser for active employment
following the Closing Date, provided that such date is no later than (A) if such
Business Employee is not an Active Employee due to short-term disability, the
last day on which Seller or affiliate of Seller would have been required to
re-employ such Business Employee in accordance with the applicable short-term
disability plan of Seller or such affiliate, as applicable, if the transactions
contemplated by this Agreement had not occurred; (B) if such Business Employee
is not an Active Employee due to approved leave of absence under FMLA, the last
day on which Seller or any affiliate of Seller would have been required to
re-employ such Business Employee in accordance with the provisions of FMLA, if
the transactions contemplated by this Agreement had not occurred; (C) if such
Business Employee is not an Active employee due to reserve military or full-time
military leave, the last day on which Seller or affiliate of Seller would have
been required to re-employ such Business Employee in accordance with the
provisions of the Uniformed Services Employment and Reemployment Rights Act of
1994 and the Department of Labor regulations promulgated thereunder, if the
transactions contemplated by this Agreement had not occurred; (D) if such
Business Employee is not an Active Employee due to jury duty leave, the day
following the end of such Business Employee’s jury service; or (E) if such
Business Employee is not an Active Employee due to emergency family, personal
short-term or adoption leave, the day that is six months after the Closing
Date.  The offers of employment pursuant to this Section 6.01(a)(i) shall be at
a base salary or hourly rate of payment that is no less than that in

 

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effect on the Closing Date, and on terms and conditions no less favorable in the
aggregate than those applicable to the Business Employees immediately prior to
the Closing. Seller and Purchaser intend that for purposes of any severance or
termination benefit plan, program, policy, agreement or arrangement of Seller or
any Seller Subsidiary, the transactions contemplated by this Agreement shall not
constitute a severance of employment of any Business Employee prior to or upon
the consummation of the transactions contemplated hereby, and that Business
Employees will have continuous and uninterrupted employment immediately before
and immediately after the Closing.  Nothing herein shall be construed as a
representation or guarantee by Seller that any particular Business Employee will
accept the offer of employment from Purchaser or will continue in employment
with Purchaser following the Closing.

 

                (ii) Each Business Employee who continues in or accepts
employment with Purchaser (or Purchaser Subsidiary) as of the Closing Date (or,
in the case of a Business Employee who is not an Active Employee, as of such
later date that such Business Employee commences employment with Purchaser or
its affiliates) is referred to herein as a “Transferred Employee”.  If any
Transferred Employee requires a work permit or employment pass or other approval
for his or her employment to continue with Purchaser following the Closing,
Purchaser shall use its reasonable best efforts to ensure that any necessary
applications are promptly made and to secure the necessary permit, pass or other
approval.

 

                (iii) If the employment of a Transferred Employee is
involuntarily terminated without cause within twelve months following the
Closing Date (as determined by Purchaser within its sole discretion), Purchaser
shall pay such Transferred Employee an amount equal to the product of (A) two
times such Transferred Employee’s weekly base salary at the time of such
termination of employment and (B) the number of years of such Transferred
Employee’s service with Seller and any affiliate of Seller.  In addition,
Purchaser shall indemnify, defend and hold harmless Seller and any affiliate
thereof against all obligations, liabilities and commitments in respect of
claims made by any Business Employee for severance or other termination benefits
(including claims for wrongful dismissal, notice of termination of employment or
pay in lieu of notice) arising out of, relating to or in connection with
Purchaser’s failure to offer employment to, or continue the employment of, any
Business Employee, or failure to offer or continue employment on terms and
conditions which would preclude any claims of constructive dismissal or similar
claims under any Applicable Law or other failure to comply with the terms of
this Agreement, or where any such severance or termination benefits are
automatically required to be paid under Applicable Law.

 

                (iv) Purchaser shall comply with all Applicable Laws relating to
notification of works councils, unions and relevant governmental bodies, and
negotiations with works councils and/or unions in respect of transactions
contemplated by this Agreement and shall bear all expenses of any compensation
resulting from negotiations with works councils or unions.

 

                (b) Assumption of Liabilities. Except with respect to any
liabilities that transfer to Purchaser pursuant to Applicable Law or as
otherwise specifically provided in this Article VI, effective as of the Closing,
Seller and the Seller Subsidiaries shall retain sole liability and
responsibility for all employment and employee benefits-related liabilities,
obligations, claims and losses incurred, or arising out of a period ending, on
or

 

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prior to the Closing that relate to the Business Employees (or any dependent or
beneficiary of any Business Employee).  Except as specifically provided in this
Agreement, effective as of the date following the Closing Date, (i) Purchaser
shall assume and be solely responsible for all employment and employee
benefits-related liabilities, obligations, claims and losses that are incurred
and payable on or after the Closing, which liabilities, obligations, claims and
losses are incurred or arise out of a period ending on or after the Closing
Date, and that relate to any Transferred Employee (or any dependent or
beneficiary of any Transferred Employee), (ii) Seller and the Seller
Subsidiaries shall have no liability with respect to any Transferred Employee
(or any dependent or beneficiary of any Transferred Employee) that relates to
such Transferred Employee’s employment with Purchaser or any of its affiliates,
(iii) except with respect to any liabilities that transfer to Purchaser pursuant
to Applicable Law or as otherwise specifically provided in this Article VI,
neither Purchaser nor any of its affiliates shall have any liability or
responsibility for any employment and employee benefits-related liabilities,
obligations, claims and losses incurred, or arising out of a period ending,
prior to the Closing that relate to the Business Employees (or any dependent or
beneficiary of any Business Employee).  For the avoidance of doubt, provided
that Purchaser complies with all its obligations under this Agreement and except
as required by Applicable Law, Purchaser and its affiliates shall have no
liability or obligation whatsoever for Business Employees who do not become
Transferred Employees or for any former employees of the Business (or their
beneficiaries or dependents).

 

                (c) Purchaser Benefit Plans. Effective as of the date following
the Closing Date, each Transferred Employee shall cease to participate in all
Employee Benefit Plans.  Effective not later than the Closing Date, Purchaser
shall establish or have in effect compensation and benefit plans, programs and
arrangements for the benefit of the Transferred Employees (collectively,
“Purchaser Benefit Plans”) in accordance with this Article VI. Purchaser will
provide each Transferred Employee who remains employed by Purchaser or its
affiliates with compensation and benefits substantially comparable in the
aggregate with similarly situated employees of Purchaser and its affiliates.

 

                (d) Incentive Bonuses for Year of Acquisition. Seller, the
Seller Subsidiaries and the other affiliates of Seller shall retain liabilities,
obligations and commitments with respect to the Transferred Employees under any
applicable annual incentive plans or arrangements of Seller, the Seller
Subsidiaries and the other affiliates of Seller that relate to periods
commencing prior to and ending on the Closing Date.

 

                (e) Prior Service Credit. After the Closing Date, Purchaser
shall give or cause to be given each Transferred Employee full credit for
purposes of eligibility to participate, vesting and benefit accrual, under the
Purchaser Benefit Plans, including vacation and severance plans and policies,
for such Transferred Employee’s service with Seller, the Seller Subsidiaries and
their ERISA Affiliates, to the same extent recognized by Seller, the Seller
Subsidiaries and their ERISA Affiliates as of the Closing Date.

 

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                (f) Certain Welfare Benefits Matters.

 

                (i) With respect to each Purchaser Benefit Plan that is an
“employee welfare benefit plan” within the meaning of Section 3(1) of ERISA (a
“Purchaser Welfare Plan”), Purchaser shall waive all limitations as to
preexisting conditions, exclusions, waiting periods, actively-at-work
requirements with respect to participation and coverage requirements applicable
to the Transferred Employees and their dependents and beneficiaries under the
Purchaser Welfare Plans to the extent waived under the applicable corresponding
Seller Benefit Plan immediately prior to the Closing, and provide each
Transferred Employee and his or her eligible dependents and beneficiaries with
credit under the Purchaser Welfare Plans for any co-payments and deductibles
paid under corresponding Seller Benefit Plans prior to the Closing in the
calendar year in which the Closing occurs for purposes of satisfying any
applicable deductible or out-of-pocket requirements (and any annual or lifetime
maximums) under any Purchaser Welfare Plans in which such Transferred Employee
or his or her eligible dependents participates following the Closing.

 

                (ii) Seller, the Seller Subsidiaries and the other affiliates of
Seller shall be responsible in accordance with their respective Seller Benefit
Plans that are “employee welfare benefit plans” within the meaning of Section
3(1) of ERISA (each, a “Seller Welfare Plan”) in effect prior to the Closing for
all reimbursement Claims (such as medical and dental Claims) for expenses
incurred, and for all non-reimbursement Claims (such as life insurance Claims)
incurred, while covered under such plans by Transferred Employees and their
dependents.  Purchaser shall be responsible in accordance with the applicable
Purchaser Welfare Plans for all reimbursement Claims (such as medical and dental
Claims) for expenses incurred, and for all non-reimbursement Claims (such as
life insurance Claims) incurred, by Transferred Employees and their dependents
while covered under the Purchaser Welfare Plans.  For purposes of this Section
6.01(f)(ii), a Claim shall be deemed to be incurred as follows:  (A) life,
accidental death and dismemberment, and business travel accident insurance
benefits, upon the death or accident giving rise to such benefits and (B)
health, dental or prescription drug benefits (including in respect of any
hospital confinement), upon provision of such services, materials or supplies.

 

                (g) Pension Plans. Effective after the Closing Date, each
Transferred Employee who is a participant, as of the Closing Date, in a Seller
Benefit Plan that is a defined benefit pension plan or a defined contribution
pension plan (including any supplemental or excess benefit plan) (as applicable,
the “Seller Pension Plans”) shall cease participation in the Seller Pension
Plans, and service with any employer following the Closing shall not be taken
into account for any purpose under the Seller Pension Plans.

