Document:

Exhibit 10.1

 

FIFTH AMENDMENT TO  CREDIT AGREEMENT

 

This Fifth Amendment to Credit Agreement (this “Fifth Amendment”) is made as of October 23, 2007, by and among GLOBAL OPERATING LLC, a Delaware limited liability company
(“OLLC”), GLOBAL COMPANIES LLC, a Delaware
limited liability company (“Global”), GLOBAL
MONTELLO GROUP CORP., a Delaware corporation (“Montello”), GLEN HES CORP., a Delaware corporation (“Glen Hes”), CHELSEA
SANDWICH LLC, a Delaware limited liability company (“Sandwich” and, collectively with OLLC, Global,
Glen Hes and Montello, the “Borrowers” and each a “Borrower”), GLOBAL PARTNERS LP, a Delaware limited partnership (the “MLP”),
GLOBAL GP LLC, a Delaware limited
liability company (the “GP” and, collectively with the MLP, the “Initial Guarantors and each individually, an “Initial Guarantor”), each “Lender” (as such
term is defined in the Credit Agreement referred to below) (collectively, the “Lenders”
and each individually, a “Lender”) party hereto  and Bank of America, N.A. as Administrative
Agent and L/C Issuer (as each such term is defined in the Credit Agreement),
amending certain provisions of that certain Credit Agreement dated as of
October 4, 2005 (as amended and in effect from time to time, the “Credit Agreement”) by and among the Borrowers,
the Initial Guarantors, the Lenders, the Administrative Agent and the L/C
Issuer. Terms not otherwise defined in the Credit Agreement shall have the same
respective meanings herein as therein.

 

WHEREAS, the Loan
Parties, the Lenders, the Administrative Agent and the L/C Issuer desire to
amend certain provisions of the Credit Agreement as provided more fully herein
below;

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

 

§1.  Amendment  to  Section
2  of  the  Credit  Agreement.  Section
2.1(a) of the Credit Agreement is hereby amended by inserting immediately after
the end of the text of Section 2.1(a)(iii) the following:

 

(iv)          Notwithstanding
anything to the contrary contained in this Section 2.1(a), in each calendar
year, the Outstanding Amount of all WC Revolver Loans shall not exceed
$130,000,000 for a period of ten (10) consecutive calendar days.

 

§2.  Conditions
to Effectiveness. This Fifth Amendment
will become effective as of the date hereof upon receipt by the Administrative
Agent of the following:

 

(a)           fully-executed original counterparts of this Fifth Amendment
executed by the Loan Parties, the Administrative Agent and the required
Lenders; and

 

 

(b)           receipt by the Administrative Agent for the account of each Lender that
consents to this Fifth Amendment and returns its duly executed signature page
hereto by not later than 12:00 noon (EST) on October 22, 2007, an amendment fee
of $5,000.

 

§3.          Representations and Warranties. Each
of the Loan Parties hereby repeats, on and as of the date hereof, each of the
representations and warranties made by it in Article V of the Credit Agreement,
provided, that all references therein to
the Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, each of the Loan Parties hereby represents and warrants that the
execution and delivery by such Loan Party of this Fifth Amendment and the
performance by each such Loan Party of all of its agreements and obligations
under the Credit Agreement as amended hereby and the other Loan Documents to
which it is a party are within the corporate, partnership and/or limited
liability company authority of each of the Loan Parties and have been duly
authorized by all necessary corporate, partnership and/or membership action on
the part of each of the Loan Parties.

 

§4.          Ratification, Etc.
Except as expressly amended hereby, the Credit Agreement and all documents,
instruments and agreements related thereto, including, but not limited to the
Security Documents, are hereby ratified and confirmed in all respects and shall
continue in full force and effect. The Credit Agreement and this Fifth
Amendment shall be read and construed as a single agreement. All references in
the Credit Agreement or any related agreement or instrument to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended hereby.

 

§5.          No Waiver. Nothing
contained herein shall constitute a waiver of, impair or otherwise affect any
Obligations, any other obligation of the Loan Parties or any rights of the
Administrative Agent, the L/C Issuer or the Lenders consequent thereon.

 

§6.          Counterparts. This
Fifth Amendment may be executed in one or more counterparts, each of which
shall be deemed an original but which together shall constitute one and the
same instrument.

 

§7.          Governing
Law . THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT
REFERENCE TO CONFLICT OF LAWS).

 

2

 

                IN WITNESS WHEREOF,
the parties hereto have executed this Fifth Amendment as a document under seal
as of the date first above written.

