Document:

Exhibit 10.1

 

 

 

AGREEMENT AND PLAN OF MERGER

 

 

among

 

 

BASF AKTIENGESELLSCHAFT,

 

IRON ACQUISITION CORPORATION

 

 

and

 

 

ENGELHARD CORPORATION

 

 

Dated as of May 30, 2006

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  
	
  The Merger

  
	
  SECTION 1.01

  	
   

  	
  The Offer

  	
   

  	
  1

  
	
  SECTION 1.02

  	
   

  	
  Company Actions

  	
   

  	
  3

  
	
  SECTION 1.03

  	
   

  	
  Directors

  	
   

  	
  4

  
	
  SECTION 1.04

  	
   

  	
  The Merger

  	
   

  	
  5

  
	
  SECTION 1.05

  	
   

  	
  Closing

  	
   

  	
  5

  
	
  SECTION 1.06

  	
   

  	
  Effective Time

  	
   

  	
  6

  
	
  SECTION 1.07

  	
   

  	
  Effects of the Merger

  	
   

  	
  6

  
	
  SECTION 1.08

  	
   

  	
  Certificate of Incorporation and Bylaws

  	
   

  	
  6

  
	
  SECTION 1.09

  	
   

  	
  Directors

  	
   

  	
  6

  
	
  SECTION 1.10

  	
   

  	
  Officers

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  Effect of
  the Merger on the Capital Stock of the

  
	
  Constituent
  Corporations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
   

  	
  Effect on Capital Stock

  	
   

  	
  6

  
	
  SECTION 2.02

  	
   

  	
  Payment to Company Stockholders

  	
   

  	
  8

  
	
  SECTION 2.03

  	
   

  	
  Treatment of Options, Restricted Stock and
  other Equity Awards

  	
   

  	
  9

  
	
  SECTION 2.04

  	
   

  	
  Adjustments.

  	
   

  	
  10

  
	
  SECTION 2.05

  	
   

  	
  Lost Certificates

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  Representations
  and Warranties of the Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Organization, Standing and Corporate Power

  	
   

  	
  10

  
	
  SECTION 3.02

  	
   

  	
  Significant Subsidiaries

  	
   

  	
  11

  
	
  SECTION 3.03

  	
   

  	
  Capital Structure

  	
   

  	
  11

  
	
  SECTION 3.04

  	
   

  	
  Authority; Noncontravention

  	
   

  	
  12

  
	
  SECTION 3.05

  	
   

  	
  Governmental Approvals and Consents

  	
   

  	
  13

  
	
  SECTION 3.06

  	
   

  	
  Company Documents

  	
   

  	
  13

  
	
  SECTION 3.07

  	
   

  	
  Absence of Certain Changes or Events

  	
   

  	
  14

  
	
  SECTION 3.08

  	
   

  	
  Employee Benefits

  	
   

  	
  14

  
	
  SECTION 3.09

  	
   

  	
  Brokers and Other Advisors

  	
   

  	
  15

  
	
  SECTION 3.10

  	
   

  	
  Fairness Opinions

  	
   

  	
  15

  

 

i

 

	
  SECTION 3.11

  	
   

  	
  Information in the Offer Documents and the Schedule 14D-9

  	
   

  	
  15

  
	
  SECTION 3.12

  	
   

  	
  Sole Representations and Warranties

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  Representations
  and Warranties of Parent and Merger Sub

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Organization, Standing and Corporate Power

  	
   

  	
  16

  
	
  SECTION 4.02

  	
   

  	
  Authority; Noncontravention

  	
   

  	
  16

  
	
  SECTION 4.03

  	
   

  	
  Governmental Approvals

  	
   

  	
  17

  
	
  SECTION 4.04

  	
   

  	
  Brokers and Other Advisors

  	
   

  	
  17

  
	
  SECTION 4.05

  	
   

  	
  Financial Capacity

  	
   

  	
  17

  
	
  SECTION 4.06

  	
   

  	
  Information in the Offer Documents

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  Covenants
  Relating to Conduct of Business

  
	
   

  
	
  SECTION 5.01

  	
   

  	
  Conduct of Business

  	
   

  	
  18

  
	
  SECTION 5.02

  	
   

  	
  Action by Written Consent

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  Additional
  Agreements

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
   

  	
  Reasonable Best Efforts

  	
   

  	
  20

  
	
  SECTION 6.02

  	
   

  	
  Indemnification, Exculpation and Insurance

  	
   

  	
  20

  
	
  SECTION 6.03

  	
   

  	
  Fees and Expenses

  	
   

  	
  22

  
	
  SECTION 6.04

  	
   

  	
  Public Announcements

  	
   

  	
  22

  
	
  SECTION 6.05

  	
   

  	
  Notification of Certain Matters

  	
   

  	
  22

  
	
  SECTION 6.06

  	
   

  	
  Access to Information

  	
   

  	
  22

  
	
  SECTION 6.07

  	
   

  	
  Employee Benefits Matters

  	
   

  	
  23

  
	
  SECTION 6.08

  	
   

  	
  NYSE Listing

  	
   

  	
  24

  
	
  SECTION 6.09

  	
   

  	
  Further Assurances

  	
   

  	
  24

  
	
  SECTION 6.10

  	
   

  	
  Confidentiality Agreement

  	
   

  	
  24

  
	
  SECTION 6.11

  	
   

  	
  Adjourn Annual Meeting; Terminate
  Self-Tender; Consent Solicitation; Rights Agreement

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  Conditions
  Precedent

  
	
   

  
	
  SECTION 7.01

  	
   

  	
  Conditions to Each Party’s Obligation to
  Effect the Merger

  	
   

  	
  25

  
	
  SECTION 7.02

  	
   

  	
  Frustration of Closing Conditions

  	
   

  	
  25

  

 

ii

 

	
  ARTICLE VIII

  
	
   

  
	
  Termination,
  Amendment and Waiver

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Termination

  	
   

  	
  26

  
	
  SECTION 8.02

  	
   

  	
  Intentionally Omitted

  	
   

  	
  27

  
	
  SECTION 8.03

  	
   

  	
  Effect of Termination

  	
   

  	
  27

  
	
  SECTION 8.04

  	
   

  	
  Amendment

  	
   

  	
  27

  
	
  SECTION 8.05

  	
   

  	
  Extension; Waiver

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  General
  Provisions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Nonsurvival of Representations and
  Warranties

  	
   

  	
  28

  
	
  SECTION 9.02

  	
   

  	
  Notices

  	
   

  	
  28

  
	
  SECTION 9.03

  	
   

  	
  Definitions

  	
   

  	
  29

  
	
  SECTION 9.04

  	
   

  	
  Interpretation

  	
   

  	
  33

  
	
  SECTION 9.05

  	
   

  	
  Counterparts

  	
   

  	
  34

  
	
  SECTION 9.06

  	
   

  	
  Entire Agreement; No Third-Party
  Beneficiaries

  	
   

  	
  34

  
	
  SECTION 9.07

  	
   

  	
  Governing Law

  	
   

  	
  34

  
	
  SECTION 9.08

  	
   

  	
  Assignment

  	
   

  	
  34

  
	
  SECTION 9.09

  	
   

  	
  Specific Enforcement; Consent to
  Jurisdiction; Service of Process

  	
   

  	
  34

  
	
  SECTION 9.10

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  35

  
	
  SECTION 9.11

  	
   

  	
  Severability

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annex I

  	
   

  	
  Conditions to the Offer

  	
   

  	
   

  

 

iii

 

AGREEMENT AND PLAN OF MERGER 

 

This AGREEMENT
AND PLAN OF MERGER (this “Agreement”), dated as of May 30, 2006, is
made by and among BASF AKTIENGESELLSCHAFT, a stock corporation organized under
the laws of the Federal Republic of Germany (“Parent”), IRON ACQUISITION
CORPORATION, a Delaware corporation and a wholly owned Subsidiary of Parent (“Merger
Sub”), and ENGELHARD CORPORATION, a Delaware corporation (the “Company”).
Capitalized terms used in this Agreement and not otherwise defined shall have
the meaning given to such terms in Section 9.03.

 

WHEREAS,
Merger Sub has commenced a tender offer (the “Offer”) to purchase all of
the issued and outstanding shares of common stock, par value $1.00 per share of
the Company, including the associated Series A Junior Participating
Preferred Stock Purchase Rights (collectively, the “Company Common Stock”)
for a price of $39.00 per share of Company Common Stock (such amount or any
greater amount per share of Company Common Stock paid pursuant to the Offer,
the “Offer Price”), subject to any required withholding of Taxes, net to
the seller in cash, and on the terms and subject to the conditions set forth in
this Agreement;

 

WHEREAS, the
Board of Directors of the Company has, on the terms and subject to the
conditions set forth herein, approved the Offer and adopted this Agreement, and
is recommending that the Company’s stockholders accept the Offer, tender their
shares of Company Common Stock to Merger Sub and approve this Agreement;

 

WHEREAS, the
respective Boards of Directors of Parent, Merger Sub and the Company have
approved and declared advisable the merger of Merger Sub with and into the
Company (the “Merger”), upon the terms and subject to the conditions set
forth in this Agreement; and

 

WHEREAS,
Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the
Merger and also to prescribe various conditions to the Offer and the Merger.

 

NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements contained in this Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

The Merger

 

SECTION 1.01                    The Offer.

 

(a)                                  Provided
that this Agreement shall not have been terminated in accordance with Section 8.01,
as promptly as practicable and in any event within one Business Day following
the date hereof (or such later date as the parties may mutually agree in
writing), Merger Sub (i) shall amend the Offer to reflect the execution of
this Agreement, (ii) shall file an amendment to its Schedule TO,
which amendment shall include an amended offer to purchase, 

 

 

form of transmittal letter, form of
notice of guaranteed delivery and all other necessary documents and exhibits
with the Securities and Exchange Commission (the “SEC”) and make all
deliveries, filings, publications, mailings and telephonic notices required to
be made in connection with the Offer under the Federal securities laws,
including Regulations 14D and 14E of the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated thereunder, the “Exchange
Act”) (such documents filed or required to be filed with the SEC and such
other filings, deliveries, mailings and notices, collectively and together with
any amendments, exhibits or supplements thereto, the “Offer Documents”)
and (iii) shall use its reasonable best efforts to consummate the Offer.
Parent will cause Merger Sub to accept for payment and pay for any shares of
Company Common Stock tendered pursuant to the Offer, subject only to the
condition that there shall be validly tendered and not withdrawn prior to the
expiration of the Offer such number of shares of Company Common Stock that,
when added to the shares of Company Common Stock already owned by Parent or any
of its Subsidiaries, would constitute at least a majority of the shares of
Company Common Stock outstanding determined on a Fully Diluted Basis on the
date of expiration of the Offer (the “Minimum Condition”) and to the
other conditions set forth in Annex I hereto (together with the Minimum
Condition, collectively, the “Tender Offer Conditions”).

 

(b)                                 Without
the prior written consent of the Company, Merger Sub shall not (and Parent
shall cause Merger Sub not to) decrease the Offer Price or change the form of
consideration payable in the Offer, decrease the number of shares of Company
Common Stock sought to be purchased in the Offer, impose additional conditions
to the Offer or amend any other term of the Offer in a manner that is adverse
to the holders of shares of Company Common Stock, except as provided in this
Agreement. The Offer shall remain open until the date that is five Business
Days after the amendment of the Offer (the “Expiration Date”), unless
the period of time for which the Offer is open shall have been extended as may be
required by applicable Law or in accordance with the immediately following
sentence, in which event the term “Expiration Date” shall mean the latest time
and date as the Offer, as so extended, may expire; provided, however,
that Merger Sub may (or, at the Company’s option, if at least 80% of the
outstanding shares of Company Common Stock on a Fully Diluted Basis have been
tendered and accepted for payment by Merger Sub, shall) provide for a
subsequent offering period after the Expiration Date, in accordance with Rule 14d-11
under the Exchange Act (including the obligations that Merger Sub immediately
accept and promptly pay for all shares of Company Common Stock tendered during
the initial offering period and immediately accept and promptly pay for any
shares of Company Common Stock tendered during such subsequent offering
period). If, at any Expiration Date, any of the Tender Offer Conditions are not
satisfied or waived by Merger Sub, Merger Sub shall (and Parent shall cause
Merger Sub to) extend the Offer from time to time, each such extension not to
exceed such number of days that Merger Sub reasonably believes is necessary to
cause the Tender Offer Conditions to be satisfied (but in any event not more
than 15 Business Days for all such extensions, unless, in each case, the
parties shall otherwise mutually agree in writing). Under no circumstances
shall Parent or Merger Sub waive the Minimum Condition. Subject to the terms of
the Offer and this Agreement and the satisfaction of the Tender Offer
Conditions as of any Expiration Date, including the Minimum Condition, Parent
will cause Merger Sub to accept for payment and pay for any and all shares of
Company Common Stock validly tendered and not validly withdrawn pursuant to the
Offer promptly after such Expiration Date, regardless of the number of shares
of Company Common Stock tendered in the Offer (such date as Merger Sub shall be
obligated to accept for payment any and all shares of Company Common Stock
validly tendered and not validly withdrawn 

 

2

 

pursuant to the Offer, the “Acceptance
Date”). For the avoidance of doubt, and notwithstanding anything in this
Agreement to the contrary, Merger Sub shall not (and Parent shall cause Merger
Sub not to) accept for payment any shares of Company Common Stock tendered
pursuant to the Offer unless the Minimum Condition shall have been satisfied.

 

(c)                                  Each
of Parent and Merger Sub, on the one hand, and the Company, on the other hand,
agrees to correct promptly any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect and Merger Sub further agrees to take all steps necessary
to cause the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to stockholders of the Company, in each case, as and to the extent
required by applicable Federal securities Laws. The Company and its counsel
shall be given a reasonable opportunity to review and comment on the Offer
Documents in advance of their filing with the SEC and dissemination to
stockholders of the Company. Parent and Merger Sub shall provide to the Company
and its counsel copies in writing of any comments and shall inform the
Company of any oral comments that Parent, Merger Sub or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
receipt of such comments. The Company and its counsel shall be given a
reasonable opportunity to review any such written and oral comments and
proposed responses.

 

SECTION 1.02                    Company
Actions.

 

(a)                                  The
Company shall, after affording Parent and its counsel a reasonable opportunity
to review and comment thereon, file with the SEC, as promptly as practicable on
the date of the filing by Parent and Merger Sub of the Offer Documents, an
amendment to its Solicitation/Recommendation Statement on Schedule 14D-9
(together with the existing statement and any subsequent amendments or
supplements thereto, the “Schedule 14D-9”) reflecting the
recommendation of the Company’s Board of Directors that holders of shares of
Company Common Stock tender their shares into the Offer, and shall disseminate
the Schedule 14D-9 as required by Rule 14d-9 promulgated
under the Exchange Act. The Schedule 14D-9 will set forth that the
Company’s Board of Directors has (i) determined by unanimous vote of all
its members that each of the transactions contemplated hereby, including each
of the Offer and the Merger, is fair to and in the best interests of the
Company and its stockholders, (ii) approved the Offer and the Merger and
this Agreement in accordance with the Delaware General Corporation Law (“DGCL”)
and (iii) recommended acceptance and approval of the Offer and adoption of
this Agreement by the Company’s stockholders; provided, however,
that Parent and Merger Sub agree that such recommendations and the Schedule 14D-9
may be modified in a manner adverse to Parent and Merger Sub or withdrawn
after the date hereof if, but only if, after consultation with its outside
counsel, the Board of Directors determines that such action is advisable in
connection with its fiduciary duties under applicable Law.

 

(b)                                 Each
of the Company, on the one hand, and Parent and Merger Sub, on the other hand,
agrees to correct promptly any information provided by it for use in the Schedule 14D-9
if and to the extent that it shall have become false or misleading in any
material respect and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to stockholders of the Company, in each case, as and to
the extent required by applicable Federal securities Laws. The Company 

 

3

 

shall provide to Parent and its counsel
copies in writing of any comments and shall inform Parent of any oral
comments that the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after receipt of
such comments. Parent and its counsel shall be given a reasonable opportunity
to review any such written and oral comments and proposed responses.

 

(c)                                  In
connection with the Offer, the Company will promptly furnish Merger Sub with
mailing labels, security position listings, any available non-objecting beneficial
owner lists and any available listing or computer list containing the names and
addresses of the record holders of the Company Common Stock as of the most
recent practicable date and shall furnish Merger Sub with such additional
available information (including, but not limited to, updated lists of holders
of the Company Common Stock and their addresses, mailing labels and lists of
security positions and non-objecting beneficial owner lists) and such other
assistance as Merger Sub or its agents may reasonably request in
communicating the Offer to the Company’s record and beneficial stockholders.
Subject to the requirements of applicable Law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Merger Sub and their Affiliates, associates,
agents and advisors shall keep such information confidential and use the
information contained in any such labels, listings and files only in connection
with the Offer and the Merger and, should the Offer terminate or if this
Agreement shall be terminated, will destroy all copies of such information then
in their possession.

 

SECTION 1.03                    Directors.

 

(a)                                  Promptly
upon the purchase of and payment for any shares of Company Common Stock by
Merger Sub pursuant to the Offer which represent at least a majority of the
shares of Company Common Stock outstanding on a Fully Diluted Basis and at all
times thereafter and subject to Section 1.03(b), Merger Sub shall be
entitled to elect such number of directors, rounded up to the next whole
number, on the Company’s Board of Directors as is equal to the product of the
total number of directors on the Company’s Board of Directors (giving effect to
the directors elected or designated by Merger Sub pursuant to this sentence)
multiplied by the percentage that the aggregate number of shares of Company
Common Stock beneficially owned by Merger Sub and any of its Affiliates bears
to the total number of shares of Company Common Stock then outstanding (such
directors which Merger Sub is entitled to elect pursuant to this sentence, the “Merger
Sub Designees”). The Company shall, upon Merger Sub’s request at any time
following the purchase of and payment for shares of Company Common Stock
pursuant to the Offer which represent at least a majority of the shares of
Company Common Stock outstanding on a Fully Diluted Basis, take such reasonable
actions, including promptly filling vacancies or newly created directorships on
the Company’s Board of Directors, promptly increasing the size of the Company’s
Board of Directors and/or promptly requesting the resignations of such number
of its incumbent directors as are necessary to enable the Merger Sub Designees
to be so elected or designated to the Company’s Board of Directors, and shall
use its best efforts to cause the Merger Sub Designees to be so elected or
designated at such time. The Company’s obligations under this Section 1.03(a) shall
be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly upon execution of this
Agreement take all actions required pursuant to Section 14(f) and Rule 14f-1
in order to fulfill its obligations under this Section 1.03(a), including
mailing to stockholders the 

 

4

 

information required by Section 14(f) and
Rule 14f-1 as is necessary to enable the Merger Sub Designees to be
elected or designated to the Company’s Board of Directors. Merger Sub shall
supply the Company with, and be solely responsible for, information with
respect to the Merger Sub Designees and Parent’s and Merger Sub’s respective
officers, directors and Affiliates to the extent required by Section 14(f) and
Rule 14f-1.

 

(b)                                 In
the event that Merger Sub’s designees are elected or designated to the Company’s
Board of Directors pursuant to Section 1.03(a), then, until the Effective
Time, the Company and Parent shall cause the Company’s Board of Directors to
maintain as directors two directors who are members of the Company’s Board of
Directors on the date hereof (the “Continuing Directors”); provided,
however, that if any Continuing Director is unable to serve due to
death, disability or resignation, the remaining Continuing Director shall be
entitled to elect or designate another person to fill such vacancy, and such
person shall be deemed to be a Continuing Director for purposes of this
Agreement. If no Continuing Director then remains, the other directors shall designate
two persons to fill such vacancies and such persons shall be deemed Continuing
Directors for all purposes of this Agreement. Notwithstanding anything to the
contrary contained herein, neither Parent nor Merger Sub shall take any action
to cause any Continuing Director to be removed for cause. Notwithstanding
anything in this Agreement to the contrary, the affirmative vote of a majority
of the Continuing Directors shall (in addition to the approval rights of the
Board of Directors or the stockholders of the Company as may be required
by the Restated Certificate of Incorporation of the Company (as amended, the “Company
Articles”), the bylaws of the Company (as amended, the “Company Bylaws,”
and together with the Company Articles, the “Company Governing Documents”)
or applicable Law) be required (i) for the Company to amend or terminate
this Agreement, (ii) to exercise or waive any of the Company’s rights,
benefits or remedies hereunder, (iii) to amend the Company Governing
Documents or (iv) to take any other action of the Company’s Board of
Directors under or in connection with this Agreement. The Continuing Directors
shall have the authority to retain such counsel and other advisors at the
expense of the Company as determined appropriate by the Continuing Directors
and shall have the authority to institute any action on behalf of the Company
to enforce the performance of this Agreement.

 

SECTION 1.04                    The Merger.
Upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, Merger Sub shall be merged with and into the Company
at the Effective Time. Following the Effective Time, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation in the Merger (the “Surviving Corporation”) and
shall succeed to and assume all the rights and obligations of Merger Sub in
accordance with the DGCL.

 

SECTION 1.05                    Closing.
The closing of the Merger (the “Closing”) will take place at 10:00 a.m.
on a date to be specified by the parties (the “Closing Date”), which
shall be no later than the second Business Day after satisfaction or waiver of
the conditions set forth in Article VII (other than those conditions that
by their terms are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions), at the offices of Shearman &
Sterling LLP, 599 Lexington Avenue, New York, New York, unless another date or
place is agreed to in writing by the parties hereto.

 

5

 

SECTION 1.06                    Effective
Time. Subject to the provisions of this Agreement, as soon as practicable
on the Closing Date, the parties shall file a certificate of merger (the “Certificate
of Merger”) executed in accordance with the relevant provisions of the DGCL
and shall make all other filings or recordings required under the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware, or at such other
time as Parent and the Company shall agree and shall specify in the Certificate
of Merger (the time the Merger becomes effective being the “Effective Time”).

 

SECTION 1.07                    Effects of
the Merger. The Merger shall have the effects set forth in Section 2.01
below and in the DGCL (including in Section 259 of the DGCL).