 

                (h) Accrued Vacation. Purchaser shall allow each Transferred
Employee who has vacation days that are accrued or earned for the calendar year
in which the Closing occurs but that are not used as of the Closing Date to
take, prior to the end of such calendar year, a number of paid vacation days
equal to the number of such accrued or

 

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earned and unused vacation days.  As soon as practicable after the Closing,
Seller shall provide Purchaser with an updated schedule of each Business
Employee’s accrued but unused vacation and paid time off as of the Closing Date
as reflected in Seller’s records.

 

                (i) Administration. Following the date of this Agreement, Seller
and Purchaser shall reasonably cooperate in all matters reasonably necessary to
effect the transactions contemplated by this Article VI, including exchanging
information and data relating to workers’ compensation, employee benefits and
employee benefit plan coverages (except to the extent prohibited by Applicable
Law), and in obtaining any governmental approvals required hereunder.

 

SECTION 6.02.   Special U.S. Provisions.

 

                (a) Notwithstanding the provisions of Section 6.01, references
to “Business Employees” and “Transferred Employees” in this Section 6.02 shall
refer only to Business Employees and Transferred Employees, as the case may be,
who immediately prior to the Closing, are primarily based in the United States.

 

                (b) 401(k) Plan. As soon as practicable after and effective as
of the day following the Closing Date, Purchaser or one of its affiliates shall
adopt or designate a defined contribution plan (the “Purchaser Qualified Defined
Contribution Plan”) that covers the Transferred Employees and meets the
requirements of Section 401(a) of the Code.  As soon as practicable after the
Closing Date, Purchaser shall permit each Transferred Employee participating in
the Seller Retirement Savings Plan (the “Seller Qualified Defined Contribution
Plan”) to effect, and Purchaser agrees to cause the Purchaser Qualified Defined
Contribution Plan to accept, in accordance with Applicable Law, a “direct
rollover” to the Purchaser Qualified Defined Contribution Plan of each
Transferred Employee’s account balance (including earnings thereon through the
date of transfer, and promissory notes evidencing all outstanding loans) under
the Seller Qualified Defined Contribution Plans if such rollover is elected in
accordance with Applicable Law by such Transferred Employee, subject to each of
Seller and Purchaser’s reasonable satisfaction that the Seller Qualified Defined
Contribution Plan or the Purchaser Qualified Defined Contribution Plan, as
applicable, is in compliance with all Applicable Laws and that such plan
continues to satisfy the requirements for a qualified plan under Section 401(a)
of the Code and that the trust that forms a part of such plan is exempt from tax
under Section 501(a) of the Code.  Upon completion of a direct rollover of a
Transferred Employee’s account balances, as described in this Section 6.02(b),
Purchaser and the Purchaser Qualified Defined Contribution Plans shall be fully
responsible for the account balances rolled over in such manner, provided that
Seller shall indemnify and hold Purchaser, its affiliates and the Purchaser
Qualified Defined Contribution Plan harmless from and against any liability that
may result from any claim for any benefit alleged to be payable under the Seller
Qualified Defined Contribution Plan arising out of the failure by Seller or any
other affiliate of Seller to administer the Seller Qualified Defined
Contribution Plan in compliance with Applicable Law.

 

                (c) U.S. Welfare Benefits Matters. (i) Effective as of the
Closing Date, Seller, the Seller Subsidiaries and the other affiliates of Seller
shall be responsible for

 

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providing continuation coverage within the meaning of COBRA to Transferred
Employees and their eligible dependents to the extent required by COBRA with
respect to a “qualifying event” (as defined in COBRA) occurring on or prior to
the Closing Date, and Purchaser shall be responsible for providing  continuation
coverage within the meaning of COBRA to Transferred Employees and their eligible
dependents to the extent required by COBRA with respect to a qualifying event
occurring after the Closing Date.

 

                (ii) Seller shall be responsible for all Claims for workers’
compensation benefits which are incurred prior to the Closing by Transferred
Employees that are payable under the terms and conditions of Seller’s workers’
compensation programs.  Purchaser shall be responsible for all Claims for
workers’ compensation benefits which are incurred after the Closing by
Transferred Employees.  For purposes of this Section 6.02(c)(ii), a claim for
workers’ compensation benefits shall be deemed to be incurred when the event
giving rise to the claim occurs (the “Workers’ Compensation Event”).  If the
Workers’ Compensation Event occurs over a period both preceding and following
the Closing, the claim shall be the joint responsibility and liability of Seller
and Purchaser and shall be equitably apportioned between Seller and Purchaser
based upon the relative periods of time that the Workers’ Compensation Event
transpired preceding and following the Closing.

 

                (d) U.S. Flexible Spending Accounts. Purchaser shall have in
effect as of the Closing flexible spending reimbursement accounts under a
cafeteria plan qualifying under Section 125 of the Code (the “Purchaser
Cafeteria Plan”) that provide benefits to Transferred Employees who had flexible
spending reimbursement accounts immediately prior to the Closing in a Seller
Benefit Plan that is intended to qualify under Section 125 of the Code (the
“Seller Cafeteria Plan”) and Purchaser agrees to cause the Purchaser Cafeteria
Plan to accept a spin-off of the flexible spending reimbursement accounts from
the Seller Cafeteria Plan and to honor and continue through the end of the
calendar year in which the Closing Date occurs the elections made by each
Transferred Employee under the Seller Cafeteria Plan in respect of the flexible
spending reimbursement accounts that are in effect immediately prior to the
Closing.  As soon as practicable following the Closing Date, Seller shall cause
to be transferred from the Seller Cafeteria Plan to the Purchaser Cafeteria Plan
the excess, if any, of the aggregate accumulated contributions to the flexible
spending reimbursement accounts made prior to the Closing during the year in
which the Closing Date occurs by Transferred Employees over the aggregate
reimbursement payouts made prior to the Closing for such year from such accounts
to the Transferred Employees.  If the aggregate reimbursement payouts made to
Transferred Employees prior to the Closing from the flexible spending
reimbursement accounts during the year in which the Closing Date occurs exceed
the aggregate accumulated contributions to such accounts made by the Transferred
Employees prior to the Closing for such year, Purchaser shall make a payment
equal to the value of such excess to Air Products as soon as practicable
following the Closing Date.  From and after the Closing, Purchaser shall assume
and be solely responsible for all claims by Transferred Employees under the
Seller Cafeteria Plan, whether incurred prior to, on or after the Closing Date,
that have not been paid in full as of the Closing.

 

                (e) WARN Act. Purchaser agrees to provide any required notice
under the Worker Adjustment and Retraining Notification Act, as amended (the
“WARN Act”),

 

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and any similar Federal, state or local law or regulation, and to otherwise
comply with the WARN Act and any such other similar law or regulation with
respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or
group termination or similar event affecting Business Employees (including as a
result of the consummation of the transactions contemplated by this Agreement)
and occurring after the Closing.  Purchaser shall not take any action after the
Closing that would cause any termination of employment of any employees by
Seller or its affiliates that occurs on or before the Closing Date to constitute
a “plant closing” or “mass layoff” or group termination under the WARN Act or
any similar Federal, state or local law or regulation, or to create any
liability or penalty to Seller or its affiliates for any employment terminations
under Applicable Law.  On the Closing Date, Seller shall notify Purchaser of any
layoffs of any Business Employees in the 90-day period prior to the Closing.

 

                (f) Employment Tax Reporting Responsibility. Purchaser and
Seller hereby agree to follow the alternate procedure for United States
employment tax withholding as provided in Section 5 of Rev. Proc. 2004-53,
I.R.B. 2004-34.  Accordingly, Seller shall have no United States employment tax
reporting responsibilities, and Purchaser shall have full United States
employment tax reporting responsibilities, for Transferred Employees subject to
United States employment taxes following the close of business on the Closing
Date.

 

SECTION 6.03.   Special Non-U.S. Provisions.

 

                (a) Without limiting the generality of Section 6.01, with
respect to any Business Employees who are employed primarily outside the United
States, following the Closing, Purchaser shall, or shall cause its affiliates
to, provide such Business Employees with terms and conditions of employment in
accordance with all Applicable Laws.

 

                (b) From and after the Closing Date, Purchaser shall, or shall
cause its affiliates to, comply in all material respects with the terms of all
collective bargaining agreements that cover one or more Transferred Employees
(each, a “CBA”).  Notwithstanding anything to the contrary in this Section
6.03(b), Purchaser further agrees that the provisions of this Section 6.03(b)
shall be subject to any applicable provisions of the CBA in respect of the
Business Employees, to the extent such provisions are inconsistent with or
otherwise conflict with the provisions of the CBA.

 

ARTICLE VII

 

Conditions Precedent

 

SECTION 7.01.   Conditions to Each Party’s Obligation. The obligation of
Purchaser to purchase and pay for the Transferred Assets, and the obligation of
Seller to sell, transfer, assign and deliver, or cause the Seller Subsidiaries
to sell, transfer, assign and deliver, as applicable, the Transferred Assets to
Purchaser, are subject to the satisfaction (or waiver by Purchaser and Seller)
on or prior to the Closing Date of the following conditions:

 

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                (a) Governmental Approvals. The waiting period under the HSR Act
or any other applicable Antitrust Laws shall have expired or been terminated in
relation to the Acquisition.

 

                (b) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity, or other legal restraint or prohibition shall be in
effect preventing, the purchase or sale of all or substantially all the
Transferred Assets or the assumption of any portion of the Assumed Liabilities.

 

                (c) No Actions. No Action challenging this Agreement or seeking
to prevent the consummation of the transactions contemplated hereby shall have
been instituted by any Governmental Entity and be pending.

 

SECTION 7.02.   Conditions to Obligation of Purchaser.  The obligation of
Purchaser to purchase and pay for the Transferred Assets is subject to the
satisfaction (or waiver by Purchaser) on or prior to the Closing Date of the
following conditions:

 

                (a) Representations and Warranties.  The representations and
warranties of Seller made in this Agreement shall be true and correct in all
material respects as of the Closing Date as though made on the Closing Date
(except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be true
and correct on and as of such earlier date). Purchaser shall have received a
certificate signed by an authorized officer of Seller to such effect.

