Ecolab Inc 8-K, filed Dec 1, 2021
Ecolab Inc. (ECL)
About this 8-K
Ecolab Inc filed this 8-K on December 1, 2021.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 1, 2021, pursuant to the Stock and Asset Purchase Agreement (the “Purchase Agreement”), dated October 28, 2021 by and among Ecolab Inc., a Delaware corporation (“Ecolab”), Purolite Corporation, a Delaware corporation (“Purolite”), Stefan E. Brodie and Don B. Brodie (the “Founder Sellers” and together with Purolite, the “Sellers”) and Stefan E. Brodie, solely in his capacity as the representative of the Sellers (“Seller Representative”), Ecolab acquired the shares of the subsidiaries and certain other affiliated entities of Purolite (the “Acquired Companies”) and substantially all of Purolite’s assets used or held for use in connection with its filtration and purification resins business, and assumed the liabilities related to the business (the “Transaction”).
The purchase price paid by Ecolab was approximately $3.7 billion in cash, subject to certain adjustments for working capital, cash, debt, transaction expenses, and certain real estate expenses. Ecolab paid the purchase price for the Transaction through (i) proceeds from borrowings under Ecolab’s Term Credit Agreement, dated November 19, 2021, by and among Ecolab, the financial institutions party thereto as Banks from time to time, and JP Morgan Chase Bank, N.A., as administrative agent, and (ii) cash on hand.
The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is incorporated herein by reference and attached as Exhibit 2.1 hereto.
Item 8.01 Other Events.
Press Release
On December 1, 2021, Ecolab issued a press release announcing the closing of the Transaction. This press release is being filed as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit No. | | Description | | Method of Filing | |
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(2.1) | | | Filed herewith electronically. | | |
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(99.1) | | | Filed herewith electronically. | | |
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(104) | | Cover Page Interactive Data File. | | Embedded within the Inline XBRL document. | |
*The schedules and exhibits to the Stock and Asset Purchase Agreement have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. Ecolab will furnish copies of such schedules and exhibits to the Securities and Exchange Commission upon request by the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | ECOLAB INC. | ||
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Date: December 1, 2021 | | By: | /s/ David F. Duvick | |
| | | Name: David F. Duvick | |
| | | Title: Assistant Secretary | |
Exhibit (2.1)
Execution Version
ANNEXES | |
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ANNEX A | Index of Defined Terms |
ANNEX B | Shares |
ANNEX C | Accounting Principles |
ANNEX D | Illustrative Calculation of Net Working Capital |
ANNEX E | US Assumed Benefit Plans |
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EXHIBITS | |
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EXHIBIT A | Form of Purosoft SPA |
EXHIBIT B | RWI Policy |
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Company Disclosure Letter | |
Seller Disclosure Letter | |
Purchaser Disclosure Letter | |
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STOCK AND ASSET PURCHASE AGREEMENT
This Stock and Asset Purchase Agreement (this “Agreement”) is made and entered into as of the 28th day of October, 2021 among Purolite Corporation, a Delaware corporation (the “Company”), Stefan E. Brodie and Don B. Brodie (the “Founder Sellers” and together with the Company, the “Sellers”), Stefan E. Brodie, solely in his capacity as the representative of the Sellers (the “Seller Representative”) and Ecolab Inc., a Delaware corporation (“Purchaser,” and together with the Sellers, the “Parties” and any of them, a “Party”).
WHEREAS, the Company is engaged in the Business (as defined below) through itself and its direct and indirect Subsidiaries;
WHEREAS, the Founder Sellers, directly or indirectly, own and control the Company and the Target Companies;
WHEREAS, the Company owns (i) 94.998% of Purolite AG, a Swiss company limited by shares (“Purolite Switzerland”); (ii) 8.771% of Purolite S.R.L., a Romanian limited liability company (“Purolite Romania”); (iii) 99.9999% of Purolite Do Brazil Ltda, a Brazilian limited liability company (“Purolite Brazil”); and (iv) 100% of Purolite “C” Corporation, a Delaware corporation;
WHEREAS, Don B. Brodie owns (i) 2.501% of Purolite Switzerland; (ii) 0.001% of Purolite Pte Ltd, a Singaporean private company limited by shares (“Purolite Singapore”); (iii) 0.005% of Purolite Romania; (iv) 0.033% of Purolite, S. de R.L. de C.V., a Mexican limited liability company (“Purolite Mexico ”); and (v) 0.0001% of Purolite Brazil;
WHEREAS, Stefan E. Brodie owns (i) 2.501% of Purolite Switzerland; (ii) 0.001% of Purolite Singapore; (iii) 0.005% of Purolite Romania; (iv) 0.033% of Purolite Mexico; and (v) 0.0001% of Purolite Brazil;
WHEREAS, Stefan E. Brodie and Don B. Brodie beneficially own 100% of Cymru Holdings Limited, a private company limited by shares incorporated in Jersey (“Purosoft HoldCo”);
WHEREAS, the Company holds the Purchased Assets;
WHEREAS, the Parties desire that the Sellers sell and transfer to Purchaser or one or more of its designated Affiliates, and that Purchaser or such designated Affiliates purchase from the Sellers, the Shares of the Acquired Companies as are set forth opposite each such Seller’s name on Annex B hereto, and that the Company sells, transfers and assigns to Purchaser or its designated Affiliates, and that Purchaser or such designated Affiliates purchase and assume from the Company, the Purchased Assets and the Assumed Liabilities, in the manner and upon the terms and conditions set forth herein;
WHEREAS, two nominees of the Founder Sellers (the “Purosoft Sellers”) are the legal holders of the Purosoft HoldCo Shares (as defined below);
WHEREAS, pursuant to the Purosoft SPA (as defined below), Purchaser or one of its designated Affiliates will purchase the Purosoft HoldCo Shares from the Purosoft Sellers; and
WHEREAS, the Sellers will, and will cause their respective Affiliates to, and Purchaser will, and will cause its Affiliates to, at or prior to the Closing, execute and deliver each of the Ancillary Agreements (as defined below) to which they are a party.
NOW, THEREFORE, in consideration of the foregoing, the representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the Parties hereby agree as follows:
“Accounting Principles” means the principles, policies, procedures, categorizations, definitions, methods, practices, judgments, classifications, estimation methodologies and techniques set forth in Annex C hereto.
“Acquired Companies” means the Subsidiaries of the Company set forth in Section 1.1(A) of the Company Disclosure Letter, and “Acquired Company” means any of them.
“Action” means any litigation, action, suit, arbitration, proceeding, claim, audit, investigation or other proceeding by or before any Governmental Authority or arbitrator.
“Adjustment Escrow Amount” means $10,000,000.
“Affiliate” means, with respect to any Person, (a) any other Person directly or indirectly controlling, controlled by or under common control with, such first Person, and (b) if such Person is an individual, solely for purposes of Sections 4.22, 7.12, 7.13, and 7.14(b), (i) such individual’s spouse, (ii) the members of the immediate family (including parents, siblings and children) of such individual or of such individual’s spouse, (iii) any corporation, limited liability company, general or limited partnership, trust, association or other business or investment entity that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with any of the foregoing individuals, and (iv) any trust of which any of the foregoing individuals is a beneficiary. For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power or right, by Contract or otherwise, to direct or cause the direction of the management and policies of such Person through the ownership of voting securities.
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“Ancillary Agreements” means, collectively, (a) the Intellectual Property Assignment Agreement, (b) the Assignment and Assumption Agreement, (c) the Bill of Sale, (d) the Escrow Agreement, (e) the Data Transfer Agreement, (f) the Purolite Brazil Amendment, (g) the Deed, (h) the PA Bill of Sale, (i) the Assignment of Contracts, (j) the Owner’s Affidavit, (k) the Purosoft SPA, and (l) the Benefits Assignment and Assumption Agreement.
“Assignment and Assumption Agreement” means the assignment and assumption agreement to be entered into between the Company and Purchaser or one of its Affiliates, in form and substance mutually agreed by the Parties.