 

SECTION 1.08                    Certificate
of Incorporation and Bylaws.

 

(a)                                  The
Company Articles shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law; provided, however, that, at the Effective Time,
the Certificate of Incorporation of the Surviving Corporation shall be amended
in its entirety to be identical to the Certificate of Incorporation of Merger
Sub in effect immediately prior to the Effective Time, except that Article I
thereof shall read as follows:  “The name
of the corporation is Engelhard Corporation.”

 

(b)                                 The
Bylaws of the Merger Sub, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable Law.

 

SECTION 1.09                    Directors.
The directors of Merger Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, each of such directors to hold
office, subject to the applicable provisions of the Certificate of
Incorporation and Bylaws of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.

 

SECTION 1.10                    Officers.
The officers of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation, such officers to hold office,
subject to the applicable provisions of the Certificate of Incorporation and
Bylaws of the Surviving Corporation, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.

 

ARTICLE II

Effect of the Merger on the Capital Stock of the

Constituent Corporations

 

SECTION 2.01                    Effect on
Capital Stock. As of the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any shares of Company
Common Stock or any shares of capital stock of Merger Sub:

 

(a)                                  Common Stock of
Merger Sub. Each issued and outstanding share of common stock of Merger Sub
shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the Surviving

 

6

 

Corporation with the same rights, powers and privileges as the shares
so converted and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation.

 

(b)                                 Cancellation of
Stock. Each share of Company Common Stock held by the Company as treasury
stock (other than shares, if any, in any Employee Benefit Plans) or owned by
Parent or any of its Subsidiaries immediately prior to the Effective Time shall
automatically be canceled and retired and shall cease to exist and no payment
shall be made with respect thereto.

 

(c)                                  Company Common
Stock; Determination of Merger Consideration. Each share of Company Common
Stock outstanding as of the Effective Time (other than the Dissent Shares and
shares cancelled pursuant to Section 2.01(b) and excluding shares of
Company Common Stock owned by Parent, Merger Sub or any other wholly owned
direct or indirect Subsidiary of Parent), by virtue of the Merger, shall be
converted into a right to receive the Offer Price in cash, without interest,
less the per share amount of any dividend that has, after the date hereof and
prior to the Effective Time, been paid to, or become payable to, holders of
Company Common Stock by the Company (the “Per Share Merger Consideration,”
the aggregate amount in cash into which all shares of Company Common Stock may be
converted pursuant to this Section 2.01, the “Aggregate Merger
Consideration”).

 

(d)                                 Dissenters’ Rights.
Notwithstanding anything in this Agreement to the contrary, shares of Company
Common Stock that are outstanding immediately prior to the Effective Time, that
are not held by Parent, Merger Sub or any other wholly owned direct or indirect
Subsidiary of Parent, and that are held by any Person who is entitled to
dissent from the Merger pursuant to Section 262 of the DGCL (the “Dissenters’
Rights Statute”), who did not vote in favor of the Merger or consent
thereto in writing and who complies in all other respects with the Dissenters’
Rights Statute (such shares, “Dissent Shares”) shall not be converted
into a right to receive the Per Share Merger Consideration as provided in Section 2.01(c),
but rather the holders of Dissent Shares shall be entitled to the right to
receive payment of the fair value of such Dissent Shares in accordance with the
Dissenters’ Rights Statute; provided, however, that if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to receive payment of the fair value under the Dissenters’ Rights
Statute, then the right of such holder to be paid the fair value of such holder’s
Dissent Shares shall cease and such Dissent Shares shall be deemed to have been
converted as of the Effective Time into, and to have become exchangeable solely
for, the right to receive the Per Share Merger Consideration, without interest,
as provided in Section 2.01(c). The Company shall give prompt notice to
Parent of any written demands and any other instruments served pursuant to the
Dissenters’ Rights Statute received by the Company relating to rights of
appraisal under the Dissenters’ Rights Statute, and Parent shall have the right
to direct all negotiations and proceedings with respect to such demands. Except
with the prior written consent of Parent, the Company shall not make any
payment with respect to, or offer to settle or settle, any such demands. Each
holder of Dissent Shares who becomes entitled to payment for such shares
pursuant to the Dissenters’ Rights Statute shall receive payment therefor from
the Surviving Corporation in accordance with the Dissenters’ Rights Statute.

 

7

 

SECTION 2.02                    Payment to
Company Stockholders.

 

(a)                                  Prior
to the Effective Time, Merger Sub shall designate a bank or trust company to
act as agent (the “Exchange Agent”) for the purpose of exchanging for
the Merger Consideration (i) certificates representing Company Common
Stock (the “Certificates”) or (ii) uncertificated Company Common
Stock (the “Uncertificated Shares”). At the Effective Time, Parent shall
deposit with the Exchange Agent an amount in immediately available funds equal
to the Aggregate Merger Consideration to be paid in respect of all of the
Certificates and the Uncertificated Shares. Promptly after the Effective Time,
Parent shall send, or shall cause the Exchange Agent to send, to each holder of
Company Common Stock at the Effective Time a letter of transmittal and
instructions (which shall specify that the delivery shall be effected, and risk
of loss and title shall pass, only upon proper delivery of the Certificates or
transfer of the Uncertificated Shares to the Exchange Agent) for use in such
exchange.

 

(b)                                 Each
holder of shares of Company Common Stock that have been converted into the
right to receive the Merger Consideration shall be entitled to receive, upon (i) surrender
to the Exchange Agent of a Certificate, together with a properly completed
letter of transmittal or (ii) receipt of an “agent’s message” by the
Exchange Agent (or such other evidence, if any, of transfer as the Exchange
Agent may reasonably request) in the case of a book-entry transfer of
Uncertificated Shares, the Merger Consideration, without interest, payable for
each Company Common Share represented by a Certificate or for each
Uncertificated Share. Until so surrendered or transferred, as the case may be,
each such Certificate or Uncertificated Share shall represent after the
Effective Time for all purposes only the right to receive such Merger Consideration.

 

(c)                                  If
any portion of the applicable Merger Consideration is to be paid to a Person
other than the Person in whose name the surrendered Certificate or the
transferred Uncertificated Share is registered, it shall be a condition to such
payment that (i) either such Certificate shall be properly endorsed or
shall otherwise be in proper form for transfer or such Uncertificated
Share shall be properly transferred and (ii) the Person requesting such
payment shall pay to the Exchange Agent any transfer or other Taxes required as
a result of such payment to a Person other than the registered holder of such
Certificate or Uncertificated Share or establish to the satisfaction of the
Exchange Agent that such Tax has been paid or is not payable.

 

(d)                                 After
the Effective Time, there shall be no further registration of transfers of
shares of Company Common Stock. If, after the Effective Time, Certificates or
Uncertificated Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration provided for, and in
accordance with the procedures set forth, in this Article II.

 

(e)                                  Any
portion of the Merger Consideration deposited with the Exchange Agent pursuant
to Section 2.02(a) (and any interest or other income earned thereon)
that remains unclaimed by the holders of Company Common Stock one year after
the Effective Time shall be returned to Parent, upon demand, and any such
holder who has not exchanged such Company Common Stock for the Merger
Consideration in accordance with this Section 2.02 prior to that time
shall thereafter look only to Parent and the Surviving Corporation for payment
of the Merger Consideration in respect of such Company Common Stock without any
interest thereon. 

 

8

 

Notwithstanding the foregoing, Parent, the
Surviving Corporation and the Exchange Agent shall not be liable to any holder
of Company Common Stock for any amount paid to a public official pursuant to
applicable abandoned property, escheat or similar Laws.

 

(f)                                    Any
portion of the Merger Consideration deposited with the Exchange Agent pursuant
to Section 2.02(a) to pay for Company Common Stock, for which
dissenters’ rights have been perfected and have not been withdrawn or lost 30
days after the Effective Time, shall be returned to Parent, upon demand.

 

(g)                                 Notwithstanding
anything to the contrary contained herein, the Exchange Agent, Parent or the
Company shall be entitled to deduct and withhold from the consideration
otherwise payable (i) to any holder of shares of Company Common Stock
pursuant to this Agreement, (ii) to any Person designated to receive
Merger Consideration pursuant to Section 2.02(c) or (iii) to any
Person pursuant to Section 2.03 hereof such amounts as may be
required to be deducted and withheld with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, or under any provision of state, local or
foreign tax Law; provided, that no amount shall be withheld or deducted
under any provisions of foreign tax Law, except to the extent that a person is
subject to such withholding or deduction as a result of a connection between
such person and the foreign jurisdiction that imposes such withholding or
deduction (other than a connection arising solely from the receipt of consideration
pursuant to this Agreement). To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by the Exchange Agent, Parent or
the Company, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Company Common Stock in respect
of which such deduction and withholding was made.

 

SECTION 2.03                    Treatment
of Options, Restricted Stock and other Equity Awards.

 

(a)                                  Upon
the consummation of the Offer, each employee and director stock option to
purchase Company Common Stock outstanding under any stock option or
compensation plan or arrangement of the Company shall, with no action on the part of
the Company or holder thereof, become fully vested. At or immediately prior to
the Effective Time, the Company will cause any necessary action to be taken to
cause each such stock option to be canceled and the Company shall pay each
holder of any such option, at the Effective Time, for each such option
surrendered an amount in cash determined by multiplying (i) the excess, if
any, of the Merger Consideration over the applicable exercise price of such
option by (ii) the number of shares of Company Common Stock such holder
could have purchased (assuming full vesting of all options) had such holder
exercised such option in full immediately prior to the Effective Time.

 

(b)                                 Upon
the consummation of the Offer, each share of Company Common Stock subject to
restrictions on transfer and/or forfeiture outstanding under any stock or
compensation plan or arrangement of the Company shall, with no action on the part of
the Company or holder thereof, become fully vested. In addition, upon
consummation of the Offer, the Company will cause any necessary action to be
taken to cause each restricted stock unit and each other deferred right to
receive in the future shares or cash measured in reference to shares of 

 

9

 

Company Common Stock granted pursuant to the
Company’s deferred compensation plans to vest and the maximum amount of shares
of Company Common Stock deliverable thereunder will be delivered as provided in
the applicable plan pertaining thereto.

 

(c)                                  Prior
to the Effective Time, the Company shall take all necessary action (i) such
that the disposition by each member of the Board of Directors and each employee
of the Company that is subject to Section 16 of the Exchange Act of
Company Common Stock, options to purchase Company Common Stock, restricted
stock units and other deferred rights to receive shares or cash measured in
reference to shares of Company Common Stock, in each case, pursuant to the
transactions contemplated by this Agreement, shall be exempt from Section 16(b) of
the Exchange Act pursuant to Rule 16b-3 thereunder and (ii) in order
to give effect to the transactions contemplated by Sections 2.03(a) and
2.03(b).

 

SECTION 2.04                    Adjustments.

 

If, during the
period between the date hereof and the Effective Time, any change in the
outstanding Company Common Stock shall occur, including by reason of any
reclassification, recapitalization, stock split or combination or exchange of
Company Common Stock, or stock dividend thereon with a record date during such
period or issuer tender or exchange offer or similar transaction (excluding any
such change as a result of any exercise of options outstanding as of the date
hereof to purchase Company Common Stock granted under the Company’s stock
option or compensation plans or arrangements), the Merger Consideration and any
other amounts payable pursuant to this Agreement shall be appropriately adjusted.

 

SECTION 2.05                    Lost
Certificates. If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such Person of a bond, in such reasonable amount as
the Surviving Corporation may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent shall pay,
in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the Company Common Stock represented by
such Certificate, as contemplated by this Article II.

 

ARTICLE III

Representations and Warranties of the Company

 

Except as set
forth in the disclosure schedule of the Company attached to this Agreement
(the “Company Disclosure Schedule”) and except as the Company has
disclosed in public filings made prior to the date hereof with the SEC, the
Company represents and warrants to Parent and Merger Sub that:

 

SECTION 3.01                    Organization,
Standing and Corporate Power.

 

(a)                                  The
Company is duly organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is incorporated or organized and has all
requisite corporate or other power and authority to own, operate and lease its
properties and to carry on its business as now being conducted.

 

10

 

(b)                                 Each
of the Company and its Significant Subsidiaries is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership, leasing or operation of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.

 

(c)                                  The
Company has made available to Parent complete and correct copies of the Company
Articles and Company Bylaws, each as amended to the date hereof. There have
been no amendments to the Certificate of Incorporation and Bylaws or other
similar documents of each Significant Subsidiary of the Company that had previously
been made available to Parent since such time as they were made available to
Parent.

 

SECTION 3.02                    Significant
Subsidiaries. Each “significant subsidiary” of the Company (as defined in Rule 1-02
of Regulation S-X of the SEC) (such Subsidiaries of the Company, the “Significant
Subsidiaries”) is duly organized, validly existing and in good standing
under the Laws of the jurisdiction in which it is incorporated or organized and
has all requisite corporate or other power and authority to own, operate and
lease its properties and to carry on its business as now being conducted,
except where the failure to have such power and authority or good standing
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. All the outstanding shares of capital stock
of, or other equity interests in, each Significant Subsidiary have been duly
authorized, validly issued and are fully paid and nonassessable and are owned
directly or indirectly by the Company free and clear of all pledges, claims,
liens, charges, encumbrances or security interests (collectively, “Liens”),
and free of any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other equity interests, other than, in each case, as would
not reasonably be expected to have a Company Material Adverse Effect. There are
no stock appreciation rights, stock options, “phantom” stock, profit
participation or similar rights outstanding with respect to the capital stock
of any direct or indirect Significant Subsidiary of the Company.

 

SECTION 3.03                    Capital
Structure. The authorized capital stock of the Company consists of
350,000,000 shares of Company Common Stock and 5,000,000 shares of preferred
stock, without par value (the “Company Preferred Stock”). As of May 25,
2006, (a) 124,080,451 shares of Company Common Stock (including the
associated Series A Junior Participating Preferred Stock Purchase Rights)
were issued and outstanding, (b) 23,212,490 shares of Company Common Stock
were held by the Company in its treasury, (c) 7,430,419 shares of Company
Common Stock were subject to outstanding options to acquire shares of Company
Common Stock granted pursuant to the Company’s 2002 Long-Term Incentive Plan,
the Stock Option Plan of 1999 for Certain Key Employees, the Company’s Stock
Option Plan of 1991 and the Directors Stock Option Plan, (d) restricted
stock units to acquire 21,470 shares of Company Common Stock were issued and
outstanding granted pursuant to the Company’s 2002 Long Term Incentive Plan, (e) 154,657
shares of Company Common Stock had been awarded under, and remain subject to,
the Company’s deferred compensation plans for directors and (f) no shares
of Company Preferred Stock were issued and outstanding. All outstanding shares
of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable and not subject to or issued in violation of any preemptive
rights. There are not issued, reserved for issuance or outstanding (A) any
securities of the Company or any of its Significant

 

11

 

Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of the Company or any of its Significant Subsidiaries or (B) any
warrants, calls, options, subscriptions or other rights, agreements or
commitments to acquire from the Company or any of its Significant Subsidiaries,
or any obligation of the Company or any of its Significant Subsidiaries to
issue, any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company or any of its Significant Subsidiaries (each, a “Company Option”).
Neither the Company nor any of its Significant Subsidiaries (i) has any
obligation to repurchase, redeem or otherwise acquire the securities described
in the preceding sentence or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities or (ii) is a party to any voting
agreement or proxy with respect to the voting of any such securities.

 

SECTION 3.04                    Authority;
Noncontravention.

 

(a)                                  The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, perform its obligations hereunder and consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action, other than the Stockholder Approval, on the part of the
Company, and no other corporate proceedings, other than the Stockholder
Approval, on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, solvency, fraudulent transfer, reorganization, moratorium and other
Laws affecting creditors’ rights generally from time to time in effect). The
Board of Directors of the Company, at a meeting duly called and held, duly
adopted resolutions (i) approving and declaring advisable this Agreement,
the Offer, the Merger and the other transactions contemplated by this
Agreement, (ii) resolving that the adoption of this Agreement be submitted
to the stockholders of the Company, but subject to Section 5.02 hereof and
(iii) recommending that the stockholders of the Company accept the Offer,
tender their shares of Company Common Stock to Merger Sub pursuant to the Offer
and adopt this Agreement (the “Company Board Recommendation”). The
affirmative vote (or written consent in lieu thereof) of the holders of a
majority of the outstanding Company Common Stock (the “Stockholder Approval”)
is the only vote of the holders of any of the Company’s capital stock necessary
in connection with the consummation of the Merger.

 

(b)                                 The
execution and delivery of this Agreement do not, and the consummation of the
Merger and the other transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, require the
consent, waiver, approval or authorization from any party to, or result in any
violation or breach 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 the loss of a benefit under, (i) the
Company Governing Documents, (ii) any note, bond, mortgage, indenture,
lease, license, permit, franchise, contract, agreement or other instrument to
which the Company or any Significant Subsidiary is a party or by which any of
them or their respective properties or assets is bound or

 

12

 

affected or (iii) subject to the
Stockholder Approval and the governmental filings and other matters referred to
in Section 3.05 hereof, any Law applicable to the Company or any of its
Subsidiaries or their respective properties or other assets, other than, in the
case of clause (ii), any such conflicts, consents, waivers, approvals, authorizations,
violations, breaches, defaults, rights or losses that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.

 

(c)                                  The
Board of Directors of the Company has taken all action necessary to render Article 7
of the Company Articles inapplicable to the Offer, the Merger, this Agreement
and the transactions contemplated hereby. The Company has made available to
Parent a complete and correct copy of the Company Rights Agreement, including
all current and proposed amendments and exhibits thereto. The Company has duly
executed an amendment to the Company Rights Agreement, as described herein, and
the Board of Directors of the Company has duly adopted a resolution to
irrevocably amend the Company Rights Agreement to provide that: (i) a
Distribution Date (as defined in the Company Rights Agreement) shall not occur,
the Rights (as defined in the Company Rights Agreement) shall not separate (to
the extent the Company Rights Agreement otherwise provides for such separation)
or become exercisable and neither Parent nor Merger Sub shall become an
Acquiring Person (as defined in the Company Rights Agreement) as a result of
the execution or delivery of this Agreement by Parent or Merger Sub, the public
announcement of such execution and delivery or, provided that this Agreement
shall not have been terminated in accordance with Section 8.01 hereof and
subject to the terms of this Agreement, the public announcement or the
commencement of the Offer or the consummation of the Offer and (ii) the
Rights shall cease to be exercisable and the Company Rights Agreement shall
terminate after the consummation of the Offer in accordance with the terms
thereof and the terms and conditions hereof, including the acceptance for payment
of, and the payment for all shares of Company Common Stock tendered pursuant to
the Offer.

 

SECTION 3.05                    Governmental
Approvals and Consents. No consent, waiver, approval, order, license or
permit of, or authorization of, action by or in respect of, or registration,
declaration or filing with or notification to, any Federal, state, local or
foreign government, any court, administrative, regulatory or other governmental
agency, commission or authority or any non-governmental self-regulatory agency,
commission or authority, whether Federal, state, local or foreign (each, a “Governmental
Authority”) is required with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the Merger or the other
transactions contemplated by this Agreement, except for (a) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
(b) any consent, waiver, approval, order, license, permit, authorization,
action, registration, declaration, filing or notification, the failure of which
to obtain, individually or in the aggregate, would not reasonably be expected
to have a Company Material Adverse Effect and (c) any filings made or approvals
received prior to the date hereof.

 

SECTION 3.06                    Company
Documents.

 

(a)                                  Since
January 1, 2004, the Company has filed all reports, schedules, forms,
statements and other documents (including exhibits and other information
incorporated therein) required to be filed by it with the SEC or the New York
Stock Exchange (the “NYSE”) 

 

13

 

(such documents, as they have been amended
since the respective time of their filing, the “Company Documents”). As
of their respective dates, the Company Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended, the
Exchange Act or the Laws of any such jurisdiction, as the case may be, and
the rules and regulations promulgated thereunder applicable to such
Company Documents, and, as of their respective dates, or, if amended, the date
of such amendment, none of the Company Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided that,
if the Company amends any of the Company Documents, the fact of the filing of
such amendment shall not, in and of itself, be deemed to mean or imply that any
representation or warranty in this Agreement was not true when made or became
untrue thereafter. No Subsidiary is required to file any form, report or other
document with the SEC.

 

(b)                                 The
financial statements of the Company included in the Company Documents were
prepared in accordance with generally accepted accounting principles in the
United States (“GAAP”), as then in effect, applied on a consistent basis
during the periods involved (except as may be indicated therein or in the
notes thereto or in the case of unaudited statements, as permitted by Form 10-Q)
and fairly presented in all material respects the financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments and any other adjustments described therein).

 

(c)                                  The
Company has timely filed all certifications and statements required by (i) Rule 13a-14
or Rule 15d-14 under the Exchange Act or (ii) 18 U.S.C. Section 1350
(Section 906 of the Sarbanes-Oxley Act of 2002) with respect to any
applicable Company Document.

 

SECTION 3.07                    Absence of
Certain Changes or Events. Except for actions undertaken in connection with
this Agreement and the transactions contemplated hereby, since May 1, 2006
(a) there have not been any events, circumstances or other occurrences
that, individually or in the aggregate, have had a Company Material Adverse
Effect and (b) none of the Company or any Subsidiary has taken any action
that, if taken after the date hereof, would constitute a breach of any of the
covenants set forth in Section 5.01 hereof (not including Section 5.01(c),
sales with respect to Section 5.01(e)(i)(A) in an aggregate amount of
less than $1,000,000, Section 5.01(e)(ii), Section 5.01(f) and Section 5.01(g)).

 

SECTION 3.08                    Employee
Benefits.

 

(a)                                  Section 3.08(a) of
the Company Disclosure Schedule sets forth each Employee Benefit Plan
under which as a result of the consummation of the transactions contemplated by
this Agreement, either alone or in combination with another event, (i) any
employee of the Company or its Subsidiaries may become entitled to
severance pay or any other payment, except as expressly provided in this
Agreement or (ii) any compensation due any such employee from the Company
or its Subsidiaries may be increased or the time of payment or vesting may become
accelerated.