 

	
   

  	
  GLOBAL OPERATING LLC

  
	
   

  	
  By: Global Partners LP, its sole member

  
	
   

  	
  By: Global GP LLC, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  Thomas Hollister

  	
   

  
	
   

  	
  Title:   Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GLOBAL COMPANIES LLC

  
	
   

  	
  By: Global Operating LLC, its sole member

  
	
   

  	
  By: Global Partners LP, its sole member

  
	
   

  	
  By: Global GP LLC, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Thomas Hollister

  	
   

  
	
   

  	
  Title:   Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GLOBAL MONTELLO GROUP CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Thomas Hollister

  	
   

  
	
   

  	
  Title:   Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
  GLEN HES CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Thomas Hollister

  	
   

  
	
   

  	
  Title:   Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHELSEA SANDWICH LLC

  
	
   

  	
  By: Global Operating LLC, its sole member

  
	
   

  	
  By: Global Partners LP, its sole member

  
	
   

  	
  By: Global GP LLC, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Thomas Hollister

  	
   

  
	
   

  	
  Title:   Chief Operating Officer

  

 

3

 

	
   

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
       Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/Todd Mac Neill

  	
   

  
	
   

  	
      Title: Vice Pesident

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
       a Lender and
  L/C Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/Christen A. Lacey

  	
   

  
	
   

  	
      Christen A. Lacey, Principal

  
	
   

  	
   

  
	
   

  	
  STANDARD CHARTERED BANK, as

  
	
   

  	
       a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/Robert K. Reddington, Assitant
  Vice President

  	
   

  
	
   

  	
  By:

  	
    /s/Patricia Doyle, Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as

  
	
   

  	
       a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/John M. Hariaczyi

  	
   

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOCIETE GENERALE, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Barbara Paulsen

  	
   

  
	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Emmanuel Chesneau

  	
   

  
	
   

  	
  Title:  Managing Director

  
					

 

4

 

	
   

  	
  RBS CITIZENS, NA

  
	
   

  	
       as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Marina E. Grossi

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  SOVEREIGN BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Robert Lanigan

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  FORTIS CAPITAL CORP., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Matthew L. Rosetti

  	
   

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Juan J. Mejia

  	
   

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WEBSTER BANK NATIONAL

  
	
   

  	
       ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Carol Carver

  	
   

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
       as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Keven D. Smith

  	
   

  
	
   

  	
  Title:  Senior Vice President

  

 

5

 

	
   

  	
  TD BANKNORTH, N.A.,

  
	
   

  	
       as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/John Mercier

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
       as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Michael Sweeney

  	
   

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK,

  
	
   

  	
     NATIONAL ASSOCIATION

  
	
   

  	
       as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/Daniel M. Grondin

  	
   

  
	
   

  	
  Title:  Senior Vice President

  

 

6

 

RATIFICATION OF GUARANTY

 

Each of the undersigned guarantors (each a “Guarantor”) hereby
acknowledges and consents to the foregoing Fifth Amendment as of October 23,
2007, and agrees that the Guaranty dated as of October 4, 2005 (as amended and
in effect from time to time, the “Guaranty”) from each of the
undersigned Guarantors remains in full force and effect, and each of the
Guarantors confirms and ratifies all of its obligations thereunder.
Notwithstanding anything to the contrary contained herein, the parties thereto
hereby acknowledge, agree and confirm that as of the date hereof, the Guaranty
remains in full force and effect.

 

 

	
   

  	
  GLOBAL
  PARTNERS LP

  
	
   

  	
  By: Global
  GP LLC, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Thomas Hollister

  	
   

  
	
   

  	
             Title:
  Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GLOBAL GP
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Thomas Hollister

  	
   

  
	
   

  	
             Title:
  Chief Operating Officer

  

 

7Exhibit
10.36

 

ASSET PURCHASE AGREEMENT

by and among

AIR PRODUCTS AND CHEMICALS, INC.

and

KMG CHEMICALS, INC.

 

Dated as of October 19, 2007

 

 

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

  

 

i

 

	
  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

  

 

ii

 

	
  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

 

 

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,

 

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”);

 

2

(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

(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

(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);

 

5

(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,

 

6

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;

 

7

(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;

 

8

(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

 

9

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

 

 

10

 

 

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

 

11

 

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

12

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

 

13

 

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

14

 

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.

 

15

(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

 

16

 

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

 

17

 

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;

 

18

 

(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.

 

19

 

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.

 

20

 

(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.

21

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

22

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

23

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

24

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

25

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

26

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

 

27

 

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

28

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

29

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

 

30

 

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.

 

31

 

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,

 

32

 

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.

 

33

 

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.

 

34

 

(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

 

35

 

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

 

36

 

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

 

37

 

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.

 

38

 

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 

 

39

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

 

40

 

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 

 

41

 

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 

 

42

 

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.

 

43

 

                (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 

 

44

 

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 

 

45

 

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”),

 

46

 

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:

 

47

 

                (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 

 

48

 

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 

 

49

 

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,

 

50

 

 

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).

51

(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.

52

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.

53

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

54

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.

55

(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;

 

56

 

(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.

 

57

 

(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.

58

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

 

59

 

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.

 

60

 

 

 

“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

 

61

 

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

 

62

 

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.

 

63

 

“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

 

64

 

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.

 

65

 

                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.

 

66

 

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)

  

 

67

 

 

	
  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

  

 

 

68

 

	
  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)

  

 

 

69

 

 

	
  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)

  

 

 

70

 

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

  

 

 

 

 

71

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]