“Assumed Benefit Plan” means (a) any Employee Benefit Plan that is maintained or sponsored by a Target Company that will transfer to Purchaser or its Affiliates under applicable Law as a result of the transactions contemplated by this Agreement, and (b) the US Assumed Benefit Plans.
“Assumed Intercompany Payables” means the payables of the Company to any Target Company as of the Closing, excluding the Specified UK Intercompany Payables and the Specified Swiss Intercompany Payables.
“Authorization” means any authorization, approval, consent, certificate, license, registration, permit, franchise or similar right obtained from or other filing issued or required by any Governmental Authority or pursuant to any Law.
“Benchmark Date” means the day immediately preceding the Closing Date.
“Benchmark Time” means 11:59 p.m. (local time wherever applied) on the Benchmark Date.
“Bill of Sale” means the bill of sale to be entered into by and between the Company and Purchaser or one of its Affiliates, in form and substance mutually agreed by the Parties.
“Bulletin 7” means the Tax notice issued by the PRC State Taxation Administration titled the “State Taxation Administration’s Bulletin on Several Issues of Enterprise Income Tax on Income Arising from Indirect Transfers of Property by Non-resident Enterprises” (State Taxation Administration Bulletin [2015] No. 7)（国家税务总局《关于非居民企业间接转让财产企业所得税若干问题的公告》（国家税务总局公告2015年第7号）, as may be amended or supplemented from time to time, including any similar or replacement Law on the Tax treatment of the offshore indirect transfer of any property of an “establishment or place” situated in the PRC, real estate situated in the PRC, equity interest in PRC resident enterprises and any other property directly held by a non-resident enterprise and whose transfer results in enterprise Income Tax Liability for the non-resident enterprise in accordance with the provisions of the Enterprise Income Tax Law of the PRC, and any applicable Laws in the PRC against the avoidance of PRC Tax.
“Business” means the business of developing, manufacturing, marketing, commercializing, distributing and selling filtration and purification resins and adsorption/absorption media of any nature (organic or synthetic/inorganic, chemical-based or otherwise), including styrenic, phenolic, vinylic, acrylic, methacrylic, or agarose based affinity, ion exchange, catalyst, chromatographic, absorbant, adsorbent and other resins and polymers, enzyme carriers, resin-based active
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pharmaceutical ingredients (APIs) and excipients, and any integrated, adjacent, alternative, emerging or related products, technologies, applications, services and solutions (including digital), for removing substances from or adding substances to liquids, gases and solids, as conducted, planned or under development or consideration, by the Company and its direct and indirect Subsidiaries, the Target Companies and their respective Affiliates, as applicable, as evidenced by the Business’s written records, as of immediately prior to the Closing and at any time during the five (5) years prior to Closing.
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City, New York, Zurich, Switzerland, Jersey or London, United Kingdom are authorized or obligated by Law or executive order to close.
“Business Intellectual Property” means all Intellectual Property that is owned by the Company or any Target Company.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) and any administrative or other guidance published with respect thereto by any Governmental Authority.
“Cash Equivalents” means with respect to (1) the Target Companies, an amount equal to, without duplication, all cash or cash equivalents, including (i) cash on hand, bank balances, term deposits and cash on deposit (including the security deposits set forth on Section 1.1(B) of the Company Disclosure Letter), (ii) uncleared checks or drafts received or deposited for the account of any Target Company to the extent a corresponding amount has been cleared from accounts receivable, to the extent applicable and (iii) short-term investments that are readily convertible to cash, including short-term deposits with original maturities of three months or less, demand deposits, savings accounts, certificates of deposit, money market funds, U.S. treasury bills and other highly liquid marketable securities; and (2) the Company, an amount equal to, without duplication, (I) all cash or cash equivalents, including (i) cash on hand, bank balances, term deposits and cash on deposit (including the security deposits set forth on Section 1.1(B) of the Company Disclosure Letter), (ii) uncleared checks or drafts received or deposited for the account of the Company to the extent a corresponding amount has been cleared from accounts receivable, to the extent applicable and (iii) short-term investments that are readily convertible to cash, including short-term deposits with original maturities of three months or less, demand deposits, savings accounts, certificates of deposit, money market funds, U.S. treasury bills and other highly liquid marketable securities, in each case under this clause (2)(I), to the extent held in any Transferred Bank Account; and (II) any security deposits paid by the Company related to any real property lease that will be assumed by the Purchaser pursuant to this Agreement; provided that Cash Equivalents shall not include (A) any amounts required to cover uncleared checks or drafts, issued by any Target Company or the Company, as applicable (to the extent a corresponding amount has been cleared from accounts payable, to the extent applicable), and (B) Retained Cash Equivalents.
“Closing” means the closing of the Contemplated Transactions pursuant and subject to the terms of this Agreement.
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“Company Disclosure Letter” means the letter from the Company to Purchaser delivered concurrently with the execution of this Agreement.
“Company Employee” means any individual who is employed by the Company or any of its Subsidiaries, Purolite Poland or Zhe Jiang Purosoft Home Appliances Sale Co, Ltd. (“Purosoft China”), other than an Excluded Employee.
“Company Fundamental Representations” means the representations and warranties of the Company set forth in Section 4.1 (Authority; Enforceability); Section 4.3 (The Shares); Section 4.4(a) and Section 4.4(b) (Organization; Subsidiaries); and Section 4.19 (Brokers); provided that only the representations and warranties set forth in Section 4.4(a) and Section 4.4(b) with respect to the Company and the Acquired Companies (and not those with respect to any other Target Company) shall be treated as Company Fundamental Representations.
“Company Independent Contractor” means each independent contractor or consultant of the Company or any of its Subsidiaries.
“Confidentiality Agreements” means (i) the Confidentiality Agreement between the Company and Purchaser, dated as of February 26, 2021, as supplemented by the addendum dated as of May 25, 2021 and (ii) the Confidentiality Agreement between the Company and Purchaser, dated as of September 29, 2021.
“Consideration Allocation Schedule” means the consideration allocation schedule to be delivered by the Seller Representative to Purchaser at least three (3) Business Days prior to the Closing.
“Consolidated Tax Returns” means any Tax Returns with respect to federal, state, provincial, local or foreign income taxes that are paid on an affiliated, consolidated, combined, unitary or similar basis.
“Contemplated Transactions” means the purchase and sale of the Shares, the Purosoft HoldCo Shares, and the Purchased Assets, and the assignment and assumption of the Assumed Liabilities, in each case as contemplated herein.
“Contract” means any legally binding agreement, arrangement, contract, lease, license, commitment, warranty, guaranty, or other similar instrument or obligation.
“Coronavirus” means the presence, transmission, or threat of a novel coronavirus, including COVID-19 or SARS-CoV-2, or any variations, evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks.
“Coronavirus Measure” means any restriction, quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, safety or similar Law, directive, guideline or recommendation promulgated by any Governmental Authority, including the Centers for Disease Control and Prevention and the World Health Organization, in connection with or in response to a Coronavirus, including the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Families First Coronavirus Response Act and the American Rescue Plan Act.
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“Current Assets” means, with respect to the Company and the Target Companies as of the Benchmark Time, all current assets, but only those current assets (on a consolidated basis) that are specifically listed in the Illustrative Calculation of Net Working Capital set forth on Annex D hereto, calculated in accordance with the Accounting Principles. Current Assets shall not include (i) any assets in respect of Income Taxes of the Target Companies, (ii) any assets in respect of Taxes of the Company, and (iii) any deferred Income Tax assets of the Company or Target Companies.
“Current Liabilities” means, with respect to the Company and the Target Companies as of the Benchmark Time, all current liabilities, but only those current liabilities (on a consolidated basis) that are specifically listed in the Illustrative Calculation of Net Working Capital set forth on Annex D hereto, calculated in accordance with the Accounting Principles. Current Liabilities shall not include (i) any liabilities in respect of Income Taxes of the Target Companies, (ii) any liabilities in respect of Taxes of the Company, and (iii) any deferred Income Tax liabilities of the Company or Target Companies.
“Data Transfer Agreement” means the data transfer agreement to be entered into by and between the Company and Purchaser or one of its Affiliates, in form and substance mutually agreed by the Parties.