 

14

 

(b)                                 Except
in the ordinary course of business consistent with past practice, since December 1,
2005, none of the Company or any Subsidiary has (i) granted to any
director or executive officer of the Company (A) any increase in
compensation, bonus or other benefits or (B) any increase in severance or
termination pay, in each case except as required by any employment, severance
or termination agreement in effect as of the date hereof, (ii) amended any
provision of any Employee Benefit Plan or (iii) adopted or entered into
any arrangement that would be an Employee Benefit Plan, except (A) to the
extent required under the terms of any agreements, trusts, plans, funds or
other arrangements existing as of the date hereof that are required or (B) to
the extent required to comply with applicable Law.

 

SECTION 3.09                    Brokers and
Other Advisors. No broker, investment banker, financial advisor or other
person, other than Merrill Lynch & Co. and J.P. Morgan Securities
Inc., the fees and expenses of which will be paid by the Company, is entitled
to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and Merrill Lynch & Co. and J.P. Morgan Securities
Inc. pursuant to which such firms would be entitled to any payment relating to
the transactions contemplated by this Agreement.

 

SECTION 3.10                    Fairness Opinions. Merrill
Lynch & Co. and J.P. Morgan Securities Inc. have each delivered to the
Board of Directors of the Company an opinion, which will be confirmed promptly
in writing, to the effect that, as of the date hereof, on the basis of and
subject to the assumptions set forth therein, the consideration to be received
by the holders of Company Common Stock (other than Parent, Merger Sub and their
respective Affiliates) pursuant to each of the Offer and the Merger is fair to such
holders of Company Common Stock from a financial point of view.

 

SECTION 3.11                    Information
in the Offer Documents and the Schedule 14D-9. The information
supplied by the Company expressly for inclusion in the Offer Documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The Schedule 14D-9 will comply as to form in all material
respects with the provisions of Rule 14d-9 of the Exchange Act and any
other applicable Federal securities Laws and will not when filed with the SEC
or distributed or disseminated to the Company’s stockholders contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading,
except that the Company makes no representation or warranty with respect to
statements made in Schedule 14D-9 based on the information furnished by or
on behalf of Parent or Merger Sub for inclusion therein; and provided
that, if the Company amends the Schedule 14D-9, the fact of the filing of
such amendment shall not, in and of itself, be deemed to mean or imply that any
representation or warranty in this Agreement was not true when made or became
untrue thereafter.

 

SECTION 3.12                    Sole
Representations and Warranties.

 

(a)                                  Except
for the representations and warranties contained in this Article III, none
of the Company, or its Affiliates or their respective officers, directors,
employees, agents,

 

15

 

advisors or representatives, or any other
Person makes any express or implied, whether oral or written, representation or
warranty on behalf of the Company, and the Company hereby disclaims any such
representation or warranty whether by the Company, or its Affiliates, or their
respective officers, directors, employees, agents, advisors or representatives
or by any other Person.

 

(b)                                 In
particular, without limiting the foregoing disclaimer, none of the following
shall be deemed to constitute a representation or warranty of any Person
referred to in paragraph (a) of this Section 3.12:  (i) any information set forth in any
documents distributed to any Person in connection with the proposed sale of the
Company; (ii) any financial projection or forecast relating to the
Company; or (iii) any oral or written information presented to Parent,
Merger Sub, their Affiliates or advisors during any management presentation,
including any question and answer session thereto or due diligence process.
With respect to any projection or forecast delivered by or on behalf of the
Company to Parent, Merger Sub, their Affiliates or advisors, Parent and Merger
Sub acknowledge that (A) there are uncertainties inherent in attempting to
make such projections and forecasts, (B) each is familiar with such
uncertainties, (C) each is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts
so furnished to it and (D) each shall have no claim against any Person with
respect thereto other than a claim for fraud.

 

ARTICLE IV

Representations and Warranties of Parent and Merger Sub

 

Parent and
Merger Sub represent and warrant to the Company:

 

SECTION 4.01                    Organization,
Standing and Corporate Power. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the
Laws of the jurisdiction in which it is incorporated and has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted.

 

SECTION 4.02                    Authority;
Noncontravention.

 

(a)                                  Each
of Parent and Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement, perform its obligations hereunder and,
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and Merger Sub
and, assuming the due authorization, execution and delivery by the other party
hereto, constitutes a legal, valid and binding obligation of Parent and Merger
Sub enforceable against Parent and Merger Sub in accordance with its terms
(subject to applicable bankruptcy, solvency, fraudulent transfer,
reorganization, moratorium and other Laws affecting creditors’ rights generally
from time to time in effect).

 

16

 

(b)                                 The
execution and delivery of this Agreement do not, and the consummation of the
Merger and the other transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, require the
consent, waiver, approval or authorization from any party to, or result in any
violation or breach of, or default (with or without notice or lapse of time or
both) under (i) the organizational documents of Parent and Merger Sub, (ii) any
contract to which Parent or Merger Sub is a party or any of their respective
properties or other assets is subject or (iii) subject to the governmental
filings and other matters referred to in Section 4.03, any Law applicable
to Parent or Merger Sub or their respective properties or other assets other
than, in the case of clause (ii) or (iii), any such violations, breaches
or defaults which would not, individually or in the aggregate, prevent or
materially delay consummation of any of the transactions contemplated by this
Agreement or otherwise prevent Parent or Merger Sub from performing its obligations
under this Agreement.

 

SECTION 4.03                    Governmental
Approvals. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any Governmental
Authority is required by or with respect to Parent or Merger Sub in connection
with the execution and delivery of this Agreement by Parent and Merger Sub or
the consummation by Parent and Merger Sub of the Merger or the other
transactions contemplated by this Agreement, except for (a) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
and (b) any consent, approval, order, authorization, action, regulation,
declaration or filing that has been obtained prior to the date hereof or that,
individually or in the aggregate, would prevent or materially delay
consummation of any transaction contemplated by this Agreement or otherwise
prevent Parent or Merger Sub from performing its obligations under this
Agreement.

 

SECTION 4.04                    Brokers and
Other Advisors. No broker, investment banker, financial advisor or other
person, other than Lehman Brothers, Inc., the fees and expenses of which
will be paid by Parent, is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.

 

SECTION 4.05                    Financial
Capacity. Parent has, and as of the Acceptance Date and as of the Effective
Time, will have sufficient funds to consummate the transactions contemplated by
this Agreement.

 

SECTION 4.06                    Information
in the Offer Documents. The Offer Documents (and any amendment thereof or
supplement thereto) will not, when filed with the SEC or at the time of
distribution or dissemination thereof to the stockholders of the Company,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading,
except that no representation or warranty is made by Parent or Merger Sub with
respect to statements made therein based on information supplied by the Company
for inclusion in the Offer Documents. The Offer Documents will comply as to form in
all material respects with applicable Federal securities Laws and the rules and
regulations thereunder.

 

17

 

ARTICLE V

Covenants Relating to Conduct of Business

 

SECTION 5.01                    Conduct of
Business. During
the period from the date hereof to the Acceptance Date, the Company shall, and
shall cause each of its Subsidiaries to, carry on its business in the ordinary
course consistent with past practice. The Company shall, and shall cause each
of its Subsidiaries to, use their respective reasonable best efforts to
preserve intact the business organization of the Company and its Subsidiaries,
to keep available the services of their respective present officers and key
employees and to preserve the goodwill of those having business relationships
with the Company and its Subsidiaries. Without limiting the generality of the
foregoing, during the period from the date hereof to the Acceptance Date,
except as provided in Section 5.01 of the Company Disclosure Schedule or
as contemplated by this Agreement or as required by Law, the Company shall not,
and shall not permit any of its Subsidiaries to, without Parent’s prior written
consent:

 

(a)                                  (i) declare,
set aside or pay any dividends on, or make any other distributions (whether in
cash, stock or property) in respect of, any of its capital stock, other than (A) dividends
or distributions by a direct or indirect wholly owned Subsidiary of the Company
to its parent in the ordinary course of business consistent with past practice
and (B) the Company’s quarterly dividend to be paid on June 30, 2006
to its stockholders of record as of June 15, 2006 in the amount of $0.12
per share of Company Common Stock or (ii) split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock;

 

(b)                                 issue,
deliver, sell, grant, pledge or otherwise encumber any shares of its capital
stock, any other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities or
convertible securities, or any “phantom” stock, “phantom” stock rights, stock
appreciation rights or stock based performance units other than shares issued
pursuant to option exercise or settlement of stock-based awards, in each case
outstanding as of the date hereof (including issuances of shares pursuant to
employee stock ownership programs to the extent such shares are issued from
treasury shares);

 

(c)                                  amend
the Company Governing Documents or the comparable charter or organizational
documents of any of its Subsidiaries;

 

(d)                                 acquire
in any manner any assets of any Third Party, except for (i) acquisitions
of properties, inventory or other assets in the ordinary course of business
consistent with past practice and (ii) pursuant to contracts existing as
of the date hereof and described in Section 5.01 of the Company Disclosure
Schedule;

 

(e)                                  (i) sell,
transfer, pledge, guarantee, lease, license, mortgage, sell and leaseback or
otherwise subject to any Lien or otherwise dispose of any of its properties or
other assets to a Third Party, except for (A) sales of properties,
inventory or other assets in the ordinary course of business consistent with
past practice and (B) pursuant to contracts existing as of the date hereof
and described in Section 5.01 of the Company Disclosure Schedule; (ii) incur,
assume or modify any indebtedness for money borrowed or guarantee thereof,
including

 

18

 

capitalized lease obligations, except for
drawdowns or borrowings under the credit facilities of the Company in effect on
the date hereof in the ordinary course of business consistent with past
practice and in an amount not to exceed (A) $30,000,000 in the aggregate
in connection with the operations of the Company, other than operations of the
materials services business and other than to pay the estimated expenses described
by the Company to Parent prior to the date hereof and (B) $75,000,000 in
the aggregate in connection with the operations of the materials services
business; or (iii) redeem, purchase or otherwise acquire directly or
indirectly, by repurchase or otherwise any shares of the capital stock of the
Company or any Subsidiary except (A) for shares acquired by the Company
from the holder of a stock option or other stock-based award in satisfaction of
the exercise price of a stock option or Taxes or withholding obligations in
case of a stock-based award in each case outstanding as of the date hereof, (B) for
shares acquired in the open market for the benefit of any employee stock plan
in the ordinary course of business consistent with past practice or (C) as
contemplated by this Agreement;

 

(f)                                    grant
to any director or officer of the Company or any of its Subsidiaries (i) any
increase in compensation, bonus or other benefits or (ii) any increase in
severance or termination pay, in each case except as required by any
employment, severance or termination agreement in effect as of the date hereof;

 

(g)                                 (i) amend
any provision of any Employee Benefit Plan or (ii) adopt or enter into any
arrangement that would be an Employee Benefit Plan, except (A) to the
extent required under the terms of any agreements, trusts, plans, funds or other
arrangements existing as of the date hereof or (B) to the extent required
to comply with applicable Law;

 

(h)                                 change
any of the Company’s accounting methods or principles, except as required by
GAAP or applicable Law;

 

(i)                                     commence
or settle (i) any suit, action or proceeding relating to the transactions
contemplated by this Agreement or (ii) any other suit, action or
proceeding involving payments by or to the Company or any of its Subsidiaries
in excess of $2,000,000; or

 

(j)                                     authorize
any of, or commit, propose or agree to take any of, the foregoing actions.

 

SECTION 5.02                    Action by
Written Consent.

 

(a)                                  The
Company shall use its best efforts to prepare an information statement relating
to the Merger and this Agreement and obtain and furnish the information
required to be included by the Exchange Act, including Regulation 14C thereof
(such information statement, the “Information Statement”) and respond
promptly to any comments made by the SEC with respect to the Information
Statement and cause the Information Statement to be mailed to its stockholders.

 

(b)                                 As
soon as practicable following the purchase of and payment for a majority of the
outstanding shares of Company Common Stock on a Fully Diluted Basis by Merger
Sub in connection with the Offer, Merger Sub shall deliver its consent,
representing a majority of the outstanding shares of Company Common Stock on a
Fully Diluted Basis, to approve the Merger by written consent in lieu of a
meeting in accordance with Section 288 of the DGCL.

 

19

 

(c)                                  Notwithstanding
Section 5.02(a), but subject to Article VII hereof, in the event that
Parent, Merger Sub or any other Subsidiary of Parent shall acquire at least 90%
of the outstanding Company Common Stock following the completion of the Offer,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after the acceptance for
payment of and payment for Company Common Stock by Merger Sub pursuant to the
Offer without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.

 

ARTICLE VI

Additional Agreements

 

SECTION 6.01                    Reasonable
Best Efforts. Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use its reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable best efforts to accomplish the
following:  (a) the taking of all
acts necessary to cause the conditions to Closing to be satisfied as promptly
as practicable, (b) the obtaining of all necessary actions, waivers,
consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings (including filings with Governmental
Authorities, if any) and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Authority with respect to the transactions contemplated hereunder,
(c) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental
Authority vacated or reversed and (d) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement.

 

SECTION 6.02                    Indemnification,
Exculpation and Insurance.

 

(a)                                  Parent
agrees that the Surviving Corporation shall, and shall cause the Surviving
Corporation to, perform all of the obligations of the Surviving
Corporation with respect to all rights of the individuals who on or prior to
the Effective Time were directors, officers or employees of the Company or any
of its Subsidiaries (collectively, the “Indemnitees”) to indemnification
and exculpation from liabilities for acts or omissions occurring at or prior to
the Effective Time as provided in the Company Governing Documents or other
agreements of the Company or in comparable organizational documents or other
agreements of any of its Subsidiaries as now in effect and such obligations
shall survive the Merger and shall continue in full force and effect in
accordance with their terms.

 

(b)                                 Each
of Parent, the Surviving Corporation and the applicable Indemnitee shall
cooperate, and cause their respective Affiliates to cooperate, in the defense
of any claim and shall provide access to properties and individuals as
reasonably requested and furnish or

 

20

 

cause to be furnished records, information
and testimony, and attend such conferences, discovery proceedings, hearings,
trials or appeals, as may be reasonably requested in connection therewith.

 

(c)                                  As
of the Acceptance Date, the Company shall have obtained, and for a six-year
period thereafter, the Surviving Corporation shall maintain in effect, a
so-called “tail” policy for such six-year period covering acts or omissions
occurring at or prior to the Effective Time, including all acts or omissions
relating to this Agreement and the transactions contemplated herein, with
respect to those Persons who are currently covered by the Company’s directors’
and officers’ liability insurance policy on terms with respect to such coverage
and amount no less favorable to the Company’s directors and officers currently
covered by such insurance than those of such policy in effect on the date
hereof (the “Minimum Insurance); provided, however, that
in no event shall the Surviving Corporation be required to expend pursuant to
this Section 6.02(c) more than $5,000,000.

 

(d)                                 The
provisions of this Section 6.02 are intended to be for the benefit of, and
shall be enforceable by, each Indemnitee, his or her heirs and his or her
representatives.

 

(e)                                  In
the event that the Surviving Corporation or any of its successors or assigns (i) consolidates
with or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation shall assume all of the
obligations thereof set forth in this Section 6.02.

 

(f)                                    The
obligations of Parent and the Surviving Corporation under this Section 6.02
shall not be terminated or modified in such a manner as to adversely affect any
Indemnitee to whom this Section 6.02 applies without the written consent
of the affected Indemnitee (it being expressly agreed that the Indemnitees to
whom this Section 6.02 applies shall be third party beneficiaries of this Section 6.02).

 

(g)                                 Parent,
from and after the Acceptance Date, shall unconditionally guarantee the timely
payment of all funds owed by, and the timely performance of all other
obligations of, the Surviving Corporation under this Section 6.02. Parent
agrees that its payment obligations hereunder are unconditional, irrespective
of the validity or enforceability of this Agreement against the Surviving
Corporation or any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor (other than the defenses of
statute of limitations, which are not waived). Parent hereby acknowledges that
its obligations under this Section 6.02 constitute a guaranty of payment
and not merely of collectability and Parent hereby waives (i) promptness,
diligence, presentment, demand of payment, protest and order in connection with
this guarantee and (ii) any requirement that any party enforcing the
guarantee exhaust any right to take any action against the Surviving
Corporation or any other Person prior to or contemporaneously with proceeding
to exercise any right against Parent hereunder.

 

SECTION 6.03                    Fees and
Expenses. Except as otherwise provided herein, all fees and expenses
incurred in connection with this Agreement, the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees
or

 

21

 

expenses,
whether or not the Merger is consummated. All transfer, documentary, sales,
use, real property transfer, stock transfer, stamp, registration and other
similar Taxes and fees (including any penalties and interest) incurred in
connection with the transaction contemplated by this Agreement shall be borne
equally by the Company and Parent.

 

SECTION 6.04                    Public
Announcements. Parent and the Company shall consult with each other before
issuing, and give each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable Law or court
process. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form heretofore
reasonably agreed to by the parties.

 

SECTION 6.05                    Notification
of Certain Matters. From the date hereof to the Acceptance Date, the
Company shall give prompt notice to Parent, and each of Parent and Merger Sub
shall give prompt notice to the Company, of (i) any notice or other
communication received by such party from any Governmental Authority in
connection with the Offer, the Merger or the transactions contemplated thereby
or from any Person alleging that the consent of such Person is or may be
required in connection with the Offer, the Merger or the other transactions
contemplated thereby if the subject matter of such communication or the failure
of such party to obtain such consent purports to materially affect the
consummation of the transactions contemplated thereby, (ii) any actions,
suits, claims, investigations or proceedings commenced or, to such party’s
knowledge, threatened against, relating to or involving or otherwise affecting
such party or any of its Subsidiaries which relate to the Offer, the Merger or
the other transactions contemplated thereby, (iii) to the knowledge of the
Company, the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement and required to be made by the notifying party to be untrue or
inaccurate such that the condition in paragraph (b)(ii) of Annex I would
not be satisfied or the Company would have a termination right under Section 8.01(d)(ii),
as the case may be and (iv) any failure to comply with or satisfy a
covenant, condition or agreement to be complied with or satisfied by it
hereunder, such that the condition in paragraph (b)(ii) of Annex I would
not be satisfied or the Company would have a termination right under Section 8.01(d)(ii),
as the case may be.

 

SECTION 6.06                    Access to
Information.

 

(a)                                  From
the date hereof until the Acceptance Date, the Company shall, and shall cause
its Subsidiaries, and each of their respective officers, directors and
employees, counsel, advisors, accountants, financial advisors, lenders and
representatives to, provide Parent and Merger Sub and their respective
officers, employees, counsel, advisors, accountants, financial advisors,
financial sources, affiliates and representatives reasonable access during
normal business hours and upon reasonable notice, to the officers, directors,
employees, accountants, properties, offices and other facilities and to the
books and records of the Company and its Subsidiaries, as will permit Parent
and Merger Sub to make inspections of such as either of them may reasonably
require. The parties acknowledge that all legal, accounting and business due
diligence has been completed prior to the date hereof.

 

22

 

(b)                                 Prior to the
Acceptance Date, except in the ordinary course of Parent’s business, each of
Parent and Merger Sub shall not, and shall cause the representatives of
Parent and Parent’s Affiliates to not, contact or otherwise communicate with
the employees (other than executive officers), customers and suppliers of the
Company and its Subsidiaries regarding the business of the Company without the
prior written approval of the general counsel of the Company, which approval
shall not be unreasonably withheld, conditioned or delayed.

 

SECTION 6.07                    Employee
Benefits Matters.

 

(a)                                  From
and after the Effective Time, each of the Surviving Corporation and its
Subsidiaries shall honor all of its respective compensation and benefits plans,
programs, agreements and arrangements of the Company and its Subsidiaries in
accordance with their terms as in effect immediately prior to the Effective
Time, provided that nothing in this sentence shall prohibit the
Surviving Corporation or its Subsidiaries from amending or terminating any such
plans, programs, agreements and arrangements in accordance with their terms.
The Surviving Corporation shall, for the period immediately following the
Effective Time through and including the first anniversary of the Effective
Time, provide each employee of the Company and the Subsidiaries as of the
Effective Time (each, an “Employee”), other than any Employee whose
employment is subject to a collective bargaining or other labor agreement, with
compensation and employee benefits, excluding equity, equity-based and similar
compensation, that are comparable in the aggregate to those provided by the
Company and its Subsidiaries (other than with respect to change of control
payments or other payments resulting from the Offer or the Merger) to such
Employees immediately prior to the Effective Time. Nothing herein shall be
deemed to be a guarantee of employment for any Employee or prohibit or restrict
the right of the Surviving Corporation to (i) make changes to salaries,
employee benefits and incentive compensation pursuant to negotiations in
connection with a collective bargaining agreement or (ii) amend and/or
eliminate any benefit program, subject to compliance with the first sentence of
this Section 6.07(a).

 

(b)                                 The
Employees shall receive credit for service with the Company and the
Subsidiaries for all purposes (including for purposes of eligibility to
participate, vesting, benefit accrual and eligibility to receive benefits, but
excluding benefit accruals under any defined benefit pension plan) under any
compensation or employee benefit plan, program or arrangement established or
maintained by Parent (to the extent an Employee is brought under any such
plan), the Surviving Corporation or any of their respective Affiliates under
which each Employee may be eligible to participate on or after the
Effective Time to the same extent recognized by the Company or any of the
Company’s Subsidiaries under comparable benefit plans immediately prior to the
Effective Time (or, if no comparable benefit plans exist, the Employee shall
receive service credit to the same extent credited under either the Company’s
Salary Deferral Savings Plan or Savings Plan for Hourly Paid Employees, as
applicable); provided, however, that such crediting of service
shall not operate to duplicate any benefit or the funding of any such benefit.

 

(c)                                  To
the extent that, after the Effective Time, the Surviving Corporation changes
the welfare benefit plans, programs and arrangements in which Employees
participate, Parent shall (i) waive, or use its reasonable best efforts to
cause its insurance carrier to waive, all limitations as to preexisting and
at-work conditions, if any, with respect to participation and coverage
requirements applicable to each Employee to the same extent waived under a

 

23

 

comparable benefit plan and (ii) with
respect to the plan year in which the change was made, provide a credit to each
Employee for any co-payments, deductibles and out-of-pocket expenses paid by
such Employee under the benefit plans during the relevant plan year, up to and
including the Effective Time.