 

                (b) Performance of Obligations of Seller.  Seller shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by it by
the time of the Closing.  Purchaser shall have received a certificate signed by
an authorized officer of Seller as to the satisfaction of the foregoing
condition.

 

                (c) Execution and Delivery of Ancillary Agreements.  Seller and
Seller Subsidiaries shall have executed and delivered the Ancillary Agreements
to which it is a party.  Seller Subsidiaries shall have executed and delivered
the Ancillary Agreements and the Subsidiary Business Transfer Agreement to which
any such Seller Subsidiary is a party.

 

                (d) Delivery of Consents and Notices. Seller shall have
delivered to the Purchaser, in form and substance reasonably satisfactory to the
Purchaser, the consents set forth on Section 7.02(d) of the Seller Disclosure
Letter.  Seller shall have delivered to the appropriate third parties (with a
copy to Purchaser), the notices set forth in Section 7.02(d) of the Seller
Disclosure Letter.

 

SECTION 7.03.   Conditions to Obligation of Seller.  The obligation of Seller to
sell, transfer, assign and deliver, or to cause the Seller Subsidiaries to sell,
transfer, assign and deliver

 

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the Transferred Assets to Purchaser is subject to the satisfaction (or waiver by
Seller) on or prior to the Closing Date of the following conditions:

 

                (a) Representations and Warranties.  The representations and
warranties of Purchaser made in this Agreement shall be true and correct in all
material respects as of the Closing Date as though made on the Closing Date. 
Seller shall have received a certificate signed by an authorized officer of
Purchaser to such effect.

 

                (b) Performance of Obligations of Purchaser.  Purchaser shall
have performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by
Purchaser by the time of the Closing.  Seller shall have received a certificate
signed by an authorized officer of Purchaser as to the satisfaction of the
foregoing condition.

 

                (c) Execution and Delivery of Ancillary Agreements.  Purchaser
shall have executed and delivered each of the Ancillary Agreements to which it
is a party.

 

SECTION 7.04.   Frustration of Closing Conditions.  Neither Purchaser nor Seller
may rely on the failure of any condition set forth in this Article VII to be
satisfied if such failure was caused by such party’s failure to act in good
faith or to use its reasonable best efforts to cause the Closing to occur, as
required by Section 5.04.

 

ARTICLE VIII

 

Termination; Effect of Termination

 

SECTION 8.01.   Termination.

 

                (a) Notwithstanding anything to the contrary in this Agreement,
this Agreement may be terminated and the Acquisition and the other transactions
contemplated by this Agreement abandoned at any time prior to the Closing:

 

                (i) by mutual written consent of Seller and Purchaser;

 

                (ii) by Seller if Purchaser does not provide to Seller within 40
days of execution of this Agreement evidence that it has cash on hand and
commitments for borrowing facilities that together are sufficient to enable it
to consummate the Acquisition;

 

                (iii) by Seller if (A) any of the conditions set forth in
Section 7.03 shall have become incapable of fulfillment and shall not have been
waived by Seller, (B) 45 days have elapsed since the receipt by Purchaser of a
written notice from Seller of such incapability and (C) Purchaser shall have
failed to fulfill such condition within such 45-day period;

 

                (iv) by Purchaser if (A) any of the conditions set forth in
Section 7.02 shall have become incapable of fulfillment and shall not have been
waived by Purchaser, (B) 45 days have elapsed since the receipt by Seller of a
written notice from Purchaser of

 

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such incapability and (C) Seller shall have failed to fulfill such condition
within such 45-day period;

 

                (v) by Seller or Purchaser if the Closing does not occur on or
prior to January 31, 2008 (each in this Section 8.01, the “Termination Date”);
or

 

                (vi) by Purchaser, if Purchaser shall have delivered to Seller
the notice set forth in Section 5.02(b)(ii), within five calendar days after the
receipt thereof.

 

provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.

 

                (b) In the event of termination by Seller or Purchaser pursuant
to this Section 8.01, written notice thereof shall forthwith be given to the
other parties and the transactions contemplated by this Agreement shall be
terminated, without further action by any party.  If the transactions
contemplated by this Agreement are terminated as provided herein:

 

                (i) Purchaser shall, and shall cause each of its directors,
officers, employees, agents, representatives and advisors to, return to Seller
all documents and other material received from Seller and any of its affiliates
relating to the transactions contemplated by this Agreement, whether so obtained
before or after the execution hereof; and

 

                (ii) all confidential information received by Purchaser and its
directors, officers, employees, agents, representatives and advisors with
respect to the businesses of Seller shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement.

 

SECTION 8.02.      Effect of Termination.

 

If this Agreement is terminated and the transactions contemplated hereby are
abandoned as described in Section 8.01, this Agreement shall become null and
void and of no further force and effect, except for the provisions of
(i) Section 5.03(a) relating to the obligation of Purchaser to keep confidential
certain information and data obtained by it, (ii) Section 5.05 relating to
certain expenses, (iii) Section 8.01(b) and this Section 8.02 and (iv) Article
X.  Nothing in this Section 8.02 shall be deemed to release any party from any
liability for any breach by such party of the terms, conditions, covenants and
other provisions of this Agreement or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement.

 

ARTICLE IX

 

Indemnification

 

SECTION 9.01.      Indemnification by Seller.

 

                (a) From and after the Closing, Seller shall indemnify, defend
and hold harmless Purchaser and its affiliates and each of their respective
officers, directors,

 

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EMPLOYEES, STOCKHOLDERS, AGENTS AND REPRESENTATIVES (THE “PURCHASER
INDEMNITEES”) FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES,
OBLIGATIONS OR EXPENSES, INCLUDING REASONABLE FEES AND EXPENSES OF ATTORNEYS AND
OTHER NECESSARY OUTSIDE CONSULTANTS (COLLECTIVELY, “LOSSES”) (WITHOUT
DUPLICATION, IN THE CASE OF ANY SUCH LOSS RELATING TO THE SELLER ENVIRONMENTAL
LIABILITIES (AS DEFINED IN SECTION 9.09(A)), FOR WHICH INDEMNIFICATION
PROVISIONS ARE SET FORTH IN SECTION 9.09) TO THE EXTENT ARISING OR RESULTING
FROM:

(I) THE FAILURE OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF SELLER MADE IN
THIS AGREEMENT OR IN ANY DOCUMENT OR CERTIFICATE DELIVERED IN CONNECTION
HEREWITH TO BE TRUE AND CORRECT AS OF THE CLOSING DATE AS THOUGH MADE ON THE
CLOSING DATE (EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES EXPRESSLY
RELATE TO AN EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES
SHALL BE TRUE AND CORRECT ON AND AS OF SUCH EARLIER DATE); PROVIDED THAT THE
FOREGOING SHALL NOT APPLY TO ANY OF THE REPRESENTATIONS AND WARRANTIES SET FORTH
IN SECTION 3.14(B) THROUGH (G);

(II) ANY BREACH OF ANY COVENANT OF SELLER (OR ANY SELLER SUBSIDIARY) CONTAINED
IN THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR THE SUBSIDIARY BUSINESS TRANSFER
AGREEMENT;

(III) RETAINED LIABILITIES; AND

(IV) ANY FEES, EXPENSES OR OTHER PAYMENTS INCURRED OR OWED BY SELLER TO ANY
AGENT, BROKER, INVESTMENT BANKER, FINANCIAL ADVISOR OR COMPARABLE OTHER PERSONS
RETAINED OR EMPLOYED BY THEM IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS.

(B) SELLER SHALL NOT BE REQUIRED TO INDEMNIFY ANY PURCHASER INDEMNITEE, AND
SHALL NOT HAVE ANY LIABILITY:

(I)  UNDER CLAUSE (I) OR (II) OF SECTION 9.01(A), FOR LOSSES SUFFERED BY
PURCHASER INDEMNITEES UNLESS THE AGGREGATE OF ALL LOSSES SUFFERED BY THE
PURCHASER INDEMNITEES AS A RESULT OF THE MATTERS DESCRIBED IN SUCH CLAUSES
EXCEEDS AN AMOUNT EQUAL TO $250,000, AND THEN ONLY TO THE EXTENT OF ANY SUCH
EXCESS;

(II) UNDER CLAUSES (I) AND (II) OF SECTION 9.01(A), IN EXCESS OF 20% OF THE
PURCHASE PRICE;

(III) UNDER CLAUSE (I) OR (II) OF SECTION 9.01(A), FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES CLAIMED BY PURCHASER ARISING OUT
OF A BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT OF SELLER HEREUNDER,
EXCEPT TO THE EXTENT THAT SUCH DAMAGES BEING CLAIMED BY PURCHASER ARE OWED BY
PURCHASER TO A THIRD PARTY AS A RESULT OF A THIRD PARTY CLAIM (AS DEFINED IN
SECTION 9.05); AND

(IV) WITH RESPECT TO ANY MATTER, TO THE EXTENT THAT SUCH MATTER WAS REFLECTED IN
THE CALCULATION OF THE ADJUSTMENT TO THE CLOSING DATE PAYMENT, IF ANY, PURSUANT
TO SECTION 2.01(C).