“Employee Benefit Plan” means (i) each “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA) and (ii) each other compensation, bonus, cash or equity based compensation or incentives, profit sharing, stock bonus, stock option, stock purchase, phantom or stock equivalent deferred compensation, incentive compensation, thirteenth month, holiday, vacation, welfare benefit, severance, termination indemnity, retirement, employment, pension, pension or savings benefits, supplemental income, retiree benefit, change in control, retention, life insurance, death benefit, sick pay, disability, educational assistance, housing assistance, moving expense reimbursement, fringe benefit or similar employee benefit plan, program, agreement or arrangement, in each case which is either (x) sponsored, maintained or contributed to by the Company or any of its Affiliates in respect of any current or former Company Employee (or their eligible dependents or beneficiaries) or (y) pursuant to which the Company or any of its Affiliates has any Liability regardless of whether it is mandated under local Law; provided that an Employee Benefit Plan shall not include any governmental plan or program requiring the mandatory payment of social insurance taxes or similar contributions to a governmental fund with respect to the wages of an employee.
“Environmental Law” means any applicable Law (i) relating to the protection of the environment (including indoor and outdoor air, surface water, groundwater, drinking water, and surface or subsurface land), (ii) as pertains to exposure to Hazardous Materials, public and occupational health and safety, or (iii) relating to the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, Release, disposal or other management of Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“Escrow Agent” means JPMorgan Chase & Co., a national banking institution incorporated under the Laws of the United States of America.
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“Escrow Agreement” means the Escrow Agreement to be entered into by and among the Company, Purchaser and the Escrow Agent, in form and substance mutually agreed by the Parties and the Escrow Agent.
“Estimated Cash Equivalents” means the Company’s good faith estimate of Cash Equivalents as of the Benchmark Time.
“Estimated Closing Payment Amount” means the Estimated Purchase Price minus the Adjustment Escrow Amount minus the Purosoft Purchase Price.
“Estimated Indebtedness” means the Company’s good faith estimate of Indebtedness as of the Benchmark Time.
“Estimated Net Working Capital” means the Company’s good faith estimate of Net Working Capital as of the Benchmark Time.
“Estimated Real Estate Prorations” means the Company’s good faith estimate of the Real Estate Prorations.
“Estimated Transaction Expenses” means the Company’s good faith estimate of Transaction Expenses.
“Excluded Employee” means each individual listed on Section 1.1(C) of the Company Disclosure Letter.
“Excluded Taxes” means, without duplication and excluding Transfer Taxes (which are addressed in Section 11.5(b)), any (a) Pre-Benchmark Asset Taxes, (b) Taxes imposed on the Contemplated Transactions, including any Taxes imposed by any PRC Tax Authority (together with penalties and interest) on the Contemplated Transactions and any Brazilian capital gains Tax (together with penalties and interest) imposed on the Contemplated Transactions in excess of the amount deducted and withheld by Purchaser from the Estimated Purchase Price and Final Purchase Price pursuant to Section 2.10, (c) Taxes imposed with respect to the Excluded Assets or the Retained Liabilities for any Tax period, (d) Pre-Benchmark Target Company Taxes, (e) Pre-Benchmark CFC Taxes, (f) any Liability of any Target Company for Taxes of any Person (other than a Target Company), which Liability arises by reason of such Target Company being a member of an affiliated, consolidated, combined, or unitary group that includes such Person prior to the Closing, (g) any successor or transferee Liability of any Target Company or other secondary or non-primary Liability of any Target Company for the Taxes of any Person (other than a Target Company), which Liability arises as a result of transactions or events occurring, or Contracts or agreements entered into, prior to the Closing, (h) Taxes (including Income Taxes but excluding Post-Benchmark Taxes) imposed on the Sellers or any of their Affiliates (other than the Target Companies) for any Tax period, and (i) any Taxes described in the foregoing (a) through (h) for which Purchaser, the Target Companies, or any of their Affiliates is jointly and severally liable or becomes liable as a successor or transferee.
“Final Determination” means (i) with respect to U.S. federal Income Taxes, a “determination” as defined in Section 1313(a) of the Code or execution of an IRS Form 870-AD, and (ii) with respect to Taxes other than U.S. federal Income Taxes, any final determination of
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liability in respect of a Tax that, under applicable Law, is not subject to further appeal, review or modification through proceedings or otherwise, including the expiration of a statute of limitations or a period for the filing of claims for refunds, amended Tax Returns or appeals from adverse determinations.
“Founder Fundamental Representations” means the representations and warranties of the Founder Sellers set forth in Section 5.1 (Authority; Enforceability); Section 5.3(a) (Ownership of Shares); and Section 5.5 (Brokers).
“Fraud” means a knowing and intentional fraud in the making of a representation or warranty expressly stated in Article IV, Article V or Article VI of this Agreement; provided that (i) such representation or warranty was materially false or materially inaccurate at the time such representation or warranty was made, (ii) the Party making such representation or warranty had actual knowledge (and not imputed or constructive knowledge), without any duty of inquiry or investigation, that such representation or warranty was materially false or materially inaccurate, (iii) such Party had the specific intent to deceive another Party and induce such other Party to enter into this Agreement and (iv) such other Party reasonably relied on such false or inaccurate representation or warranty in entering into this Agreement. “Fraud” shall not include any cause of action, including fraud, based on constructive or imputed knowledge, negligence or recklessness.
“Governing Documents” means a Person’s articles of association or incorporation, bylaws, operating agreement, partnership agreement or other equivalent constitutional documents.
“Governmental Authority” means any supra-national, national, federal, state, provincial, municipal, foreign or local government (including any subdivision, court of competent jurisdiction, department, agency, branch or commission or other authority thereof), stock exchange, self-regulatory organization, or any other body exercising executive, legislative, judicial, regulatory, taxing, administrative, or any other governmental authority.
“Governmental Order” means any order, injunction, judgment or other award, decree, ruling, determination, or writ of a Governmental Authority or arbitrator.
“Hazardous Materials” means all materials, substances, products, wastes, or contaminants defined or characterized as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “special waste,” “toxic substances,” “pollutants,” “contaminants,” “toxic,” “dangerous,” “corrosive,” “flammable,” “reactive” or “radioactive,” or words of similar import or meaning, pursuant to Environmental Law, including oils, petroleum, petroleum products, asbestos or asbestos-containing material in any form or condition, per- and polyfluoroalkyl substances, and polychlorinated biphenyls.
“HSBC Payoff Amount” means the amount specified in the payoff letter from HSBC Bank plc delivered pursuant to Section 3.2(a)(xii).
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“Income Taxes” means Taxes imposed on, or determined by reference to, gross income, net income, gross receipts, gains, profits, franchise or any similar item.
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“Indebtedness” means, with respect to the Company and the Target Companies, an amount equal to, without duplication, (i) the unpaid principal amount of, and accrued interest in respect of, indebtedness for borrowed money; (ii) other indebtedness that is evidenced by a note, bond, draft, debenture or similar debt instrument (excluding performance guarantees and similar bonds); (iii) obligations under leases that are classified as capital or finance leases in accordance with the Accounting Principles; (iv) letters of credit to the extent drawn; (v) obligations for the deferred purchase price of property or services; (vi) obligations under any interest rate, currency or other hedging agreement; (vii) any guaranty by the Company or any Target Company of obligations of the types described in clauses (i) through (vi); and (viii) any prepayment penalties, premiums, breakage costs, fees and other costs and expenses as a result of repayment related to any of the foregoing clauses (i) through (vii) on the Closing Date; provided, however, that in no event will Indebtedness include: (a) any indebtedness incurred by any Target Company that is owed to another Target Company, (b) any undrawn amounts under existing letters of credit, lines of credit and revolving credit facilities, (c) any amount that is deducted from the Purchase Price as a Transaction Expense or included as a Current Liability in the determination of Net Working Capital, (d) any obligations associated with leases other than those described in clause (iii) above, (e) the amount of the Specified UK Intercompany Payables, (f) the amount of the Specified Swiss Intercompany Payables, (g) the HSBC Payoff Amount, (h) the amount of the Assumed Intercompany Payables and (i) the items set forth in Section 1.1(D) of the Company Disclosure Letter.