 

(d)                                 During
the period from the date hereof to the Acceptance Date, the Company shall not,
and shall not permit any of its Subsidiaries to, without Parent’s prior written
consent, make any payment or contribution to the Company’s Supplemental
Retirement Trust in an aggregate amount in excess of the amount set forth in Section 6.07(d) of
the Company Disclosure Schedule.

 

(e)                                  The
parties agree that the provisions of this Section 6.07 may be
modified without the consent of any Employee (it being understood and agreed
that the Employees to whom this Section 6.07 applies shall not be third
party beneficiaries of this Section 6.07).

 

SECTION 6.08                    NYSE
Listing. Parent and Merger Sub shall use their reasonable best efforts,
following the Acceptance Date and until the Effective Time to keep the Company
Common Stock quoted for trading on the NYSE, as long as the Company is required
to be registered under the Exchange Act and satisfies the NYSE listing
standards (other than standards entirely within the Company’s control).

 

SECTION 6.09                    Further
Assurances. At and after the Effective Time, the officers and directors of
the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of the Company or Merger Sub, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Merger Sub, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title
and interest in, to and under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.

 

SECTION 6.10                    Confidentiality Agreement.
Upon the acceptance for payment of Company Common Stock pursuant to the Offer,
the Confidentiality Agreement shall be deemed to have terminated without
further action by the parties thereto.

 

SECTION 6.11                    Adjourn
Annual Meeting; Terminate Self-Tender; Consent Solicitation; Rights Agreement.

 

(a)                                  The
Board of Directors of the Company has adopted a resolution to adjourn, and the
Company shall use all reasonable efforts to adjourn, the annual meeting of
holders of Company Common Stock scheduled for June 2, 2006 to June 30,
2006, prior to conducting any business at such meeting and to subsequently
adjourn such meeting in no more than 29-day increments (prior to conducting any
business) if the Effective Time shall not have occurred prior to the date of
such adjourned meeting.

 

(b)                                 No
later than two Business Days after the date hereof the Company shall terminate
its outstanding offer to purchase shares of the Company Common Stock by filing
an amendment to its Tender Offer Statement on Schedule TO in connection
therewith, issuing a

 

24

 

press release with respect to such termination
and providing notice to the depositary of such termination.

 

(c)                                  Parent
shall not solicit written consents from any holder of Company Common Stock
prior to the earlier of the Acceptance Date and August 31, 2006.

 

(d)                                 As
promptly as practicable after the date hereof but in no event later than
midnight, New York City time, on June 2, 2006, the Company shall cause the
amendment of the Company Rights Agreement referred to in Section 3.04(c) hereof
to be duly executed by the Rights Agent and take all other action necessary to
render such amendment irrevocable.

 

ARTICLE VII

Conditions Precedent

 

SECTION 7.01                    Conditions
to Each Party’s Obligation to Effect the Merger. The respective obligations
of each party to effect the Merger are subject to the satisfaction or waiver on
or prior to the Effective Time of the following conditions:

 

(a)                                  Stockholder
Approval. If required by applicable Law, the Stockholder Approval shall
have been obtained.

 

(b)                                 No Injunctions or
Restraints. No temporary restraining order, preliminary or permanent injunction
or other judgment or order shall have been issued by or shall be pending before
any court of competent jurisdiction and no other statute, Law, rule, legal
restraint or prohibition (collectively, “Restraints”) shall be in effect
preventing or restraining the consummation of the Merger.

 

(c)                                  Purchase of
Company Common Stock in Offer. Merger Sub shall have accepted for payment
and purchased, or caused to be accepted for payment and purchased, all shares
of Company Common Stock validly tendered and not withdrawn pursuant to the
Offer; provided, however, that this condition shall be deemed to
have been satisfied with respect to the obligation of Parent and Merger Sub to
effect the Merger if Merger Sub fails to accept for payment or pay for shares
of Company Common Stock validly tendered and not withdrawn pursuant to the
Offer in violation of the terms of the Offer or of this Agreement.

 

SECTION 7.02                    Frustration
of Closing Conditions. None of the Company, Parent or Merger Sub may rely
on the failure of any condition set forth in Section 7.01 to be satisfied
if such failure was caused by such party’s failure to use its commercially
reasonable efforts to consummate the Merger and the other transactions contemplated
by this Agreement.

 

ARTICLE VIII

Termination, Amendment and Waiver

 

SECTION 8.01                    Termination.
This Agreement may be terminated by written notice by the terminating
party to the other party at any time prior to the Effective Time:

 

25

 

(a)                                  by mutual written
consent of Parent and Merger Sub on the one hand and the Company on the other
hand;

 

(b)                                 by either Parent or
the Company:

 

(i)                                     if
the shares of Company Common Stock tendered in the Offer shall not have been
purchased on or before July 31, 2006; provided, however,
that the right to terminate this Agreement under this Section 8.01(b)(i) shall
not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to be consummated
on or before such date; or

 

(ii)                                  if
any Restraint having the effect set forth in Section 7.01(b) hereof
shall be in effect and shall have become final and nonappealable;

 

(c)                                  by Parent if at
any time prior to the purchase of the shares of Company Common Stock pursuant
to the Offer:

 

(i)                                     the Company shall
have breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement, which breach or failure to
perform (A) would give rise to the failure of a condition set forth
in paragraph (b)(ii) or (iii) of Annex I and (B) is not cured by
the Company within 10 Business Days following receipt of written notice of such
breach or failure to perform from Parent;

 

(ii)                                  there shall have been
a breach in any material respect of the representation and warranty set forth
in Section 3.08(b)(i) hereof;

 

(iii)                               the Company shall have
breached any of its obligations under Section 6.11(a) or (b) hereof;
or

 

(iv)                              any Third Party shall
have become the beneficial owner of more than 15% of the outstanding Company
Common Stock and the Company shall have terminated the Company Rights Agreement
in connection therewith or taken any action to amend or modify the Company
Rights Agreement to exempt such Third Party from the Company Rights Agreement
or render it inapplicable to such Third Party;

 

(d)                                 by the Company if
at any time prior to the purchase of the shares of Company Common Stock
pursuant to the Offer:

 

(i)                                   its
Board of Directors determines in good faith, after considering the advice from
outside legal Counsel to the Company, that it is required by its fiduciary
duties under applicable Law in order to enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal; provided
that any termination of this Agreement pursuant to this Section 8.01(d)(i) shall
not be effective until the Company has

 

26

 

entered into a binding agreement with respect
to such Superior Proposal; or

 

(ii)                                if
Parent or Merger Sub shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach or failure to perform (A) would have a
material adverse effect on Parent’s or Merger Sub’s ability to purchase the
Company Common Stock tendered pursuant to the Offer and (B) is not cured
by Parent within 10 Business Days following receipt of written notice of such
breach or failure to perform from the Company.

 

SECTION 8.02                    Intentionally
Omitted.

 

SECTION 8.03                    Effect of
Termination. In the event of termination of this Agreement by either the
Company or Parent as provided in Section 8.01, this Agreement shall
forthwith become void and have no effect, without any liability or obligation
on the part of Parent, Merger Sub or the Company, other than the
provisions of Section 6.03 (and any other provision herein related to the
payment of expenses), Section 8.01, Section 8.02, this Section 8.03
and Article IX, which provisions shall survive such termination, and
except to the extent that such termination results from the willful breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement. Nothing contained in this Section 8.03 shall
relieve any party from liability for any breach of this Agreement or alter the
provisions of the Confidentiality Agreement.

 

SECTION 8.04                    Amendment.
At any time prior to the Effective Time, this Agreement may be amended by
the parties hereto; provided, however, that there shall be made
no amendment that by Law requires further approval by the Company’s
stockholders or the

 

27

 

approval of
the stockholders of Parent without such approval having been obtained. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.

 

SECTION 8.05                    Extension;
Waiver. At any time prior to the Effective Time, the parties may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or (c) subject
to the proviso to the first sentence of Section 8.04, waive compliance
with any of the agreements of any other party or conditions to its obligations
contained herein. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of such rights.

 

ARTICLE IX

General Provisions

 

SECTION 9.01                    Nonsurvival
of Representations and Warranties. None of the representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 9.01 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.

 

SECTION 9.02                    Notices.
Except for notices that are specifically required by the terms of this
Agreement to be delivered orally, all notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed given if
delivered personally (notice deemed given upon receipt), facsimiled (notice
deemed given upon confirmation of receipt) or sent by overnight courier (notice
deemed given upon proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):

 

if to Parent,
to:

BASF Aktiengesellschaft

67056 Ludwigshafen

Germany

Facsimile No:  +49-621-604-41789

Attention:  Dr. Jörg Buchmüller

 

if to Merger
Sub, to:

BASF Corporation

100 Campus Drive

Florham Park, NJ  07932

Facsimile No:  973-245-6711

Attention:  David M. Stryker, Esq.

 

28

 

in either
case, with a copy to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York  10022

Facsimile No:  212-848-7179

Attention:   Peter D. Lyons, Esq.

                   Alberto
Luzarraga, Esq.

 

if to the
Company, to:

Engelhard Corporation

101 Wood Avenue

Iselin, New Jersey 08830

Facsimile No.:  732-548-7835

Attention:  Arthur A. Dornbusch II, Esq.

 

with copies
to:

Cahill Gordon & Reindel LLP

80 Pine Street 

New York, NY  10005

Facsimile No.:  212-269-5420

Attention:  Kenneth W. Orce, Esq.

 

and

 

Wachtell,
Lipton, Rosen & Katz

51 West 52nd St.

New York, NY  10019

Facsimile No.:  212-403-2000

Attention:  Richard D. Katcher, Esq.

 

SECTION 9.03                    Definitions.
For purposes of this Agreement:

 

(a)                                  “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.

 

(b)                                 “Business Day”
has the meaning set forth in Rule 14d-1(g)(3) under the Exchange Act.

 

(c)                                  “Company Material
Adverse Effect” means any event, circumstance, change or effect that,
individually or in the aggregate with any other events, circumstances, changes
and effects, is or is reasonably likely to (i) have a material adverse
effect on the business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole or (ii) prevent or
materially delay the consummation of any of the transactions

 

29

 

contemplated hereby or the performance of the Company’s obligations
under this Agreement, other than any effect resulting from (A) any change
in conditions in the United States, foreign or global economy or capital or
financial markets generally, including any change in interest or exchange
rates, but only if such change or impact does not have a materially
disproportionate effect (relative to other industry participants) on the
Company or its Subsidiaries, (B) any change in conditions (including any
change in general legal, regulatory, political, economic or business conditions
or any change in GAAP) in or otherwise generally affecting the industries in which
the Company and its Subsidiaries conduct business but only if such change or
impact does not have a materially disproportionate effect (relative to other
industry participants) on the Company or its Subsidiaries, (C) the impact
of the announcement of the execution of this Agreement or the consummation of
the transactions contemplated by this Agreement on any relationships,
contractual or otherwise, between the Company and its landlords, suppliers,
vendors, customers, OEMs or employees or others having business relationships
with the Company or its Subsidiaries, (D) any act of terrorism or war
(whether or not threatened, pending or declared), but only if such act of
terrorism or war does not have a materially disproportionate effect (relative
to other industry participants) on the Company or its Subsidiaries, (E) any
action taken by the Company as required by this Agreement or (F) any
action taken by the Company with Parent’s consent.

 

(d)                                 “Company Proposal”
means any bona fide written proposal (i) for a merger, consolidation,
dissolution, recapitalization or other business combination of the Company, (ii) for
the issuance of any equity securities of the Company or any of its Subsidiaries
representing at least 15% of the equity securities of the Company or (iii) to
acquire in any manner, directly or indirectly, (A) at least 15% of the
equity securities of the Company or (B) at least 15% of the assets of the
Company and its Subsidiaries taken as a whole, in each case other than the
transactions contemplated by this Agreement and the agreements to be executed
in connection herewith.

 

(e)                                  “Company Rights
Agreement” means that certain rights agreement, dated as of October 1,
1998, between the Company and Chase Mellon Shareholder Services LLC.

 

(f)                                    “Employee
Benefit Plans” means any material compensation or benefit plan, fund,
program, agreement or arrangement, including each incentive compensation or
equity compensation plan; each material “welfare” plan, fund or program (within
the meaning of Section 3(1) of ERISA); each deferred compensation or “pension”
plan, fund or program (within the meaning of Section 3(2) of ERISA)
and each other material welfare, deferred compensation or pension plan, fund or
program; each employment, termination or severance agreement; and each other
material employee benefit plan, fund, program, agreement or arrangement, in
each case, that is sponsored, maintained or contributed to or required to be
contributed to by the Company or by any ERISA Affiliate, that together with the
Company would be deemed a “single employer” within the meaning of Section 4001(b) of
ERISA, or to which the Company, any of its Subsidiaries or an ERISA Affiliate
is party, for the benefit of any employee or director of the Company and its
Subsidiaries, including any such employee or director located outside the
United States.

 

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

 

30

 

(h)                                 “ERISA
Affiliate” means any trade or business, whether or not incorporated which
sponsors, maintains or contributes to or is required to contribute to any
Employee Benefit Plan.

 

(i)                                     “Fully Diluted
Basis” means, as of any applicable date, without duplication, the number of
shares of Company Common Stock outstanding together with the shares of Company
Common Stock which the Company may be required to issue pursuant to
obligations outstanding under the Company’s stock option plans, deferred
compensation plans, employee stock ownership plans or other similar benefit
plans, the conversion or exchange of all outstanding securities convertible or
exchangeable into, shares of Company Common Stock, or otherwise, in each case,
whether or not vested, exercisable, exercised or converted or subject to
restrictions at the time of determination.

 

(j)                                     “Laws”
means any statutes, laws, ordinances, rules, codes, regulations, judgments,
orders and decrees of any Governmental Authority.

 

(k)                                  “Person” means
an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization or other entity.

 

(l)                                     a “Subsidiary”
of any Person means another Person, an amount of the voting securities, other
voting rights or voting partnership interests of which is sufficient to elect
at least a majority of its board of directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity interests of
which) is owned directly or indirectly by such first Person.

 

(m)                               “Superior Proposal”
means any unsolicited bona fide, written Company Proposal for at least a
majority of the outstanding Company Common Stock or all or substantially all of
the assets of the Company and its Subsidiaries, taken as a whole, or a merger
or other business combination involving the Company, in each case which is
reasonably likely to be consummated on the terms proposed, taking into account
all financial, legal, regulatory and other aspects of such proposal, and which
the Board of Directors determines in good faith, after consultation with
outside legal counsel and taking into account the material terms and conditions
of such proposal, is more favorable to the Company’s stockholders (other than
Parent and its Affiliates) than as provided hereunder.

 

(n)                                 “Taxes” means
all taxes, assessments, charges, duties, fees, levies or other governmental
charges, including, without limitation, all Federal, state, local, foreign and
other income, franchise, profits, gross receipts, capital gains, capital stock,
transfer, property, sales, use, value-added, occupation, property, excise,
severance, windfall profits, stamp, license, payroll, social security,
withholding and other taxes, assessments, charges, duties, fees, levies or
other governmental charges of any kind whatsoever (whether payable directly or
by withholding and whether or not requiring the filing of a tax return), all
estimated taxes, penalties and interest.

 

(o)                                 “Third Party”
means any Person other than Parent, the Company or any of their respective
Affiliates.

 

(p)                                 Each of the following
terms is defined in the Section set forth opposite such term:

 

31

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Acceptance
  Date

  	
   

  	
  1.01(b)

  
	
  Affiliate

  	
   

  	
  9.03(a)

  
	
  Aggregate
  Merger Consideration

  	
   

  	
  2.01(c)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Business Day

  	
   

  	
  9.03(b)

  
	
  Certificate
  of Merger

  	
   

  	
  1.06

  
	
  Certificates

  	
   

  	
  2.02(a)

  
	
  Closing

  	
   

  	
  1.05

  
	
  Closing Date

  	
   

  	
  1.05

  
	
  Company

  	
   

  	
  Preamble

  
	
  Company
  Articles

  	
   

  	
  1.03(b)

  
	
  Company
  Board Recommendation

  	
   

  	
  3.04(a)

  
	
  Company
  Bylaws

  	
   

  	
  1.03(b)

  
	
  Company
  Common Stock

  	
   

  	
  Recitals

  
	
  Company
  Disclosure Schedule

  	
   

  	
  Article III

  
	
  Company
  Documents

  	
   

  	
  3.06(a)

  
	
  Company
  Governing Documents

  	
   

  	
  1.03(b)

  
	
  Company
  Material Adverse Effect

  	
   

  	
  9.03(c)

  
	
  Company
  Option

  	
   

  	
  3.03

  
	
  Company
  Preferred Stock

  	
   

  	
  3.03

  
	
  Company
  Proposal

  	
   

  	
  9.03(d)

  
	
  Company
  Rights Agreement

  	
   

  	
  9.03(e)

  
	
  Confidentiality
  Agreement

  	
   

  	
  9.06

  
	
  Continuing
  Directors

  	
   

  	
  1.03(b)

  
	
  Dissent
  Shares

  	
   

  	
  2.01(d)

  
	
  Dissenters’
  Rights Statute

  	
   

  	
  2.01(d)

  
	
  DGCL

  	
   

  	
  1.02(a)

  
	
  Effective
  Time

  	
   

  	
  1.06

  
	
  Employee

  	
   

  	
  6.07(a)

  
	
  Employee
  Benefit Plans

  	
   

  	
  9.03(f)

  
	
  ERISA

  	
   

  	
  9.03(g)

  
	
  ERISA
  Affiliate

  	
   

  	
  9.03(h)

  
	
  Exchange Act

  	
   

  	
  1.01(a)

  
	
  Exchange
  Agent

  	
   

  	
  2.02(a)

  
	
  Expiration
  Date

  	
   

  	
  1.01(b)

  
	
  Fully
  Diluted Basis

  	
   

  	
  9.03(i)

  
	
  GAAP

  	
   

  	
  3.06(b)

  
	
  Governmental
  Authority

  	
   

  	
  3.05

  
	
  Hazardous
  Substances

  	
   

  	
  9.03(h)

  
	
  Indemnitees

  	
   

  	
  6.02(a)

  
	
  Information
  Statement

  	
   

  	
  5.02(a)

  
	
  Laws

  	
   

  	
  9.03(j)

  
	
  Merger

  	
   

  	
  Recitals

  
	
  Merger Sub

  	
   

  	
  Preamble

  
	
  Merger Sub
  Designees

  	
   

  	
  1.03(a)

  
	
  Minimum
  Condition

  	
   

  	
  1.01(a)

  
	
  Minimum
  Insurance

  	
   

  	
  6.02(c)

  
	
  NYSE

  	
   

  	
  3.06(a)

  
	
  Offer

  	
   

  	
  Recitals

  
	
  Offer
  Documents

  	
   

  	
  1.01(a)

  
	
  Offer Price

  	
   

  	
  Recitals

  
	
  Parent

  	
   

  	
  Preamble

  
	
  Per Share
  Merger Consideration

  	
   

  	
  2.01(c)

  
	
  Permit

  	
   

  	
  3.09

  
	
  Person

  	
   

  	
  9.03(k)

  
	
  Restraints

  	
   

  	
  7.01(b)

  
	
  Schedule 14D–9

  	
   

  	
  1.02(a)

  
	
  SEC

  	
   

  	
  1.01(a)

  
	
  Significant
  Subsidiary

  	
   

  	
  3.02

  
	
  Stockholder
  Approval

  	
   

  	
  3.04(a)

  
	
  Subsidiary

  	
   

  	
  9.03(l)

  
	
  Superior
  Proposal

  	
   

  	
  9.03(m)

  
	
  Surviving
  Corporation

  	
   

  	
  1.04

  
	
  Taxes

  	
   

  	
  9.03(n)

  
	
  Tender Offer
  Conditions

  	
   

  	
  1.01(a)

  
	
  Third Party

  	
   

  	
  9.03(o)

  
	
  Uncertificated
  Shares

  	
   

  	
  2.02(a)

  
	
   

  	
   

  	
   

  

 

32

 

SECTION 9.04                    Interpretation.

 

(a)                                  When
a reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without
limitation”. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its permitted
successors and assigns.

 

33

 

(b)                                 Any
information disclosed in any section of the Company Disclosure Schedule shall
be considered disclosed in each and every other Company Disclosure Schedule in
which the information is required to be included to the extent that such
disclosure sets forth facts in sufficient detail so that the relevance of the
disclosure would be reasonably apparent to a reader of such disclosure. Any
disclosure in any Company Disclosure Schedule of any contract, document,
liability, default, breach, violation, limitation, impediment or other matter,
although the provision for such disclosure may require such disclosure
only if such contract, document, liability, default, breach, violation,
limitation, impediment or other matter be “material” or shall have a Company
Material Adverse Effect, shall not be construed against the Company as an
assertion by the Company that any such contract, document, liability, default,
breach, violation, limitation, impediment or other matter is, in fact, material
or shall have a Company Material Adverse Effect.

 

SECTION 9.05                    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 and delivered
to the other parties.

 

SECTION 9.06                    Entire
Agreement; No Third-Party Beneficiaries. This Agreement, including the
disclosure schedules hereto, and the confidentiality agreement, dated as of March 15,
2006, among Parent, BASF Corporation and the Company (the “Confidentiality
Agreement”), (a) constitute the entire agreement and supersede all
prior agreements, arrangements, undertakings and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement, the Offer and the Merger and (b) except for the provisions of Section 1.03
and Section 6.02 are not intended to confer upon any Person other than the
parties any rights or remedies.

 

SECTION 9.07                    Governing
Law. This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to this Agreement or the facts
and circumstances leading to its execution, whether in contract, tort or
otherwise, shall be governed by and construed in accordance with, the Laws of
the State of Delaware, without reference to conflict of laws principles.

