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Item 1.01
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Entry into a Material Definitive Agreement
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On August 9, 2017, Hudson Technologies, Inc. (the “Company”)
and its wholly-owned subsidiary, Hudson Holdings, Inc. (“Holdings”) entered into a Stock Purchase Agreement (the “Purchase
Agreement”), by and among Airgas, Inc. (“Seller”), Holdings and the Company. The Purchase Agreement provides
for the sale (the “Sale”) by Seller to Holdings of all of the outstanding stock of Airgas-Refrigerants, Inc., a Delaware
corporation (“ARI”).
Pursuant to the Purchase Agreement, at closing Holdings will
acquire all of the outstanding shares of capital stock of ARI for aggregate cash consideration of $220 million, subject to closing
and post-closing adjustments. As provided in the Purchase Agreement, the aggregate consideration payable by Holdings at closing
is subject to adjustment (upward or downward): (i) based upon changes in the net working capital of ARI as of the closing relative
to a net working capital target and (ii) based upon the actual amount of specified types of R-22 refrigerant inventory on hand
at closing relative to a target amount thereof. The Purchase Agreement also provides for a post-closing true-up of these closing
adjustments and a $0.8 million credit for a specified capital project.
In addition, promptly following the closing, Seller will purchase
from Holdings, at a price per pound of $21.00, the greater of (x) any R-22 inventory delivered at the Closing in excess of 7,000,000
pounds and (y) 200,000 pounds of R-22 inventory delivered at the Closing (the “Initial Inventory Purchase”). For a
period of two (2) years following the closing, Holdings shall have the option to repurchase from Seller any or all such remaining
unsold R-22 inventory contained in the Initial Inventory Purchase, at a price per pound of $21.00.
Seller, Holdings and the Company have made customary representations
and warranties, covenants and indemnities in the Purchase Agreement. The transaction is subject to specified closing conditions,
including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (“HSR”), the absence of injunctions or restraints imposed by governmental entities, and consummation by the
Company of contemplated debt financing.
The
Purchase Agreement also contains certain termination rights for both Holdings and the Seller, including a termination right for
either party if any of the mutual closing conditions or closing conditions of the terminating party are not fulfilled by February
9, 2018 (the “Outside Date”) and such failure is not due to the terminating party’s
failure to perform
or comply with any of the covenants, agreements or conditions to be performed or complied with by it prior to the closing. The
Purchase Agreement may also be terminated by Holdings, if
Holdings
is
not then in material breach of any provision of the Purchase Agreement or the other related agreements, and there has been a failure
to perform any covenant made by the Seller pursuant to the Purchase Agreement or the other related agreements that would, in the
aggregate, give rise to a Material Adverse Effect (as defined in the Purchase Agreement), and such breach, inaccuracy or failure
cannot reasonably be expected to be cured by the Seller prior to the Outside Date. Furthermore, the Purchase Agreement may be terminated
by the Seller if
the Seller
is not then in material breach of any
provision of the Purchase Agreement or the other related agreements, and there has been a failure to perform any covenant made
by Holdings pursuant to the Purchase Agreement or the other related agreements, and such breach, inaccuracy or failure cannot reasonably
be expected to be cured by Holdings prior to the Outside Date.
In the event that the Purchase Agreement is terminated by Holdings
or Seller solely because of the inability to obtain HSR approvals or Holdings’ failure to obtain the contemplated debt financing,
Holdings would be required to pay to Seller a termination fee of $8.5 million (the “Termination Fee”). The Company
has guaranteed the obligations of Holdings under the Purchase Agreement.
The Purchase Agreement and the above description of the Purchase
Agreement have been included to provide investors and security holders with information regarding the terms of the Purchase Agreement.
It is not intended to provide any other factual information about the Company or any other entity. The representations, warranties
and covenants contained in the Purchase Agreement were made only for purposes of that agreement and as of specific dates; were
solely for the benefit of the parties to the Purchase Agreement; and may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating
contractual risk between them that differ from those applicable to investors. Investors should not rely on the representations,
warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company,
Holdings, ARI or any of their respective subsidiaries, affiliates or businesses. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information
may or may not be fully reflected in public disclosures by the Company. Accordingly, investors should read the representations
and warranties in the Purchase Agreement not in isolation but only in conjunction with the other information about the Company,
Holdings, ARI and their respective subsidiaries that are included in reports, statements and other filings made with the Securities
and Exchange Commission.
The foregoing summary of the Purchase Agreement and the transactions
contemplated thereby does not purport to be complete. Additionally, the foregoing summary of the Purchase Agreement is subject
to, and qualified in its entirety by, the full text of the Purchase Agreement, which is attached as Exhibit 2.1 and incorporated
herein by reference.