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(C) PURCHASER SHALL HAVE NO CLAIM OR RIGHT TO INDEMNIFICATION PURSUANT TO THIS
ARTICLE IX AND NONE OF SELLER, ITS AFFILIATES OR ANY OTHER PERSON SHALL HAVE OR
BE SUBJECT TO ANY LIABILITY TO PURCHASER OR ANY OTHER PERSON, WITH RESPECT TO
THE ACCURACY AND CORRECTNESS OF ANY INFORMATION, DOCUMENTS OR MATERIALS
FURNISHED BY SELLER, ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS TO PURCHASER AND ANY INFORMATION,
DOCUMENTS OR MATERIAL MADE AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES IN
CERTAIN “DATA ROOMS”, MANAGEMENT PRESENTATIONS OR ANY OTHER FORM (OTHER THAN AS
SPECIFICALLY CONTAINED IN ARTICLE II OR III OF THIS AGREEMENT) IN EXPECTATION OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

(D) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT OR IN ANY
ANCILLARY AGREEMENT, PURCHASER ACKNOWLEDGES THAT, SHOULD THE CLOSING OCCUR,
ABSENT FRAUD, ITS SOLE AND EXCLUSIVE MONETARY REMEDY AFTER THE CLOSING WITH
RESPECT TO ANY AND ALL CLAIMS RELATING TO THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS, THE ACQUISITION AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY, AND THE TRANSFERRED ASSETS SHALL BE PURSUANT TO THE INDEMNIFICATION
PROVISIONS SET FORTH IN THIS ARTICLE IX.  IN FURTHERANCE OF THE FOREGOING,
PURCHASER HEREBY WAIVES, FROM AND AFTER THE CLOSING, TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION
(OTHER THAN CLAIMS OR CAUSES OF ACTION ARISING FROM FRAUD OR BREACHES OF
COVENANTS THAT SURVIVE THE CLOSING) IT MAY HAVE AGAINST SELLER OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
ADVISORS ARISING UNDER OR BASED UPON THIS AGREEMENT, ANY ANCILLARY AGREEMENT,
ANY DOCUMENT OR CERTIFICATE DELIVERED IN CONNECTION HEREWITH, ANY APPLICABLE LAW
(INCLUDING, INTER ALIA, ANY RIGHTS OF CONTRIBUTION OR RECOVERY UNDER CERCLA OR
OTHER ENVIRONMENTAL LAW), COMMON OR OTHERWISE, EXCEPT PURSUANT TO THE
INDEMNIFICATION PROVISIONS SET FORTH IN THIS ARTICLE IX.

(E) EXCEPT AS MAY EXPRESSLY BE SET FORTH IN THIS AGREEMENT, (A) SELLER MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING ANY CONSENTS OR APPROVALS
REQUIRED IN CONNECTION THEREWITH) OR THE BUSINESS, ASSETS, CONDITION OR
PROSPECTS (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING THE
TRANSFERRED ASSETS, ASSUMED LIABILITIES OR THE BUSINESS, (B) ALL OF THE ASSETS
TO BE TRANSFERRED OR THE LIABILITIES TO BE ASSUMED OR TRANSFERRED IN ACCORDANCE
WITH THIS AGREEMENT OR ANY SUBSIDIARY BUSINESS TRANSFER AGREEMENT SHALL BE
TRANSFERRED OR ASSUMED ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE ARE HEREBY
EXPRESSLY DISCLAIMED, AND (C) NONE OF THE PARTIES HERETO OR ANY OTHER PERSON
MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS
OR MATERIAL MADE AVAILABLE IN CONNECTION WITH THE ENTERING INTO OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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SECTION 9.02.   Indemnification by Purchaser.  From and after the Closing,
Purchaser shall indemnify, defend and hold harmless Seller and its affiliates
and each of their respective officers, directors, employees, stockholders,
agents and representatives (the “Seller Indemnitees”) from and against any and
all Losses, to the extent arising or resulting from any of the following:

(A) THE FAILURE OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF PURCHASER MADE
IN THIS AGREEMENT OR IN ANY DOCUMENT OR CERTIFICATE DELIVERED IN CONNECTION
HEREWITH TO BE TRUE AND CORRECT AS OF THE CLOSING DATE AS THOUGH MADE ON THE
CLOSING DATE;

(B) ANY BREACH OF ANY COVENANT OF PURCHASER OR ITS AFFILIATES CONTAINED IN THIS
AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY SUBSIDIARY BUSINESS TRANSFER
AGREEMENT;

(C) ANY ASSUMED LIABILITY;

(D) ANY FEES, EXPENSES OR OTHER PAYMENTS INCURRED OR OWED BY PURCHASER OR ITS
AFFILIATES TO ANY AGENT, BROKER, INVESTMENT BANKER OR OTHER FIRM OR PERSON
RETAINED OR EMPLOYED BY IT IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS; AND

(E) ANY AND ALL OBLIGATIONS, LIABILITIES AND COMMITMENTS OF ANY NATURE, WHETHER
KNOWN OR UNKNOWN, EXPRESS OR IMPLIED, PRIMARY OR SECONDARY, DIRECT OR INDIRECT,
LIQUIDATED, ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE AND WHETHER DUE OR TO
BECOME DUE, ARISING FROM, OR RELATING TO, THE OWNERSHIP OR OPERATION OF THE
BUSINESS OR THE TRANSFERRED ASSETS AFTER THE CLOSING DATE.

SECTION 9.03.   Calculation of Losses.  The amount of any Loss for which
indemnification is provided under this Article IX shall be net of any amounts
recovered by the Indemnified Party (as defined in Section 9.05) under insurance
policies with respect to such Loss and shall be (a) increased to take account of
any net Tax cost actually incurred by the Indemnified Party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (b)
reduced to take account of any net Tax benefit actually realized by the
Indemnified Party arising from the incurrence or payment of any such Loss.  In
computing the amount of any such Tax cost or Tax benefit, the Indemnified Party
shall be deemed to recognize all other items of income, gain, loss deduction or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence or payment of any indemnified Loss.  Any
indemnity payment under this Agreement shall be treated as an adjustment to the
Purchase Price for Tax purposes, unless a final determination (which shall
include the execution of a Form 870-AD or successor form) with respect to the
Indemnified Party or any of its affiliates causes any such payment not to be
treated as an adjustment to the Purchase Price for United States Federal income
tax purposes.  The amount of the Loss arising out of any item included as a
liability in calculating Closing Working Capital shall be calculated net of the
amount so included.  The amount of the Loss arising out of any reduction in
value of any asset acquired at the Closing shall be calculated net of the
reported value of such asset used in calculating Closing Working Capital.

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SECTION 9.04.   Termination of Indemnification.  The obligations to indemnify
and hold harmless any party (i) pursuant to Section 9.01(a)(i) or 9.02(a)(i)
shall terminate when the applicable representation or warranty terminates
pursuant to Section 9.07 and (ii) the other clauses of Sections 9.01 and 9.02
shall not terminate; provided, however, that such obligations to indemnify and
hold harmless shall not terminate with respect to any item as to which the
person to be indemnified shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice of such claim (stating in
reasonable detail the basis of such claim) pursuant to Section 9.05 to the party
to be providing the indemnification.

SECTION 9.05.   Indemnification Procedures.

(A) THIRD PARTY CLAIMS.  IF ANY PARTY (THE “INDEMNIFIED PARTY”) RECEIVES WRITTEN
NOTICE OF THE COMMENCEMENT OF ANY ACTION OR PROCEEDING OR THE ASSERTION OF ANY
CLAIM BY A THIRD PARTY OR THE IMPOSITION OF ANY PENALTY OR ASSESSMENT FOR WHICH
INDEMNITY MAY BE SOUGHT UNDER SECTION 9.01 OR 9.02 (A “THIRD PARTY CLAIM”), AND
SUCH INDEMNIFIED PARTY INTENDS TO SEEK INDEMNITY PURSUANT TO THIS ARTICLE IX,
THE INDEMNIFIED PARTY SHALL PROMPTLY PROVIDE THE OTHER PARTY (THE “INDEMNIFYING
PARTY”) WITH WRITTEN NOTICE OF SUCH THIRD PARTY CLAIM, STATING THE NATURE, BASIS
AND THE AMOUNT THEREOF, IN EACH CASE TO THE EXTENT KNOWN, ALONG WITH COPIES OF
THE RELEVANT DOCUMENTS EVIDENCING SUCH THIRD PARTY CLAIM AND THE BASIS FOR
INDEMNIFICATION SOUGHT.  FAILURE OF THE INDEMNIFIED PARTY TO GIVE SUCH NOTICE
WILL NOT RELIEVE THE INDEMNIFYING PARTY FROM LIABILITY ON ACCOUNT OF THIS
INDEMNIFICATION, EXCEPT IF AND TO THE EXTENT THAT THE INDEMNIFYING PARTY IS
ACTUALLY PREJUDICED THEREBY  (EXCEPT THAT THE INDEMNIFYING PARTY SHALL NOT BE
LIABLE FOR ANY EXPENSES INCURRED BY THE THIRD PARTY DURING THE PERIOD IN WHICH
THE INDEMNIFIED PARTY FAILED TO GIVE SUCH NOTICE).  THE INDEMNIFYING PARTY WILL
HAVE 30 DAYS FROM RECEIPT OF ANY SUCH NOTICE OF A THIRD PARTY CLAIM TO GIVE
NOTICE TO ASSUME THE DEFENSE THEREOF.  IF NOTICE TO THE EFFECT SET FORTH IN THE
IMMEDIATELY PRECEDING SENTENCE IS GIVEN BY THE INDEMNIFYING PARTY, THE
INDEMNIFYING PARTY WILL HAVE THE RIGHT TO ASSUME THE DEFENSE OF THE INDEMNIFIED
PARTY AGAINST THE THIRD PARTY CLAIM WITH COUNSEL OF ITS CHOICE; PROVIDED,
HOWEVER, THAT SUCH COUNSEL IS REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY;
PROVIDED, FURTHER, HOWEVER, THAT IN THE EVENT THE INDEMNIFYING PARTY ASSUMES THE
DEFENSE OF ANY THIRD PARTY CLAIM IT SHALL ACTIVELY PURSUE SUCH DEFENSE IN GOOD
FAITH.  IF THE INDEMNIFYING PARTY DOES NOT ASSUME THE DEFENSE OF SUCH THIRD
PARTY CLAIM WITHIN 30 DAYS OF RECEIPT OF SUCH NOTICE, THE INDEMNIFIED PARTY
AGAINST WHICH SUCH THIRD PARTY CLAIM HAS BEEN ASSERTED WILL HAVE THE RIGHT TO
ASSUME THE DEFENSE THEREOF, AT THE COST AND EXPENSE OF THE INDEMNIFYING PARTY,
UPON DELIVERY OF NOTICE TO SUCH EFFECT TO THE INDEMNIFYING PARTY.  SO LONG AS
THE INDEMNIFYING PARTY HAS ASSUMED THE DEFENSE OF THE THIRD PARTY CLAIM IN
ACCORDANCE HEREWITH, (I) THE INDEMNIFIED PARTY MAY RETAIN SEPARATE CO-COUNSEL AT
ITS SOLE COST AND EXPENSE (SUCH COUNSEL TO BE REASONABLY SATISFACTORY TO THE
INDEMNIFYING PARTY) AND PARTICIPATE IN THE DEFENSE OF THE THIRD PARTY CLAIM, IT
BEING UNDERSTOOD THAT THE INDEMNIFYING PARTY SHALL CONTROL SUCH DEFENSE,
(II) THE INDEMNIFIED PARTY WILL NOT FILE ANY PAPERS OR CONSENT TO THE ENTRY OF
ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WITH RESPECT TO THE THIRD PARTY CLAIM
WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFYING PARTY AND (III) THE
INDEMNIFYING PARTY WILL NOT (A) ADMIT TO ANY WRONGDOING OR (B) CONSENT TO THE
ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WITH RESPECT TO THE THIRD
PARTY CLAIM TO THE EXTENT SUCH JUDGMENT OR SETTLEMENT PROVIDES FOR (X) RELIEF
OTHER THAN MONEY DAMAGES OR (Y) MONEY DAMAGES IF THE INDEMNIFYING PARTY HAS NOT
ACKNOWLEDGED IN