 

SECTION 9.08                    Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation of Law or
otherwise by any of the parties without the prior written consent of the other
parties, except that Parent and Merger Sub may assign this Agreement or
all or any of their rights, interests or obligations hereunder (including,
without limitation, the right to purchase Company Common Stock pursuant to the
Offer) to any Affiliate of Parent without the prior written consent of the
Company; provided, however, that no such assignment shall relieve
the assigning party of its obligations hereunder if such assignee does not perform such
obligations. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.

 

SECTION 9.09                    Specific
Enforcement; Consent to Jurisdiction; Service of Process. 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

 

34

 

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 Federal court located in the State of
Delaware or in any state court in the State of Delaware, this being in addition
to any other remedy to which they are entitled at Law or in equity. In
addition, each of parties hereto (a) consents to the sole and exclusive
jurisdiction of any Federal court located in the State of Delaware or of any
state court located in the State of Delaware in the event any dispute arises
out of or relates to this Agreement or the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this
Agreement or the transactions contemplated by this Agreement in any court other
than a Federal court located in the State of Delaware or a state court located
in the State of Delaware. Each of Merger Sub and the Company further agrees
that service of any process, summons, notice or document by U.S. registered
mail to its address set forth in Section 9.02 hereof (or such other
address given pursuant to Section 9.02) shall be effective service of
process for any action, suit or proceeding brought against it in any Federal
court located in the State of Delaware or of any state court located in the
State of Delaware. Parent further agrees that service of any process, summons,
notice or document in accordance with the Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters
shall be effective service of process for any action, suit or proceeding
brought against it in any Federal court located in the State of Delaware or of
any state court located in the State of Delaware.

 

SECTION 9.10                    Waiver of
Jury Trial. To the extent not prohibited by applicable Law that cannot be
waived, the parties hereby waive, and covenant that they will not assert
(whether as plaintiff, defendant or otherwise), any right to trial by jury in
any action arising in whole or in part under or in connection with this
Agreement, whether existing or hereafter arising, and whether sounding in
contract, tort or otherwise. The parties agree that any of them may file a
copy of this Section 9.10 with any court as written evidence of the
knowing voluntary and bargained–for agreement among the parties irrevocably to
waive its right to trial by jury in any proceeding whatsoever between them relating
to this Agreement and its consent that any such proceeding will instead be
tried in a court of competent jurisdiction by a judge sitting without a jury.

 

SECTION 9.11                    Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.

 

[Remainder of Page Intentionally
Left Blank]

 

35

 

IN WITNESS
WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.

 

	
   

  	
   

  	
  BASF
  AKTIENGESELLSCHAFT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joerg
  Buchmueller

  	
   

  
	 	 	 	
	 
	
   

  	
   

  	
   

  	
  Name: Joerg
  Buchmueller

  	
   

  
	
   

  	
   

  	
   

  	
  Title:
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IRON
  ACQUISITION CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Hans-Ulrich
  Engel

  	
   

  
	 	 	 	
	 
	
   

  	
   

  	
   

  	
  Name:
  Hans-Ulrich Engel

  	
   

  
	
   

  	
   

  	
   

  	
  Title:
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ENGELHARD
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael A. Sperduto
  	
   

  
	 	 	 	
	 
	
   

  	
   

  	
   

  	
  Name: Michael A. Sperduto
  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President and Chief Financial Officer
  	
   

  

 

 

Annex I

 

CONDITIONS OF THE OFFER

 

Capitalized
terms used in this Annex I but not defined herein have the meanings
assigned to such terms in the Agreement and Plan of Merger (this “Agreement”) of which this Annex I is a part.

 

Notwithstanding
any other provisions of the Offer or this Agreement, and in addition to (and
not in limitation of) Merger Sub’s rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of this Agreement),
Merger Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to Merger Sub’s obligation to pay for or return
tendered shares of Company Common Stock promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for
payment of or, subject to the restriction referred to above, the payment for,
any tendered shares of Company Common Stock, and may terminate or amend
the Offer as to any shares of Company Common Stock not then paid for, if:

 

(a)                                  the
Minimum Condition shall not have been satisfied immediately prior to the
expiration date of the Offer (as it may be extended in accordance with the
terms of this Agreement); or

 

(b)                                 on
or after the date of the Agreement and prior to the expiration date of the
Offer (as it may be extended in accordance with the terms of this
Agreement), any of the following conditions shall have occurred:

 

(i)                                     any Restraints
shall be in effect and not removed making illegal, restraining or prohibiting
the making of the Offer, the acceptance for payment of any Company Common Stock
by Parent, Merger Sub or any other Affiliate of Parent, or the consummation of
any other transaction contemplated by this Agreement;

 

(ii)                                  the representations
and warranties of the Company set forth in the Agreement shall not be true and
correct (without giving effect to any materiality or Company Material Adverse
Effect qualification contained therein except with respect to Section 3.07(a))
as of the Expiration Date of the Offer (except to the extent that any such
representation or warranty refers specifically to a particular date, in which
case such representation or warranty shall be true and correct as of such date)
except where the failure to be so true and correct, individually or in the
aggregate, does not and would not reasonably be expected to have a Company
Material Adverse Effect;

 

(iii)                               the Company shall have
failed to perform any obligation or to comply with any agreement or
covenant of the Company to be performed or complied with by it under the
Agreement, except where the failure to perform or comply, individually or
in the aggregate, does not have a Company Material Adverse Effect or would not
reasonably be likely to have a material adverse effect on Merger Sub’s ability
to purchase the shares of Company Common Stock pursuant to the Offer;

 

 

(iv)                              it shall have been
publicly disclosed, or Parent or Merger Sub shall have otherwise learned, that
beneficial ownership (determined for the purposes of this paragraph as set
forth in Rule 13d-3 promulgated under the Exchange Act) of 15% or more of
the then-outstanding Company Common Stock has been acquired by any Third Party
and the Company shall have terminated the Company Rights Agreement in
connection therewith or taken any action to amend or modify the Company Rights
Agreement to exempt such Third Party from the Company Rights Agreement or
render it inapplicable to such Third Party;

 

(v)                                 there shall have
occurred (A) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or Germany or (B) any
limitation (whether or not mandatory) by any government or Governmental
Authority on the extension of credit by banks or other lending institutions
that materially and adversely affects the ability of Merger Sub to consummate
the Offer;

 

(vi)                              this Agreement shall have
been terminated in accordance with its terms; or

 

(vii)                           Merger Sub and the Company
shall have agreed that Merger Sub shall terminate the Offer or postpone the
acceptance for payment of Company Common Stock thereunder.

 

The foregoing
conditions are for the sole benefit of Parent and Merger Sub and may be
asserted by Parent and Merger Sub regardless of the circumstances giving rise
to any such condition and may be waived by Parent or Merger Sub (except
for the Minimum Condition), in whole or in part, at any time and from time to
time prior to the expiration of the Offer, in their respective sole discretion.
The failure by Parent or Merger Sub at any time to exercise any of the
foregoing rights will not be deemed a waiver of any such right, the waiver of
any such right with respect to any particular facts and circumstances shall not
be deemed a waiver with respect to any other facts and circumstances and each
such right will be deemed an ongoing right that may be asserted at any
time and from time to time.

 

2exv10w1

 

Exhibit 10.1

EARNEST MONEY CONTRACT AND AGREEMENT

          THIS
EARNEST MONEY CONTRACT AND AGREEMENT, dated for reference purposes as
of May 26, 2006,
is made and entered into by and between NEW YORK LIFE INSURANCE COMPANY, a New York mutual
insurance company (hereinafter together referred to as “Seller”), and NUVASIVE, INC., a
Delaware corporation (“Purchaser”).

          The mailing, delivery or negotiation of this Earnest Money Contract and Agreement by Seller or
Purchaser or their agents or attorneys shall not be deemed an offer by Seller or Purchaser to enter
into any transaction or to enter into any other relationship, whether on the terms contained herein
or on any other terms. This Earnest Money Contract and Agreement shall not be binding upon Seller
or Purchaser, nor shall Seller or Purchaser have any obligations, liabilities or rights with
respect thereto, or with respect to the Property (as hereinafter defined), unless and until Seller
and Purchaser have executed and delivered this Earnest Money Contract and Agreement to the Escrow
Agent (as hereinafter defined). Until such execution and delivery of this Earnest Money Contract
and Agreement, either Seller or Purchaser may terminate all negotiations and discussions of the
subject matter hereof, with or without cause and for any reason without recourse or liability.

ARTICLE I

DEFINITIONS

          The terms hereinafter used shall have the following meanings unless the context of this
Contract requires otherwise:

          “Building” shall refer to that certain building situated on the Land commonly known as
4670 Shelby Drive, Memphis, Tennessee.

          “Buyer’s Agent” means Equis Corporation.

          “Closing” means the closing of the purchase and sale contemplated herein as described
in Article IV hereof.

          “Closing Date” means the date on which the Closing occurs.

          “Commission” means the brokerage fee payable to Seller’s Agent pursuant to a separate
written agreement between Seller and Seller’s Agent, which shall be paid by Seller in accordance
with Article XI hereof.

          “Contract” means this Earnest Money Contract and Agreement and all written amendments,
modifications, and supplements thereto executed by both Purchaser and Seller.

          “Deposit” means the total sum of One Hundred Fifty Thousand and No/100 Dollars
($150,000.00), to be paid in accordance with Section 2.03 hereof, including any and all
interest earned thereon, if any, while in possession of the Escrow Agent.

          “Earnest Money Deposit” means the total sum of Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00), comprised of the Good Faith Deposit and the Deposit to be paid in accordance
with Section 2.03 hereof, including any and all interest earned thereon, if any, while in
the possession of the Escrow Agent.

 

 

          “Effective Date” means the date the LOI (hereinafter defined) has been signed by both
Purchaser and Seller, and the Escrow Agent has received the Good Faith Deposit.

          “Escrow Agent” means First American Title Insurance Company, with its office located
at 3 Greenway Plaza, Suite 1100, Houston, Texas 77046, Attention: Ms. Jennifer M. Leuschner, Phone
No.: 713-850-0455 ext. 1418, Fax: 713-850-0456 pursuant to the terms and conditions of the Escrow
Agreement and Section 2.03 hereof.

          “Escrow Agreement” means that certain Escrow Agreement dated as of April 25, 2006
among Seller, Purchaser and Escrow Agent.

          “Existing Survey” means any existing survey of the Real Property in the possession or
control of Seller.

          “Existing Title Exceptions” means (i) all of the exceptions to title that may be set
forth in the Title Commitment and (ii) matters shown on the Existing Survey or the Survey that
indicate the existence of encumbrances, encroachments and other matters affecting title not listed
in the Title Commitment.

          “Good Faith Deposit” means the total sum of One Hundred Thousand and No/100 Dollars
($100,000.00), paid in accordance with Section 2.03 hereof, including any and all interest
earned thereon, if any, while in possession of the Escrow Agent.

          “Improvements” shall mean Seller’s right, title and interest in to and under the
Building and all other improvements constructed on the Land as of Closing.

          “Inspection Period” means the period that commenced on the Effective Date and expiring
at 5:00 p.m. (New York City time) on May 26, 2006, during which time Purchaser shall review and
inspect the Property.

          “Land” means that certain parcel of real property situated in Memphis, Shelby County,
Tennessee, legally described on Exhibit A attached hereto.

          “Leases” means those certain Lease Agreements described on Exhibit F annexed hereto
and made a part hereof and any amendment or modification thereof or any new lease entered into in
accordance with the terms of this Contract.

          “LOI” shall mean that certain letter of intent dated as of April 24, 2006 between
Seller and Purchaser with respect to the sale contemplated hereby.

          “Outside Closing Date” means June 6, 2006.

          “Owner’s Title Policy” means a policy of title insurance with respect to the Real
Property issued by the Title Company to Purchaser, in a face amount equal to the Total Purchase
Price on American Land Title Association Form 1970.

          “Permitted Exceptions” means the Existing Title Exceptions to which Purchaser shall
not object or to which Purchaser shall waive its objection, if any, all in accordance with
Section 3.04, as well as all of the following:

2

 

	 	1.	 	Zoning regulations and ordinances, building restrictions and regulations of
governmental agencies having jurisdiction over the Land and the Improvements;
	 
	 	2.	 	The lien of any real estate taxes, water charges, sewer rents, vault taxes and
assessments not yet due and payable, provided that apportionment thereof is made as
provided in this Contract;
	 
	 	3.	 	Uniform Commercial Code financing statements or conditional bills of sale,
provided that either (i) such statements were filed on a date more than five years
prior to the Closing Date, or (ii) a tenant is the debtor thereunder;
	 
	 	4.	 	The lien of any assessment which is or may become payable in annual
installments of which any installment is then a charge or a lien, provided that
apportionment thereof is made as provided in this Contract;
	 
	 	5.	 	Any matters disclosed by the Existing Survey or the Survey, which are not
disapproved by Purchaser during the Inspection Period.
	 
	 	6.	 	Rights of electric, gas, steam, telephone, cable, water and any other utility
companies to lay, maintain, install and repair pipes, lines, poles, conduits, cables,
boxes and related equipment upon, under and above the Real Property, provided same are
not violated by, and do not prohibit, the existence of, or unreasonably interfere with
the present use of the Improvements;
	 
	 	7.	 	Possible variations between the legal description of the Land described on
Exhibit A hereto and on the tax maps;
	 
	 	8.	 	The Leases, as in effect on the Outside Closing Date, subject to the terms of
this Contract; and
	 
	 	9.	 	Certain existing exceptions to title set forth on Exhibit D hereto,
which are contained in that certain Leasehold Owner’s Title Insurance Policy dated
December 30, 1999 issued to Seller by Chicago Title Insurance Company.

          “Personal Property” shall mean the right, title and interest of Seller in and to those
certain items of personal property more particularly described on Exhibit G attached hereto
located on the Land and used in connection with the operation of the Land and the Improvements.

          “PILOT Lease” means that certain Real Property Lease Agreement dated December 31, 1999
between The Industrial Development Board of the City of Memphis and County of Shelby, Tennessee
(the “IDB”), as lessor, and Seller, as lessee, recorded as Instrument No. JY 0086 in the Register’s
Office of Shelby County, Tennessee.

          “Property” means collectively (i) the Real Property; (ii) the Personal Property; (iii)
the Improvements; (iv) Seller’s interest in the Leases; and (v) Seller’s interest in the Service
Contracts that Purchaser elects to assume during the Inspection Period in accordance with the terms
hereof, provided same are transferable at no cost to Seller.

          “Property Manager” means the property manager for the Real Property engaged by Seller,
CB Richard Ellis – Memphis.

3

 

          “Real Property” means the Land and the Improvements, collectively.

          “Seller’s Agent” means CB Richard Ellis.

          “Service Contracts” shall mean all written agreements, contracts, work orders and
purchase orders for the operation, maintenance, repair and supplies for the Real Property to which
Seller is a party, together with any and all amendments thereto, more particularly described on
Exhibit H attached hereto.

          “Survey” means a survey certified to Purchaser, Seller and the Title Company dated
after the Effective Date and that is made in accordance with the “Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys” jointly established and adopted by the American Land
Title Association, American Congress on Surveying and Mapping and the National Society of
Professional Surveyors in 1999 and which shall include the following optional Table A items 1-4,
7a, 7b(1), 8-10 and 13 or the equivalent sections of Table A of the 2005 ALTA/ACSM Survey
Standards. The following additional Table A requirements shall be added at Purchaser’s expense: 6,
11(a), 11(b), 14 and 17.

          “Title Commitment” means a written commitment to issue the Owner’s Title Policy and
committing the Title Company to issue such title policy promptly following Closing and upon payment
of the premium therefor, subject only to the standard printed exceptions and to all Permitted
Exceptions.

          “Title Company” means First American Title Insurance Company, with its office located
at 3 Greenway Plaza, Suite 1100, Houston, Texas 77046, Attention: Jennifer Leuschner, Phone No.:
713-850-0455, ext. 1418, Fax: 713-850-0456.

          “Title Documents” means each recorded instrument that is listed on the Title
Commitment.

          “Total Purchase Price” means the total purchase price for the Property, which shall be
THREE MILLION AND NO/100THS DOLLARS ($3,000,000.00).

ARTICLE II

PURCHASE AND SALE: PURCHASE PRICE; EARNEST MONEY

        2.01. Purchase and Sale. Seller hereby agrees to sell and transfer and Purchaser hereby
agrees to purchase the Property for the consideration and upon and subject to the terms,
provisions, and conditions set forth in this Contract. The consideration for such purchase and
sale shall be the Total Purchase Price.

        2.02. Payment of Total Purchase Price. The Total Purchase Price, as adjusted in
accordance with Section 4.04, shall be payable at Closing by wire transfer of immediately
available U.S. funds.

        2.03. Earnest Money. For the purpose of securing the performance of Purchaser under
the terms and provisions of this Contract, Purchaser has delivered to the Escrow Agent the sum of
One Hundred Thousand and
No/100 Dollars ($100,000.00) (the “Good Faith Deposit”) following execution of the LOI and
prior to the date hereof.

          Upon expiration of the Inspection Period and provided that Purchaser has not exercised its
right to terminate this Contract, Purchaser shall deliver an additional One Hundred Fifty Thousand
and

4

 

No/100 Dollars ($150,000.00) (the “Deposit”) for an aggregate of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) (the Good Faith Deposit and the Deposit collectively hereinafter
referred to as the “Earnest Money Deposit”) are non-refundable, except as otherwise provided
herein.

          The Earnest Money Deposit shall be deposited into an interest bearing, readily available,
liquid, federally insured account(s). The account(s) to which the funds are deposited shall be an
escrow or trust account(s) of the Escrow Agent and the Earnest Money shall at all times be fully
covered by federal insurance so that no portion of the Earnest Money shall ever be at risk. The
Earnest Money Deposit (together with any interest earned thereon) shall constitute the Earnest
Money hereunder and shall be held, invested, and disbursed pursuant to the respective terms and
provisions hereof and of the Escrow Agreement.

          If Purchaser terminates this Contract on or before the expiration of the Inspection Period in
accordance with Section 3.05 hereof, the Good Faith Deposit shall be promptly returned to Purchaser
together with all interest earned thereon. Following the expiration of the Inspection Period,
Purchaser shall only be entitled to the return of the Earnest Money Deposit from the Escrow Agent
in the event this Contract is terminated pursuant to its terms under circumstances that entitle
Purchaser to a return of the Earnest Money Deposit.

ARTICLE III

TITLE AND SURVEY MATTERS

        3.01 Title Commitment. Purchaser has obtained the Title Commitment from the Title
Company, together with copies of the Title Documents.

        3.02. Survey. Within twenty-one days following the Effective Date, Seller shall
exercise reasonable business efforts to cause to be delivered a copy of the Survey to Purchaser and
to the Title Company.

        3.03. Property Information. Seller shall within three (3) business days following
the Effective Date cause to be delivered to Purchaser the following to the extent and if available
to Seller: (i) the Leases, (ii) all third-party environmental reports or studies, (iii) any
Existing Surveys, title policies or reports and any site plans of the Land or Improvements, (iv)
the Service Contracts, (v) copies of ad valorem tax receipts for calendar years 2003, 2004, 2005
and 2006, if available, (vi) copies of all plans, specifications, drawings and topographic maps of
the Improvements, (vii) copies of all operating statements or reports prepared by or on behalf of
Seller for calendar years 2003, 2004 and 2005 and for all available periods during calendar year
2006, (viii) copies of any certificates of occupancy and warranties with respect to the Property
and equipment, (ix) copies of all property condition reports prepared by third parties for Seller,
(x) an operating budget for calendar year 2006 for the Property, (xi) any marketing materials
prepared by Seller or its agents or representatives for the Property, (xii) the PILOT Lease, (xiii)
utility bills, (xiv) Flight
Safety certificate of insurance, (xv) soils and grading reports and (xvi) a copy of the notice
to vacate given to Essex Brownell. All of the items delivered to or made available for inspection
by Purchaser are sometimes hereinafter referred to as the “Property Information”.

        3.04. Permitted Exceptions. All Existing Title Exceptions and all matters shown on
the Survey of the Property not objected to by Purchaser by delivery of written notice to Seller on
or before the end of the Inspection Period shall be Permitted Exceptions. If Purchaser objects in
writing to Seller prior to the foregoing deadline (“Purchaser’s Objection Notice”), Seller may (but
shall not be obligated to, and Seller shall have no obligation to expend any money with respect
thereto) cure such objection(s), in which event Purchaser shall have no right to terminate this
Contract. Seller shall advise

5

 

Purchaser as to whether Seller is unwilling or unable to cure any
objection set forth in Purchaser’s Objection Notice within five (5) business days following receipt
of Purchaser’s Objection Notice. If Seller so notifies Purchaser, Purchaser may, as its sole and
exclusive remedies, exercisable not later than five (5) business days after receipt of the
aforesaid notice from Seller, either (i) waive its objections or (ii) terminate this Contract. If
Purchaser shall fail to deliver timely written notice of the termination of this Contract because
of Seller’s failure to cure Purchaser’s objection(s), Purchaser shall be deemed to have waived any
objection that is not cured. If Purchaser terminates this Contract, Purchaser shall then be
entitled to the return of the Earnest Money and all interest accrued thereon and except for
obligations that expressly survive termination of this Contract, Purchaser and Seller shall have no
further obligations to each other under this Contract.

        3.05. Inspection Period. Purchaser may terminate this Contract at any time during
the Inspection Period, for any reason in Purchaser’s sole discretion. If Purchaser shall, within
such period, deliver written notice of termination of this Contract to Seller by telecopy as
provided in Article IX hereof, Purchaser shall be entitled to receive a return of the Earnest Money
Deposit deposited by Purchaser and held by Escrow Agent and all interest accrued thereon. The
parties shall thereafter have no further obligations hereunder except those that expressly survive
termination of this Contract. If Purchaser fails to deliver written notice of termination of this
Contract within said period, Purchaser shall be deemed to have waived such right to terminate.