“Intellectual Property” means all intellectual property, industrial property, and proprietary rights worldwide, whether registered or unregistered, including rights in and to (a) patents and utility models (“Patents”) and inventions and invention disclosures (whether or not patentable), (b) copyrights, moral rights and mask work rights, (c) trade secrets, Know-How, proprietary information (such as processes, formulae, models and methodologies), business or financial information, technical or engineering information, drawings, schematics, tooling maintenance information and assembly instructions (“Trade Secrets”), (d) trademarks, trade names, logos, service marks, trade dress, emblems, certification marks, collective marks, insignia, slogans, corporate names, DBAs, other similar designations of source or origin and general intangibles of like nature, together with all of the goodwill symbolized by or associated with any of the foregoing (“Trademarks”), (e) domain names, IP addresses, and web addresses, (f) designs, (g) any registrations or applications for registration for any of the foregoing, and any provisionals, divisionals, continuations, continuations-in-part, renewals, reissuances, re-examinations and extensions of any of the foregoing (as applicable), each of which shall be deemed to be included in Patents, Trademarks or the foregoing clauses (a) or (d), as applicable, and (h) rights to sue for past, present, and future infringement of the rights set forth above.
“Intellectual Property Assignment Agreement” means the Intellectual Property assignment agreement to be entered into by and between the Company and Purchaser or one of its Affiliates, in form and substance mutually agreed by the Parties.
“Interest Rate” means 5% per year in excess of the prime rate of interest as published in The Wall Street Journal in effect on a given date, or a lesser rate that is the maximum permitted by applicable Law.
“IRS” means the Internal Revenue Service of the United States of America.
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“Know-How” means all technical, scientific and other know-how, trade secrets, information, inventions, developments, knowledge, technology, research, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, designs, drawings, assembly procedures, computer programs, apparatuses, specifications and data, results and other material, including drug discovery and development technology, assays and any other methodology, manufacturing procedures, test procedures and purification and isolation techniques, whether or not confidential, patented or patentable and whether in written, electronic or any other form now known or hereafter developed.
“Knowledge of Purchaser” means the actual knowledge of, or any knowledge that would be obtained after reasonable inquiry by, those Persons set forth in Section 1.1 of the Purchaser Disclosure Letter.
“Knowledge of the Company” means the actual knowledge of, or any knowledge that would be obtained after reasonable inquiry by, those Persons set forth in Section 1.1(E) of the Company Disclosure Letter.
“Law” means any applicable (a) federal, national, state, provincial, local, municipal, supra-national or foreign law, (b) statute, code, ordinance, rule, regulation, constitution or treaty of a Governmental Authority or (c) Governmental Order.
“Liabilities” means any and all losses, debts, liabilities and obligations, whether accrued or unaccrued, fixed or variable, known or unknown, absolute or contingent, matured or unmatured or determined or determinable.
“Licensed Intellectual Property” means all material Intellectual Property that is licensed from a third party to the Company or any Target Company.
“Liens” means any mortgage, hypothec, lien, pledge, charge, right of first refusal, right of first offer, purchase option, easement, claim, covenant, equitable interest, license or similar encumbrance or other security interest of third parties, in each case excluding any Permitted Lien.
“Losses” means all losses, damages, Liabilities, Taxes, claims, costs and expenses (including reasonable attorneys’ fees), interest, penalties, fines, assessments, injuries, Governmental Orders, Actions, and settlements.
“Material Adverse Effect” means any fact, event, change, development or effect that has a material adverse effect on the business, assets, Liabilities, financial condition or results of operations of the Business, taken as a whole; provided that no fact, event, change, development or effect resulting or arising from or in connection with any of the following matters shall be deemed, either alone or in combination, to constitute or contribute to, or be taken into account in determining whether there has been, a Material Adverse Effect: (a) any national, international, foreign, domestic or regional economic, financial, social or political conditions (including changes therein), including (i) hostilities, acts of war, protests, riots, unrest, sabotage, terrorism, cyberterrorism or cybercrime or military actions or any escalation or worsening of any of the same, (ii) changes in any financial, debt, credit, capital or banking markets or conditions, and (iii) changes in interest, currency or exchange rates or tariffs or any trade wars; (b) any act of God, hurricane, flood, tornado, fire, explosion, weather event, earthquake, landslide, other natural
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disaster, epidemic, plague, pandemic (including the Coronavirus), or other outbreak of illness or public health event (whether human or animal); (c) changes in legal or regulatory conditions, including changes or proposed changes in Law or interpretations thereof (whether or not related to the Coronavirus pandemic or other similar pandemic or public health emergency); (d) changes in UK GAAP or interpretations thereof; (e) changes in the industries in which the Business operates; (f) the failure of the Business to meet any internal or published projections, estimates or forecasts of revenues, goals, earnings or other measures of financial or operating performance for any period (provided that any fact, event, change, development or effect that caused such failure shall not be excluded under this clause (f), unless otherwise excluded pursuant to this Agreement); (g) any effect resulting from the negotiation, pendency, announcement or consummation of this Agreement or compliance with the terms of this Agreement or the Contemplated Transactions, including adverse effects related to compliance with the covenants or agreements contained herein, or the identity of Purchaser or its Affiliates; (h) the effect of any action taken or any omission to act by Purchaser with respect to the Business, the Target Companies or the Contemplated Transactions, including any communication or disclosure by Purchaser or any of its Affiliates of its plans or intentions with respect to the Business or the Target Companies, including losses or threatened losses of, or any adverse change in the relationship with, employees, customers, suppliers, vendors, distributors, financing sources, licensors, licensees or others having relationships with the Business; or (i) the effect of any event, action taken or omission to act by the Sellers or their Affiliates contemplated by this Agreement or at the express written request of or with the express written consent of Purchaser; provided that, to the extent that any event in clauses (a) or (b) materially and disproportionately has a greater adverse impact on the Business, taken as a whole, as compared to the adverse impact such event has on other Persons operating in the same industries as the Business operates, then the incremental effect of such event shall be taken into account in determining whether a Material Adverse Effect has occurred.
“Net Working Capital” means the amount equal to: (a) Current Assets; minus (b) Current Liabilities.
“Net Working Capital Overage” means the amount, if any, by which (a) the Net Working Capital as of the Benchmark Time is greater than (b) the Target Net Working Capital; provided that (i) if such amount is less than $5,000,000, for purposes of this Agreement, the Net Working Capital Overage shall be equal to zero (0), and (ii) if such amount is greater than $5,000,000, for purposes of this Agreement, the Net Working Capital Overage shall be equal to the excess of Net Working Capital as of the Benchmark Time over the Target Net Working Capital.
“Net Working Capital Underage” means the amount, if any, by which (a) the Net Working Capital as of the Benchmark Time is less than (b) the Target Net Working Capital; provided that (i) if such amount is less than $5,000,000, for purposes of this Agreement, the Net Working Capital Underage shall be equal to zero (0), and (ii) if such amount is greater than $5,000,000, for purposes of this Agreement, the Net Working Capital Underage shall be equal to the difference between Net Working Capital as of the Benchmark Time and the Target Net Working Capital.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
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“PA Owned Real Property” means the real property known as 3620 G Street, Philadelphia, Pennsylvania, held in fee simple by the Company (successor-in-interest to Brotech Corp.), and evidenced by the Special Warranty Deed by and between Philadelphia Authority for Industrial Development as grantor, and Brotech Corp. as grantee, dated October 17, 1997.