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WRITING THAT IT SHALL BE RESPONSIBLE FOR SUCH MONEY DAMAGES, IN EACH CASE,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFIED PARTY (WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD OR DELAYED).  THE PARTIES WILL USE THEIR REASONABLE
BEST EFFORTS TO MINIMIZE LOSSES FROM THIRD PARTY CLAIMS AND WILL ACT IN GOOD
FAITH IN RESPONDING TO, DEFENDING AGAINST, SETTLING OR OTHERWISE DEALING WITH
SUCH CLAIMS.  THE PARTIES WILL ALSO COOPERATE IN ANY SUCH DEFENSE AND GIVE EACH
OTHER REASONABLE ACCESS TO ALL INFORMATION RELEVANT THERETO.  SUCH COOPERATION
SHALL INCLUDE THE RETENTION AND (UPON THE INDEMNIFYING PARTY’S REQUEST) THE
PROVISION TO THE INDEMNIFYING PARTY OF RECORDS AND INFORMATION WHICH ARE
REASONABLY RELEVANT TO SUCH THIRD PARTY CLAIM, AND MAKING EMPLOYEES AVAILABLE ON
A MUTUALLY CONVENIENT BASIS TO PROVIDE ADDITIONAL INFORMATION AND EXPLANATION OF
ANY MATERIAL PROVIDED HEREUNDER.  WHETHER OR NOT THE INDEMNIFYING PARTY HAS
ASSUMED THE DEFENSE OF THE THIRD PARTY CLAIM, SUCH INDEMNIFYING PARTY WILL NOT
BE OBLIGATED TO INDEMNIFY THE INDEMNIFIED PARTY HEREUNDER FOR ANY SETTLEMENT
ENTERED INTO OR ANY JUDGMENT THAT WAS CONSENTED TO WITHOUT THE INDEMNIFYING
PARTY’S PRIOR WRITTEN CONSENT.

(B) OTHER CLAIMS.  THE INDEMNIFIED PARTY WILL NOTIFY THE INDEMNIFYING PARTY IN
WRITING PROMPTLY OF ITS DISCOVERY OF ANY MATTER GIVING RISE TO A CLAIM OF
INDEMNITY PURSUANT TO SECTION 9.01 OR 9.02, THAT DOES NOT INVOLVE A THIRD PARTY
CLAIM BEING ASSERTED AGAINST OR SOUGHT TO BE COLLECTED FROM THE INDEMNIFIED
PARTY.  THE FAILURE SO TO NOTIFY THE INDEMNIFYING PARTY SHALL NOT RELIEVE THE
INDEMNIFYING PARTY FROM LIABILITY ON ACCOUNT OF THIS INDEMNIFICATION, EXCEPT
ONLY TO THE EXTENT THAT THE INDEMNIFYING PARTY IS ACTUALLY PREJUDICED THEREBY. 
THE INDEMNIFYING PARTY WILL HAVE 30 DAYS FROM RECEIPT OF ANY SUCH NOTICE TO GIVE
NOTICE OF DISPUTE OF THE CLAIM TO THE INDEMNIFIED PARTY.  THE INDEMNIFIED PARTY
WILL REASONABLY COOPERATE AND ASSIST THE INDEMNIFYING PARTY IN DETERMINING THE
VALIDITY OF ANY CLAIM FOR INDEMNITY BY THE INDEMNIFIED PARTY AND IN OTHERWISE
RESOLVING SUCH MATTERS.  SUCH ASSISTANCE AND COOPERATION WILL INCLUDE PROVIDING
REASONABLE ACCESS TO AND COPIES OF INFORMATION, RECORDS AND DOCUMENTS RELATING
TO SUCH MATTERS AND FURNISHING EMPLOYEES TO ASSIST IN THE INVESTIGATION, DEFENSE
AND RESOLUTION OF SUCH MATTERS.

SECTION 9.06.   Mitigation.

(A) PURCHASER AND SELLER SHALL COOPERATE WITH EACH OTHER WITH RESPECT TO
RESOLVING ANY CLAIM OR LIABILITY WITH RESPECT TO WHICH ONE PARTY IS OBLIGATED TO
INDEMNIFY ANY OTHER PARTY OR AN AFFILIATE THEREOF HEREUNDER, INCLUDING BY USING
REASONABLE BEST EFFORTS TO MITIGATE OR RESOLVE ANY SUCH CLAIM OR LIABILITY. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY SHALL COOPERATE
WITH THE OTHER PARTIES IN OBTAINING ANY GOVERNMENTAL APPROVALS, LICENSES,
CONSENTS, WAIVERS OR PERMITS, OR ANY OTHER APPROVALS OR CONSENTS REASONABLY
WITHIN SUCH PARTY’S CONTROL, WHICH MAY BE REQUIRED TO RESOLVE ANY CLAIM OR
LIABILITY.  IN THE EVENT THAT PURCHASER OR SELLER SHALL FAIL TO USE SUCH
REASONABLE BEST EFFORTS TO MITIGATE OR RESOLVE ANY CLAIM OR LIABILITY, THEN,
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY CONTAINED HEREIN, THE OTHER PARTY
SHALL NOT BE REQUIRED TO INDEMNIFY ANY PERSON FOR ANY LOSS THAT COULD REASONABLY
BE EXPECTED TO HAVE BEEN AVOIDED IF PURCHASER OR SELLER, AS THE CASE MAY BE, HAD
USED SUCH EFFORTS.

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(B) PURCHASER AND SELLER EACH AGREE TO USE ITS REASONABLE BEST EFFORTS TO PURSUE
(AND COLLECT ON) ANY RECOVERY AVAILABLE UNDER ANY INSURANCE POLICIES WITH
RESPECT TO THE RELEVANT LOSS.

SECTION 9.07.   Survival of Representations.  The representations and warranties
in this Agreement shall survive the Closing solely for purposes of this
Article IX and shall terminate the date that is sixteen (16) months after the
Closing Date, except for (i) those representations and warranties set forth in
Section 3.01, Section 3.02, the first sentence of Section 3.05(a), and the third
sentence of Section 3.06(a), which shall survive indefinitely, (ii) those
representations and warranties under Section 3.10, which shall expire thirty
(30) days after the expiration of the applicable statute of limitations for the
subject matter of the representation or warranty, and (iii) those
representations and warranties set forth in Section 3.14, which shall expire on
the second (2nd) anniversary of the Closing Date.

SECTION 9.08.   Access.  In the event that Seller receives any demand, claim or
notice of any liability, violation or Proceeding relating to the matters covered
by 9.09(a)(viii) (but only with respect to a breach of the representations and
warranties contained in Section 3.14(c)), Purchaser shall grant to Seller and
its respective affiliates, agents, contractors and subcontractors, within three
(3) business days of a request therefor, rights to access, enter, travel over,
use and occupy the relevant property sufficient to investigate or defend such
claim, perform any voluntary or mandatory remedial activity or otherwise comply
with its obligations under this Agreement or Applicable Law including any
request of any Governmental Entity.  Seller shall indemnify Purchaser against
any actual Losses directly resulting from bodily injury or property damage that
occur during the terms of such access and to the extent such are caused by the
gross negligence or intentional misconduct of Seller or its respective agents,
affiliates, contractors or subcontractors while at such property.

SECTION 9.09.   Specific Environmental Indemnity by Seller.

(A) FROM AND AFTER THE CLOSING, SELLER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS
ALL PURCHASER INDEMNITEES FROM AND AGAINST ANY AND ALL LOSSES TO THE EXTENT
ARISING OR RESULTING FROM (THE “SELLER ENVIRONMENTAL LIABILITIES”):

(i) any breach of Seller’s covenants under Section 5.28;

 

(ii) [intentionally omitted];

 

(iii) [intentionally omitted];

 

(iv) groundwater and soil contamination described in Section 9.09(a)(iv) of the
Seller Disclosure Letter;

 

(v) except for those items covered under Sections 9.09(a) (ii) — (iv), any
Hazardous Substances on, in or about the Transferred Assets, including all
Releases of Hazardous Substances on, to or from the Transferred Assets, prior to
or as of Closing, including the subsequent migration of such substances
post-Closing;

 

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(vi) to the extent not covered by Section 9.09(a)(v), personal injuries and
property damage (such property damage being at locations not part of the
Transferred Assets) related to Hazardous Substances or arising under
Environmental Law, arising out of acts, omissions or conditions prior to or as
of Closing;

 

(vii) to the extent not covered by Section 9.09(a)(v), the presence or Release
of Hazardous Substances at locations not a part of the Transferred Assets; and

 

(viii) the failure of any of the representations and warranties of Seller made
in Section 3.14(b) through (g) to be true and correct as of the Closing Date as
though made on the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct on and as of such
earlier date).