        3.06. Inspections. (a) Subject to the rights of the Tenants under the Leases, Seller
shall allow Purchaser and Purchaser’s agents and representatives reasonable access to the Real
Property (during business hours or such other time reasonably agreeable to Purchaser and Seller)
for purposes of any non-intrusive physical or environmental inspection of the Property, interviews
of the Tenants and review of the leases, books and records and other matters. Purchaser shall not
meet with or interview Tenants without a representative of Seller present. Purchaser neither has
nor shall communicate with the Tenants without prior written approval from Seller, which shall not
be unreasonably withheld. During the Inspection Period, Purchaser shall notify Seller in writing
which, if any, of the Service Contracts Purchaser desires to assume. Any Service Contracts that are
not assumed by Purchaser shall be terminated by Seller, without cost to Purchaser, as of the
Closing Date. Purchaser’s failure to give such notice shall constitute an election to assume all of
the Service Contracts. PURCHASER HAS NOT AND SHALL NOT CONDUCT OR ALLOW ANY PHYSICALLY INTRUSIVE
TESTING OF, ON OR UNDER THE REAL PROPERTY, INCLUDING ENVIRONMENTAL TESTING OF THE SURFACE OR
SUBSURFACE, SOILS, SURFACE WATER OR GROUND WATER OF THE PROPERTY NOR ANY INVASIVE ENGINEERING
TESTING, WHATSOEVER WITHOUT SELLER’S PRIOR
WRITTEN CONSENT, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD PROVIDED THAT SELLER SHALL HAVE THE
RIGHT TO REASONABLY APPROVE THE PARTIES PERFORMING SUCH WORK AND THE SCOPE OF SUCH WORK.
PURCHASER’S BREACH OF THE FOREGOING PROHIBITION SHALL ENTITLE SELLER, AT ITS OPTION, IMMEDIATELY TO
DECLARE THIS CONTRACT TO BE TERMINATED AND SELLER SHALL BE ENTITLED TO THE EARNEST MONEY.

          (b) Purchaser agrees that, in making any permitted physical or environmental inspections of
the Real Property, Purchaser or Purchaser’s agents have carried and will in the future carry not
less than Two Million Dollars ($2,000,000) commercial general liability insurance with contractual
liability endorsement which insures Purchaser’s Indemnity Obligations (as hereinafter defined),
contains a waiver of subrogation and names Seller, as an additional insured and will provide Seller
with written evidence of same, will exercise commercially reasonable efforts not to interfere with
the activity of the Tenants or any persons occupying or providing services at the Real Property,
will not, except as required by law, reveal to any third party not approved by Seller the results
of its inspections (other than its lenders, advisors, partners, consultants and attorneys, provided
they each agree in writing to hold the

6

 

Property Information in confidence), and will restore
promptly any physical damage caused by the inspections. Purchaser shall give Seller reasonable
prior notice of its intention to conduct any inspections or to interview or otherwise speak with
the Tenants of the Real Property, and Seller reserves the right to have a representative present.
Purchaser agrees to provide Seller with a copy of any inspection report upon Seller’s written
request, which agreement shall survive Closing and any termination of this Contract. Purchaser
agrees (which agreement shall survive Closing and any termination of this Contract) to indemnify,
defend, and hold Seller and its managers, agents, partners and their respective employees, officers
and directors, free and harmless from any loss, personal injury, property damage, claim, lien, cost
or expense, including reasonable attorneys’ fees, arising out of any of its inspections of the
Property (excluding the mere reporting or discovery of an existing condition), any breach of the
foregoing agreements by Purchaser in connection with the inspection of the Property, or otherwise
from the exercise by Purchaser or its agents or representatives of the right of access under this
Section 3.06 (collectively, “Purchaser’s Indemnity Obligations”). Any inspections shall be
at Purchaser’s sole expense. The terms and provisions of this Section 3.06(b) shall survive
Closing and any termination of this Contract.

          (c) Except as otherwise expressly set forth herein, Seller makes no representations or
warranties as to the truth, accuracy or completeness of any materials, data or other information
supplied to Purchaser in connection with Purchaser’s inspection of the Property (e.g., that such
materials are complete, accurate or the final version thereof, or that all such materials are in
Seller’s possession). It is the parties’ express understanding and agreement that such materials
have been provided only for Purchaser’s convenience in making its own examination and determination
during the Inspection Period as to whether it wishes to purchase the Property, and, in doing so,
Purchaser has and shall rely exclusively on its own independent investigation and evaluation of
every aspect of the Property and not on any materials supplied by Seller. Purchaser expressly
disclaims any intent to rely on any such materials provided to it by Seller in connection with its
inspection and agrees that it shall rely solely on its own independently developed or verified
information.

          3.07. Confidentiality. Except as provided in Section 3.06 hereof or otherwise
required by applicable law, rule, regulation or order, each of Seller and Purchaser agrees with the
other that it has no present intention of making, and shall not, without the prior written consent
of the other, make in the future any public announcement about the purchase and sale transaction
contemplated hereby or of any of the terms hereof, including without limitation, the results of any
inspection, test, survey, or study conducted pursuant to Section 3.06 hereof unless
required by law. If this Contract is terminated for any reason, Purchaser shall
promptly return to Seller all of the documents and information theretofore delivered to
Purchaser by Seller in connection with this Contract, including, without limitation, all documents
recited in Section 3.03 hereof, plus every report of findings obtained pursuant to
Section 3.06 hereof, and all copies of any of the foregoing documents made by Purchaser,
but without representation, warranty or liability therefor. At any time prior to the Closing Date,
or at any time if this Contract is terminated, Purchaser shall not deliver any of the documents
theretofore delivered to Purchaser by Seller or obtained by Purchaser pursuant to Section
3.06 hereof, or otherwise transmit any of the information contained in any such documents, to
any third party except Purchaser’s counsel, lenders, partners, consultants and other advisors,
engaged to help Purchaser in its analysis of the Property, on a need-to-know basis, provided such
individuals are advised of and agree to the same burdens of confidentiality and nondisclosure as
Purchaser. Purchaser agrees to indemnify and hold Seller harmless from and against any actual
loss, injury, damage, claim, lien, cost or expenses, including reasonable attorneys’ fees, arising
from a breach of the foregoing confidentiality agreement. The covenants set forth in this
Section 3.07 shall survive the termination or Closing of this Contract. Except with
respect to the Purchase Price, which shall remain confidential, this Section 3.07 shall
lapse and be of no further force or effect after the Closing.

7

 

          3.08. PROPERTY CONDITION. PURCHASER ACKNOWLEDGES THAT PURCHASER HAS INSPECTED OR
WILL INSPECT THE PROPERTY PURSUANT TO THE PROVISIONS OF SECTION 3.06 HEREOF, TO ITS
SATISFACTION AND IS QUALIFIED OR WILL RETAIN PERSONS THAT ARE QUALIFIED TO MAKE SUCH INSPECTION.
PURCHASER ACKNOWLEDGES THAT IT IS FULLY RELYING ON PURCHASER’S (OR PURCHASER’S REPRESENTATIVES’)
INSPECTIONS OF THE PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY SELLER OR ANY OF ITS REPRESENTATIVES EXCEPT FOR SELLER’S
REPRESENTATIONS AS EXPRESSLY SET FORTH HEREIN OR IN ANY OF THE DOCUMENTS DELIVERED AT CLOSING.
PURCHASER ACKNOWLEDGES THAT PURCHASER HAS (OR PURCHASER’S REPRESENTATIVES HAVE), OR PRIOR TO THE
CLOSING DATE WILL HAVE, THE OPPORTUNITY TO THOROUGHLY INSPECT AND EXAMINE THE PROPERTY TO THE
EXTENT DEEMED NECESSARY BY PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE THE CONDITION OF THE
PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY (INCLUDING, BUT NOT LIMITED TO, THE ENVIRONMENTAL
CONDITION OF THE PROPERTY, PROVIDED SELLER GRANTS CONSENT AS REQUIRED PURSUANT TO SECTION
3.06 HEREOF), AND PURCHASER ACKNOWLEDGES THAT PURCHASER IS RELYING SOLELY UPON ITS OWN (OR ITS
REPRESENTATIVES’) INSPECTION, EXAMINATION AND EVALUATION OF THE PROPERTY. AS A MATERIAL PART OF
THE CONSIDERATION FOR THIS CONTRACT AND THE PURCHASE, PURCHASER HEREBY AGREES TO ACCEPT THE
PROPERTY ON THE CLOSING DATE IN ITS “AS IS”, “WHERE IS” CONDITION, AND WITH ALL FAULTS, AND WITHOUT
REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY OF THE DOCUMENTS DELIVERED AT CLOSING. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, IN CONNECTION WITH THE SALE OF THE PROPERTY TO PURCHASER,
SELLER AND SELLER’S OFFICERS, AGENTS, DIRECTORS, EMPLOYEES, ATTORNEYS, CONTRACTORS AND AFFILIATES
(“SELLER’S RELATED PARTIES”) HAVE MADE NO, AND SPECIFICALLY DISCLAIM, AND PURCHASER ACCEPTS THAT
SELLER AND SELLER’S RELATED PARTIES HAVE DISCLAIMED, ANY AND ALL REPRESENTATIONS, GUARANTIES OR
WARRANTIES, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW (EXCEPT AS OTHERWISE PROVIDED IN
THIS CONTRACT OR IN ANY OF THE DOCUMENTS DELIVERED AT CLOSING), OF OR RELATING TO THE PROPERTY,
INCLUDING WITHOUT LIMITATION, OF OR RELATING TO (I) THE USE, INCOME POTENTIAL, EXPENSES,
OPERATION, CHARACTERISTICS OR CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, TENANTABILITY, DESIGN
OR FITNESS FOR ANY SPECIFIC OR A PARTICULAR PURPOSE, OR GOOD AND WORKMANLIKE CONSTRUCTION, (II) THE
NATURE, MANNER, CONSTRUCTION, CONDITION, STATE OF REPAIR OR LACK OF REPAIR OF ANY IMPROVEMENTS
LOCATED ON THE PROPERTY, ON THE SURFACE OR SUBSURFACE THEREOF, WHETHER OR NOT OBVIOUS, VISIBLE OR
APPARENT, (III) THE NATURE OR QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR ENGINEERING OF THE
PROPERTY, (IV) THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OR ABSENCE OF OR
CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF THE PROPERTY WITH REGULATIONS OR LAWS
PERTAINING TO HEALTH OR THE ENVIRONMENT, AND (V) THE SOIL CONDITIONS, DRAINAGE, FLOODING
CHARACTERISTICS, UTILITIES OR OTHER CONDITIONS EXISTING IN, ON OR UNDER THE PROPERTY. PURCHASER
ACKNOWLEDGES THAT ANY CONDITION OF THE PROPERTY WHICH PURCHASER DISCOVERS OR DESIRES TO CORRECT OR
IMPROVE PRIOR TO OR AFTER THE CLOSING DATE SHALL BE AT PURCHASER’S SOLE EXPENSE. EXCEPT AS
OTHERWISE PROVIDED IN THIS CONTRACT OR IN ANY OF THE DOCUMENTS DELIVERED

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AT CLOSING, PURCHASER,
SOLELY ON ITS OWN BEHALF BUT NOT ON BEHALF OF ANY THIRD PARTY, EXPRESSLY WAIVES (TO THE EXTENT
ALLOWED BY APPLICABLE LAW) ANY CLAIMS UNDER FEDERAL LAW, STATE OR OTHER LAW THAT PURCHASER MIGHT
OTHERWISE HAVE AGAINST SELLER RELATING TO THE PAST, PRESENT OR FUTURE USE, CHARACTERISTICS OR
CONDITION OF THE PROPERTY. THE PROVISIONS OF THIS SECTION 3.08 SHALL SURVIVE THE CLOSING.

ARTICLE IV

CLOSING

        4.01. Time of Closing. The Closing shall be held at 10 A.M. local time on the
Outside Closing Date in escrow at the Title Company, or as otherwise designated by Purchaser and
Seller, time being of the essence. Any failure on the part of the Purchaser or Seller to be ready,
willing and able to close on such Outside Closing Date shall be deemed a material default
hereunder. Closing may be held at an earlier date mutually satisfactory to Seller and Purchaser.
If the Outside Closing Date is not a business day, Closing shall be held on the next succeeding
business day.

        4.02. Seller’s Obligations. At Closing, Seller shall deliver or cause to be
delivered to Purchaser the following:

          (a) An assignment and assumption of the PILOT Lease (substantially in the form of Exhibit B),
duly executed and acknowledged.

          (b) An assignment and assumption of the Leases and the Service Contracts that Purchaser has
elected to assume during the Inspection Period (substantially in the form of Exhibit C) duly
executed and acknowledged (the “Assignment and Assumption of Leases and Service Contracts”).
Seller shall deliver written notice of termination at Closing of any Service Contract which (x)
Purchaser requests that Seller terminate in writing at least ten (10) days prior to Closing and (y)
is terminable without cost or penalty to Seller.

          (c) A standard form of tenant notice letter (substantially in the form of Exhibit E), duly
executed, informing the Tenant that the Property has been sold (the “Tenant Notice Letters”).

          (d) A certificate (substantially in the form of Exhibit I) indicating that Seller is not a foreign
corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the
Internal Revenue Code and Income Tax Regulations.

          (e) Such other affidavits or documents as are reasonably required under Tennessee law to
consummate these transactions, in form and substance acceptable to Seller.

          (f) The originals of the Leases, all Service Contracts that Purchaser has elected to assume
and certificates of occupancy for the Improvements, to the extent such items are in Seller’s
possession.

          (g) Seller shall obtain and deliver the following to Purchaser at or prior to Closing:

               (i) a Tenant Estoppel Certificate substantially in the form of the attached as Exhibit
K (a “Tenant’s Estoppel Certificate”) from Flight Safety International, Inc. (“Flight Safety”)
dated within thirty (30) calendar days of the Closing Date. Anything herein to the contrary

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notwithstanding, a Tenant Estoppel Certificate satisfying the requirements contained in such
Tenant’s Lease, without material modification, shall be deemed satisfactory for purposes of this
Section 4.02(g)(i);

               (ii) a No Default Certificate from the Lessor under the PILOT Lease pursuant to Section
12.09 of the PILOT Lease; and

               (iii) the Property, free from tenancies, with the exception of Flight Safety.

     The foregoing deliveries in clauses (i), (ii) and (iii) are hereinafter collectively referred
to as the “Required Deliveries”. Seller shall use commercially reasonable efforts to obtain the
Required Deliveries. If Seller is unable to obtain and deliver the Required Deliveries to Purchaser
at or prior to Closing, then Purchaser shall have the right, as its sole and exclusive remedy, to
terminate this Contract by delivering written notice of termination to Seller and the Escrow Agent,
whereupon Purchaser shall receive a return of the Earnest Money Deposit and all accrued interest
thereon and thereafter neither of the parties hereto shall have any further rights or obligations
hereunder whatsoever, except for such rights or obligations that, by the express terms hereof,
survive any termination of this Contract.

          (h) Original Tenant files, building plans, warranties and keys to the extent such items are in
Seller’s possession.

     4.03. Purchaser’s Obligations. At Closing, Purchaser shall deliver to Seller the
Total Purchase Price required pursuant to Section 2.02 and as adjusted in accordance with
Section 4.04. Purchaser shall execute and deliver the Tenant Notice Letters (acknowledging
that it has received and is responsible for the Tenant’s security deposit and specifying the exact
dollar amount of the deposit to be delivered to each tenant for whom Seller delivers a security
deposit to Purchaser, with a copy for Seller), the Assignment and Assumption of the PILOT Lease,
the Assignment and Assumption of Leases and Service Contracts and such other
documents as the Title Company shall reasonably require or as are customary for transactions
similar to the purchase and sale under this Contract, if any.

     4.04. Adjustments. The following items shall be credited, debited and otherwise
adjusted and prorated between Seller and Purchaser to the Closing Date, and the resulting
calculation shall be an adjustment to the Total Purchase Price payable at Closing pursuant to
Section 2.02 hereof (where appropriate, such adjustments shall be made on the basis of a
year of 12 months, 30 days to the month, with Purchaser receiving all income and being responsible
for all expenses relating to the Property on and after the Closing Date):

          (a) General property tax (or payments in lieu of taxes) (state, county, municipal, school and fire
district) upon the Property for the then current tax fiscal year based upon the latest available
tax bills or assessment information, whether for that year or the preceding year, unless the taxes
are paid directly by the Tenant under the Lease in which case no proration of general property tax
shall be made.

          (b) Special taxes or assessments, if any, upon the Property assessed or becoming a lien prior to
the date hereof (but only a prorata share of the then current installment of such special taxes or
assessment, if any, shall be charged as a credit against the Total Purchase Price), Purchaser
agreeing to assume all liability for future installments and deferred payments.

          (c) Fuel, electricity, water, sewer, gas, electric, telephone and other utility charges not payable
directly to the utility companies by Tenant under the Lease (such proration to be based upon meter
readings the day prior to the Closing Date), and assigned deposits, if such deposits shall be
assignable (except such metered utility charges which Seller shall cause to be read on the business
day

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prior to the Closing Date and billed to Seller), Purchaser agreeing to assume all liability for
future utility payments. Any deposits assigned to Purchaser shall be credited to Seller at the
Closing.

          (d) Security deposits, amounts payable and/or prepaid under the Service Contracts and the Owner’s
Association dues being assumed by Purchaser. Any security deposits and prepaid amounts assigned to
Purchaser shall be credited to Seller at the Closing.

          (e) Unapplied security deposits in Seller’s possession or control and accrued and/or prepaid
rentals, and other charges under the Leases. For purposes of this Section 4.04(e) the terms rentals
and rents shall be deemed include basic or fixed rental, percentage rental and operating expense
payments made by the Tenant under the Lease. Unpaid rents shall not be adjusted, and the right to
collect the same shall be assigned to Seller (provided that Purchaser shall, subsequent to Closing,
remit any collections — applying any payment received from a Tenant formerly delinquent first to
the rentals due to Purchaser for the month of Closing and any remaining rents will be delivered
promptly to Seller for any rents accrued and unpaid for periods prior to Closing). Seller shall
have a continuing right to attempt to collect any
delinquent rentals and to prosecute any pending claims for sums owed to Seller for periods prior to
Closing pursuant to pending bankruptcy proceedings affecting any Tenant. Following Closing,
Purchaser shall cooperate with Seller and provide such information as Seller may reasonably request
to ensure that post-closing re-prorations, including without limitation, delinquent rent
re-prorations, are performed in accordance with the foregoing. The provisions of this Section
4.04(e) shall survive the Closing for a period of one (1) year after Closing.

          (f) Rents, if any, under the PILOT Lease.

          (g) Items not prorated, or prorated on the basis of an estimate or in error shall be
readjusted after Closing upon receipt of information showing the amount that should have been
prorated at Closing, or upon discovery of such error, and either party owing the other any sums
after such readjustment shall be paid within one (1) month of such information or discovery of such
error; provided that all prorations shall be final one (1) year after Closing. The provision of
this Section 4.04(e) shall survive the Closing for a period of one (1) year after Closing.

        4.05. Closing Costs. All costs of closing the sale and purchase of the Property
shall be borne as follows:

          (a) Purchaser shall bear the cost of (i) search and exam fees and the premium for the Owner’s Title
Policy, including the cost of all endorsements to the Owner’s Title Policy, (ii) the cost of any
mortgagee’s policy of title insurance, including the cost of any endorsements thereto, (iii) all of
Purchaser’s due diligence costs, (iv) any transfer taxes associated with the conveyance and/or
transfer of the Property, (v) one-half of any escrow costs charged by the Title Company and (vii)
any modifications to the Survey required by Purchaser or its lender;

          (b) Seller shall bear the cost of (i) preparation of the deed or Assignment of the PILOT Lease and
the cost of recording same, (ii) one-half of any escrow fee charged by the Title Company, (iii) the
cost of obtaining the Survey of the Property, and (iv) the brokerage fee to Seller’s Agent
(pursuant to separate agreement);

          (c) Attorney’s fees of Seller and Purchaser are to be paid by each, respectively; and

          (d) Any other costs related to the transfer of the Property, unless otherwise specified in
this Contract, are to be borne in accordance with customary practices in Shelby County, Tennessee.

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          4.06. Tax Certiorari. If there be any tax certiorari proceedings or tax protest
proceedings pending with respect to the Property, then after deducting the cost of such proceedings
including attorneys’ fees, all benefits obtained including, without limitation, any tax refunds
attributable to (i) any tax year ended prior to the Closing Date shall be the property of and shall
be paid to Seller, (ii) any tax year commencing after the Closing Date may be retained by Purchaser
and (iii) the tax year in which the Closing Date occurs shall be the property of and shall be paid
to Purchaser subject to apportionment between Seller and Purchaser as of the Closing Date.
Purchaser shall have the right to prosecute any such proceedings for the tax year in which the
Closing Date occurs by attorneys selected by Purchaser and to settle any such proceedings
without the consent of Seller. If Purchaser receives any benefits to which Seller shall be
entitled under this Paragraph, Purchaser shall hold the same in trust for the benefit of Seller and promptly remit the same to Seller. The provisions of this Article shall survive the Closing. With
respect to any such proceedings that are pending for any tax year ended prior to the Closing Date,
such proceedings shall be prosecuted by Seller without any expense to Purchaser.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

        5.01. Seller’s Representations. Seller hereby represents and covenants, as of the
Effective Date, and again as of the Closing:

          (a) As of the Effective Date, (i) Seller, to its knowledge, has not received any notices of a
violation of the building code, any applicable zoning ordinances, or other laws relating to the
use, ownership, construction or design of the Improvements with respect to the Property (other than
notices of violations which have been previously removed or corrected); and (ii) Seller, to its
knowledge, is not aware of and has not received any notices of any action or governmental
proceeding in condemnation or eminent domain, or for a change in the zoning, which would affect the
Property; and

          (b) As of the Effective Date, there are no leases or rental agreements or service agreements
affecting the Property that will remain in effect after the Closing Date other than the Leases or
rental agreements or service agreements currently affecting the Property and delivered by Seller to
Purchaser pursuant to the LOI and this Contract. Between the date hereof and the earlier of the
Closing Date or the termination of this Contract, Seller shall not amend, modify or terminate the
Leases, except that Seller shall terminate the Lease with Essex-Brownell, nor enter into new leases
of space at the Property. Seller has not received any notice of default from any tenant under the
Leases, and Landlord has not sent any notice of default to any tenant of the Property within the
last six (6) months that remains outstanding.