“Permitted Liens” means (i) those Liens set forth in Section 1.1(F) of the Company Disclosure Letter; (ii) Liens in favor of vendors, warehousemen, mechanics, carriers, workmen, repairmen, materialmen, suppliers, or Persons having taken part in the construction or renovation of real or immovable property or other like Liens arising or incurred in the ordinary course of business for amounts not yet due and payable or which are being contested in good faith by appropriate Actions; (iii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; (iv) Liens for Taxes that are not due and payable or that are being contested in good faith by appropriate Actions and for which adequate reserves have been maintained in accordance with UK GAAP on the Financial Statements; (v) Liens that do not, individually or in the aggregate, materially impair or affect the continued use and operation of the Company’s and Target Companies’ assets in the conduct of their business as presently conducted; (vi) easements, servitudes, covenants, rights-of-way, charges or other similar rights, interest, restrictions or encumbrances; (vii) any conditions disclosed on title reports, title insurance policies or foreign equivalents made available to Purchaser or that may be shown by a current, accurate title report, title insurance policy or foreign equivalent; (viii) (A) zoning, building and other similar restrictions, (B) Liens that have been placed by or are in favor of any developer, landlord or other third party on property over which the Company or Target Companies have use, occupancy or easement rights and (C) unrecorded encumbrances, easements, covenants, rights-of-way and other similar restrictions, none of which items set forth in this clause (viii), in the aggregate, materially impair the continued use and operation of real property used in the conduct of the business of the Company and the Target Companies as presently conducted; (ix) undetermined or inchoate Liens arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Laws or of which written notice has not been given in accordance with applicable Laws and which, in any such case, relate to obligations not due and payable; (x) non-exclusive licenses of and other grants of rights to use or obligations with respect to Intellectual Property, granted in the ordinary course of business; (xi) any Liens arising under applicable corporation (or similar entities) or securities Law; and (xii) any other Liens that will be released and, as applicable, removed of record at or prior to the Closing Date or which Purchaser will have the right to remove of record as of the Closing Date pursuant to any payoff letter delivered pursuant to Section 3.2(a)(xii), Section 3.2(a)(xiii) or Section 3.2(a)(xiv).
“Person” means an individual, a limited liability company, a joint venture, a corporation, a partnership, an association, a trust, a division or operating group of any of the foregoing or any other entity or organization, including a Governmental Authority, and including any successor, by merger, amalgamation or otherwise, of any of the foregoing.
“Post-Benchmark Tax Period” means any Tax period (or portion thereof) beginning after the Benchmark Date.
“Post-Benchmark Taxes” means, without duplication, (i) Taxes, other than Income Taxes, with respect to the Purchased Assets, the Assumed Liabilities, or the Business, other than Pre-
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Benchmark Asset Taxes and (ii) Taxes of the Target Companies for any Post-Benchmark Tax Period, including the portion of any Straddle Period beginning after the Benchmark Date determined in accordance with Section 7.6(e), in each case, other than any Excluded Taxes.
“PRC” means the People’s Republic of China excluding, for the purposes of this Agreement, the Special Administrative Regions of Hong Kong and Macao and Taiwan.
“Pre-Benchmark Asset Taxes” means Taxes, other than Income Taxes, imposed with respect to the Purchased Assets, the Assumed Liabilities, or the Business (a) for any Pre-Benchmark Tax Period, including the portion of any Straddle Period ending on the Benchmark Date determined in accordance with Section 7.6(e), or (b) attributable to actions taken by the Sellers or any of their Affiliates outside the ordinary course of business after the Benchmark Date and prior to the Closing (other than actions expressly required by this Agreement).
“Pre-Benchmark CFC Taxes” means Taxes of Purchaser or any of its Affiliates that are imposed as a result of any inclusion under Sections 951 or 951A of the Code in respect of income of the Target Companies for any Tax period that includes (but does not end on) the Closing Date that is attributable to (a) a Pre-Benchmark Tax Period or (b) actions taken by the Sellers or any of their Affiliates outside the ordinary course of business after the Benchmark Date and prior to the Closing (other than actions expressly required by this Agreement). The amount of Pre-Benchmark CFC Taxes shall be calculated taking into account any tested loss under Section 951A(c) of the Code, deduction under Section 250(a)(1)(B) of the Code, and credit under Section 960(a) or (d) of the Code, in each case to the extent such tested loss, deduction, or credit is allowed in respect of loss, foreign tax liability, or another relevant item of the Target Companies for any Tax period that includes (but does not end on) the Closing Date that is attributable to a Pre-Benchmark Tax Period. For purposes of determining the amount of Pre-Benchmark CFC Taxes, (i) the amount of a Target Company’s income, loss, foreign tax liability, or other relevant item for any Tax period that includes (but does not end on) the Closing Date that is attributable to a Pre-Benchmark Tax Period shall be computed on a “closing-of-the-books” basis as if any relevant Tax period of such Target Company ended at the close of business on the Benchmark Date and (ii) the Target Companies shall be deemed to be the only controlled foreign corporations (as defined in Section 957(a) of the Code) with respect to which either Purchaser or any its Affiliates is a United States shareholder (as defined in Section 951(b) of the Code). Any reference in this definition to a Section of the Code shall include any corresponding or similar provision of state or local Tax Law.
“Pre-Benchmark Target Company Taxes” means Taxes of the Target Companies (a) for a Pre-Benchmark Tax Period, including the portion of any Straddle Period ending on the Benchmark Date determined in accordance with Section 7.6(e), or (b) attributable to actions taken by the Sellers or any of their Affiliates outside the ordinary course of business after the Benchmark Date and prior to the Closing (other than actions expressly required by this Agreement).
“Pre-Benchmark Tax Period” means any Tax period (or portion thereof) ending on or before the Benchmark Date.
“Purchased Intercompany Receivables” means the receivables of the Company from any Target Company as of the Closing.
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“Purchaser Disclosure Letter” means the disclosure letter that Purchaser has delivered to the Sellers concurrently with the execution of this Agreement.
“Purchaser Real Estate Prorations” means the amount of Real Estate Prorations credited to Purchaser that accrued after the Benchmark Time.
“Purchaser Related Parties” means Purchaser, its Affiliates, and each of Purchaser’s and its Affiliates’ respective current and former officers, directors, employees, partners, managers, members, advisors, successors and permitted assigns.
“Purosoft HoldCo Shares” means all of the issued shares in the capital of Purosoft HoldCo.
“Purosoft Purchase Price” means the purchase price for the Purosoft HoldCo Shares, as shall be set forth in the Purosoft SPA.
“Real Estate Prorations” means the items of expense with respect to the PA Owned Real Property prorated between the Parties, as mutually agreed by the Parties.
“Real Property” means, collectively, the Leased Real Property and the Owned Real Property.
“Real Property Leases” means the real property leases, subleases, licenses, and any other use and occupancy agreements with respect to the Leased Real Property, including all amendments, modifications, supplements, extensions and renewals with respect thereto, pursuant to which the Company or any of the Target Companies is a party.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, injecting, depositing, disposing, discharging, dispersing, escaping, dumping, migrating or leaching into the environment, including ambient air, surface water, surface or subsurface strata or groundwater, including the movement of Hazardous Materials through or in the outdoor air, soil, surface water, groundwater or property, in each case in contravention of any Environmental Law.
“Representatives” means, with respect to any Person, any and all directors, managers, officers, members, shareholders, trustees, beneficiaries, employees, consultants, financial advisors, counsel, accountants and other agents, advisors or representatives of such Person.
“Retained Cash Equivalents” means with respect to the Company, an amount equal to, without duplication, all cash or cash equivalents, including (i) cash on hand, bank balances, term deposits and cash on deposit, (ii) uncleared checks or drafts received or deposited for the account of the Company to the extent a corresponding amount has been cleared from accounts receivable, to the extent applicable, and (iii) short-term investments that are readily convertible to cash, including short-term deposits with original maturities of three months or less, demand deposits, savings accounts, certificates of deposit, money market funds, U.S. treasury bills and other highly liquid marketable securities, in each case, solely to the extent not held in a Transferred Bank Account; provided that Retained Cash Equivalents shall not include Cash Equivalents.
“RWI Policy” means the representation and warranty insurance policy obtained by Purchaser in connection with the Contemplated Transactions, attached hereto as Exhibit B.
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“Sanctioned Person” means (a) any Person designated on a sanctions or export controls-related list maintained by the United States, the European Union, or the United Kingdom, including Persons designated on OFAC’s Specially Designated Nationals and Blocked Persons List, or (b) Persons 50% or more owned by such Persons, to the extent that ownership results in the same sanctions or export controls being applicable to the owned Person.