 

The indemnities in this Section 9.09(a) are intended to include claims resulting
from the negligence or alleged negligence of an Purchaser Indemnitee and
statutory and common law negligence and strict liability claims including those
arising under Environmental Laws, including without limitation CERCLA and
analogous Laws.

(B) LIMITATIONS ON SELLER’S INDEMNIFICATION.

(i) The indemnities in this Section 9.09 are not subject to any limitations
contained in Sections 9.01(b) and 9.04.

 

(ii) Seller shall not be required to indemnify any Purchaser Indemnitee, and
shall not have any liability under Section 9.09(a)(iv) upon Seller’s receipt of
the consent, in a form reasonably acceptable to Purchaser, to assign Seller’s
interest in the Remediation Agreement (as defined in Section 9.09(a)(iv) of the
Seller Disclosure Letter).

 

(iii) Under Sections 9.09(a)(v) and 9.09(a)(viii), Seller shall not be required
to indemnify any Purchaser Indemnitee, and shall not have any liability for
Losses suffered by Purchaser Indemnitees unless the aggregate of all Losses
suffered by the Purchaser Indemnitees subject to Section 9.09 exceeds an amount
equal to $250,000, and then only to the extent of any such excess.  Further,
Seller’s liability under Sections 9.09(a)(v) and 9.09(a)(viii) shall not exceed
20% of the Purchase Price.

 

(iv) Seller’s indemnity obligations under Sections 9.09(a)(v)-(viii) are
conditioned upon either (a) Purchaser’s discovery of the relevant matters
without any Unreasonable Action or (b) notice relating to such matters from a
Third Party or a Governmental Entity.

 

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(v) Seller shall not be required to indemnify any Purchaser Indemnitee, and
shall not have any liability pursuant to Sections 9.09(a)(v)-(vii) unless
Purchaser Indemnitee shall have provided notice to Seller of such right or claim
prior to the tenth anniversary of Closing.  The obligations to indemnify
pursuant to Section 9.09(a)(viii) shall terminate when the applicable
representation or warranty terminates pursuant to Section 9.07.

 

(vi) To the extent Losses under Section 9.09(a)(v) relate to or involve the
remediation, removal or cleanup of Hazardous Materials, Seller’s indemnity
obligation under Section 9.09(a)(v) shall be limited to those Losses necessary
to achieve the least stringent cleanup standard for an industrial property
available under applicable Environmental Law and permitted by the Governmental
Entity with jurisdiction and utilizing, for the applicable Transferred Asset,
such reasonable institutional or engineering controls which do not materially
interfere with or restrict the use of the Transferred Asset and do not
materially diminish the value of the Transferred Asset.  However, to the extent
that the Losses under Section 9.09(a)(v) relate to the remediation, removal or
cleanup of Hazardous Materials and arises as the result of a third party claim,
Purchaser will use reasonable efforts to secure the third party’s acceptance of
the cleanup standard set forth in the proceeding sentence, but if the third
party will not consent to such standard, the Seller’s indemnification obligation
will not be limited by this Section 9.09(b)(vi).

 

(vii) Seller shall not be required to indemnify any Purchaser Indemnitee, and
shall not have any liability under Section 9.09(a)(viii), for any indirect,
special, incidental, consequential or punitive damages claimed by Purchaser
arising out of a breach of any representation, warranty or covenant of Seller
under Section 3.14, except to the extent that such damages being claimed by
Purchaser are owed by Purchaser to a third party as a result of a Third Party
Claim.

 

(C) THE INDEMNIFICATION PROCEDURES GOVERNING THIS SECTION 9.09 SHALL BE THE SAME
AS THOSE SET OUT IN SECTIONS 9.05(A) AND (B).

ARTICLE X

GENERAL PROVISIONS

SECTION 10.01.   Assignment.  This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any party without the prior
written consent of the other parties hereto, except that Purchaser may assign
its rights hereunder to a wholly owned subsidiary of Purchaser without the prior
written consent of Seller; provided, however, that no such assignment shall
limit or affect Purchaser’s obligations hereunder.  Any attempted assignment in
violation of this Section 10.01 shall be void.

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SECTION 10.02.   Amendments and Waivers.  This Agreement may not be amended,
modified, superseded or canceled except by an instrument in writing signed on
behalf of each of the parties hereto.  By an instrument in writing, Purchaser,
on the one hand, or Seller, on the other hand, may waive compliance by the other
with any term, covenant, representation, warranty, condition or other provision
of this Agreement that such other party was or is obligated to comply with or
perform.

SECTION 10.03.   No Third-Party Beneficiaries.  Except as provided in
Article IX, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.

SECTION 10.04.   Attorney Fees.  A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other parties for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such other
parties by reason of the enforcement and protection of their rights under this
Agreement.  The payment of such expenses is in addition to any other relief to
which such other parties may be entitled.

SECTION 10.05.   Notices.  All notices, requests, permissions, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) five business days following sending by registered or certified
mail, postage prepaid, (b) when sent, if sent by facsimile, provided that the
facsimile transmission is promptly confirmed by telephone, (c) when delivered,
if delivered personally to the intended recipient and (d) one business day
following sending by overnight delivery via a national courier service and, in
each case, addressed to a party at the following address for such party:

(i) if to Seller,

 

Air Products and Chemicals, Inc.

7201 Hamilton Boulevard

Allentown, Pennsylvania 18195

Attention: Corporate Secretary and General Counsel

Facsimile: (610) 481-5765

 

 

 

(ii) if to Purchaser,

 

KMG Chemicals, Inc.

10611 Harwin Drive, Suite 402

Houston, Texas 77036

Attention: Roger C. Jackson

Facsimile: (713) 600-3150

 

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with a copy to:

 

Haynes and Boone, LLP

1221 McKinney Street, Suite 2100

Houston, Texas 77002

Attention:  George G. Young III and William B. Nelson

Facsimile: (713) 236-5557

 

SECTION 10.06.   Headings; Certain Definitions.

(A) THE DESCRIPTIVE HEADINGS OF THE SEVERAL ARTICLES AND SECTIONS OF THIS
AGREEMENT AND THE SELLER DISCLOSURE LETTER AND THE TABLE OF CONTENTS TO THIS
AGREEMENT ARE INSERTED FOR CONVENIENCE ONLY, DO NOT CONSTITUTE A PART OF THIS
AGREEMENT AND SHALL NOT AFFECT IN ANY WAY THE MEANING OR INTERPRETATION OF THIS
AGREEMENT.  ALL REFERENCES HEREIN TO “ARTICLES”, “SECTIONS” OR “EXHIBITS” SHALL
BE DEEMED TO BE REFERENCES TO ARTICLES OR SECTIONS HEREOF OR EXHIBITS HERETO
UNLESS OTHERWISE INDICATED.

(B) FOR ALL PURPOSES HEREOF:

“$” means United States dollars.

“affiliate” of any person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person.

“Accounts Payable” means all accounts payable, regardless of when asserted,
billed or imposed, of Seller or any Seller Subsidiaries as of the Closing
arising out of the operation or conduct of the Business or their use and
ownership of the Transferred Assets prior to the Closing.

“Action” means any demand, action, suit, counter suit, arbitration, inquiry,
proceeding or investigation by or before any federal, state, local, foreign or
international governmental authority or any arbitration or mediation tribunal.

“Ancillary Agreements” means the Assignment and Assumption Agreement, the Bill
of Sale, the Supply Agreement, each Site License, the Transitional Services
Agreement, the Technology License Agreement, the Special Warranty Deed and any
other documents entered in connection with the transactions consummated by this
Agreement.

“Antitrust Laws” means the HSR Act or any other Applicable Law of the United
States or of any other country that pertains to antitrust, merger control or
competition matters.

“Antitrust Proceeding” means any proceeding seeking a preliminary injunction or
other comparable legal impediment to the Acquisition or to Purchaser’s freedom
to operate the Business after Closing under any Antitrust Law.

“Applicable Law” means all applicable Laws.

 

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“Assignment and Assumption Agreement” means the assignment and assumption
agreement in respect of the intangible assets substantially in the form attached
hereto as Exhibit B.

“Bill of Sale” means bill of sale in respect of the tangible assets
substantially in the form attached hereto as Exhibit C.

“Business” means the manufacturing, selling, distribution, research or
development of hydrochloric acid by Seller and the Seller Subsidiaries as of the
date of this Agreement at the facilities set out in Sections 3.06(a) and 3.06(b)
of the Seller Disclosure Letter.

“business day” shall refer to a day, other than a Saturday or a Sunday, on which
commercial banks are not required or authorized to close in Houston, Texas.

“Business Material Adverse Effect” means any state of facts, change, effect,
condition, development, event or occurrence (any such item, an “Effect”) that
has been or would reasonably be expected to be material and adverse to (A) the
business, assets, properties, condition (financial or otherwise) or results of
operations of the Business, taken as a whole, other than an Effect relating to
(i) the economy generally, (ii) the industries in which the Business operates
generally (including changes in prices for energy and raw materials), (iii) the
financial, securities and currency markets generally, or (iv) the entering into
or the public announcement or disclosure of this Agreement or the consummation
or proposed consummation of the transactions contemplated hereby or the pendancy
thereof, or (B) the ability of Seller (or any of Seller Subsidiaries, if
applicable) to perform their obligations under this Agreement and the Ancillary
Agreements or to consummate the Acquisition and the other transactions
contemplated by this Agreement and the Ancillary Agreements.