          (c) That (i) Seller has the capacity and requisite authority to enter into and carry out the
terms and provisions of the LOI and this Contract and the transaction contemplated hereby and will
provide evidence thereof to Purchaser at Closing; (ii) Seller owns leasehold title to the Property
subject to all matters of record; and (iii) no third party has any right to purchase all or any
part of Property.

          (d) Seller shall not further encumber the Property or any of the Improvements or Personal
Property located thereon. Between the date of the LOI and this Contract and the earlier of the
Closing Date or the termination of this Contract, Seller shall not voluntarily create any exception
to title to the Property.

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          (e) To the best of Seller’s knowledge, as of the date hereof, there is no cause of action or
arbitration, or other proceeding pending or threatened in writing which could materially and
adversely affect the Property or Seller’s ability to close pursuant to this Contract.

          (f) To the best of Seller’s knowledge, as of the date hereof, Seller has not received any
written notice of any violation of any applicable federal, state or local law, statute, ordinance,
rule or regulation regulating the use, generation, storage, handling or disposal of any hazardous
wastes, toxic, hazardous or dangerous substances or similar substances or materials defined as
hazardous, toxic or
environmentally unsafe under any of the aforesaid laws, statutes, ordinances, rules or
regulations.

          (g) Seller is not currently renovating the Property.

     (h) Subject to a current title search, and to the best of Seller’s knowledge, there are
no mechanics liens currently affecting the Property.

          (i) Other than the amounts disclosed by the tax bills delivered or to be delivered by Seller
to Purchaser as part of the due diligence materials, supplemental taxes imposed as a result of the
transfer of the Property to Purchaser, or the PILOT Lease with the IDB, Seller has received no
written notice of any pending proceedings for special assessments of any kind (special, bond or
otherwise) to be levied against the Property, or any portion thereof.

          (j) Seller is not a person or entity with whom U.S. persons or entities are restricted from
doing business with under regulations of the Office of Foreign Asset Control (“OFAC”) of
the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked
Persons list) or under any statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten or Commit,
or Support Terrorism), or other governmental action. Seller is not a “foreign person” as such term
is defined in Sections 1445 and 7701 of the Internal Revenue Code of 1986 and the regulations
relating thereto.

          (k) Purchaser will have access to all such other documents and written agreements and
contracts within Seller’s control or possession containing material information regarding the
Property and not of a proprietary, confidential or financial nature.

          (l) The Personal Property listed on Exhibit G is all of the Personal Property owned by
Seller located at the Property as of the date hereof.

     5.02. Purchaser’s Representations. Purchaser hereby represents to Seller as follows
which representations shall survive the Closing:

          (a) Purchaser is a corporation duly organized and validly existing under and by virtue of the
laws of the State of Delaware. Purchaser has the power, right and authority to enter into and
perform its obligations under this Contract and to consummate the transaction contemplated hereby.

          (b) Purchaser has not dealt with any broker or finder in connection with the transaction
contemplated by this Contract other than Buyer’s Agent.

          Each of the representations of Seller contained in Paragraph 5.01 is made as of the Effective
Date and will survive for a period of nine months after the Closing. Any claim that Purchaser may
have at any time against Seller for a breach of any such representation whether known or unknown,
which is not asserted by written notice from Purchaser to Seller within such nine month period will
not be valid or effective, and Seller will have no liability with respect thereto. The accuracy in
all material

13

 

respects of the aforesaid representations is a condition precedent to Purchaser’s
obligation to close. In the event that on or prior to Closing Seller becomes aware that any of such
representations are not correct, Seller shall promptly notify Purchaser of such inaccuracy. If any
of said representations is not correct in all material respects at the time the same is made or as
of Closing and on or prior to the Closing Purchaser has actual knowledge of such inaccuracy,
Purchaser as its sole and exclusive remedies may either (a) terminate this Contract without
liability on the part of Seller or Purchaser, other than Purchaser’s
obligations to Seller contained in Paragraph 3.06, and the Earnest Money and all accrued
interest thereon will be returned to Purchaser, or (b) waive such matter, including the right to
make any claim against Seller post-Closing and proceed to Closing. Solely for purposes of this
Article V, and with respect to matters known to Purchaser at Closing, “material” shall be defined
as any breach for which the cost to cure is more than $25,000 for any individual breach or more
than $50,000 in the aggregate for all separate and unrelated breaches. If the cost to cure any one
or more of the breaches is not material and Seller does not agree to cure the same, Purchaser’s
sole remedy shall be to either (such election of Purchaser to be exercised on or before the Outside
Closing Date): (i) waive its rights and claims hereunder with respect to such misrepresentation,
and proceed to Closing in accordance with the terms of this Contract, without reduction in the
Total Purchase Price, or (ii) terminate this Contract, in which event the Earnest Money shall be
returned to Purchaser, and the parties shall have no further obligations hereunder except for
obligations that expressly survive the termination of this Contract.

          As used herein, the terms “best of Seller’s knowledge”, “Seller’s actual knowledge” and
“Seller’s knowledge” shall mean the current and actual knowledge, without duty of investigation or
inquiry, of Ron F. Petit, an employee of Seller who, as of the Effective Date, has primary
oversight responsibility within Seller with respect to the Property and is the person within Seller
who is most likely to have information relating to the Property; provided, however, that
Ron F. Petit shall not have any personal liability in connection with, or arising out of, any
representation made by Seller in this Contract.

ARTICLE VI

PRE-CLOSING OPERATION

        6.01. Operation. Seller, at Seller’s sole cost and expense, shall maintain or cause
to be maintained the Property in the same manner as it has been maintained prior to the date of
this Contract. Notwithstanding anything contained herein to the contrary, from and after the date
hereof until Closing or the earlier termination of this Contract, Seller shall not enter into any
amendment or modification of any Lease or into any new lease or amendment or modification of any
Service Contract or into any new Service Contract, unless Seller obtains Purchaser’s advance
written consent to such action, which consent shall not be unreasonably withheld, delayed, denied
or conditioned prior to the end of the Inspection Period, and which may be withheld in Purchaser’s
sole discretion thereafter; provided, however, no later than three (3) business days after
the date hereof, Seller shall deliver to Essex-Brownell, a Tenant at the Property, a thirty (30)
day notice to vacate the Property.

          Purchaser further agrees to pay Seller’s Agent a commission in an amount determined pursuant
to the commission schedule set forth in Seller’s existing leasing agreement with Seller’s Agent a
copy of which has been provided to Purchaser, if, within one hundred eighty (180) calendar days
after Closing any portion of the Property is leased to any person or entity (including his/her/its
successors, assigns or affiliates) with whom Seller’s Agent has negotiated (either directly or
through an agent) and whose identity was disclosed in a list of such persons or entities submitted
to Purchaser by Seller’s Agent no later than Closing.

          Purchaser’s obligations under this Section 6.01 shall survive Closing.

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ARTICLE VII

BREACH BY SELLER

          If Seller shall fail to fully and timely perform any of its obligations hereunder for any
reason except Purchaser’s default, Purchaser shall have the following remedies, which shall be
Purchaser’s sole and exclusive remedies: (a) to terminate this Contract and receive a return of the
Earnest Money Deposit and all interest accrued thereon or (b) to seek specific performance of
Seller’s obligations hereunder. Notwithstanding the foregoing, if Seller defaults under this
Contract because it is unable to convey the Property subject to only the Permitted Exceptions due
to the existence of any other exception to title to the Property, then Purchaser’s only remedies
shall be the right to (i) terminate this Contract and receive a return of the Earnest Money Deposit
and all interest accrued thereon or (ii) waive such exception or failure, as applicable, and
proceed with the purchase contemplated herein. Purchaser expressly agrees that it shall have no
right to seek damages or any other action at law or in equity, and waives its rights, if any, with
respect to this transaction under any applicable law. Failure to give notice of intent to
specifically enforce this Contract on or before the date which is thirty (30) days after the
Outside Closing Date shall constitute an election by Purchaser to (and shall automatically)
terminate this Contract, but only in the event of Seller’s breach. Purchaser shall be deemed to
have elected to terminate this Contract and receive a return of the Earnest Money Deposit and all
interest accrued thereon if Purchaser fails to file suit for specific performance against Seller in
a court having jurisdiction in the county and state in which the Property is located, on or before
a date which is sixty (60) days after the Outside Closing Date. In no event shall any damages,
rights or remedies for Seller’s pre-Closing breach of this Contract be collectible, enforceable or
available to Purchaser other than as provided in this paragraph.

ARTICLE VIII

BREACH BY PURCHASER

          If Purchaser should fail to consummate the purchase of the Property on or before the Outside
Closing Date for any reason other than Seller’s default and other than Purchaser’s right to
terminate this Contract under any provision contained in this Contract, Seller shall have the right
as its sole and exclusive remedy, to terminate this Contract and receive the Earnest Money Deposit
from the Escrow Agent, such funds being agreed upon as liquidated damages (and not as a penalty,
Seller and Purchaser hereby acknowledging that the amount of damage resulting from a breach of this
Contract by Purchaser would be difficult or impossible to accurately ascertain) for the failure of
Purchaser to consummate the purchase of the Property as contemplated hereby, and Seller agrees to
accept and take the Earnest Money Deposit as its total damages and relief and as its sole and
exclusive remedy.

ARTICLE IX

NOTICES

          Any notice, communication, request, reply, consent, or approval (“Notice”) in this
Contract provided or permitted to be given or made by either party to the other must be in writing
and shall, unless otherwise in this Contract expressly provided, be given or served by depositing
the same in the United States mail, postage prepaid and registered or certified and addressed to
the party to be notified, with return receipt requested, or by delivering the same in person to the
party to be notified, or by depositing the same with a nationally recognized overnight courier
service, charges prepaid, addressed to the party to be notified, or by electronic facsimile
transmission delivered by 5:00 p.m. (New York City time) on the date transmitted with the original
to be sent by any of the foregoing means.

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          Except as otherwise expressly provided in this Contract, Notice deposited with an overnight
courier in the manner hereinabove described shall be effective from and after one (1) day
(exclusive of Saturdays and Sundays) after such deposit. Notice by electronic facsimile
transmission shall be effective upon sending if confirmed receipt is obtained and a copy of such
Notice is sent (together with the confirmed receipt) by any of the other means. Notice given in
any other manner shall be effective only if and when received by the party to be notified. For
purpose of Notice, the addresses for the parties shall, until changed as hereinafter provided, be
as follows:

If to Seller, to:

New York Life Insurance Company

51 Madison Avenue, Room 907

New York, NY 10010

Attention: Ron F. Petit

Phone No.: (212) 576-6629

Fax No.: (212) 447-4244

with a copy to:

New York Life Insurance Company

51 Madison Avenue, Room 1104

New York, NY 10010

Attention: Vivian Dubin

Phone No.: (212) 576-4575

Fax No.: (212) 576-7078

and to:

Ronald I. Feldman, Esquire

Shumacker Witt Gaither & Whitaker, P.C.

736 Market Street, Suite 1100

Chattanooga, TN 37402

Phone No.: (423) 425-7003

Fax No.: (423) 266-1842

if to Purchaser, to:

Nuvasive, Inc.

4545 Towne Centre Court

San Diego, CA 92121

Attention: Jason Hannon

Phone No: (858) 909-1979

Fax No.: (858) 909-2000

with a copy to:

O. Jacob Bobek

Equis Corporation

1100 Glendon Avenue, Suite 2160

Los Angeles, CA 90024

Phone No: (310) 689-2267

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Mobile No: (310) 429-4319

Fax No.: (310) 689-2270

and to

Heller Ehrman LLP

333 Bush Street

San Francisco, CA 94104

Attention: Barbara Gregoratos

Phone No.: (415) 772-6004

Fax No.: (415) 772-2004

          The parties hereto shall have the right from time to time to change their respective addresses
and each shall have the right to specify as its address any other address within the continental
United States of America by at least five (5) days notice to the other party as herein provided.

ARTICLE X

RISK OF LOSS

        10.01. Minor Damage. In the event of loss or damage to the Real Property, or any
portion thereof, which is not “Major” (as hereinafter defined), this Contract shall remain in full
force and effect, and Seller shall assign to Purchaser all of Seller’s right, title and interest in
and to any claims and proceeds Seller may have with respect to any casualty insurance policies
relating to the premises in question and reduce the Total Purchase Price by an amount equal to the
lesser of the deductible amount under Seller’s insurance policy or the cost of such repairs as
determined in accordance with Section 10.03 hereof. Upon Closing, full risk of loss with
respect to the Property shall pass to Purchaser.

        10.02. Major Damage. In the event of a “Major” loss or damage, either Seller or
Purchaser may terminate this Contract by written notice to the other party, in which event the
Earnest Money and all accrued interest thereon shall be returned to Purchaser. If neither Seller
nor Purchaser elects to terminate this Contract within ten (10) days after Seller sends Purchaser
written notice of the occurrence of such Major loss or damage (which notice shall state the cost of
repair or restoration thereof as opined by an architect in accordance with Section 10.03
hereof), then Seller and Purchaser shall be deemed to have elected to proceed with Closing, in
which event Seller shall, at Seller’s option, either (a) perform any necessary repairs, or (b)
assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds
Seller may have with respect to any casualty insurance policies relating to the premises in
question. In the event that Seller elects to perform repairs upon the Real Property, Seller shall
use reasonable efforts to complete such repairs promptly, and the date of Closing may be extended
by Seller a reasonable time not to exceed ninety (90) days in order to allow for the completion of
such repairs. Purchaser shall have the right to approve the scope of such work and the contractor
to perform such work, which approval shall not be unreasonably withheld, conditioned or delayed,
and shall be deemed given if not objected to in writing stating reasons therefor within five (5)
business days of receipt of such request for approval. If Seller elects to assign a casualty claim
to Purchaser, the Total Purchase Price shall be reduced by an amount equal to the lesser of the
deductible amount under Seller’s insurance policy or the cost of such repairs as determined in
accordance with Section 10.03 hereof. In the event such damage is not insured and
Purchaser is required to Close the purchase of the Property, the Total Purchase Price shall be
reduced
by the reasonable actual cost of such repairs. Upon Closing, full risk of loss with respect to
the Property shall pass to Purchaser. Notwithstanding the foregoing covenants of this Section
10.02, in the event of a Major loss or damage affecting only the unleased and vacant portion of
the Building, and if this Contract is not terminated as provided in this Section 10.02,
then Seller and Purchaser shall be deemed to

17

 

have elected to proceed with Closing, and Seller shall
assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds
Seller may have with respect to any casualty insurance proceeds relating to the premises in
question, and the Total Purchase Price shall be reduced by an amount equal to the lesser of the
deductible amount under Seller’s insurance policy or the cost of such repairs as determined in
accordance with Section 10.03 above.

        10.03. Definition of “Major” Loss or Damage. For purposes of Sections 10.01
and 10.02, “Major” loss or damage refers to loss or damage to the Real Property
such that the cost of repairing or restoring the premises in question to substantially the same
condition which existed prior to the event of damage would be, in the opinion of an architect
selected by Seller and reasonably approved by Purchaser, equal to or greater than Fifty Thousand
and no/100 Dollars ($50,000.00).

        10.04. Condemnation. 

          Any actual taking or condemnation for any public or quasi-public purpose or use as to which
Seller receives a notice of taking from any competent authority in appropriate proceedings or by
any right of eminent domain of all or any part of the Property between the date of this Contract
and the Closing Date shall, at Purchaser’s option, cause a termination of this Contract. The
election to terminate provided hereby must be exercised by Purchaser (or will be deemed to have
been waived) by notice to Seller to that effect given within ten (10) days following Purchaser’s
receipt from Seller of notice of such condemnation or threat of condemnation.

ARTICLE XI

COMMISSIONS

          Seller has agreed to pay the Commission to Seller’s Agent as real estate broker for this
transaction. The Commission shall not be earned and shall not be payable until Closing, the
consummation of the purchase and sale contemplated herein, the passing of title to the Property
from Seller to Purchaser, and the payment of the Total Purchase Price to Seller; provided that if
Closing of this transaction in strict accordance with the terms of this Contract does not occur,
regardless of cause, no commission whatsoever shall be due, earned, or payable to Seller’s Agent.
The Commission shall be payable in cash at Closing. Seller’s Agent has agreed to pay a fee to
Buyer’s Agent. Purchaser and Seller each represents and warrants to the other that except for
Seller’s Agent and Buyer’s Agent, there are no other brokers involved in this transaction.
Purchaser and Seller each agree to indemnify and hold the other harmless from and against any
claims by any broker or third parties (other than Agent) claiming by, through, or under it for
brokerage commissions, finder’s fees, or other fees relative to the sale or lease of the Property.
The foregoing indemnity shall survive Closing or termination of this Contract.

ARTICLE XII

MISCELLANEOUS

        12.01. Assignment.
Subject to the provisions of this Section 12.01, the terms and provisions of this
Contract are to apply to and bind the permitted successors and assigns of the parties hereto.
Purchaser may not assign its rights under this Contract without first obtaining Seller’s written
approval, which approval may be given or withheld in Seller’s sole discretion, provided, however,
Purchaser may assign its rights under this Contract to an affiliated corporation or limited
liability company which is controlled and majority owned by Purchaser. In the event Purchaser
intends to assign its rights hereunder, (a) Purchaser shall send Seller written notice of its
request at least five (5) business days prior to Closing, which request shall include the legal
name and structure of the proposed assignee,

18

 

as well as any other information that Seller may
reasonably request, and (b) Purchaser and the proposed assignee shall execute an assignment and
assumption of this Contract in form and substance reasonably satisfactory to Seller, and (c) in no
event shall any assignment of this Contract release or discharge Purchaser from any liability or
obligation hereunder. Any transfer, directly or indirectly, of any stock (excluding less than a
majority interest in publicly traded shares of Purchaser on a national stock exchange), partnership
interest or other ownership interest in Purchaser shall constitute an assignment of this Contract.

        12.02. Governing Law. This Contract shall be construed under and in accordance with
the laws of the State of Tennessee.

        12.03. Binding on Assigns. This Contract shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, legal
representatives, successors, and assigns.

        12.04. Severability. In case any one or more of the provisions contained in this
Contract for any reason is held to be invalid, illegal, or unenforceable in any respect, that
provision or provisions shall not affect any other provision hereunder.

        12.05. Sole Agreement. This Contract constitutes the sole and only agreement of the
parties hereto and supercedes any prior understanding or written or oral agreements between the
parties respecting the subject matter of this Contract.

        12.06. Gender and Number. Words of any gender used in this Contract shall be held
and construed to include any other gender and words in the singular number shall be held to include
the plural and vice versa unless the context requires otherwise.

        12.07. Headings. The headings of the articles and sections contained in this
Contract are for convenience only and shall not be taken into account in determining the meaning of
any provision of this Contract.

        12.08. No Recording.
Neither this Contract nor any memorandum hereof shall be recorded in any public records.

        12.09. Business Days. Business days shall not include Saturdays, Sundays, or any
national banking holidays.

        12.10. Time of the Essence. Time is of the essence with respect to the performance
of each of Purchaser’s obligations under this Contract.

        12.11. Counterparts. This Contract may be executed in counterparts, all such
counterparts shall constitute the same agreement, and the signature of any party to any counterpart
shall be deemed a signature to, and may be attached to, any other counterparts.

        12.12. Limitation of Liability.

          (a) Notwithstanding anything to the contrary contained in this Contract or any documents executed
in connection herewith, if the Closing of the transaction contemplated hereunder shall have
occurred, then in no event shall Seller have any liability arising pursuant to or in connection
with the representations, warranties, indemnifications, covenants or other obligations (whether
express or implied) of Seller under this Contract (or any document, affidavit or certificate
executed or delivered in

19

 

connection herewith) (i) unless and until the aggregate amount of all such
claims exceeds Twenty-Five Thousand Dollars ($25,000.00) and then only to the extent such aggregate
amounts exceed Twenty-Five Thousand Dollars ($25,000.00), or (ii) for any amounts in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00) singly or in the aggregate. The foregoing sentence
shall not apply to prorations pursuant to this Contract.

          (b) No agent, advisor, representative, affiliate, employee, director, partner, member, beneficiary,
investor, servant, shareholder, trustee or other person or entity acting on a party’s behalf or
otherwise related to or affiliated with such party (collectively, “Related Parties”), shall have
any personal liability, directly or indirectly, under or in connection with this Contract or any
agreement made or entered into under or pursuant to the provisions of this Contract, or any
amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter,
and each party and its successors and assigns and, without limitation, all other persons and
entities, shall look solely to the other party’s assets for the payment of any claim or for any
performance, and the parties hereto, on behalf of themselves and their successors and assigns,
hereby waives any and all such personal liability.

          (c) The provisions of this Section 12.12 shall survive the Closing or a termination of this
Contract.

        12.13. Third Parties.
Nothing in this Contract, whether expressed or implied, is intended to confer any rights or
remedies under or by reason of this Contract upon any other person other than the parties hereto
and their respective permitted successors and assigns, nor is anything in this Contract intended to
relieve or discharge the obligation or liability of any third persons to any party to this
Contract, nor shall any provision give any third parties any right of subrogation or action over or
against any party to this Contract. This Contract is not intended to and does not create any third
party beneficiary rights whatsoever.

        12.14. No Implied Waivers. No failure or delay of either party in the exercise of
any right or remedy given to such party hereunder or the waiver by any party of any condition
hereunder for its benefit (unless the time specified in this Contract for exercise of such right or
remedy has expired) shall constitute a waiver of any other or further right or remedy (except to
the extent expressly provided herein) nor shall any single or partial exercise of any right or
remedy preclude other or further exercise thereof or any other right or remedy. No waiver by
either party of any breach hereunder or failure or refusal by the other party to comply with its
obligations shall be deemed a waiver of any other or subsequent breach, failure or refusal to so
comply.