“Sanctioned Territory” means, at any time, a country or territory which is itself the subject or target of any country-wide or territory-wide Sanctions.
“Sanctions” means the applicable trade and economic sanctions Laws of the United States, the European Union, and the United Kingdom.
“Securities Act” means the Securities Act of 1933.
“Seller Disclosure Letter” means the disclosure letter that the Founder Sellers delivered to Purchaser concurrently with the execution of this Agreement.
“Seller Real Estate Prorations” means the amount of Real Estate Prorations credited to the Sellers that accrued at or prior to the Benchmark Time.
“Seller Related Parties” means the Sellers, their respective shareholders, members or Affiliates, and each of the Sellers’ and their respective shareholders’, members’ or Affiliates’ respective current and former officers, directors, trustees, beneficiaries, employees, partners, managers, members, advisors, successors and permitted assigns.
“Solvent” means, with respect to any Person, that, as of any date of determination, (a) the amount of the “fair saleable value” of the assets of such Person on a going concern basis will, as of such date, exceed (i) the value of all “liabilities of such Person, including contingent and other liabilities” as of such date, as such quoted terms are generally determined in accordance with applicable United States federal Laws governing determinations of the insolvency of debtors and (ii) the amount that will be required to pay the probable liabilities of such Person on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date and (c) such Person will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, each of the phrases “not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.
“Specified Indebtedness” means any Indebtedness set forth in Section 1.1(G) of the Company Disclosure Letter.
“Specified Swiss Intercompany Payables” means any indebtedness, accounts payable, or amounts otherwise owing by the Company to Purolite Switzerland as of the Closing.
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“Specified Swiss Intercompany Payables Amount” means, in respect of the Specified Swiss Intercompany Payables, an amount equal to the greater of (i) $0 and (ii) (x) the HSBC Payoff Amount minus (y) the Specified UK Intercompany Payables Amount.
“Specified UK Intercompany Payables” means any indebtedness, accounts payable, or amounts otherwise owing by the Company to Purolite UK as of the Closing.
“Specified UK Intercompany Payables Amount” means, in respect of the Specified UK Intercompany Payables, an amount equal to the lesser of (i) the amount indicated in the payoff letter received pursuant to Section 3.2(a)(xiii) and (ii) the HSBC Payoff Amount.
“Subsidiary” of any Person means any Person of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership ownership interests are, as of such date, owned, controlled or held by, or a majority of such entity’s gains or losses is entitled to be allocated to, the applicable Person or one or more subsidiaries of such Person.
“Target Companies” means (a) the Subsidiaries of the Company, including the Acquired Companies, (b) Purolite sp. z o. o., a Polish limited liability company (“Purolite Poland”), (c) Baoyun Aqua Chemicals (Shandong) Co Limited, a Chinese limited liability company (provided that, for purposes of (i) Article IV and Article V, Baoyun Aqua Chemicals (Shandong) Co Limited shall be deemed a Target Company solely for purposes of Section 4.4, and all representations contained in Section 4.4 shall be deemed qualified by the Knowledge of the Company solely with respect to Baoyun Aqua Chemicals (Shandong) Co Limited and (ii) Article VII, Baoyun Aqua Chemicals (Shandong) Co Limited shall not be deemed a Target Company), (d) Purosoft HoldCo (provided that solely for purposes of Section 4.5(a), Purosoft HoldCo shall not be deemed a Target Company), and (e) Purosoft China (provided that solely for purposes of Section 4.5(a), Purosoft China shall not be deemed a Target Company) and “Target Company” means any of them.
“Target Net Working Capital” means $141,000,000.
“Tax Attribute” means a net operating loss, net capital loss, unused investment credit, unused foreign Tax credit, excess charitable contribution, general business credit, research and development credit, or any other similar Tax attribute that can be carried forward or backward to reduce a Tax or create a refund, credit, or other item that causes reduction in an otherwise required liability for Taxes.
“Tax Authority” means a Governmental Authority responsible for the imposition, assessment or collection of any Tax (domestic or foreign).
“Tax Claim” means a claim by any Tax Authority.
“Tax Return” means any return, report, declaration, information return, statement or other document filed or required to be filed with any Governmental Authority, in connection with the determination, assessment or collection of any Tax or the administration of any Laws relating to any Tax.
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“Taxes” means (a) all taxes, charges, duties, fees, levies or other assessments, including income, excise, gross receipts, property, sales, use, value-added, profits, license, withholding, ad valorem, payroll, employment, net worth, goods or services, capital gains, conveyance or transfer, stamp, social security, workers’ compensation or unemployment, environmental, occupation and franchise taxes, imposed by any Governmental Authority, and including any interest, penalties and additions thereto, (b) any Liability for payment of amounts described in clause (a) whether as a result of transferee liability, joint and several liability, or by reason of being a member of an affiliated, consolidated, combined, unitary, or other group for any period, or payable by reason of contract assumption, operation of law, or otherwise, and (c) any Liability for the payment of amounts described in clause (a) or (b) as a result of any tax sharing agreement, tax indemnity agreement, or any other express or implied agreement to pay or indemnify any other Person whether by Contract or otherwise.
“Trade Control Laws” means all applicable Laws relating to the import, export, reexport, deemed export, deemed reexport, or transfer of information, data, goods, services, software and technology, including the Export Administration Regulations administered by the United States Department of Commerce, the International Traffic in Arms Regulations administered by the United States Department of State, the Foreign Trade Regulations administered by the United States Census Bureau, customs and import Laws administered by United States Customs and Border Protection, any other export controls, the anti-boycott regulations administered by the United States Department of Commerce and the United States Department of the Treasury, and other applicable Laws adopted by Governmental Authorities of other countries relating to the same subject matter as the United States Laws described above.
“Transaction Expenses” means, in each case, solely to the extent not paid prior to the Closing, without duplication, the sum of (A) all amounts that are payable by any Target Company to (x) counsel to the Target Companies or the Sellers and (y) any other transaction advisors engaged by the Target Companies or the Sellers, including financial advisors, investment bankers, brokers, accountants and data room administrators, in connection with this Agreement (including the fees payable to both of Evercore Group LLC and Centerview Partners LLC), in the case of each of clauses (x) and (y) for services rendered prior to the Closing, (B) amounts agreed to be paid by the Target Companies prior to the Closing that are payable by any of the Target Companies to directors, officers, consultants or employees of the Company or any Target Company as a result of and contingent solely on the consummation of the Contemplated Transactions, and (C) amounts that are payable to the Sellers or any of their respective shareholders, members or Affiliates by any Target Company triggered solely as a result of the execution of this Agreement or the consummation of the Contemplated Transactions (and not any event following the Closing); provided that Transaction Expenses shall not include (a) any amounts deducted from the Purchase Price as Indebtedness, (b) any amounts included as a Current Liability in the determination of Net Working Capital, (c) any fees or expenses incurred by or on behalf of Purchaser in connection with the Contemplated Transactions whether or not billed or accrued (including any fees and expenses of legal counsel, financial advisors, investment bankers, brokers and accountants of Purchaser) or (d) any other amounts paid by the Sellers or any of their respective shareholders, members or Affiliates (other than the Target Companies) in connection with the Contemplated Transactions.
“Transfer Taxes” means any federal, state, county, local, foreign and other sales, use, transfer, value-added, conveyance, documentary transfer, stamp, recording, registration or other
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similar Tax (including any notarial fee) incurred or payable in connection with, or otherwise relating to, the Contemplated Transactions or the recording of any sale, transfer or assignment of property (or any interest therein) effected pursuant to this Agreement, provided, however, that Transfer Taxes shall not include (a) any Income Taxes or (b) any withholding Taxes that apply to amounts payable in connection with this Agreement.
“UK GAAP” means generally accepted accounting practice in the United Kingdom, including Financial Reporting Standard 102, as in effect on the Balance Sheet Date, or specifically with respect to the Financial Statements, the date thereof.
“UK Pension Plan” means the Purolite International Ltd Retirement Benefits Scheme.