“Claims” means claims, demands, actions, suits and causes of action in law or
equity.

“Code” means the U.S. Internal Revenue Code of 1986, as amended, and the
Treasury regulations promulgated thereunder.

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code Section 4980B and of any similar state Law.

“Early Closing Adjustment Amount” has the meaning ascribed to it in Section
1.07(b) of the Seller Disclosure Letter.

“Early Closing Adjustment Statement” has the meaning ascribed to it in Section
1.07(b) of the Seller Disclosure Letter.

“Environmental Laws” means all applicable federal, state and local foreign laws,
(including the common law), statutes, codes, ordinances, orders, rules,
regulations, binding directives or Judgments issued or promulgated by any
Governmental Entity relating to pollution, the generation, use, management,
manufacture, treatment, storage, disposal, transportation, investigation,
remediation, removal, cleanup, monitoring or Release of Hazardous Materials, the
protection of human health or the environment, or the protection of natural
resources or the

 

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environment (including the restoration thereof), or the protection of
environmentally sensitive areas or protected, endangered or threatened species
or biota.  Environmental Laws shall include without limitation the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et
seq.) and analogous state or local Laws. Environmental Laws shall also include
those laws regulating severe accidents, Italian Legislative Decree No. 334/1988,
Italian Legislative Decree No. 59/2005, safety at work legislation, legislation
concerning security industrial machinery and industry plants, Italian
Legislative Decree No. 152/2006 and Italian Legislative Decree No. 626/1994, as
those may have been subsequently amended and integrated.

“Environmental Permits” means any permit, license, approval, registration
notification, or other authorization required pursuant to any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
which is or at any time within the six (6)-year period preceding the date of
this Agreement would have been treated as a “single employer” with Seller under
Code Section 414(b), (c), (m), or (o).

“Hazardous Materials” means any material, substance or waste that is regulated,
classified or otherwise characterized because of its effect or potential effect
on human health or the environment, including without limitation any material
defined as a “hazardous waste,” “solid waste”, “hazardous material,” or other
words of similar import, and includes without limitation (i) any petroleum or
any fraction thereof or petroleum products or by-products, radioactive materials
or wastes, asbestos in any form, asbestos-containing materials, urea
formaldehyde foam insulation and polychlorinated biphenyls, radon gas, silica or
(ii) any other pollutant, chemical, material, substance, contaminant or waste to
the extent prohibited, limited or regulated by or pursuant to any Environmental
Law.

“including” means including, without limitation, with “include” having a
correlative meaning.

“IRS” means the U.S. Internal Revenue Service.

“knowledge of Seller” means the actual knowledge of the persons set forth in
Attachment C, after due inquiry in order to make the applicable representation
or warranty referred to herein in an informed manner.

“Law” means any federal, state, local, municipal, or foreign statute, law,
ordinance, regulation, rule, code, order, principle of common law, judgment
enacted, promulgated, issued, enforced or entered by any Governmental Entity, or
other requirement or rule of law.

“Site License” means the site license for either the Pueblo Gas Pad or Milan
site substantially in the form attached hereto as Exhibit E.

“Legal Requirement” means any statute, ordinance, code, Law, rule, regulation,
order, guidance or other requirement, standard or procedure enacted, adopted or
applied by any

 

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Governmental Entity (including judicial decisions applying common law or
interpreting any other Legal Requirement).

“Licensed Assets” means those assets of Seller licensed to Purchaser pursuant to
the Technology License Agreement.

“Person” or “person” means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity.

“Post-Closing Tax Period” means all taxable periods beginning after the Closing
Date and the portion beginning on the day after the Closing Date of any tax
period that includes but does not end on the Closing Date.

“Pre-Closing Tax Period” means all taxable periods ending on or prior to the
Closing Date and the portion ending on the Closing Date of any taxable period
that includes but does not end on the Closing Date.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or migrating into
or through the environment or any natural or man-made structure.

“Seller Employee Benefit Plan” means any “employee benefit plan” (as defined in
Section 3(3) of ERISA), any retirement plan, cafeteria plan, flexible spending
arrangement, sick leave policy, vacation policy, bonus, stock option, stock
purchase, restricted stock, incentive compensation, deferred compensation,
severance, medical, life, disability or other welfare benefit plan or program,
or any other benefit plans, programs, agreements, or policies, and all
employment termination, severance, or other employment agreements, whether
written or oral, sponsored, established, maintained or contributed to, by Seller
or any ERISA Affiliate, for the benefit of any current or former employee or
other person, and any related trust or other funding medium.

“Shared Contract” means any Transferred Contract to which Seller or any Seller
Subsidiary is a party or by which Seller or any Seller Subsidiary is bound which
does not relate exclusively to the Business.

“Straddle Period” means any taxable period that includes (but does not end on)
the Closing Date.

“subsidiary” of any person (other than an individual) means any other person
(other than an individual) of which at least a majority of the securities or
interests having by the terms thereof ordinary voting power to elect at least a
majority of the board of directors or others performing similar functions with
respect to such person is directly or indirectly owned or controlled (i) by such
first person, (ii) by any one or more of its subsidiaries or (iii) by such first
person and one or more of its subsidiaries; provided, however, that no person
that is not directly or indirectly wholly owned by any other person shall be a
subsidiary of such other person unless such other person controls, or has the
right, power or ability to control, that person.

 

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“Subsidiary Business Transfer Agreement” means the subsidiary business transfer
agreement substantially in the form attached hereto as Exhibit F.

“Supply Agreement” means the supply agreement substantially in the form attached
hereto as Exhibit H.

“Tax” or “Taxes” means all forms of taxation imposed by any Federal, state,
provincial, local, foreign or other Taxing Authority (as defined below),
including income, franchise, property, sales, use, excise, employment,
unemployment, payroll, social security, estimated, value added, ad valorem,
transfer, recapture, withholding, health and other taxes of any kind, including
any interest, penalties and additions thereto.

“Tax Return” means any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority with
respect to Taxes, including any amendment made with respect thereto.

“Taxing Authority” means any Federal, state, provincial, local or foreign
government, any subdivision, agency, commission or authority thereof or any
quasi-governmental body exercising Tax regulatory authority.

“Technology License Agreement” means the property license agreement
substantially in the form of Exhibit G.

“Transfer Taxes” means all sales use, transfer, recording, filing, value added,
ad valorem, privilege, documentary, gross receipts, registration, conveyance,
excise, license, stamp or similar Taxes and notarial or other fees arising out
of, in connection with or attributable to the transactions effectuated pursuant
to this Agreement.

“Transitional Services Agreement” means the transitional services agreement
substantially in the form attached hereto as Exhibit D.

“Unreasonable Action” shall mean any voluntary action by Purchaser (including a
communication with a Governmental Entity) unless such action is (a) required by
Law; (b) reasonably necessary in order to avoid a order, suit or action or to
avoid an Order by a Governmental Entity; (c) reasonably necessary in order to
prevent or mitigate a threat to human health or the environment, including based
upon the discovery of a contaminant detected in connection with the performance
of the Remediation Agreement (as defined in Section 9.09(a)(iv) of the Seller
Disclosure Letter), the responsibility for which has been disclaimed by the
other party thereto; (d) consistent in nature, scope and magnitude with
Purchaser’s past practices and is taken in the ordinary course of Purchaser’s
normal operations (including the performance of capital improvements, operations
and maintenance and construction and renovation activities); (e) undertaken
based upon conditions discovered in connection with Purchaser’s performance of a
Phase I environmental site assessment prior to the execution of this agreement;
(f) undertaken based upon conditions discovered during the addressing the
repairs to the sewer lines at the Via Ticino facility; (g) undertaken at the
request of Purchaser’s insurer or in order to obtain insurance; or (h)
undertaken in connection with or as the result of items discovered during an
environmental investigation or other due diligence activity by a bona fide
prospective purchaser, assignee or sublessee of any of the Transferred

 

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Assets who is not affiliated with Purchaser, and which activity is taken in
connection with the prospective sale or other transfer of an interest in such
Transferred Asset

                SECTION 10.07.   Counterparts.  This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered, in person, by facsimile, or
by electronic image scan, receipt acknowledged in each case, to the other
parties hereto.

                SECTION 10.08.   Integrated Contract; Exhibits and Seller
Disclosure Letter.  This Agreement, including the Seller Disclosure Letter and
Exhibits hereto, any written amendments to the foregoing satisfying the
requirements of Section 10.02 hereof, the Confidentiality Agreement and the
Ancillary Agreements, including the schedules and exhibits thereto, constitute
the entire agreement among the parties with respect to the subject matter hereof
and thereof and supersede any previous agreements and understandings between the
parties with respect to such matters.  All Exhibits and the Seller Disclosure
Letter annexed hereto or referred to herein are hereby incorporated in and made
a part of this Agreement as if set forth in full herein.  Any capitalized terms
used in the Seller Disclosure Letter or Exhibits but not otherwise defined
therein shall be defined as set forth in this Agreement.  There are no
restrictions, promises, representations, warranties, agreements or undertakings
of any party hereto with respect to the transactions contemplated by this
Agreement, the Confidentiality Agreement or the Ancillary Agreements other than
those set forth herein or therein or in any other document required to be
executed and delivered hereunder or thereunder.  In the event of any conflict
between the provisions of this Agreement (including the Seller Disclosure Letter
and Exhibits hereto), on the one hand, and the provisions of the Confidentiality
Agreement or the Ancillary Agreements (including the schedules and exhibits
thereto), on the other hand, the provisions of this Agreement shall control. 
Any matter disclosed in the Seller Disclosure Letter shall be deemed disclosed
for all purposes and all Sections to the extent that the relevance of any such
disclosure to any other Section is reasonably apparent from the text of such
disclosure.

                SECTION 10.09.   Interpretation.  The parties have participated
jointly in the negotiation and drafting of this Agreement.  If an ambiguity or a
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.  The Ancillary Agreements are in the English
language only, which shall be controlling in all respects.  No translation, if
any, of the Ancillary Agreements into any other language shall be of any force
or effect in the interpretation of such Ancillary Agreement or in a
determination of the intent of either party thereto.