        12.15. WAIVER OF TRIAL BY JURY. SELLER AND PURCHASER HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT) BROUGHT BY EITHER
AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS CONTRACT.

ARTICLE XIII

LIKE-KIND EXCHANGE

        13.01. Purchaser’s Cooperation. Purchaser acknowledges that Seller may desire to
effect an exchange (the “Exchange”) of the Property for property of like-kind and qualifying use
(the “Exchange Property”) pursuant to Section 1031 of the Internal Revenue Code as amended, and the
Treasury Regulations promulgated thereunder. Notwithstanding anything contained in this Contract
to the contrary, Purchaser agrees that Purchaser shall cooperate with Seller in effecting such
Exchange. Seller may effect a deferred “tax-free exchange” under Section 1031 and the Treasury
Regulations promulgated

20

 

thereunder, including, without limitation, through the use of a ‘qualified
intermediary” within the meaning of Treasury Regulations Section 1.1031 (k)-1(g)(4) (hereafter a
“Qualified Intermediary”), as shall be selected by Seller. Purchaser shall take such steps and
execute such documents, including, without limitation, the QI Assignment (as hereinafter defined),
as may be reasonably necessary to assist Seller in this regard, except that in no event will
Purchaser be obligated to acquire or take title to any Exchange Property or incur any cost, expense
or liability (contingent or otherwise) in connection therewith, and any such Exchange shall not
unreasonably delay the Closing. Purchaser further agrees to permit Seller to assign its interest
(but not its obligations, to the extent such obligations survive the Closing in accordance with the
terms of this Contract) in this Contract to a Qualified Intermediary (the “QI Assignment”) as
provided in Treasury Regulation Section 1.1031(k)-1(g)(4) on or before the date of the Closing, and
Purchaser, upon written notice from Seller, shall pay the Total Purchase Price to such Qualified
Intermediary. Notwithstanding the above-described Exchange, Purchaser shall not be obligated to
pay any amounts greater than the Total Purchase Price or incur any debt with respect to the
Exchange Property or incur any other liability; and Purchaser shall not
be required to make any warranties or representations in addition to those contained herein or
perform any additional covenants in favor of Seller or any other Person.

        13.02. Survival. The obligations of Seller and Purchaser pursuant to this Article
XIII shall survive the Closing.

[Signature Pages Follow]

21

 

          IN WITNESS WHEREOF, THIS CONTRACT IS HEREBY EXECUTED by Seller as of the date first above
written.

	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NEW YORK LIFE INSURANCE COMPANY, a New York mutual

insurance company
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Ron Petit 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	Ron F. Petit	 	 	 	 
	 

	 	Title:
	 	Asst.
V. P. 

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 

22

 

          IN WITNESS WHEREOF, THIS CONTRACT IS HEREBY EXECUTED by Purchaser as of the date first above
written.

	 	 	 	 	 
	 	PURCHASER:

NUVASIVE, INC.,

a Delaware corporation

 	 
	 	By:  	/s/
Alexis
V. Lukianov	 
	 	 	Alexis V. Lukianov 	 
	 	 	Chairman and Chief Executive Officer 	 

23

 

	 	 	 	 	 

ATTACHMENTS

Exhibit A — Legal Description

Exhibit B
— Assignment and Assumption of PILOT Lease

Exhibit C — Assignment and Assumption of Leases and Service Contracts

Exhibit D
— Existing Title Exceptions

Exhibit E
— Tenant Notice Letter

Exhibit F
— Description of Lease

Exhibit G — Personal Property

Exhibit H
— Service Contracts

Exhibit I
— Seller’s IRC Section 1445 Certificate

Exhibit J
— List of Pending Litigation

Exhibit K
— Form of Estoppel Certificate

24

 

EXHIBIT A

LEGAL DESCRIPTION

Being part of the Industrial Developments International, Inc. property in Memphis, Tennessee, known
as Building “B”, and being more particularly described as follows:

Beginning at a point, said point being the southeast corner of M.S. Carriers property as recorded
in Instrument BA-8198 at the Shelby County Register’s Office and the north line of Shelby Drive (14
right-of-way); thence N 00o 34’15” E along the east line of the M.S. Carriers property, a distance
of 468.50 feet to a point; thence S 89o 25’ 45” E, a distance of 692.44 feet to a point, said point
being the centerline of the future Pleasant Hill Road (84 foot right-of-way); thence S 09o 44’ 15”
E along the centerline of said road, a distance of 24.58 feet to a point of curvature; thence with
a curve to the right, continuing along the centerline of said road, having a 1,125.00 foot radius,
an arc distance of 202.40 feet (chord S 04o 35’ 00” E, 202.13 feet) to a point of tangency; thence
S 00o34’15” W along the centerline of said road, a distance of 243.00 feet to a point, said point
being the north line of Shelby Drive; thence N 89o25’45” W along the north line of Shelby Drive, a
distance of 715.00 feet to the point of beginning.

 

 

EXHIBIT B

ASSIGNMENT AND ASSUMPTION OF PILOT LEASE

	 	 	 	 	 	 	 
	STATE OF TENNESSEE

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	COUNTY OF SHELBY

	 	 	)	 	 	KNOW ALL MEN BY THESE PRESENTS:

     THIS ASSIGNMENT AND ASSUMPTION OF PILOT LEASE (this “Assignment”) is made and entered into as
of the                     day of                                          , 2006 by NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance company
(“Assignor”), and                                                                                  (“Assignee”)

WITNESSETH:

     WHEREAS, Assignor is the lessee under that certain Real Property Lease Agreement (“PILOT
Lease”) dated December 31, 1999 with The Industrial Development Board of the City of Memphis and
County of Shelby, Tennessee as lessor (“Lessor”) recorded as Instrument No. JY 0086 in the
Register’s Office of Shelby County, Tennessee covering certain Real Property located in the City of
Memphis, Shelby County, Tennessee more particularly described on Exhibit A attached hereto;
and

     WHEREAS, Assignor desires to assign the PILOT Lease to Assignee, and Assignee desires to
assume the PILOT Lease as hereinafter provided.

     NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other valuable consideration paid
by Assignee to Assignor, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:

     1. Assignor hereby assigns and transfers to Assignee, its successors and assigns, all of the
right, title and interest of Assignor in the PILOT Lease. Assignee hereby affirmatively and
unconditionally assumes the obligations of the lessee under the PILOT Lease arising on or after the
date hereof.

     2. Assignee agrees to indemnify, defend and hold harmless Assignor from and against any and
all claims, costs, loss, liability, damage or expense (including reasonable attorneys fees and
court costs) arising out of or related to the assumed obligations under the PILOT Lease on or after
the date hereof and/or Assignee’s use or operation of the Real Property arising on or after the
date hereof.

     3. Assignor hereby agrees to indemnify, defend and hold harmless Assignee from and against any
and all claims, costs, loss, liability, damage or expense (including reasonable attorneys fees and
court costs) arising out of or related to Assignor’s obligations under the PILOT Lease arising
prior to the date hereof; provided that the foregoing indemnity shall not extend to any obligations
under the PILOT Lease relating to the physical or environmental condition of the Real Property.

      4. This Assignment is made without warranty, representation, or guaranty by, or recourse
against, Assignor of any kind whatsoever, except as set forth in and subject to the terms of that
certain Earnest Money Contract and Agreement dated                      , 2006 between Assignor and Assignee.

      5. This Assignment shall be binding upon, and inure to the benefit of the parties hereto and
their successors and assigns.

 

 

     6. To facilitate execution of this Assignment, this Assignment may be executed in multiple
counterparts, each of which, when assembled to include an original signature for each party
contemplated to sign this Assignment, will constitute a complete and fully executed original. All
such fully executed original counterparts will collectively constitute a single agreement.

          EXECUTED as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 
	 	 	NEW YORK LIFE INSURANCE COMPANY, a New York mutual

insurance company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 
	STATE OF NEW YORK

	 	)
	COUNTY OF NEW YORK

	 	)

          Before me,                                                             , of the state and county aforesaid, personally
appeared                                                 , with whom I am personally acquainted (or proved to me on the
basis of satisfactory evidence), and who, upon oath, acknowledged him/herself to be
                                                             of NEW YORK LIFE INSURANCE COMPANY, the within named bargainor, a New
York mutual insurance company, and that he/she as such officer, being authorized so to do,
executed the foregoing instrument for the purpose therein contained by signing the name of the
corporation by him/herself as such officer.

          WITNESS my hand and seal at office in New York, New York this                      day of
                                        , 2006.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	My commission expires:

	 	 	 	Notary Public	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Affix Notarial Seal]

 

 

	 	 	 	 	 	 	 
	 	 	ASSIGNEE:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	a                                         corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Attachments:

     Exhibit A – Legal Description

	 	 	 	 	 
	STATE OF

	 	 	 	      )
	COUNTY OF

	 	 

	 	
      )
	 

	 	 

	 	 

          Before me,                                                             , of the state and county aforesaid, personally
appeared                                                , with whom I am personally acquainted (or proved to me on the
basis of satisfactory evidence), and who, upon oath, acknowledged him/herself to be
                                                             of                                                                                 , the within named
bargainor, a corporation, and that he/she as such officer, being authorized so to do, executed the
foregoing instrument for the purpose therein contained by signing the name of the corporation by
him/herself as such officer.

          WITNESS my hand and seal at office in                                         ,                                          this                      day
of                                         , 2006.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	   
	My commission expires:

	 	 	 	Notary Public	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Affix Notarial Seal]

 

 

EXHIBIT C

ASSIGNMENT AND ASSUMPTION OF 

LEASES AND SERVICE CONTRACTS

	 	 	 	 	 
	STATE OF TENNESSEE

	 	§	 	 
	 
	 	 	 	 
	COUNTY OF SHELBY

	 	§
	 	KNOW ALL MEN BY THESE PRESENTS:

          THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SERVICE CONTRACTS (this “Assignment”) is made
and entered into as of the       day of                     , 2006 by New York Life
Insurance Company, a New York mutual insurance company (“Assignor”), and
                                                            , (“Assignee”).

WITNESSETH:

          WHEREAS, Assignee is this day purchasing from Assignor and Assignor is conveying to Assignee a
leasehold estate in that certain real property together with the improvements situated thereon
known as 4670 Shelby Drive, Memphis, Tennessee and legally described on Exhibit A attached
hereto (the “Real Property”) pursuant to that certain Earnest Money Contract and Agreement (the
“Contract”) dated as of                     , ___, 2006 between Assignor and Assignee; and

          WHEREAS, the Assignor is the lessor under those certain leases (such leases referred to herein
as the “Leases”) affecting the Property, which leases are more fully described in Exhibit B
attached hereto and made a part hereof for all purposes; and

          WHEREAS, the Assignor is a contracting party under those certain written agreements,
contracts, work orders and purchase orders for the operation, maintenance, repair and supplies for
the Real Property to which Seller is a party, together with any and all amendments thereto (the
“Service Contracts”) which Service Contracts are more fully described in Exhibit C attached
hereto and made a part hereof for all purposes; and

          WHEREAS, in accordance with the terms and provisions of the Contract, Assignor is assigning
and Assignee is assuming the Leases and Service Contracts as hereinafter provided.

          NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged and
confessed:

     1. Assignor hereby assigns and transfers to Assignee, its successors and assigns, all of the
right, title, and interest of Assignor in the Leases and Service Contracts. Assignee hereby
affirmatively and unconditionally assumes the obligations of the lessor under the Leases and of
Assignor under the Service Contracts that arise on or after the date hereof. Assignee agrees to
indemnify, defend and hold harmless Assignor from and against any and all claims, costs, loss,
liability, damage or expense (including reasonable attorneys fees and court costs) arising out of
or related to the assumed obligations under the Leases and Service Contracts on or after the date
hereof and/or Assignee’s use or operation of the Real Property arising on or after the date hereof.
Assignor hereby agrees to indemnify, defend and hold harmless Assignee from and against any and
all claims, costs, loss, liability, damage or expense (including reasonable attorneys fees and
court costs) arising prior to the date hereof out of or related to

 

 

Assignor’s obligations under the Leases and Service Contracts; provided that the foregoing
indemnity shall not extend to any obligations under the Leases or Service Contracts relating to the
physical or environmental condition of the Real Property.

     2. This Assignment is made without warranty, representation, or guaranty by, or recourse
against, Assignor of any kind whatsoever, except as set forth in and subject to the terms of the
Contract.

     3. This Assignment shall be binding upon, and inure to the benefit of, all of the parties
hereto, their successors and assigns.

     4. To facilitate execution of this Assignment, this Assignment may be executed in multiple
counterparts, each of which, when assembled to include an original signature for each party
contemplated to sign this Assignment, will constitute a complete and fully executed original. All
such fully executed original counterparts will collectively constitute a single agreement.

          EXECUTED as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 
	 	 	NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	ASSIGNEE:	 	 
	 
	 	 	 	 	,	 
	 	 	 	 	 
	 	 	a                                         corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Attachments:

     Exhibit A – Property

     Exhibit B – Rent Roll

 

 

EXHIBIT D

EXISTING TITLE EXCEPTIONS

	1.	 	Subdivision restrictions, building lines and easements of record in Plat Book 135, Page 97,
in the Register’s Office of Shelby County, Tennessee.

	2.	 	Declaration of Protective Covenants, Agreements, Easements, Charges and Liens for Southpark
of record under Register’s No. CE 8037, in the aforesaid Register’s Office.

	3.	 	Assignment and Assumption of Leases and Guaranties recorded under Register’s No. CN 9678, in
the aforesaid Register’s Office.

	4.	 	Parcel F Agreement recorded under Register’s No. CN 9679, in the aforesaid Register’s Office.

	5.	 	Consent to Encroachments recorded under Register’s No. CP 3244, in the aforesaid Register’s
Office.

	6.	 	Access and Road Easement Agreement recorded under Register’s No. EE 7037, in the aforesaid
Register’s Office.

	7.	 	Easement Contract recorded under Register’s No. BZ 0440, in the aforesaid Register’s Office.

	8.	 	Easement recorded under Register’s No. CK 6140, in the aforesaid Register’s Office.

	9.	 	Real Property Lease Agreement recorded under Register’s No. JY 0086, in the aforesaid
Register’s Office.

 

 

EXHIBIT E

TENANT LETTER

                                         , 2006

TO ALL TENANTS AT:

                                        

                                        

                                        

TO WHOM IT MAY CONCERN:

          Please be advised that we have conveyed our entire ownership interest in the above-mentioned
project to                     , a                                          (“Purchaser”). Your lease agreement,
including without limitation, your security deposit of $                     held by Seller pursuant to the
terms of your lease, has been assigned and transferred to Purchaser. Therefore all rents and other
payments payable pursuant to the terms of the respective leases on or after the date hereof should
be payable to:

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	Very truly yours,	 	 
	 
	 	 	 	 
	 

	 	SELLER:	 	 
	 
	 	 	 	 
	 

	 	NEW YORK LIFE INSURANCE COMPANY	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

Purchaser hereby confirms and consents to the terms of the foregoing notice and acknowledges that
it has assumed all of the landlord’s obligations under the Lease arising on or after the date
Purchaser acquired title to the Property, and has received and is responsible for the security
deposit referenced above held pursuant to the Lease, if any.

	 	 	 
	 

	 	By:
	 

	 	Name:
	 

	 	Title:

 

 

EXHIBIT F

LIST OF LEASES

Flight Safety International, Inc.

     Lease dated 8/26/99.

Essex-Brownell.

     Lease dated 11/14/91.

     Amendment dated 8/16/97.

     Landlord’s Consent to Assignment dated 2/02.

     Second Amendment dated 9/12/02.

 

 

EXHIBIT G

PERSONAL PROPERTY

None

 

 

EXHIBIT H

SERVICE CONTRACTS

	1.	 	Rick Carr Services
	 
	2.	 	Landcare Group
	 
	3.	 	Miller Protective
	 
	4.	 	G&S Electrical Services

 

 

EXHIBIT I

GRANTOR’S IRC SECTION 1445 CERTIFICATE

	 	 	 	 	 
	SUBJECT PROPERTY:

	 	That certain tract of land (“Land”), situated in
Memphis, Tennessee described in Exhibit A attached
hereto.
	 
	 	 	 	 
	GRANTOR:	 	New York Life Insurance Company, a New York mutual
insurance company.
	 
	 	 	 	 
	GRANTEE:
	 	 	 	 
	 

	 	 
 	 	 

          Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a
transferee of a United States real property interest (“USRPI”) must withhold tax if the transferor
is a foreign person. To inform Grantee that the withholding of tax is not required upon the
disposition of a USRPI by Grantor, the undersigned hereby certifies to the following on behalf of
Grantor:

     1. Grantor is not a foreign corporation, foreign partnership, foreign trust or foreign estate
(as those terms are defined in the Code and the Treasury Regulations)

     2. Grantor’s U.S. employer identification number is                     .

     3. Grantor’s office address is:

New York Life Insurance Company

51 Madison Avenue, Room 1104

New York, NY 10010

     Grantor understands that this certification may be disclosed to the Internal Revenue Service
by Grantee and that any false statement contained herein could be punished by fine, imprisonment,
or both.

     Under penalties of perjury, the undersigned declares that he has examined this certification
and to the best of his knowledge and belief, it is true, correct and complete, and he further
declares that he has authority to sign this document on behalf of Grantor in the capacity set forth
below.

Executed as of                                          , 2006

	 	 	 	 	 	 	 	 	 
	 	 	NEW YORK LIFE INSURANCE COMPANY	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	Name:
	 	 

	 	 	 	 
	 

	 	Title:
	 	 

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 

 

 

EXHIBIT J

LIST OF PENDING LITIGATION

None

 

 

EXHIBIT K

TENANT ESTOPPEL CERTIFICATE

                    , 2006

New York Life Insurance Company

51 Madison Avenue

Suite 907

New York, New York 10010

Attention: Mr. Ron Petit

Re: Industrial Occupancy Agreement (“Lease”) between New York Life Insurance Company as
landlord or its assignees (“Landlord”), and                                                              as tenant (“Tenant”), dated                                          for approximately
                     square feet of space (the “Premises”) in that certain building located at 4670
Shelby Drive, Memphis, Tennessee (the “Project”), as amended by the following amendments
[list; if none, say “None”]:

                                                                        
            
                                
    .

Ladies and Gentlemen:

     Tenant understands that Nuvasive, Inc., or its assigns, (“Buyer”) intends to purchase the
Project from Landlord. Tenant presently leases the Premises within the Project pursuant to the
Lease, and, in connection with the foregoing, Tenant does hereby certify to Landlord and Buyer as
follows:

	 	1.	 	Attached hereto as Exhibit “A” is a true, complete and accurate copy of the
Lease and all amendments and modifications thereto.
	 
	 	2.	 	The Lease is in full force and effect; there are no amendments or modifications
of any kind to the Lease except as referenced above; except as specifically described
in the Lease, there are no other promises, agreements, understandings, or commitments
between Landlord and Tenant relating to the Premises leased under the Lease except as
follows [list, if none, say “None"]; and Tenant has not given Landlord any notice of
termination under the Lease.
	 
	 	3.	 	There has not been and is now no subletting of the Premises, or any part
thereof, or assignment by Tenant of the Lease, or any rights therein, to any party.
	 
	 	4.	 	A security deposit in the amount of $                     has been delivered by Tenant
to the Landlord under the Lease.
	 
	 	5.	 	To the best of Tenant’s knowledge, no default, event of default, or breach by
Landlord currently exists under the Lease and remains uncured, and no facts or
circumstances exist that, with the passage of time or the giving of notice, or both,
will or could constitute an event of default or breach under Lease. Tenant has made no
claim against Landlord alleging Landlord’s default under the Lease. Tenant is currently
not in default under the Lease and no facts or circumstances exist that, with the
passage of time or the giving of

 

 

	 	 	 	notice, or both, will or could constitute a material event of default, or breach by
Tenant under the Lease.

	 	6.	 	Tenant is in possession of the Premises and has accepted the Premises,
including any work of Landlord performed therein pursuant to the terms and provisions
of the Lease, and all common areas of the Project (including, without limitation,
parking areas, sidewalks, access ways and landscaping) as being in compliance with the
Lease and satisfactory for Tenant’s purposes.
	 
	 	7.	 	Tenant is obligated to pay rent to Landlord at the rate set forth in the Lease.
The base rent specified in the Lease is $                     per month and has been paid by
Tenant through                                         , 2006. Tenant is current with respect to, and is
paying the full rent and other charges stipulated in the Lease (including, without
limitation, reimbursements for utility expenses as set forth in the Lease) and has no
offsets, deductions, defenses or claims to its obligations under the Lease. Tenant has
not prepaid any rent or other amounts to Landlord other than rent and other charges due
and payable in the calendar month of this certification.
	 
	 	8.	 	Tenant is not entitled to any concession or rebate of rent or other charges
from time to time due and payable under the Lease, and there are no unpaid or
unreimbursed construction allowances or other offsets due Tenant under the Lease,
except as follows: [list, if none, say “None”]:
	 
	 	9.	 	Tenant is open for business and in operation in the Project.
	 
	 	10.	 	Tenant acknowledges that the initial term of the Lease commenced                                         on and shall
expire on                     , 20___, unless sooner terminated in accordance with the terms of the Lease.
Tenant has no option to renew or extend the lease term.
	 
	 	11.	 	There has not been filed by or against Tenant, a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any petition
seeking reorganization or arrangement under the Bankruptcy Code of the United States or
any state thereof, or any other action brought under said Bankruptcy Code with respect
to Tenant.
	 
	 	12.	 	The undersigned representative of Tenant is duly authorized and fully qualified
to execute this instrument on behalf of Tenant thereby binding Tenant.
	 
	 	13.	 	Tenant has no option or right to purchase the Project in which the Premises are
located, or any part thereof.
	 
	 	14.	 	Tenant acknowledges and agrees that Landlord and Buyer and Buyer’s lender (if
any) shall be entitled to rely on Tenant’s certifications set forth herein.

          IN WITNESS WHEREOF, Tenant has executed this Estoppel Certificate this                      day of
                                        , 2006.

	 	 	 	 	 	 	 
	TENANT:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	Name:

	 	 

	 	 	 	 
	Title:

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