“US Assumed Benefit Plan” means each Employee Benefit Plan providing for benefits to U.S. employees or their dependents or beneficiaries and which are listed on Annex E, which shall not include any benefits involving executive life insurance or pre-paid life insurance.
“Willful Breach” means: (a) an action or failure to act by one of the Parties that constitutes a material breach or violation of this Agreement, and such action was taken or such failure occurred with such Party’s knowledge or intention that such action or failure to act constituted a material breach or violation of this Agreement, and such breach or violation: (i) resulted in, or contributed to, the failure of any of the conditions to Closing set forth in Article VIII to be satisfied; or (ii) resulted in, or contributed to, the Closing not being consummated at the time the Closing would have otherwise occurred pursuant to Section 3.1; or (b) the failure of Purchaser to deliver on the Closing Date the full consideration payable pursuant to Article II and Article III under this Agreement.
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notice to the Sellers no later than thirty (30) days after the date hereof to identify the Persons that will acquire the Shares and the number of Shares to be acquired by each such Person, in each case subject to the terms of this Section 2.1.
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respective Liabilities (all of the foregoing Liabilities being collectively referred to herein as the “Assumed Liabilities”). Assumed Liabilities shall include, but not be limited to, the following:
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Except as set forth in the Company Disclosure Letter or disclosed in the Data Room (if the relevance of such disclosure in the Data Room to the applicable representation and warranty is reasonably apparent on its face), the Company represents and warrants to Purchaser, as of the date of this Agreement and as of the Closing, as follows:
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insurance policy. All premiums due on all such insurance policies have been paid and neither the Company nor any Target Company is in default in any material respect with its obligations under such policies. Except as would not reasonably be expected to be, individually or in the aggregate, material to the Business taken as a whole, to the Knowledge of the Company, the Company and the Target Companies maintain, and at all times during the five (5) years prior to the date of this Agreement have maintained, in full force and effect, insurance policies of such types and in such amounts and for such risks, casualties and contingencies as is reasonably adequate to insure the Company and the Target Companies against the types of insurable losses, damages, claims and risks to or in connection with or relating to its businesses, properties, assets and operations as are customary taking into account the industries in which the Company and the Target Companies operate.
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respective Affiliates or Representatives or any other person will have or be subject to any liability or other obligation to Purchaser, its Affiliates or Representatives or any other Person resulting from Purchaser’s use of, or the use by any of its Affiliates or Representatives of any such information. It is understood by the Company, the Founder Sellers and Purchaser that Purchaser takes its ownership in the Target Companies, the Purchased Assets, the Assumed Liabilities, the Shares and the Purosoft HoldCo Shares, and the business represented thereby as is and where is with all faults as of the Closing and with any and all defects.
Except as set forth in the Seller Disclosure Letter or disclosed in the Data Room (if the relevance of such disclosure in the Data Room to the applicable representation and warranty is reasonably apparent on its face), each Founder Seller represents and warrants as to himself to Purchaser, as of the date of this Agreement and as of the Closing, as follows:
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which such Founder Seller has had any dealings or communications is entitled to any brokerage commission or finder’s fee in connection with this Agreement or the Contemplated Transactions.
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Purchaser represents and warrants to the Sellers, as of the date of this Agreement and as of the Closing, as follows:
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Transactions with the intent to hinder, delay or defraud either present or future creditors of Purchaser, any Seller or any Target Company.
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available in the electronic data room hosted by or on behalf of the Company in connection with the Contemplated Transactions or in connection with presentations by the Company’s management, are not and shall not be deemed to be or include representations or warranties.
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warranty, other than those representations and warranties set forth in this Article VI. Notwithstanding anything contained in this Article VI or any other provision of this Agreement, it is the explicit intent of each Party, and Purchaser agrees, that the Company and the Founder Sellers are not making and have not authorized any Person to make any representation or warranty whatsoever, express or implied, except those representations and warranties set forth in Article IV and Article V. It is understood by Purchaser, the Founder Sellers and the Company that Purchaser takes its ownership in the Target Companies, the Purchased Assets, the Assumed Liabilities, the Shares and the Purosoft HoldCo Shares, and the business represented thereby as is and where is with all faults as of the Closing and with any and all defects.
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advisable to consummate the Contemplated Transactions (including satisfaction, but not waiver, of the conditions to Closing set forth in Article VIII).
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as of the date immediately prior to the Closing), or otherwise induce or attempt to induce any Transferred Employees to leave the employ of Purchaser or any of its Affiliates (including the Target Companies); provided that nothing in this Section 7.12 shall restrict or preclude the rights of any Seller to solicit or hire any individual (i) who responds to a general solicitation or advertisement that is not targeted or directed at current or former Company Employees (absent any prohibited solicitation of such individual), provided such individual has not been employed by the Company, Purchaser or any of its Affiliates (including the Target Companies) for at least six (6) months from the date of such individual’s response, and in the case of key employees identified on Section 7.12 of the Company Disclosure Letter, for at least twelve (12) months from the date of such individual’s response or (ii) whose employment has been involuntarily terminated without cause by Purchaser or any of its Affiliates (including the Target Companies).
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timely comply with any and all requirements for such registration in accordance with applicable Laws. Within thirty (30) Business Days following the Closing Date, Purchaser shall, and shall cause Purolite Brazil to, perform all acts and take all measures to file for update the necessary documents in any and all registries in Brazil to reflect the change of ownership and management of Purolite Brazil, including before the Brazilian federal revenue service (Secretaria da Receita Federal), the social security service (Instituto Nacional da Seguridade Social) and the severance pay fund (Fundo de Garantia por Tempo de Serviço), and timely comply with any and all requirements for such filing in accordance with applicable Laws. Purchaser shall keep Sellers reasonably informed of all such actions and procedures until applicable registrations and updates are finally consummated.
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Days of the Closing Date, amend its organizational documents and take reasonable additional actions necessary to amend its company name to delete any reference to “Purolite” (which replacement company name shall be subject to the prior written approval of Purchaser, such approval not to be unreasonably withheld) and make all required filings with Governmental Authorities to effect such amendment. The Sellers shall, and shall cause their Affiliates to, (i) cease all use of the Trademarks included in the Purchased Assets or owned by the Target Companies as of the Closing, and (ii) subject to the first sentence of this Section 7.25, not use “Purolite”, “Purosoft” or “Brotech”, or any derivations thereof, in their company names after the Closing. Purchaser shall have the right from and after the Closing to reference any such names in the company name of any of its Subsidiaries.