                SECTION 10.10.   Severability; Enforcement.  The invalidity of
any portion hereof shall not affect the validity, force or effect of the
remaining portions hereof.  If it is ever held that any restriction hereunder is
too broad to permit enforcement of such restriction to its fullest extent, each
party agrees that a court of competent jurisdiction may enforce such restriction
to the maximum extent permitted by law, and each party hereby consents and
agrees that such scope may be judicially modified accordingly in any proceeding
brought to enforce such restriction.

 

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                SECTION 10.11.   Consent to Jurisdiction.  Each party
irrevocably agrees that any Action against them arising out of, or in connection
with, this Agreement, any Ancillary Agreement or the transactions contemplated
hereby or thereby or disputes relating hereto or thereto (whether for breach of
contract, tortious conduct or otherwise) shall be brought exclusively in the
United States District Court for the Southern District of New York, or, if such
court does not have subject matter jurisdiction, the state courts of  located in
New York County and hereby irrevocably accepts and submits to the exclusive
jurisdiction and venue of the aforesaid courts in personam, and waives any
objection it may have to venue or convenience of forum, in each case, with
respect to any such Action.  This Section 10.11 shall not apply to any dispute
under Section 2.01(b) that is required to be decided by the Accounting Firm.

                SECTION 10.12.   Service of Process.  Each of the parties agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party’s address set forth above shall be effective service of process
for any Action in New York with respect to any matters for which it has
submitted to jurisdiction pursuant to Section 10.11.

                SECTION 10.13.   Governing Law.  This Agreement and any disputes
arising under or related hereto (whether for breach of contract, tortious
conduct or otherwise) shall be governed and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
entirely within such State, without reference to its conflicts of law
principles.

                SECTION 10.14.   Waiver of Jury Trial.  Each party hereby waives
to the fullest extent permitted by Applicable Law, any right it may have to a
trial by jury in respect to any litigation directly or indirectly arising out
of, under or in connection with this Agreement, any Ancillary Agreement or any
transaction contemplated hereby or thereby.  Each party (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and the Ancillary
Agreements, as applicable, by, among other things, the mutual waivers and
certifications in this Section 10.14.

                SECTION 10.15.   Specific Enforcement.  The parties agree that
irreparable damage would occur and that the parties would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. 
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court having jurisdiction
pursuant to Section 10.11, this being in addition to any other remedy to which
they are entitled at law or in equity.

 

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INDEX OF DEFINED TERMS(1)

 

 

Location of

Defined Term

 

Defined Term

 

 

 

$

 

Section 10.06(b)

Accounting Firm

 

Section 2.01(b)

Accounting Principles

 

Section 2.01(d)

Accounts Payable

 

Section 10.06(b)

Accounts Receivable

 

Section 3.16

Acquisition

 

Section 1.01

Action

 

Section 10.06(b)

Active Employee

 

Section 6.01(a)

Adjusted Purchase Price

 

Section 2.01(c)

affiliate

 

Section 10.06(b)

Agreement

 

Preamble

Ancillary Agreements

 

Section 10.06(b)

Antitrust Laws

 

Section 10.06(b)

Antitrust Proceeding

 

Section 10.06(b)

Applicable Law

 

Section 10.06(b)

Ashland Agreement

 

Section 9.09(a)(iv)

Assignment and Assumption Agreement

 

Section 10.06(b)

Assumed Liabilities

 

Section 1.04(a)

Assumed Tax Liabilities-Section

 

Section 1.04(a)(vi)

Bill of Sale

 

Section 10.06(b)

Business

 

Section 10.06(b)

Business Contracts

 

Section 3.08(b)

business day

 

Section 10.06(b)

Business Employee

 

Section 3.12(a)

Business Financial Statements

 

Section 3.04(a)

Business Material Adverse Effect

 

Section 10.06(b)

CBA

 

Section 6.03(b)

CERCLA

 

Section 3.14(f)

Claims

 

Section 10.06

Closing

 

Section 1.06

Closing Date

 

Section 1.06

Closing Date Payment

 

Section 1.07(b)

Closing Working Capital

 

Section 2.01(a)

COBRA

 

Section 10.06(b)

Code

 

Section 10.06(b)

Confidentiality Agreement

 

Section 5.03(a)

Consent

 

Section 3.03

Contract

 

Section 1.02(a)(viii)

 

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Covered Employee Liabilities

 

Section 1.04(a)(viii)

DOJ

 

Section 5.04(d)

Early Closing Adjustment Amount

 

Section 10.06(b)

Early Closing Adjustment Statement

 

Section 10.06(b)

Effect

 

Section 10.06(b)

Environmental Laws

 

Section 10.06(b)

Environmental Permits

 

Section 10.06(b)

Equipment

 

Section 1.02(a)(iii)

ERISA

 

Section 10.06(b)

ERISA Affiliate

 

Section 10.06(b)

Excluded Assets

 

Section 1.02(b)

Financing

 

Section 4.05

FMLA

 

Section 6.01(a)(i)

FTC

 

Section 5.04(d)

GAAP

 

Section 3.04(a)

Governmental Entity

 

Section 3.03

Hazardous Materials

 

Section 10.06(b)

HIPAA

 

Section 3.12(f)

HSR Act

 

Section 3.03

including

 

Section 10.06(b)

Indemnified Party

 

Section 9.05(a)

Indemnifying Party

 

Section 9.05(a)

Intellectual Property

 

Section 1.02(a)(5)

Inventory

 

Section 1.02(a)(ii)

IRS

 

Section 10.06(b)

knowledge of Seller

 

Section 10.06(b)

Law

 

Section 10.06(b)

Leased Property

 

Section 3.06

Legal Requirement

 

Section 10.06(b)

Liabilities

 

Section 3.04(b)

Licensed Assets

 

Section 10.06(b)

LIBOR

 

Section 2.01(c)

Liens

 

Section 3.05(a)

Losses

 

Section 9.01(a)

Non-solicitation Period

 

Section 5.09

Notice of Disagreement

 

Section 2.01(b)

Owned Intellectual Property

 

Section 3.07(a)

Permits

 

Section 1.02(a)(vii)

Permitted Liens

 

Section 3.05(a)

Person or person

 

Section 10.06(b)

Post-Closing Tax Period

 

Section 10.06(b)

Pre-Closing Tax Period

 

Section 10.06(b)

Prime Rate

 

Section 2.01(c)

Proceeding

 

Section 1.04(a)(ii)

Purchase Price

 

Section 1.01

Purchaser

 

Preamble

 

 

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Purchaser Benefit Plans

 

Section 6.01(c)

Purchaser Indemnitee

 

Section 9.01(a)

Purchaser Material Adverse Effect

 

Section 4.01

Purchaser Qualified Defined Contribution Plan

 

Section 6.02(b)

Purchaser Subsidiary

 

Section 6.01(a)

Purchaser Welfare Plans

 

Section 6.01(f)(i)

Real Property

 

Section 3.06

Records

 

Section 1.02(a)(x)

Release

 

Section 10.06(b)

Retained Liabilities

 

Section 1.04(b)

Retained Names

 

Section 1.02(b)(xii)

Retained Tax Liabilities

 

Section 1.04(b)(v)

Seller

 

Preamble

Seller Disclosure Letter

 

Article III

Seller Employee Benefit Plan

 

Section 10.06(b)

Seller Indemnitee

 

Section 9.02

Seller Insurance Policies

 

Section 5.12(a)

Seller Pension Plans

 

Section 6.01(g)

Seller Qualified Defined Contribution Plan

 

Section 6.02(b)

Seller Subsidiaries

 

Recitals

Seller Welfare Plan

 

Section 6.01(f)(ii)

Shared Contract

 

Section 10.06(b)

Site License

 

Section 10.06(b)

Statement

 

Section 2.01(a)

Statement of Assets and Liabilities

 

Section 3.04(a)

Straddle Period

 

Section 10.06(b)

Subsidiary, subsidiary

 

Section 10.06(b)

Subsidiary Business Transfer Agreement

 

Section 10.06(b)

Supply Agreement

 

Section 10.06(b)

Target Working Capital Amount

 

Section 2.01(c)

Tax(es)

 

Section 10.06(b)

Taxing Authority

 

Section 10.06(b)

Tax Return(s)

 

Section 10.06(b)

Technology

 

Section 1.02(a)(vi)

Technology License Agreement

 

Section 10.06(b)

Termination Date

 

Section 8.01(a)(vi)

Third Party Claim

 

Section 9.05(a)

Transfer Taxes

 

Section 10.06(b)

Transferred Assets

 

Section 1.02(a)

Transferred Contracts

 

Section 1.02(a)(vii)

Transferred Equipment

 

Section 1.02(a)(iii)

Transferred Employee

 

Section 6.01(a)(ii)

Transferred Intellectual Property

 

Section 1.02(a)(v)

Transferred Inventory

 

Section 1.02(a)(ii)

Transferred Permits

 

Section 1.02(a)(vii)

Transferred Real Property

 

Section 1.02(a)(i)

 

 

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Transferred Receivables

 

Section 1.02(a)(iv)

Transferred Technology

 

Section 1.02(a)(vi)

Transitional Services Agreement

 

Section 10.06(b)

Union Act

 

Section 5.23

Unreasonable Action

 

Section 10.06(b)

WARN Act

 

Section 6.02(d)

Workers’ Compensation Event

 

Section 6.02(c)(ii)

Working Capital

 

Section 2.01(d)

 

 

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IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement as of
the date first written above.

 

AIR PRODUCTS AND CHEMICALS, INC.,

 

by

 

 

Name:

 

Title:

 

 

 

 

 

 

 

 

 

 

KMG CHEMICALS, INC.,

 

by

 

 

Name: John V. Sobchak

 

Title: Vice President & Chief Financial Officer

 

 

 

 

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