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that arises or could reasonably be expected to give rise to a right of indemnification, with respect to any matter referred to in Section 10.2 or Section 10.3 (including a pending or threatened claim or demand asserted by a third party against the Indemnitee, such claim being a “Third-Party Claim”) in a writing that (i) describes such claim or Action in reasonable detail (including the facts underlying each particular claim and an identification of all of the particular sections of this Agreement pursuant to which indemnification is being sought, to the extent then known), (ii) attaches copies of any material written evidence upon which such claim or Action is based (it being understood that, to the extent that such written evidence is not reasonably available at such time, the Indemnitee shall so indicate, and shall promptly provide such evidence when it becomes available) and (iii) sets forth the estimated amount for which the Indemnitor may be liable (to the extent then known), and thereafter shall keep the Indemnitor reasonably informed with respect thereto; provided, however, that failure of the Indemnitee to notify or keep the Indemnitor reasonably informed as provided herein shall not relieve the Indemnitor of its obligations hereunder except to the extent that the Indemnitor is materially prejudiced thereby. Upon receipt of a notice of a Third-Party Claim for indemnity from an Indemnitee pursuant to Section 10.2 or Section 10.3 or any other provision of this Agreement, the Indemnitor shall be entitled by notice to the Indemnitee, delivered within thirty (30) Business Days of the receipt of notice of such Third-Party Claim, to assume the defense and control of such Third-Party Claim (at the expense of such Indemnitor); provided, however, that the Indemnitor shall not have the right to assume the defense of any Action if the Indemnitee shall have one or more legal or equitable defenses available to it which are different from or in addition to those available to the Indemnitor, and, in the reasonable opinion of the Indemnitee, counsel for the Indemnitor could not adequately represent the interests of the Indemnitee because such interests could be in conflict with those of the Indemnitor; provided, further, that if the Sellers are the Indemnitor, the Sellers shall not have the right to assume the defense of any Action (i) seeking non-monetary relief (except where non-monetary relief is merely incidental to a primary claim or monetary damages), (ii) involving criminal or quasi-criminal allegations, or (iii) relating to or arising in connection with any Contract with any material supplier or customer of the Business. If the Indemnitor assumes the defense of any Action, the Indemnitee shall be entitled to participate in such Action at its expense, and the Indemnitor shall not settle such Action unless the settlement shall include as an unconditional term thereof the giving by the claimant or the plaintiff of a full and unconditional release of the Indemnitee from all Liability with respect to the matters that are subject to such Action, or otherwise shall have been approved by the Indemnitee, such approval not to be unreasonably withheld or delayed. If the Indemnitor does not assume the defense of any Action, the Indemnitor shall be entitled to participate in such Action at its expense, and the Indemnitee shall not settle such Action unless the settlement shall include as an unconditional term thereof the giving by the claimant or the plaintiff of a full and unconditional release of the Indemnitor from all Liability with respect to the matters that are subject to such Action, or otherwise shall have been approved by the Indemnitor, such approval not to be unreasonably withheld or delayed. The Sellers shall, and shall cause each of their Affiliates and Representatives to, and Purchaser shall, and shall cause each of its Affiliates and Representatives to, reasonably cooperate with the Indemnitor (or the Indemnitee if the Indemnitor does not assume the defense and control of such Third-Party Claim) in the defense of any Third-Party Claim, including by furnishing books and records, personnel and witnesses, as appropriate for any defense of such Third-Party Claim. Notwithstanding anything to the contrary contained in this Agreement, no Party shall consent to the entry of any judgment or enter into any settlement or compromise with respect to a Third-Party Claim without the prior written consent of
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the other Parties, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, this Section 10.4 shall not apply to Actions taken in connection with any Tax Claim, which shall instead be governed by Section 7.6(c).
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calculation of the final Net Working Capital or otherwise taken into account in the calculation of the Final Purchase Price.
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Annex, Exhibit or Schedule, the Company Disclosure Letter or the Seller Disclosure Letter attached hereto, or any Ancillary Agreement, certificate or other document entered into, made, delivered, or made available in connection herewith, or as a result of any of the Contemplated Transactions.
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Article X, the Sellers would not enter into this Agreement or otherwise agree to consummate the Contemplated Transactions.
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Purchaser and the Seller Representative, or (b) Purchaser assigns its rights, in whole or in part, to a direct or indirect wholly owned Affiliate of Purchaser, but in the case of this clause (b), no such assignment will relieve Purchaser of its obligations under this Agreement. This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
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will be deemed to have been given when delivered personally to the recipient or when sent to the recipient by email at the address listed below (with receipt confirmed other than automatically generated confirmation), one (1) Business Day after the date when sent to the recipient by reputable overnight express courier services (charges prepaid) or three (3) Business Days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the Parties at the following addresses:
if to Purchaser or, following the Closing, to the Target Companies, to:
1 Ecolab Place
St. Paul, Minnesota 55102
Attention:General Counsel
Email:generalcounsel@ecolab.com
with a copy (which shall not constitute notice) to:
Baker & McKenzie LLP
300 E. Randolph Street, Suite 5000
Chicago, Illinois 60601
Attention:Dieter Schmitz
Email:dieter.schmitz@bakermckenzie.com
if to the Sellers or the Seller Representative or, prior to the Closing, to the Target Companies, to:
Purolite Corporation
2201 Renaissance Boulevard
King of Prussia, Pennsylvania 19406
Attention:Stefan E. Brodie; Howard Brodie
Email:steve.brodie@purolite.com; howard.brodie@Purolite.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
Attention:Stephen F. Arcano; Neil P. Stronski
Email:stephen.arcano@skadden.com; neil.stronski@skadden.com
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and the Target Companies acknowledge that the foregoing provision applies whether or not Skadden provides legal services to any Target Company after the Closing. Purchaser (on its behalf and on behalf of the Waiving Parties) further agrees that, notwithstanding anything in this Agreement to the contrary, all communications among Skadden, the Target Companies or any Seller (including any Affiliate of any Seller) that relate in any way to this Agreement or the Contemplated Transactions, shall be deemed attorney-client privileged communications, and the attorney-client privilege and the expectation of client confidence with respect to such communications belongs to the Sellers and shall be controlled by the Sellers and shall not pass to or be claimed by Purchaser, any Target Company or any of their respective Affiliates. Purchaser (on its behalf and on behalf of the Waiving Parties) further understands and agrees that the Parties have each undertaken commercially reasonable efforts to prevent the disclosure of confidential or attorney-client privileged information. Notwithstanding those efforts, Purchaser (on its behalf and on behalf of the Waiving Parties) further understands and agrees that the consummation of the Contemplated Transactions may result in the inadvertent disclosure of information that may be confidential or subject to a claim of privilege. Purchaser (on its behalf and on behalf of the Waiving Parties) further understands and agrees that any disclosure of information that may be confidential or subject to a claim of privilege will not prejudice or otherwise constitute a waiver of any claim of privilege and that no such Person may use or rely on any such disclosure, whether located in the records or email servers of any Target Company or otherwise, including in any Action against or involving any Seller or Affiliates of the Sellers after the Closing. Purchaser (on its behalf and on behalf of the Waiving Parties) agrees to use commercially reasonable efforts to return promptly any inadvertently disclosed information to the appropriate Person upon becoming aware of its existence. Notwithstanding the foregoing, in the event that a dispute arises between Purchaser, any Target Company or any of their respective Affiliates and a third party other than a party to this Agreement after the Closing, the Company may assert the attorney-client privilege to prevent disclosure of confidential communications by Skadden to such third party; provided, however, that the Company may not waive such privilege without the prior written consent of the Seller Representative. Skadden shall be a third-party beneficiary of this Agreement for purposes of this Section 11.15.
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Law, each Contracting Party hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Nonparty Affiliates.
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IN WITNESS WHEREOF, the Parties have executed or caused this Agreement to be executed as of the date first written above.
| PUROLITE CORPORATION | ||
| | ||
| By | /s/ Stefan E. Brodie | |
| | Name: Stefan E. Brodie | |
| | Title: Chief Executive Officer and President | |
| | ||
| | ||
| FOUNDER SELLERS | ||
| | ||
| /s/ Stefan E. Brodie | ||
| Stefan E. Brodie | ||
| | ||
| | ||
| /s/ Don B. Brodie | ||
| Don B. Brodie | ||
| | ||
| | ||
| SELLER REPRESENTATIVE | ||
| | ||
| /s/ Stefan E. Brodie | ||
| Stefan E. Brodie | ||
| | ||
| | ||
| ECOLAB INC. | ||
| | ||
| By: | /s/ Christophe Beck | |
| | Name: Christophe Beck | |
| | Title: President and Chief Executive Officer | |
[Signature Page to Stock and Asset Purchase Agreement]
Exhibit (99.1)
News Release
| | FOR IMMEDIATE RELEASE | |||
| | | |||
| Contact: | Michael Monahan (651) 250-2809 Andrew Hedberg (651) 250-2185 | |||
ECOLAB CLOSES ON PURCHASE OF PUROLITE |
ST. PAUL, Minn., Dec. 1, 2021: Ecolab Inc. has closed on its previously announced acquisition of Purolite, a leading and fast-growing global provider of high-end ion exchange resins for the separation and purification of solutions for pharmaceutical and industrial applications. Headquartered in King of Prussia, PA, Purolite operates in more than 30 countries, with expected 2021 sales of approximately $0.4 billion. Total consideration was approximately $3.7 billion.
About Ecolab
A trusted partner at nearly three million commercial customer locations, Ecolab (ECL) is the global leader in water, hygiene and infection prevention solutions and services. With annual sales of $12 billion and more than 44,000 associates, Ecolab delivers comprehensive solutions, data-driven insights and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries around the world. www.ecolab.com
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